Moving from pure regulatory compliance to a culture of voluntary moral compliance
- Written by Gary Watkins
- Published in articles001-100
Moving from pure regulatory compliance to a culture of voluntary moral compliance
Topics which we will address in this series and which are covered in our workshops and included in our consulting services focusing on developing employment equity plans include:
- Moving from pure regulatory compliance to a culture of voluntary moral compliance (discussed in this article)
- Who is the final arbiter of whether an organisation is compliant?
- Skilled human resource key to economic growth
- Govt withdraws special policy for Zimbabweans - questions every South African employer should ask themselves?
- What Economically Active Profiles (EAP) are appropriate for your organisation?
- Examining graduation statistics for purposes of setting employment equity numerical goals and targets
- The appropriate methodology for developing employment equity plans should be workforce planning methodologies which go beyond the limited variables required in EE Reports.
- The confusion and poor wording in the current Employment Equity General Administrative Regulations, 2009 must be amended.
- The inordinate focus on HIV/AIDS should actually be a broader focus on Employee Wellness.
- Employment Equity Plans (or as we argue "Workforce Plans") should incorporate the criteria used by the Labour Court when assessing compliance.
- Affirmative action measures are not consistently pursued and not strategically aligned to business requirements in the long term ... [complete]
- Employers cannot fully comprehend their legal obligations regarding employment equity without being fully appraised of how the legislation is interpreted and applied by the Labour and Labour Appeal Courts.
- Employment equity committee members are frustrated participants in the consultation process, have a poor comprehension of their roles and their contribution is limited.
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| Gary Watkins | Jaco Taljaard | Michelle du Toit | Carol Dowdle |
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Every employer required to prepare and implement an employment equity plan is faced with the challenge of determining the relevant EAP data against which they should benchmark their numerical goals and targets.
We are repeatedly informed by press releases from the Department of Labour and Employment Equity Commission that organisations are failing to implement employment equity. We fully accept that a vast majority of organisations have in fact paid little regard to transforming their workplaces as is evidenced by:
- Failing to comply in part or at all with any of the provisions of the Employment Equity Act;
- Have failed to address gender and disability concerns within their workplaces;
- And so forth.
We do not intend addressing or supporting organisations who have simply failed to apply their "minds" to their obvious legal obligations. This article is certainly not intended to defend these organisations. In fact we will demonstrate that their failure to implement employment equity and affirmative action measures could well be their undoing, not because they will be "fined" out of existence, but simply because they would have failed to determine their actual long term workforce (manpower) requirements, developed future talent and competency requirements within their organisations, and sourced potential future talent.
At the outset we need to be very clear about the objectives of this article and the information provided therein.
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A new approach to employment equity
We fully support the requirement for organisations to implement affirmative action measures and transform their organisations, but controversially not because it is simply a legislative requirement (or that organisations may be "fined"), but because it is actually economically necessary. There simply are not enough White, Indian and Coloured persons available to meet the long term skill requirements of the economy and organisations, especially amongst the skilled professions and artisan trades.
Adopt of philosophy encouraging moral compliance
Enforcing compliance from a purely penalty based approach, the immature "name and shame" campaign which has previously backfired the last time this was initiated, failure to recognise the limited skills at professional and artisan levels and above all the failure to focus in the early initiation phase on employment equity with growing these skills and rewarding organisations which did so has of course led to the obvious long term failings in employment equity. Remonstrating Ministers, Commissioners and Director Generals have not helped.
Whilst we do support the fact that organisations who have not complied at all with the provisions of the Employment Equity Act should be "fined" the Department of Labour and Employment Equity Commission should learn from the excellent public relations conducted by SARS requiring employees and employers to submit their tax returns, in particular the "its the right thing to do" and "make your contribution to RSA" campaigns. In fact we have nothing but admiration for the manner in which SARS and National Treasury have engaged the South African public to meet their income tax obligations. It is certainly true that non-compliance with SARS legislation does lead to penalties, fines, interest payments and possibly imprisonment, yet thanks to the marketing initiatives conducted by these entities, the "moral obligation" to meet income tax obligations is often sufficient. We are all familiar with the post filing season billboards produced by SARS thanking South Africans for completing their income tax returns. There are clear lessons here for DOL and the EE Commission. SARS captures this philosophy most eloquently in its transformation agenda formulated as long ago as 2000:
"To turn South African citizens into partners rather than antagonists through communicating the noble purpose behind the collection of tax, and by treating taxpayers as customers"
It would have taken great courage in the earliest phases of this shift in approach to persevere with this new "mindset", yet 10 years later the results speak for themselves. And above all, SARS has stayed its course, with its leadership achieving national and international respect.
SARS and National Treasury are also prime examples of how organisations can in fact transform and become representative of the South African population, yet from a public perspective increasingly become more efficient. In fact, they disprove the myth that implementing employment equity results in lower standards of performance and service delivery. Every tax payer is by now aware of the substantial advancements made in filing tax returns and the excellent customer service provided by these entities. Of course these achievements can be attributed very simply to the calibre of SARS and NT's "LEADERSHIP" of and "COMMITMENT" to transformation, elements noticeably absent in so many other organisations. We have no doubt that we will see similar developments in the Reserve Bank and the emerging Department of Economic Planning. Great leaders tend to replicate their achievements consistently, regardless and often in spite of the obvious hindrances - skills shortages, staff turnover, lack of financial resources for human capital development and acquisition etc.
SARS' transformation agenda eloquently sets out its strategic objectives as follows:
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Since South Africa's first democratic elections in 1994, SARS has strived to live up to the challenges of a changed and changing society. The organisation has had to reassess its functions and how it goes about its business. A process of transformation was begun in 2000 in a drive to make SARS work better as a business. Called Siyakha ("we are building"), it has two clear goals, which are:
The principles of Siyakha guide all the work done by the divisions of SARS. The result of these processes will be to broaden the tax base, to encourage a culture of voluntary compliance and to create a more efficient and effective business. Technology has a vital role in enhancing business processes and in permitting SARS to becoming more customer-centric. For example, technology has helped SARS to understand the risk profiles of customers and industry segments. Central to this vision are the people of SARS. The creation of a culture of team-work and learning, a vigorous programme to improve employee competency and the provision of a supporting physical infrastructure have been important features of Siyakha. The implementation of Siyakha has also improved employment equity and staff capability. Source: http://www.sars.gov.za |
The results SARS has been able to achieve over the period from 1998 - 2010 are self-apparent: growing the tax base, coupled with economic growth friendly policies, the appointment of excellent leaders / Ministers and Director Generals, encouraging a culture of "moral compliance", and most notably, substantially transforming its workforce profile.
EE Profile for SARS 1998 - 2009
Source: Annual Report 2008/2009
SARS Black Workforce Profile
Black = African, Indian & Coloured
Disabled Persons (2000/1 - 2008/9)
Achievements in the employment of persons with disabilities is equally admirable.
Historical EE Profile 1998 - 2009
| Percentage of Black Workforce from 1998 - 2009 | ||||||||||
| Occupational Level | March-1998 | March-1999 | March-2000 | March-2001 | March-2004 | March-2005 | March-2006 | March-2007 | March-2008 | March-2009 |
| Management Staff | 9% | 18% | 38% | 40% | 47% | 51% | 53% | 54% | 57% | 59% |
| Supervisory Staff | 10% | 13% | 19% | 22% | 44% | 48% | 57% | 60% | 61% | 60% |
| General Staff | 34% | 38% | 41% | 42% | 55% | 58% | 62% | 65% | 67% | 69% |
| All Staff | 32% | 36% | 38% | 40% | 53% | 56% | 61% | 63% | 65% | 67% |
Affirmative Action & Skills Development Initiatives
Equally the affirmative action measures adopted by SARS over this period indicate a recognition of the underlying competency requirements which needed to be developed as well as an appreciation of the organisation's long term talent "demand" requirements (i.e. developing the talent pool) whilst always actively pursuing its EE transformation objectives (race, gender and disability):
| Timeline | Affirmative Action & Skills Development Initiatives | Workinfo.com Analysis |
| 1999/2000 |
Human resources practices are weak in some areas. Significant progress has been made on this front, but much work remains. Retention of staff, especially in key functions such as audit, is a cause for concern . Allocation of employees is sub-optimal. A performance management system is in the process of implementation. Training is not adequately addressing the key skill shortages, and a greater focus on on-the-job training is required . A recently completed skills audit will provide a comprehensive profile of staff competencies and permit an assessment of the extent to which SARS’ future needs can be met by existing personnel. A substantial mismatch is anticipated, which will oblige substantial retraining. During1999/2000, approximately 845 internal courses were attended by more than11000 participants at SARS. In addition, about 1000 employees benefited from income tax training provided through the Rand Afrikaans University. Other key training initiatives included NITS and rules of origin courses. The International Labour Organisation (ILO) sponsored development of a labour relations training course for SARS, which will be presented to all line managers and shop stewards during 2000/2001. An important focus of activity is the development of new audit capacity. A taxation auditor programme will be introduced later this year, which will feed into the respected Master Taxation Auditor (MTA) programme offered at SARS. A partnership with the Association of Certified Chartered Accountants (ACCA) is also on the cards. An important focus of activity is the development of new audit capacity. A taxation auditor programme will be introduced later this year, which will feed into the respected Master Taxation Auditor (MTA) programme offered at SARS. A partnership with the Association of Certified Chartered Accountants (ACCA) is also on the cards. Planning has started on the establishment of a SARS college, which is likely to take the form of a virtual and a residential campus. Partners in this initiative will include Harvard University and the Open University, in addition to local tertiary institutions. In the longer term, SARS could consider providing customs and revenue administration courses to other countries in the region. Finally, SARS has played a key role in the formation of a sector education and training authority (SETA) for the financial and accounting services industry. Affirmative Action Relatively low staff turnover-rate, coupled with efforts to freeze payroll costs, constrained SARS’ ability to promote workforce representation. During 1999/2000, the total headcount declined by about 400.A moratorium was imposed on the appointment of administrative personnel to support the strategic shift to an audit focus. |
Siyakha programme
Clear, simple & communicated Vision statement Impact analysis Transformation goals identified Problem identification Competency profile gap analysis Supply and demand analysis Recognition of need for capacity development Skills training & focused course development Leadership:- Acknowledgement of constraints to transformation coupled with commitment to overcome these |
| 2000/2001 |
The past year has seen the groundwork laid for a new approach to competency acquisition at SARS. A new vision and strategy were developed, and preparatory work on a proposed corporate university for SARS won the approval of the Executive Committee. The year ahead will see a number of plans coming to fruition, including:
During 2000/2001:
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Competency profile gap analysis
Follow through on earlier initiatives identified Internal development - Bursaries, certificate programmes, MBA's, internal training interventions Identification & development of high potential employees Engagement with SETA & SAQA & professional bodies New learning technologies & platforms:
Competency database Strategic alliances with Higher Education entities and best in the world INSEAD and Harvard |
| 2001/2002 | See SARS Annual Report | |
| 2002/2003 | See SARS Annual Report | |
| 2003/2004 | See SARS Annual Report | |
| 2004/2005 | See SARS Annual Report | |
| 2005/2006 |
SARS continues to be passionate about growing its people, both professionally and personally, through targeted training initiatives and study opportunities such as the Training Outside Public Practice (TOPP) and Graduate Recruitment Programme. The SARS Academy plays a key role in ensuring that the appropriate skills training is provided for staff across all divisions. SARS also aims to provide its employees with a caring, supportive environment through the wellness programme. Ensure the appropriately skilled people are attracted to the organisation. Another is to ensure all staff continue with their personal and professional development while in the organisation. SARS commitment is realised through the creation of a high performance tax and customs administration work place where individuals and teams are employed and rewarded for exemplary performance, sharing knowledge, being team players and living SARS core values Focus employee performance and behaviour to achieve sustainable improvements in operational ability and to achieve organisational goals
SARS has enlisted top South African business schools to conduct management development programmes for managers at all levels. At present, 25 senior managers are enrolled with the Gordon Institute of Business Sciences (GIBS), and two programmes are being run by the business schools of UNISA and Stellenbosch University, with 15 middle managers participating in each of the latter two. UNISA and Stellenbosch business schools are also running management development programmes for 30 managers at a junior level, and provision has been made for 15 executive managers to attend a GIBS programme. The training and development programme “Fundamentals of Management” was presented to Team Leaders to enhance their skills. A coaching programme was developed and 15 internal coaches were accredited and are currently rolling out coaching classes countrywide. It is estimated that an overall 19% improvement in management capability has been achieved as a result of these initiatives. To improve operational effi ciencies, the School of Customs offered several key programmes. These programmes included valuation, tariff, export, post clearance inspection, risk management, excise, border control enforcement, trade agreement the anti-smuggling and programmes to administer the application of international conventions such as, Customs Convention, Istanbul Convention and the Admission Temporaire - Temporary Admission (ATA) Convention. The needs-aligned programmes were offered predominately to staff in customs and on a lesser scale to employees in revenue. These programmes have provided employees with a deeper knowledge and understanding of key interventions to facilitate security and border control. The School of Assessment and Service offered the following programmes including courses on Farming and Retirements Tax, RBT, CGT, Income Tax and Trusts. The School of Enforcement offered programmes in audit at a basic and intermediate level, criminal risk identifi cation at a basic and advanced level, electronic evidence, law interpretation, introduction to collections and fi nancial statements, tax updates and trusts. SARS has in place a Memorandum of Cooperation with the Lesotho Revenue Authority (LRA), that details how the capacity building interventions provided to the LRA by SARS are managed to ensure its sustainability and effectiveness. A project plan is in place which highlights the capacity building initiatives for LRA. SARS is in the process of finalising similar memoranda with Rwanda, DRC, and Malawi. Within the SACU context SARS is providing training assistance to Botswana, Namibia and Swaziland. The SARS Academy has also established partnerships with tertiary institutions and service providers to ensure that the training they offer is relevant to SARS business needs. SARS has been accredited by the South African Institute of Chartered Accountants (SAICA) as an approved training organisation and is authorised to present the Training Outside Public Practice (TOPP) programme under the auspices of the SARS academy. The TOPP programme focuses on training in fi nancial management and taxation. The programme environment promotes the highest standards of professional development and consists of a blend of practical experience, simulations and other interventions, in conformance with SAICA requirements. Other focus areas included performance management, reward management (Hay Job Grading) and salary benchmarking with the general labour marker, incentive bonus, and retention: The success of SARS’s labour retention strategies is evidenced by the labour turnover rate for the current financial year of 5,74%. The graduate recruitment programme has expanded since its inception in 2003 and continues to receive priority. The aim of the programme is to help alleviate the critical shortage of suitably qualified staff, to contribute towards a representative workforce and to reinforce SARS’s commitment to social responsibility. |
Clear statement on its people philosophy
Ongoing development of talent Engagement with Higher Education institutions Coaching programme Regional engagement Engagement with Higher Education institutions, locally and abroad Accreditation as a training provider Retention Ongoing graduate recruitment |
| 2006/2007 |
SARS has implemented an integrated people development strategy to ensure alignment between organisational needs and staff skills and competencies. The strategy aims to attract appropriately skilled people to the organisation through programmes such as the Graduate Recruitment and Development Programme and Training Outside Public Practice (TOPP). A career and talent management framework has been introduced in line with the career development programme to ensure that we create growth opportunities for staff. The reward, recognition and compensation strategy was reviewed and enhanced to support talent retention. In line with the human capital plan, a number of new talent intake initiatives were also successfully completed, such as the intake of candidates into both TOPP and the Graduate Recruitment and Development Programme. TOPP focuses on training in financial management, management accounting, financial accounting, auditing and taxation. The internal Career Development Programme has been essential in ensuring recognition for competencies required, acquired and applied by staff in different job categories as informed by operational requirements. SARS Academy has established partnerships with institutions such as UNISA, the University of Stellenbosch, the Gordon Institute of Business Science and Franklin Covey SA, to ensure customised training for SARS managers in line with business needs. In 2006/07, 111 staffers in managerial/leadership and specialist positions graduated successfully from management development programmes The objective of the SARS Academy is to provide and facilitate training across all SARS business areas. In the review period the Academy concluded a workplace skills plan, which met the requirements of the sector education and training authority, and delivered a total of 26 626 training interventions, exceeding its target for training. Following agreement with the World Customs Organisation, work is currently underway to establish a regional training centre for capacity building in Eastern and Southern Africa The scope of the Kulani no Hlayisa (grow while caring) employee wellbeing programme was expanded in the review period. New initiatives included incapacity and disability management, specialised absenteeism management, border post wellness, executive medical examinations and a comprehensive HIV/AIDS management programme. This, together with the counselling and support services and online health and financial management support for employees, has created an integrated and holistic approach to promoting wellness among staff. |
Ongoing competency alignment and alignment of skills & competencies to organisational needs
Graduate development programmes (securing inflow of talent) Career development programmes Strategic alignment with Higher Education institutions and regional engagement "Corporate university" concept Training in core competencies Ongoing focus on EE goals (race, gender & disability) along with capacity development of all personnel Employee wellness initiatives (i.e. retention) |
| 2007/2008 | See SARS Annual Report | |
| 2008/2009 |
Performance Highlights
The second SARS Employee Connexion survey was conducted this year to measure the improvement in levels of employee engagement. It measured employee motivation and commitment and a significant improvement was made compared to the previous year, in other words employees having a positive attitude towards the organisation and showing business enhancing behaviour. Based on the survey results a Programme of Action with immediate short, medium and long term commitments, emanating from the survey’s findings, was implemented in July 2007. The Programme of Action includes, among others:
The Kulani no Hlayisa (Grow while Caring) Employee Wellbeing Programme continued to enhance the wellbeing of SARS employees by providing counselling and support services and online health and financial management support for employees, has created an integrated and holistic approach to promoting wellness among staff. Activity Based Management (ABM) was adopted to support business analysis and enable operational and strategic decision making. Training Outside Public Practice (TOPP) is programme accredited by the South African Institute of Chartered Accountants (SAICA) and is an alternative to the conventional TIPP (Training Inside Public Practice) career path. SARS Modernisation programme
Communication strategy for Modernisation programme |
Achievement of EE targets
Employer of choice Employer Branding Focus on retention issues Ongoing training and development Modernisation campaign |
| 2009/2010 |
Structures at executive and senior management levels were realigned with the newly adopted operating and leadership model. An initiative was implemented to find the best fit between job requirements and the skills of senior managers (the “goodness of fit”) initiative. A leadership development programme at senior, middle management and team leader level was piloted with 110 employees
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Job fit compatibility
Leadership development programme Culture: employee engagement index (i.e. retention) Employee wellness (i.e. retention) Employee recognition (i.e. retention) |
Sources: SARS Annual Reports 1998 - 2010
The efficiencies SARS achieved whilst aggressively pursuing its transformation agenda are clearly evident from SARS 2010 annual report:
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By 31 March 2009, SARS had collected R625.10 billion in revenue, which represents a collection outcome of 99.59% against the revised revenue target of R627.60 billion (original estimate R642.27 billion). This occurred against the backdrop of rapidly-deteriorating global economic conditions, in particular during the first quarter of 2009. During this time SARS delivered on its mandate, transformed its public image and is now widely regarded as a top performing government agency. These improvements and the release of resources from manual backroom activities into service and enforcement spheres, is having a significant impact not only n compliance, but on the experience f taxpayers and traders. The results can be seen in the recently concluded 2009 Tax Season which resulted in a number of new records for submissions and processing.
While we may need to invest in critical skills available outside the organisation as well as focus on building a skills inflow through our graduate and youth recruitment programme, we do not envisage that our staff numbers of approximately 15 000 will change significantly over the medium term, as we will primarily seek to develop our existing staff to meet changing business requirements.
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Gary Watkins
Gary Watkins
Managing Director
BA LLB
C: +27 (0)82 416 7712
T: +27 (0)10 035 4185 (Office)
F: +27 (0)86 689 7862
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