Benchmarking people management practices in South Africa

Benchmarking people management practices in South Africa

By Theo Veldsman & Karin Conidaris

1. Motivation for the study

The new world of work in which companies will conduct their business can be summarised as follows, namely:

>> Globalisation requires company’s to conduct their business in an environment, characterised by speed, connectivity and intangibles, i.e. being connected.

>> In the new world of work the intellectual capital will be the determining factor whether companies will have the competitive advantage over their nearest rival. People will be the core pin / pinnacle, to create / leverage wealth through the resources at their disposal.

The war for talent will be as fierce as never before. Effectively,

developing and retaining top talent will be the number one strategic objective of companies.

Business challenges requires companies to change constantly and rapidly to stay in business.

This blurring environment in which companies are functioning demands new people strategies and practices (new people "DNA structures").

What are the people strategies and practices that need to be in place to take companies through the 21^st century?

2. Objectives of the study

The study set out to examine the following issues:

>> To identify the leading people strategies and practices required enabling companies (in South Africa) to operate effectively in the new world of work.

>> To demonstrate that sound people strategies and practices correlate with excellent financial performance

>> To provide individual organisations to benchmark themselves against the leading practices in the participating industry sector

3. People Strategy and Practice Framework

The framework below comprises of the building blocks, which serve as a diagnostic tool and reference for the leading people strategies and practices to be benchmarked.

The intention of the suggested framework of people strategies and practices is to provide an overall framework for people strategies and practices in companies

According to the above framework, the building blocks of the people strategies and practices in companies are defined as:

>> The business strategy, which provides the setting within which the company’s people management has to unfold;

>> The alignment between the business strategy and the strategic people intent, people policies and practices of the company;

>> The organising and work place logic, from a people perspective, according to which the business is set up and managed;

>> The organisation’s strategic people intent made up of the strategic people issues and priorities pursued; it’s people philosophy; the psycho-social contract reflecting the basic relationship between the organisation and its members; and the profile of its people;

>> The contextualisation of the strategic people intent, people policies, practices and delivery process to ensure that they fit the specific and unique circumstances of the business;

>> The people management policy and practices adopted by the organisation to unleash the contribution of its people;

>> The delivery process through which the strategic people intent is actualised, and the people policies and practices executed;

>> The outcomes, from a people perspective, resulting from all of the above; and

>> The degree of readiness for change of the organisation to renew its people management.

>> It ensures that leading practices are included in work processes

4. Key findings from the 2001 study

The 2001 Benchmarking Study on People Management in South African Companies study was published in April 2002. The overall results for indicate:

>> Despite a growth in entrepreneurial, profit maintenance and turnaround strategies among South African companies, much work still needs to be done regarding the transformation of people management. This supports the findings of the World Competitiveness report, which ranks South African human resource management very poorly.

>> The survey indicates that South African companies do not score high on the criteria for excellent organisations, and people management policies within local companies appear to be deteriorating.

>> Despite a more proactive stance towards skills enhancement, building managerial capability and employment equity management, overall people management practices in this country still fall far short of being world-class.

>> People strategies continue to be formulated in isolation from business strategies, and workplace logic fails to empower people to perform productively and experience their work as satisfying and meaningful.

These results are depicted below. The table gives a more detailed overview of the findings. The study involved thirty-three companies from the financial, transport, government, manufacturing, mining, retail and pharmaceutical industries.

The legend used for the findings of the benchmarking study is as follows:

{i} Colour coding:

{ii} Key:

1998 = Results of the 1998 study of participating South African Companies;

2001 = Results of the 2001 study of participating South African Companies.

# Positive trends

>>Dynamic growth is still the dominant strategy.

>> Entrepreneurial, Profit Maintenance and Turnaround strategies have grown in strength

>> Strategic people issues and priorities have become more pro-active.

>> The primary strategic people issues and priorities are global competitiveness, skills enhancement and building leadership/managerial capability and employment equity/diversity management.

>> People management practices still fall significantly short of world-class practices, although some improvement has occurred.

>> A more optimal balance exists between the delivery activities for long-term strategic and short-term operational people management.

>> Flexibility with respect to service delivery styles exists amongst participating companies.

# Negative trends

>> The alignment between business and people strategy remains weak. People strategies are formulated in isolation from business strategies.

>> The organisational and workplace logic are not empowering and enabling people to perform productively, and experiencing their work as satisfying and meaningful.

>> South African companies, do not score high on the criteria for world-class organisations.

>> The people philosophy is consistent with people policies and practices, though not world class.

>> SA companies appear to be moving towards a strongly control orientated psychosocial contract. The partnership contract has weakened.

>> The people profile of participating companies does not meet the competency requirements to perform in a world-class manner.

>> The contextualisation of people policies, practices and delivery processes fall short of world class.

>> South African companies appear to be deteriorating with regards to people management policies.

>> A stronger emphasis is placed on a stand-alone, internal focus and to a lesser extent on an integrated, external focus with respect to people management delivery.

>> The positioning of the people service delivery is still too remote from the client, and removed from the overall business solution, to be effective.

>> The HR expert/administrator role is still overemphasised. The underemphasised strategic partner role remains worrying.

>> People measurement remains inadequate.

5. Conclusion

South African companies appear to be more ready to reinvent and renew their people management than they were previously. All in all, much work remains to be done to transform people management in South African companies