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02.2010

HUMAN STRATEGY FOR BUSINESS EXPLORE, EMBRACE. EXPAND, EXCEL.

9771608850007

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20 UPDATE YOUR TAX INFO FOR AFRICA

22 NURTURE CRITICAL SKILLS AND KNOW-HOW

24 SHAPE TOMORROW’S MANAGERS AND EMPLOYEES


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I am Lucas Radebe, father of Owami, aged 5 and Lucas Hugo, aged 10. I lost my wife, and our children their mother, because of cancer. We experienced the support and care of Hospice during this difďŹ cult time. Hospices throughout South Africa promote quality in life, dignity in death and support in bereavement for all people living with a life-threatening illness, and also for members of their family. The hospice multi-disciplinary approach to patient care is a practical, hands-on approach and is provided mainly in patients’ homes. Hospice day care is available in hospice community centres, and hospice in-patient units admit patients for pain and symptom control or respite care. Hospice was there for us in our greatest time of need. That’s why I support Hospice...

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HR FUTURE 02.2010

EDITORIAL

EXPLORE, EMBRACE. EXPAND, EXCEL.

EDITORIAL

Executive Editor Alan Hosking (tel) +27 11 888 8914 (fax) +27 11 782 5160 alan@hrfuture.net Managing Editor Courtney Mayhew (tel) +27 11 888 7064 (fax) +27 11 782 5160 courtney@hrfuture.net

Design

Designer Nanette Catherine (tel) +27 11 888 7019 design@osgard.co.za

ADVERTISING

All enquiries Courtney Mayhew (tel) +27 11 888 7064 (fax) +27 11 782 5160 courtney@hrfuture.net

membership

New and Renewals Gabby Kruger (tel) +27 11 888 8914 (fax) +27 11 782 5160 gabby@hrfuture.net

Finance

Financial Manager Stacey Victor (tel) +27 11 888 8794 (fax) +27 11 782 5160 finance@osgard.co.za

join us!

SA membership R714 excl.VAT (12 months) International rates available on request.

HR FUTURE is SA’s human strategy magazine published by Osgard Media as a support to all HR Executives, Chief Executive Officers, Managing Directors, Financial Directors, HR practitioners and senior line managers who are committed to creating shareholder value through human assets. The views expressed in articles featured in HR Future are the views of the relevant authors and do not necessarily reflect the views of the publishers. Claims for non-receipt of magazines must be made within four months of publication of the issue. Claims made thereafter will not be honoured free of charge. © 2009 All rights reserved. No part of this publication may be reproduced in any form or medium without prior written approval from the editor. ISSN 1608-8506

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o

All-talk-noaction HR is embarrassing

One conversation that regularly features among certain HR people is the gripe that they are not taken seriously. Those who voice this view don’t realise what they are saying about themselves. Any HR practitioner or professional who complains of not being taken seriously is really telling the world that they are not in touch with the business goals of their company and that they do not understand how their company generates its revenue and what their role is in helping to reach those business goals. On the other side of this coin, there are many, usually silent, HR professionals and practitioners who are engaged with their companies’ business goals and who are quietly getting on with the job of sourcing the best talent for the company and putting robust talent management practices in place. They’re not contemplating their navels. They’re not whining about not being taken seriously. Because they are taken seriously. Because their board sees just how much value they’re contributing. What is the difference between these two groups of people? The one group, the group that complains, has a perspective of what HR should look like which is dated and out of touch with reality. They then want to dictate to the business what should be done without demonstrating any understanding of the company’s business needs. The other group has understood that the business drives everything, and has made a point of getting to grips with what the business activities, issues and challenges are that the company

faces, then finding solutions for their colleagues in the business units and helping them to implement the solutions. This month’s Cover Story by Otto Pretorius suggests that HR people should look at themselves first before they complain about not being taken seriously. Pretorius says that HR people need to walk the talk if they want to earn their stripes in the eyes of the workforce. He’s right. The time has long gone when anyone is respected simply because of their position or title. Those who are expecting people to respect them without their demonstrating competence are in for a shock. Today’s workers – at all levels of a company – assess you on what you do, not on what your title is, or on what you say. If you’re an all-talk-no-action HR professional, this is a heads-up for you. Your talk may fool a few people for a short while, but sooner or later they’re going to expect to see what you can DO. No-one will respect you if all you do is talk. Texan cattle farmers have a saying for people who are all talk and no action. They say: “Big hat, no cattle.” So stop the talk and start the walk – start taking action this year!

Alan Hosking alan@hrfuture.net


At innoVIZION, we provide innovative business solution design, systems integration, implementation and support. Our focus is around global strategic megatrends and delivery of integrated leading framework solutions and services to our clients. Our core competencies have been heavily grounded in the Human Capital Solutions Market.

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TECHNOLOGY CONSULTING: INFOR (global leader in ERP solutions) Web enabled PORTAL, multi language, electronic document management enabled HCM solutions including: - INFOR HCM - INFOR ESS - INFOR HCM Payroll - INFOR HCM Workforce Management - INFOR HCM Strategic Talent Management

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management consulting

Corporate Services

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HR FUTURE 02.2010

CONTENTS

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22

P-E Corporate Services SA (Pty) Ltd Has enjoyed a reputation as one of this country’s premier consultancies for over 40 years. Our dominant market position has been established as a leading provider of professional management consulting, training and related services. It has been achieved through sustained innovation and responsiveness to client needs. Our mission is to enhance both individual and organisational performance within the more than 5 000 organisations we are privileged to count as our clients. To do so, we employ only the brightest and best professionals and offer services of consistently excellent quality. Our approach to problems and opportunities is pragmatic, balancing leading edge technology with mature judgement.

UPFRONT

Core service areas include:

2

EDITORIAL

6

CONTRIBUTORS

8

NEWS QUICKIES

9

SO THEY SAY

• • • • • •

Strategy, organisation development and change management Leadership skill development Behavioural and skills training National and industry level salary surveys Remuneration benchmarking and package structuring Pay policy and incentive scheme design and implementation Re-engeneering, productivity improvement and operations management

For more information contact our Johannesburg Head Office or any of our agents;

INTERNATIONAL WATERS 10

GLOBAL MASTERCLASS Employer brand research shows key trends

ASSET-BASED HR 12

HOT BUTTON New performance appraisal (Part one)

14

INTERVENTION DECISIONS Focus on risk management

P-E Corporate Services SA (Pty) Ltd Johannesburg Tel: (011) 442-4334 Fax: (011) 442-4758

TECHNOLOGY UPGRADE

Our Agents WORK DYNAMICS Western Cape & Eastern Cape

16

WORD OF MOUSE HR can take control

17

DEFRAG Software piracy can take you out

Tel: (021) 913-8371 Fax: (021) 913-8379

OWEN, ADENDORFF & ASSOCIATES KwaZulu-Natal Tel: (031) 700-3151 Fax: (031) 700-3190

ON THE COVER 18

NO HR PEOPLE ALLOWED

DR CHRISTINA SWART-OPPERMAN Namibia Tel: (0926461) 220712 Fax: (0926461) 234704

20

UPDATE YOUR TAX INFO FOR AFRICA

22

NURTURE CRITICAL SKILLS AND KNOW-HOW

24

SHAPE TOMORROW’S MANAGERS AND EMPLOYEES

For more information visit our website www.pecs.co.za

Leading advisors to leading companies


Cranefield

HR FUTURE 02.2010 ()

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36

COLLEGE of PROJECT and PROGRAMME MANAGEMENT STRATEGY-CENTRED LEADERSHIP and MANAGEMENT EXCELLENCE learning

ENROL NOW: New Programme starts each quarter in Midrand

Master’s Degree MComPM(Cranefield) NQF L9, 240 Credits

Postgraduate Diploma PostgradDipPM(Cranefield) NQF L8, 135 Credits

Advanced Diploma AdvDipPM(Cranefield) NQF L7, 150 Credits

CRANEFIELD COLLEGE OF PROJECT AND PROGRAMME MANAGEMENT OFFERS ITS ACADEMIC QUALIFICATIONS IN: MIDRAND, EAST LONDON, PORT ELIZABETH, CAPE TOWN AND BOTSWANA

TALENT 26

LONG VIEW Creative staffing can save a company

27

HEADHUNTING Chinese show interest in SA execs

Consult our website for details or contact: +27 (0) 12 807 3990 +27 (0) 12 807 5559 +27 (0) 82 373 4480

PERFORMANCE 28

PERSONAL MASTERY Five coaching hazards

www.cranefield.ac.za admin@cranefield.ac.za

IN THE BOARDROOM 32 FOR THE CEO’S DESK Executives motivated by meaning and significance

Main Campus: 234 Alexandra Ave, Midrand, Gauteng, South Africa

SKILLS 34

Programmes Offered Internationally (Also UK and other EU Countries)

NQF NAVIGATION More opportunity-driven businesses needed

Short Courses:

HR SECRETS 36

• Transformational Leadership

LEARNING Take the next step after blended learning

• Balanced Scorecard Strategy Implementation

LEGAL 38

BORDER CROSSING Another centralisation attempt

40

JUST IN CASE Can clients tell TES providers to fire staff?

• Transformation and Change Management • Project and Programme Management

PERSONAL OPINION 42

Programme Leader: Prof. Pieter Steyn

RATTLING THE CAGE My tax wishlist guide

44

ANTI-AGE ANALYSIS Exposing a secret killer (Part one)

46

NEXT GEN PARENTING Kids crave a dad’s touch KID-090820

MORE TO LIFE

Cranefield’s Project Management short course is available internationally through web-based multimedia distance learning. (See www.cranefield.ac.za homepage, and click on PM Short Course)

“Registered with the Department of Education as a private higher education institution under the Higher Education Act, 1997, Registration Certificate No. 2000/HE 07/010.”


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HR FUTURE 02.2010

CONTRIBUTORS

Meet some of our writers Here are some of the writers who have contributed to this issue’s high value content!

Dr Mark Bussin (Page 12)

Janine Lee (Page 12)

Peter Smanjak (Page 14)

Rob Bothma (Page 16)

Jabulani Ndhlovu (Page 17)

Otto Pretorius (Page 18)

James McKerrell (Page 20)

Taryn Haynes-Smart (Page 22)

Ruwayne Kock (Page 24)

Vicki Marais-Swanepoel (Page 26)


HR FUTURE 02.2010 ()

Dr Caren Scheepers (Page 28)

Bryan Hattingh (Page 32)

Marietta van Rooyen (Page 34)

David Creelman (Page 36)

Julian Pokroy (Page 38)

Carol Rudd (Page 40)

Yusuf Mahomedy (Page 42)

Dave Arthur (Page 44)


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HR FUTURE 02.2010

NEWS QUICKIES

THREE BOOK GIVEAWAY “THE RELATIONAL MANAGER – TRANSFORM YOUR WORKPLACE AND YOUR LIFE” BY MICHAEL SCHULTER AND DAVID JOHN LEE. Relational Manager proposes the concept that society is made up of a network of public and professional relationships. It suggests that if our relationships are dysfunctional, quality of life and organisational performance suffer. The book outlines an approach to policy making and management that will inspire all manner of leaders. This inspiring new approach is based on extensive research by an expert on relationships and supported by a wealth of statistics and case studies. Relationships are at the heart of all that we do and achieve, indeed our very identity. When relationships are neglected in a business context, the authors argue, they lead to poor health, ineffective management and low output at work. The authors focus on five key components of successful relationships and how these can be achieved: 1 Encounter (personal rather than impersonal contact is best);

2 Storyline (strength of the relationship over time); 3 Knowledge (how deeply is information shared); 4 Fairness (equal treatment and mutual respect); and 5 Alignment (sharing values, objectives and purpose). The book comes in paperback format, has 192 pages and retails for R185.95 including VAT.

WHAT THE EXPERTS SAY ‘The Relational Manager delivers what it promises – a clear, straightforward and pragmatic guide to the importance of relationships at work. It is sensible, well judged and should provide an invaluable guide for busy executives who sometimes forget this central part of their work.’ Rob Goffee, Professor of Organisational Behaviour, London Business School To be in line to win one of three copies of this book, courtesy of Pearson Education SA, email Courtney (courtney@hrfuture.net) with your contact details and the words “Relational Manager Giveaway” in the subject line. Closing date is 22 February 2010. Conditions apply.

LAST MONTH’S WINNERS The winners of the Better Green Business books which appeared in the January 2010 issue are: Lindi Kelly (NCT Forestry Co-operative Limited), Roche Houman (Express Employment Professionals) and Penny MilnerSmyth (South African Sugar Association).


SO THEY SAY

Time for action

Need ideas for your human strategy?

THIS YEAR IT’S TIME TO DO THE THINGS YOU’VE ALWAYS KNOWN YOU SHOULD DO.

Opportunities multiply as they are seized. Sun Tzu

I’m tired of dreaming. I’m into doing at the moment. It’s, like, let’s only have goals that we can go after. Bono

The way to get started is to quit talking and begin doing. Walt DIsney

Remember, a real decision is measured by the fact that you’ve taken new action. If there’s no action, you haven’t truly decided. Anthony Robbins

Action may not always bring happiness, but there is no happiness without action. Benjamin Disreali

BECOME A MEMBER OF HR FUTURE Get 12 monthly copies of HR Future delivered to your designated address. Have access to the members only section of the magazine’s web site (www.hrfuture.net) with a massive database of articles and back issues of the magazine (from Oct. 2005). Receive regular email alerts and updates. Enjoy discounts to HR Future Networking Breakfasts and other selected events.

Call Gabby on +27 11 888 8914 or e-mail gabby@hrfuture.net


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HR FUTURE 02.2010

INTERNATIONAL WATERS

Global Masterclass

Employer brand research shows key trends PROFILE Brett Minchington, MBA, is the Chairman/CEO of Employer Brand International and MD of Collective Learning Australia. He is considered one of the world’s leading authorities on employer branding and is active in 30 cities across 20 countries as part of his global tour. Brett is the author of ‘Your Employer Brand attract-engage-retain’ and his new book ‘Employer Brand Strategy’ will be published in 2010. Brett’s work has been featured in leading HR, marketing and management publications around the world including ‘the Economist’ and ‘Business Week.’

BrETT MINCHINGTON SHARES WITH ALAN HOSKING KEY OUTCOMES FROM A YEAR-LONG EMPLOYER BRANDING GLOBAL RESEARCH PROJECT.

h

HOW DO COMPANIES VIEW EMPLOYER BRANDING CURRENTLY?

The uptake in employer branding research, theory and practice has grown significantly over the past five years including

the past two following the Global Financial Crisis (GFC) where employer branding became a key priority of the leadership agenda. During times of economic growth, the focus of employer branding was on talent acquisition strategies. However, with the reduction in recruitment and headcount as a result of the GFC, companies shifted their focus to engagement and retention of the talent they already had. The economic downturn has actually been positive for the field of employer branding as companies are now seeing the benefits of applying a holistic approach to employer branding as a talent attraction, engagement and retention strategy.

WHAT WERE THE KEY OBJECTIVES OF THE RESEARCH? The key objectives of the research study were to understand the relationships and key linkages between the employer brand, corporate brand and consumer brand, and to develop a framework to guide best practice

in leveraging the brand portfolio to optimise the value of your intangible assets As part of the research project, we conducted face-face research forums in South Africa USA, Denmark and Australia with eight to 15 senior executive leaders from top companies from the regions. We also conducted one-on-one interviews with industry and corporate leaders around the world.

WHAT DID YOU FIND IS THE RELATIONSHIP BETWEEN THE EMPLOYER BRAND, CORPORATE BRAND AND CONSUMER BRAND? The relationship between the employer brand, corporate brand and consumer brand has been described as The Bermuda Triangle! I describe it as a relationship built upon focus, leadership and influence. Firstly, it is important to understand your company only has one brand and the corporate, consumer and employer brands are


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subsets which make up the brand portfolio. The total portfolio needs to be considered in organisational strategy as each subset can (and usually does) have an impact on the other. For example, a company which manages redundancies poorly and gains negative media attention will likely see an impact on their consumer brand as a groundswell builds for consumers to boycott their products as a result of the negative publicity. With today’s online communication tools and networks such as Twitter and Facebook, negative publicity can be circulated globally instantly! The damage to your reputation can take years to restore. Most companies have a different strategy for each subset of the brand. The marketing function is usually responsible for managing the corporate and consumer brand and HR is usually responsible for the employer brand, though this is changing (our global research published in 2009 found that 43% of HR departments are responsible for the employer brand vs 70%+ two years previously). The HR, Marketing and Communication functions need to work closely on the employer brand strategy to ensure they capitalise and leverage the capabilities of the ‘sum of the capabilities of different functions.’ The essence of your corporate and consumer brands should be reflected in the essence of your employer brand. The Ritz Carlton brand is about quality and service, and this must be reflected in both the customer and employee experience. If the hotel promises a superior customer experience and employees do not ‘buy in’ to the vision, the company will likely fall short on delivering the customer promise. Leaders need to inspire staff to deliver on the corporate and consumer brand promise. Sir Richard Branson, founder of Virgin does this best. It is clear when you interact with a Virgin

brand that the people who work there are aligned to the company’s brand values. Conceived in 1970, the Virgin Group has gone on to grow very successful businesses in sectors ranging from mobile telephony to transportation, travel, financial services, media, music and fitness by empowering employees to deliver on their brand values of value for money, quality, innovation, fun and a sense of competitive challenge. Branson’s trademark is outlandish publicity stunts. He will do almost anything to promote the Virgin brand: drive a tank down Fifth Avenue in New York to introduce Virgin Cola to the United States, risk his life in high-profile hotair balloon adventures or abseil down the side of a hotel whilst throwing out free airline tickets to watchers below. Whilst you may not see the CEO of Goldman Sachs abseiling down the side of a hotel, Branson gets away with it as he is merely bringing to life its brand values. The employer brand can influence the corporate and consumer brands. Sodexo, a global food services group has received enormous media exposure over the past couple of years as a result of its effective use of social media recruiting. As a result, the Sodexo corporate brand has achieved a much higher level of awareness that would have been possible through a paid advertising campaign. Sodexo are the world’s best-in-class at sharing stories about the employment experience as seen through the eyes of their employees and has engaged and built global communities and relationships with potential candidates and raised awareness of their products and services amongst consumers around the world. Customers are often prospective employees or may be a referral source for talent, so there needs to be consistency in messaging across the brand portfolio. Sometimes a different message is required for your corporate

brand vs your employer brand. For example, a bank many not want to project to clients that it is a funky, cool and a fun place to work. However, it may wish to project itself as a friendly and fun place to work to passive and active candidates, especially if it wants to recruit a diverse workforce and younger generation.

WHAT ARE THE CHALLENGES FOR HR MANAGERS IN ADDING VALUE TO THE BRAND PORTFOLIO? The key challenges include: < The ability for HR managers to break down the tradition of marketing being responsible for managing the corporate and consumer brands and HR being responsible for the employer brand. I suggest HR initiate the conversations with Marketing/ Communications to get started; < An inability to demonstrate a viable business case which results in a lack of resources available to invest in aligning the brand portfolio with corporate objectives. There may also be a lack of expertise and influence in HR/ Marketing and Communication functions to drive the alignment. This is where executives need to step in and support the agenda; < Establishing if the company’s leadership has an employer brand mindset or if they only see employees as functional ‘human capital’ in the same way as other tangible assets such as plant and equipment; and < Clarifying who owns the strategy and how it aligns with the corporate strategy, objectives and values. It actually doesn’t matter who owns the strategy. The key is to ensure collaboration, communication and commitment between the functions responsible for managing the strategy. (HRf)

Brett Minchington, MBA, will be live and in person in Johannesburg to chair the 2010 South African Employer Branding Summit on 23 March 2010. For more information, visit www.collectivelearningaustralia.com.


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ASSET-BASED HR

Hot button

New performance appraisal PART ONE

THIS SERIES OF ARTICLES DEMYSTIFIES PERFORMANCE APPRAISALS. DR MARK BUSSIN AND JANINE LEE

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Doing performance appraisals generally strikes fear in the hearts of many line managers. Often they are only done to comply with HR regulations. Is there an alternative? In this article, we discuss the possibilities. Acknowledgement goes to our own performance management guru, Professor Freddie Crous. “So much of what we call management consists in making it difficult for people to work” Peter Drucker “It seems quite probable, as we continue to question our current practices; the most systems of performance appraisals...will be unmasked as detrimental to human spirit” Dick Richards “Detailed studies of performance

appraisals show that at their best they are often wildly inconsistent and damaging to the loyalty and commitments that help people do their best” Jay Matthews “Modern management has stolen and smothered intrinsic motivation and dignity. It has removed joy in work and learning. We must give back to people intrinsic motivation; for innovation, for improvement, for joy in work for joy in learning. The need is to make a person only responsible to him/herself” Henry Neave “Do you know during what time of the year our sick leave applications spike? During the two weeks set aside for performance appraisals.” HR Director of a South African company employing over 20 000 people. Is there a new way we can conduct performance appraisals and make them enjoyable for both the employee and the rater? This article will discuss the way we have been doing and currently conducting performance appraisals within our companies, and a new approach to conduct performance appraisals to make them more enjoyable for both the employee and the rater.

CURRENT PROCESS OF PERFORMANCE APPRAISALS According to Verweire and Van den Berghe, “the ultimate goal of performance management is to achieve sustainable organisational performance and that the important aspects of performance management are setting performance goals,

developing strategies, and translating them into concrete guidelines for action”. The importance of performance management is that it supports the overall business goals by linking the objectives of individual employees to the overall mission of their work units. The objectives of performance management include motivating employees, developing their skills, determining who should be promoted, rewarding superior performance, training and or eliminating poor performers, and helping implement business strategies. The significance of performance management is to establish an organisational culture in which the individual employees and groups within the organisation take responsibility for the continuous improvement of their performance for the achievement of the organisational goals.

WHAT IS A PERFORMANCE APPRAISAL? Performance appraisal is about ascertaining the value of a person’s work performance by assessing an employee’s strength and developmental needs using different measurements and evaluation methods. The key in performance analysis is the identification of the gap between desired and actual performance. This will provide clarity on the expected performance goals and the current situation to enable monitoring of progress. Performance appraisal is a process of identifying, observing, measuring and developing human performance in organisations. Identification refers to the process of determining the

Dr Mark Bussin is the Executive Chairperson of 21st Century Pay Solutions Group (www.21century.co.za) and Janine Lee is a masters student in HRM doing work for the company.


HR FUTURE 02.2010 (13)

aspects, which are performance related, to focus on the appraisal process. Observation refers to all performance aspects, which are directly and sufficiently observable, to ensure fair and accurate judgments. A manager or supervisor is expected to document relevant factors that would be used for evaluation. The measurement means that all performance aspects that have been identified and observed are evaluated. Development refers to the improvement of future performance.

IMPORTANCE OF PERFORMANCE APPRAISALS Employee performance appraisal has several purposes, the most obvious being to furnish information about the employee’s performance. Performance appraisal purposes include reward, discipline, coaching, counselling, negotiating improvements in performance, improving the work environment, raising morale, clarifying expectations and duties, improving communication, reinforcing management control, identifying development opportunities, and improving perceptions of organisational goals. Before 1960, performance evaluations were designed primarily as tools for an organisation to use to control employees. Past performance was used to guide or justify management’s actions in dealing with the employee. Performance appraisal provided the basis for the salary and retention, discipline and promotion decisions. In the 1960s, the purpose of performance appraisal broadened to include development of an individual, organisational planning and improving the quality of an employee’s work life. Management were now using performance appraisal to try to increase employees’ productivity, effectiveness, efficiency, and satisfaction. Performance appraisal provided a basis for development of employee skills, career planning, and motivation through effective coaching and information exchange between appraiser and appraisee. Though these purposes can be viewed on a historical timeline, it must be emphasised that performance appraisal currently exists in organisations for one or more of the administrative, developmental, or legal purposes. (HRf)


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HR FUTURE 02.2010

ASSET-BASED HR INTERVENTION DECISIONS

Focus on risk management CALCULATED RISK IS AN INTEGRAL PART OF BUSINESS SUCCESS. PETER SMANJAK

r

Risk management is an important aspect in business today. Executives, management and employees are required to equip themselves with knowledge and understanding of this important function. As individuals we are exposed to risk daily, at work and in our private lives, and often subconsciously manage it in some form. The problem with this is that many take the same approach to business where the impact is far greater. Business executives and staff need to ensure that this paradigm is changed from a passive and reactive framework to one that actively delivers results in business. Risk to business can take various forms, for example financial risk, risk to projects, risk to the services we deliver, risk to the public or specific stakeholders, risks from missed opportunities or from policy failures, and risk to reputation. Should each materialise, risk can affect performance, stakeholders, customers

and members of the public. Executives and employees need a clear understanding of how risk should be managed. Doing this properly is central to planning to succeed and avoiding failure, to meeting the goals, key objectives and targets, to creating confidence in a watchful public, and to meeting the demands of good corporate governance. It will also aid your business to learn the value of appropriate risk-taking and benefit from innovation within business, promoted through a â&#x20AC;&#x2DC;no blameâ&#x20AC;&#x2122; culture. Organisations need to ensure that the necessary key components of a risk management framework are in place. These components include organisational issues such as strategy, structure, people, skills, and so on, and technological issues such as systems, communication infrastructure, data warehouses, data mining and risk management tools. These components along with the risk management process components are important to bringing to success an integrated risk management strategy. It is important that an effective strategy for managing operational risk requires an organisation to adopt a systematic and logical enterprise-wide approach. It requires the synthesis of staff skills and expertise, processes, organisational culture and structure and the technological infrastructure. The 2008 Global Insurance Industry ERM Survey Report conducted by Towers Perrin demonstrated that while major losses often emerge as market, credit or insurance risk events,

Peter Smanjak is the CEO of management consulting practice Infinite Risk.

in many cases, operational risk is a key component of the underlying causes. Nevertheless, the survey along with many other surveys shows that companies continue to struggle with operational risk. Globally, only 7% of participants believe they have an appropriate operational risk management capability in place, and 37% indicate that significant work is required in this area. Operational risk management ranks only seventh among 2008 and 2009 Enterprise Risk Management priorities, mentioned by 41% of respondents globally. Placing controls around operational risk taking also appears to be proving problematic. Of those companies that have set limits to govern day-to-day risk taking, over 70% now have limits for market, credit and insurance risk, but only 26% have limits for operational risk. In part, this may relate to the difficulty companies have in quantifying operational risk. The wide range of risks and the lack of immediately available data often require techniques quite different from those used for other risks. Itâ&#x20AC;&#x2122;s believed that the recent wave of losses in the financial services industry is resulting in a reassessment of the role of operational risk and the need for its active management. It is important to understand why risks must be managed. Valsamakis et al (2004:7-9) identify the following criteria in the management of risk: < Cost-beneficial: Any steps taken to


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< <

reduce risks must be cost beneficial; Risk aversion: People try to reduce risks when taking decisions, even if these actions are not costbeneficial; Policy-based decisions: Risks are sometimes managed on the basis of policy, for example an employee safety programme that is developed according to a National Occupational Safety Association programme which is a policybased decision arising from the organisation’s concern about occupational injuries; and < Reasons of legality: Certain risks (for example fire risk) make the implementation of risk safety measures a legal requirement. These measures are usually put in place according to accepted codes of practice. In emphasising the importance of understanding the term “risk management”, Taylor (1983:220) made the following statement: “We clearly cannot eliminate risk, but we can manage it.” There is no universally agreed upon definition of the term “risk management”; however writers describe it as a reference to the complete set of policies and procedures which organisations have in place with a view to managing, monitoring and controlling their exposure to risk. It is evident that risk management entails the control of risks facing an organisation and minimising the potential adverse effects of risk. The focus of risk management, however, is dependent on and will change according to the nature of an organisation’s business. It is clear that risk revolves around uncertainty, uncertainty that may result in loss to an organisation. Many organisations have to take risks in order to achieve their business objectives; however, it is important that they ensure that these are calculated risks that do not jeopardise the organisation’s existence. (HRf)


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HR FUTURE 02.2010

TECHNOLOGY UPGRADE word of mouse

HR can take control GET YOUR CHANGE MANAGEMENT RIGHT WHEN INTRODUCING SELF-SERVICE TECHNOLOGY. ROB BOTHMA

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One of the up sides of the recession we went through during 2009 was that it created an environment where organisations were forced to intensify their focus around all the HR issues regarding the management of their people. True management of people covers everything from the inception of a recruitment campaign to the termination of employment of the individual, and each of these elements needs to be analysed for maximum efficiency and cost effectiveness. As HR professionals have traditionally been seen as those solely responsible for all the tasks that lie within the employee’s life cycle, an opportunity has also arisen to move line management HR functions back to line, in other words, to where they logically belong. Today, with new and exciting technologies available, such as employee and manager self-service and browser-based applications, this responsibility could now be easily moved down the relevant levels within the organisation. Implementing self-service technologies would instil a totally new culture within the organisation when speaking about employee related data. HR would now become the custodian of data, and both line managers and employees would assume responsibility and ownership of their data, thereby ensuring a far greater accuracy of the data, as it

could be controlled at source. This move certainly supports the thrust from the HR team around the changing role of the HR department, in other words from being too administrative to becoming more strategic. In order for HR to start implementing any changes in their role, there would need to be a complete change of focus in their activities. A move needs to be made from their activities being administratively focused to their activities centring on core aspects in the business. HR therefore needs to: < < < < < <

align the HR strategy with the organisation’s business strategy; start fulfilling a more overall strategic role within the organisation; create a new focus on people management through talent management; become internal HR consultants within the organisation; manage the huge change that will happen within the organisation; and ensure that their systems and processes are in line with current technology and business requirements.

In order to have the time and resources to address these issues, HR needs to rid itself of the burden of being the administrator in the organisation. It has been around this topic (less admin and more strategic work) that most HR practitioners have agreed. Unfortunately, administration will never disappear; it needs to be moved to where it belongs within the organisation (at line management level or at employee level). A number of years ago it was a dream to have an HR system where an employee could sign on, request information or initiate a transaction (a leave application form or data update), and then have that transaction moved

through the layers in the organisation. To get this to work correctly, the decision-making process would have to have been based on factors such as the organisation chart, relevant job grades and reporting structures. During this entire process, the employee and all relevant parties would need to be communicated with, via the software, to ensure each person knew where their transactions were, who the next “authoriser” was in the process and also the current status of any transaction. The good news is that, by utilising self-service technology combined with a workflow engine to manage and control the business processes, and SMS and emails to facilitate communications, this is now achievable for organisations. With many software solutions now available, organisations need to understand that the challenge now resides in the organisation’s ability to adapt to change. If all employees are not educated on the benefits of using a self-service model, then you will end up with running duplicate systems, viz. manual and automated. The major challenge faced in adapting to this change centres around the fact that the focus in implementing self-service technology revolves around change management throughout the entire organisation as this technology affects not only the HR team but the entire workforce. In summary, although technology can now provide us with touch screen, self-service terminals that will communicate directly with employees, organisations must ensure that the implementation project is carefully planned with all the stakeholders’ buyin, to ensure success. Once this has been achieved, HR practitioners will be able to focus on their strategic role in their organisations, and avert any further threat around the definition of their role and their worth in the organisation. (HRf)

Rob Bothma is a Divisional Manager at Q Data DynamiQue, the e‑HR specialist within Business Connexion (www.bcx.co.za).


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TECHNOLOGY UPGRADE

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Software piracy can take you out IT’S BEST TO KEEP IT REAL WHEN PURCHASING SOFTWARE. JABULANI NDHLOVU

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South African businesses and consumers need to know the truth: piracy of software, music and branded goods is not just a mere nuisance or a matter of petty theft. It’s sophisticated and sinister, with serious criminal networks engaged in this activity. There is clear evidence that piracy of games, software and music is on the increase in South Africa. Law enforcement agencies that we work with suspect that many international crime organisations are now involved in counterfeiting to some degree – which effectively means that people who buy pirated goods are funding organised crime. They often do this unwittingly. The victims of piracy are frequently innocent purchasers of counterfeit software who buy software online or from a local reseller – and expose themselves to the damage that fake software, riddled with malicious code, viruses and spyware, can inflict upon their computers and their confidential data. This is no scare tactic. Each year, thousands of businesses and ordinary computer users come to us with stories about how they’ve been harmed by software piracy. In the past two

years alone, the number of complaints has doubled to more than 150,000, with people all over the world contacting us to report that they’ve become victims of counterfeit software and to express their concerns and frustrations. These consumer reports vary -- sometimes they’ve just paid for a product that doesn’t work. Other reported problems include more serious issues, such as viruses, spyware, malware, the loss of private data and identity theft. And these problems are striking those that are most vulnerable -- individuals, and small-to-mediumsized businesses that are losing valuable time and money. Counterfeit software doesn’t just come to market through sales of DVDs at robots, markets or stores. The Internet is emerging as a major avenue of trade for fake goods, with auction sites particularly useful for counterfeiters. Through these sites, people not only find themselves without the software they thought they were paying for, they are unable to source a refund from the dealer, and often need to purchase a genuine product again. One Johannesburg-based smallbusiness owner, Pieter Swanepoel, contracted a virus on his PC after buying a counterfeit copy of Microsoft Office Professional through a local online auction site. He relies heavily on his computer to run his small business, and says he was lucky to recognise that his PC had been infected before it caused considerable damage. “I was looking for software for my business, and wanted to save some money. After buying and trying to install the software, it turned out I had been sold a high quality counterfeit package,” he said. In 2006, a seminal study was conducted of the risks of counterfeit

Jabulani Ndhlovu is the HR Director at Microsoft SA (www.microsoft.co.za).

software. Investigators around the world purchased counterfeit versions of software in 17 different countries, and specialists in software code and forensic analysis inspected the code in all of them. More than 50% of them contained phoney code, had malware, or could not even be installed. And that was three years ago, before the generally acknowledged increase in cyber attacks took hold around the world. Today, it is all too common for software pirates to tamper with genuine code. Think about it - why wouldn’t a criminal syndicate that manufactures counterfeit software merely add a few lines of malicious code to compromise the security of your computer and victimise you a second time by stealing your identity or personal information? Worse yet, today’s counterfeiters are often large criminal syndicates that don’t stop at distributing hundreds of copies of unlicensed software. Many software pirates are likely to create Botnets, which are armies of compromised computers controlled by cybercriminals and used to perform a host of illegal Internet activities, according to Markus Schweitzer of Media Surveillance. In just one recent example, software pirates helped create a Botnet army by offering a phony version of Windows, rife with malicious code, which compromised PCs and then ordered them to connect to a server controlled by cyber-criminals. It’s a war zone out there. Make sure you’re enjoying the best protection possible – and staying on the right side of the law – by sticking to the genuine article. As it is said in a series of beer ads on TV right now: “Keep it real!”(HRf)


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HR FUTURE 02.2010

ON THE COVER

COVER STORY

NO HR PEOPLE ALLOWED BEFORE YOU COMPLAIN ABOUT NO RECOGNITION FOR HR, MAKE SURE YOU’RE DOING WHAT COUNTS IN THE EYES OF OTHERS. OTTO PRETORIUS

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In all my years as an HR practitioner I have never seen a boardroom door with a sign that says, “No HR People Allowed”. Yet, whenever I attend conferences or speak to HR people, I would assume such a sign is commonplace for they continue to harp on the same old issues:

< < < <

“The business does not listen to me”; “Managers do as they like with regard to HR”; “I am excluded from important meetings”; “I am sucked into an admin and transactional-reactive rat race”; and

< “I studied for many years and look where I find myself! When will our profession be recognised?” When we analyse these statements we come across some hard truths, like management believing that their cherished “People Focus for Business” exists in name only because senior HR people have failed to translate the strategic process to achieve this. Like HR people building their own HR ivory towers and paying scant attention to the real inner workings of the business. And, especially, widespread ignorance of the existence and utility of enterprise-wide HRM systems such as Oracle/PeopleSoft, SAP and others. HR specialists generally describe

themselves to line managers as either consultants or business partners who deal with people-related issues. The status of “partner” is by no means a simple one. It requires the HR professional to have a clear and broad understanding of the business to be able to converse with line management in their language, rather than HR-speak. That means hearing what people have to say. Soon after your appointment as an HR Business Partner, you should know how the business makes its money, what the future strategy is, how the business processes integrate and what work needs to be done in the organisation to meet its strategic intent. Only then should you ask line

Otto Pretorius is CEO and a founding member of business alignment consultancy Q-bit (www.qbit.co.za).


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management about the people issues they experience from day-to-day. You should also talk to the employees – get to know how they feel about the organisation, their work and their engagement in the business. Above all, never forget to ask: “What do you need me to pay attention to?”

“RIGHT” THINKING Naïvely, I always believe that people will do the right thing; that is, until the opposite becomes evident. People respond from within their own frame of reference as well as what they believe to be the truth or by selecting what they believe is the best choice. So what is the context within which line managers base their decisions? Well, unless they have been trained to understand and practise the fundamentals of management and leadership, they only have their own life experiences to draw from. It’s a truism that managers will always do what they think is right. So help them to think along the “right” lines, give them a little insight into people management principles; actually encourage meaningful dialogue about people issues and – especially – emphasise the importance of a solidly-based people strategy. So what people tools are available to the HR practitioner? Are we encouraging enough conversations about people issues or are we confusing “people talk” with “HR speak”? Do we truly understand our role as HR professionals in business, apart from carrying an ostentatious title such as Business Partner? Most businesses and HR practitioners are making a mistake by glibly stating: “People are the heart of our business,” or allowing executives to say so as a matter-of-fact. If you do not understand what it actually means then, quite frankly, don’t use it. Employees will know when “talk” is nothing more than just “talk” – even more so when uttered by an HR practitioner. If the business itself does not have the basic people management practices in place, this statement will become a joke.

PEOPLE MANAGEMENT PRACTICES We often talk about basic people management practices, but do HR practitioners actually clearly understand what the term means? Here is a brief primer: People are employed to do work. This is simple and clear enough. Work gets judged by the output delivered and performance levels achieved. Output is enabled by competence and reward is the pay-off. This can be seen as the basic fundamental requirement of a people practice in business. The business must determine very clearly: < < < < < < < < 

what work has to be done; how the business will contract and judge individual performance; the levels of competence required to do the work at the level of the required performance; whether the appropriate resources such as the correct work tools, information and a productive general work environment are in place; whether the building of supportive relationships amongst colleagues and management form part of the culture; how the building of flexible and affordable reward methods can help the business to achieve fairness in their people management and reward practices and not a one-sided relationship; possible advancement and development opportunities for employees in current and new roles that exist in the business; and that they are prepared to part with an employee who can make a better contribution elsewhere when they have outgrown the business.

If people are truly at the heart of a business, their people practices will reflect these fundamental principles. These fundamentals must become the basis of the general people conversations in such a business. Why do we find that conversations around financial issues are good and people talk is dismissed as just ‘HR speak’? Managing decisions on human capital investments imply making

the right choices at the right time regarding people-spend – determining the probability of financial loss or financial return. Line managers need an information-rich environment to make better and informed decisions – the ‘right’ ones. It is the ‘cut-abovethe-rest’ HR practitioner who will build these bridges of understanding and lead our business managers to think along the ‘right lines’.

HR VALUE CHAIN The HR value chain is not about recruitment, or performance management or employee upliftment. Rather, it is all about the development of appropriate HR practices, which ultimately comes down to practice management, effective process delivery and utilising technology to enable it. It also means consistently producing trustworthy information to enable management to make the right decisions within the right context. It especially means HR people using such information to consult to the business, thus adding real value. The kind of questions an enlightened HR practitioner should be asking spans the basic understanding of work and structural design, performance measurement, salary and incentive decisions, competency gaps and related development decisions, succession planning and talent management – all within a business strategic and planning context. Because all transactional practices function on the foundation of work and structural design, asking these questions correctly, and then implementing practices on each, will do more than buy that person a day ticket to the Exco -- it will virtually guarantee a permanent seat. It is no longer an excuse for an HR person not to have a comprehensive HR value chain in place, not to be busy implementing sound people practices and not to have instantly available information on each and every employee. If that’s not the case, then HR can easily be outsourced and management would not be any the wiser! (HRf)


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UPDATE YOUR TAX INFO FOR AFRICA CHANGES IN TAX ARE AFOOT AS AFRICA’S COMMERCIAL POTENTIAL RISES. JAMES MCKERRELL


FEATURE

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The extent to which companies doing business in Africa have complied with information archiving, retrieval and management, to meet statutory and governance requirements will become more apparent as the continent measures the impact of a more mature tax system. As African markets grow, there is more opportunity for business to engage a broader marketplace, take advantage of higher levels of commercial interest and general investment (both domestically and internationally) in manpower and product. With this increasing level of cross-border business-to-business and business-to-consumer activity, it is logical to assume that tax systems will evolve to meet demands and regulate economies. One of the main changes, we believe, that will characterise markets in Africa is that there will always be a need for greater and more enhanced tax collection structures. The fundamental business principle going forward is that companies should expect that governments, statutory bodies and tax authorities will make changes to their requirements on an ongoing basis. The onus is on the company or their appointed service provider to obtain, understand and apply these changes timeously and ensure that they remain compliant. One of the biggest challenges facing service providers of human resources and payroll solutions including tax consultancy, when assisting clients with their administration and employment of staff in African countries, is obtaining updated statutory information and of course ensuring compliance and governance. This is where service providers can make a meaningful difference. Companies have the option to engage with expert service providers on different levels to ensure compliance and effective tax management. As is the norm (and what should be

ON THE COVER

“African countries have differing tax laws and requirements, and South Africa is arguably the most advanced in terms of tax revenue collection and processes.” understood by all parties) is that criteria for selection of a service provider must include track record, level of expertise and knowledge of the countries in which they operate. African countries have differing tax laws and requirements, and South Africa is arguably the most advanced in terms of tax revenue collection and processes. As more and more countries in Africa mature, they too will look for methodologies to improve the collection process and offer a service to the taxpayer.

CASE FOR SOUTH AFRICANS ABROAD Organisations continue to battle with the challenges associated with crossborder taxation. When appointing expats in Africa, it is essential to find a solution that allows flexibility around these appointments and for the complexities around compliance. It is important to consider and fully understand the position of South African citizens living abroad. It is advisable for South Africans working abroad to ascertain whether they are still regarded as a tax resident in South Africa. If this is the case, they are obliged to disclose their worldwide income in their South African individual tax

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return. It is important to note that exemptions and deductions may be claimed against the income derived outside of the country. Should they not be classified as a tax resident, it is only necessary for them to disclose the South African source of their income on their individual income tax return. The reason for this is to account for interest from a local bank account and/or income from a property being rented out. If they have no locally sourced income, it is possible to deregister from South African tax. Of course with any developing scenario in business, there are various approaches that can be adopted and each will have consequences. It would be prudent for decision makers to consider the focus of the business, requirements, availability of resources and short and long-term objectives prior to making a final decision on approach. This unfolding scenario calls for a deliberate and focused approach that will require resources, most significantly that of time, manpower and a healthy dose of commitment. At this phase of local market response to worldwide economic pressure, the required attention to detail on tax and tax-related issues is substantial and constant. The challenge for operators of all sizes and nature is to be mindful of this anticipated pressure and impact on resources. Those who do not have sufficient resources must find ways to work smarter, apply tighter control, patch up/reinforce weak areas and bolster those that have proven their worth. It is, quite clearly, a case of ‘prevention is better than cure’. The view and perception of Africa as an area of solid commercial investment continues to change. Traditionally, the continent has generally been limited to large scale, major enterprise. Today, as more businesses gain access to next generation technology, broaden their sphere of influence and review their strategies, the implication of evolving tax systems will certainly influence success and growth going forward. (HRf)

James McKerrell is the Chief Executive of HR and Payroll Software and Solutions Company CRS Technologies (www.crs.co.za).


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HR FUTURE 02.2010

ON THE COVER

feature

NURTURE CRITICAL SKILLS AND KNOW-HOW SEEK A DEEPER LEVEL OF ORGANISATIONAL AND INDIVIDUAL CAPABILITY. TARYN HAYNES-SMART

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‘An organisation’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage.’ Jack Welch

If competitive advantage is about learning and action, the key to building sustainable competitive advantage must then be in our ability to select the right strategy to develop our organisational and individual capability. The resource-based view suggests organisational capability is essentially shaped by a combination of resources, therefore making sure the best ingredients are available is critical to the success of the recipe. This is certainly far easier said than done, as access to resources and knowledge of those at our disposal, is frequently imperfect. And changes to this combination of resources while essential to keep ahead introduce an additional level of complexity to an already complex environment. There is no conclusive solution to the question of how organisations can maintain competitive advantage especially during times of rapid change and increasing complexity as the context of the organisation often dictates what is both appropriate and achievable. Differing approaches range from cutting costs and doing what has always been done to focusing on the development of new core competencies. Cutting costs will no doubt lead to a leaner, more efficient cost base

(something companies may need to do from time to time to kick-start change) but on its own it is unlikely to secure significant competitive advantage as businesses everywhere reduce spending in tough times and rigorous reduction exercises inevitably reduce access to new competencies. Equally doing what one has always done, in line with the old adage, at the most gets you what you’ve always got and more likely even less as competition for market share intensifies. As competitive advantage today is shortlived, maintaining or securing a lead on other players is likely to rest in discovering opportunities to develop new core competencies or capabilities to captivate your market. Whether an organisation or individual, core competence comes from the way in which our resources are combined. In people, these resources relate to skills, know-how and motivation levels which serve as critical inputs in this process. Skills and know-how include the occupational skills built up from formal qualifications and working experience such as engineering or finance as well as the softer skills critical for interacting with the workplace. While the term ‘soft skills’ has been around for quite some time, on the surface it does little justice to the nature of the skills and abilities categorised as such. Some useful definitions providing more clarity on this question are:

Taryn Haynes-Smart is a Key Accountant Manager at ICG Corporate (www.icgcorporate.co.za).

< Soft skills is a sociological term for a person’s “EQ” (Emotional Intelligence Quotient), which refers to the cluster of personality traits, social graces, communication, language, personal habits, friendliness, and optimism that characterise relationships with other people (Source: en.wikipedia. org/wiki/Soft_skills) < A set of skills that influences how we interact with each other. It includes such abilities as effective communication, creativity, analytical thinking, diplomacy, flexibility, change-readiness, and problem solving, leadership, team building, and listening skills. (Source: www.af.mil/library/nsps-af/ nspscomingtoterms.asp) < Personal management skills such as attitudes and behaviours that drive ones potential for growth and team work skills. (Source: www.northernopportunities.bc.ca/glossary. html)

< Business skills such as communication and presentation, leadership and management, human resources, sales and marketing, professional development, project and time management, customer service, team building, administration, accounting and finance, purchasing, and personal development.


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(Source: www.syberworks.com/glossary/s/ s2.htm) While formal qualifications are essential for the foundation and knowledge they provide, technically or functionally educated individuals equally need to be mentally agile, aware and adept in the ‘softer’ skills to be successful. But soft skills are often assumed to be easy to acquire and to come with the territory. Formal qualifications, however, cannot be expected to fully develop the soft areas as well and while learning and working experiences provide opportunities to develop over time, without focused training and development plans, these skills are often underdeveloped. Hoping these skills develop within the workforce naturally is a bit like hoping you win the lotto. You may get lucky but there are better, more reliable ways to make a million. The catch is that they require conscious effort and investment, but in the end the investment (and the journey) will be

well worth it. Developing essential soft skills provides an opportunity for both personal and professional development preparing an individual for present and future states in and outside of the workplace. While not necessarily credit-bearing, the benefits of soft skills training are more than the piece of paper declaring competence; every area of a person’s life cannot help but be impacted leading to holistically enriched lives. Not surprising when you consider that impact of workplace stress on the home and vice versa. Considering the importance of the importance of these soft skills in the work environment, the question is whether we are paying enough attention to the development of essential soft skills. Too often training is scheduled as a result of individual problems rather than holistic development plans. Our ability to master these ‘softer’ skills in many instances helps develop powerful resource combinations leading not only to more competitive businesses

(and people) but also great places to work, especially when we work and grow together. Part of getting this right might need to start with reframing soft skills as professional enrichment programmes. By investing in professional enrichment by improving existing skills and develop new ones can therefore only lead to improved competitive advantage as well as other significant benefits including: < < < < <

the transformation of attitudes and perceptions; encouraging further knowledge acquisition; increased levels of motivation; others are influenced and inspired by the change they see and experience; and increased ability to deal with the pressures of change.

Individuals and organisations would do well to nurture the growth of such critical skills and know-how at all levels within their organisation. (HRf)


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HR FUTURE 02.2010

ON THE COVER

feature

SHAPE TOMORROW’S MANAGERS AND EMPLOYEES USE EMPLOYEE ENGAGEMENT TO SHAPE YOUR ORGANISATION FOR THE CHALLENGES OF TOMORROW. RUWAYNE KOCK

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Economists and clairvoyants are predicting a slow economic recovery. This means that individual managers would need to work harder to improve performance and retain key talent. These are two vital factors impacting on a company’s ability to weather economic storms as well as to outperform their competitors in the current trading conditions. Employee engagement has, in recent years, emerged as an important performance improvement and retention strategy. Employee engagement is defined as a psychological state within which an employee connects and identifies with the personal, job and organisational dimensions of their work. Employee engagement does not refer to states of the climate that are usually ascribed to environmental factors but focuses predominantly on the relationship between the person, organisation and their jobs. Interestingly, research we conducted in 2009 into employee engagement in South Africa found seven factors which influence employee engagement. Meaningfulness topped the list, followed by resourcefulness and self-awareness. This was followed by teamwork and co-workers, the organisation, job identity fit and supervisor relations. On the one hand, the research highlighted that employees in South Africa are more engaged than their

global counterparts. The Towers Perrin Global Workforce Report (2008) reported that 62% of almost 90,000 respondents worldwide were engaged or enrolled, and 38% were disengaged or disenchanted. In South Africa, 76% of 767 respondents were fully engaged, 23% were undecided and disengaged (that is, 13% were undecided and 11% disengaged). On the other hand, there were differences in ‘intention to stay’ depending on how people viewed their current career status. The research showed that just under half (47%) of the respondents stated they were ready for a new job at a new level and 17% said they were ready for a new job at the same level. Those who perceived themselves to be ‘growing in their current job’ had the highest intention to stay and those who perceived themselves to ‘need a bigger job at a new level’ had the lowest intention to stay.

WHAT DOES THIS TEACH US ABOUT MANAGING EMPLOYEES IN THESE ECONOMIC TIMES? The research aptly illustrated that employees seek a shift from an organisational-focused to a more individual-based management approach. The latter resembles Gary Hamel and renegades’ management innovation, called management 2.0. This means moving away from the traditional Industrial Age to individually based management paradigm. Acknowledging this allows

for the development of a framework for managers and organisations to engage and manage people in a more humane way. This framework focuses more on the personal meaningfulness of work than merely on job and organisational connectedness. Our research shows that South African managers need to positively influence the extent to which employees connect to their jobs and the organisation. This engagement has been positively related to productivity as engaged employees perform better which will in turn assist the company to recover from the economic crisis. Engaged employees are more likely to remain with their companies, ensuring it has the skills and experience to capitalise on the inevitable upturn.

MANAGERS OF TOMORROW Our research shows that the managers of tomorrow need to change the way they manage their people towards an empowering relationship that facilitates the creation of meaningful, challenging work which tests people’s resourcefulness. Managers have a key role to play in retaining valued employees as, with an upturn in the economy, those employees with a strong sense of resourcefulness will look for more meaningful employment outside of their organisations. To design meaningful work, managers need to establish a strong link between organisational strategic priorities and individual performance goals.

Ruwayne Kock is a registered Industrial Psychologist and the head of the consulting service line at The Human Resource Practice (www.hrpractice.co.za).


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The cascading of performance goals is necessary to ensure that there is alignment from the top through to the bottom. This cascading process means organisations are able to follow the flow of how work is delegated down the organisational structure: the subordinate’s goals must support the supervisor/manager/team leader’s goals. Conversations (including performance and career) are critical to engage employees across the different levels. Line managers often lack these critical conversational skills to conduct these discussions effectively.

EMPLOYEES OF TOMORROW Respondents who frequently thought of quitting were mainly Africans under 30, graduates, people at lower job levels or with up to 10 years experience or ready for new job challenges at the next level. This profile poses a risk to employers’ transformation and business continuity in terms of the labour market availability of mission-critical competence and experience. This may mean that young and

particularly Black employees are not finding a home in our draconian style organisations of the Industrial Age of command and control. The Internet generation have a new set of rules on hierarchy, contributions, leadership, work, teams, power, reward and conformity (i.e. hackers). Based on our research and experience, the following seven tactics to engage young graduates in organisations were identified: 1 Develop a meaningful, structured development programme that will challenge these graduate recruits at emotional, intellectual and physical levels; 2 Build personal change resilience to assist graduate recruits to cope in today’s complex organisational environment and resourcefulness to provide the recruits with the confidence and initiative to perform in these difficult times; 3 Conduct career conversations with graduate recruits to establish aspirations and possible career paths; 4 Assign both mentor and coach

to each graduate or group of graduate recruits. The coach needs to be responsible for functional (job) development aspect and executive mentor for personal and organisational aspects of their careers; 5 Build capacity with these line managers on how they should manage these young recruits – as described above; 6 Involve graduate recruits in select senior management conferences, events and projects to provide exposure to the “way thing are done” – organisational culture; and 7 Monitor progress and provide regular feedback to graduate recruits. Employee engagement is critical to create the organisation of tomorrow. The employee engagement factors and our validated instrument can be applied to assess the degree of connectedness among employees to their jobs and the organisation. The results can provide a useful guide to identifying measures for improving performance and retaining key competencies. (HRf)


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TALENT

LONG VIEW

Creative staffing can save a company RETRENCHMENT IS NOT THE ONLY OPTION TO REDUCE STAFF COSTS. vicki marais-swanepoel

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During times of economic hardship, the Manpower Bill is often the first area, where companies seek to “cut back”. Although unavoidable sometimes, retrenchments should always be viewed as the last resort, and a strategy that is deployed only when all other avenues have been exhausted. Recognising that retrenchment not only impacts on the individual, but also on the extended family and even on communities, employers should always try to find alternative solutions in consultation with their employees. Work sharing, which has its origins in the Great Depression, is one such option, and arguably an option that warrants closer investigation in the current recession. Adopting this model, companies seek to retain their entire workforce. Instead of retrenching staff, companies seek to cut costs by reducing working hours and remunerating employees on a pro rata basis. When the economy turns or orders pick up, the company will revert to the status quo. It is important to recognise that work sharing and job sharing is not the same thing. The latter is a voluntary and permanent arrangement, where two individuals

take full responsibility for splitting a full-time job into two part-time jobs. This decision is often based on the desire to achieve a better work-life balance. Work sharing, on the other hand, is a response to a temporary and cyclical decline in the demand for goods and services. Countries such as Austria, Belgium, France, Germany, Japan, the Republic of Korea, the Netherlands and Switzerland have implemented work sharing strategies very successfully. Well known examples include Kurzarbeit in Germany, and chômage partiel (partial employment) in France. As far as the former is concerned, research undertaken by the German Institute for Employment Research indicates that from 2002 to 2003, 67.1% of companies participating in the scheme were able to maintain the same level of employment, and 7% of companies were able to increase employment by hiring new employees. Although employees are required to make some sacrifices under this arrangement, many may find this preferable to being retrenched. Companies benefit from the fact that their Manpower Bill is reduced, at a time when the business may be struggling to survive. They also benefit from the fact that they are able to retain skilled workers, placing the company at an advantage when the business cycle improves. Another option is for employees to voluntarily surrender their 13th cheque. By “banking” this money, the company may be able to save a number of jobs over a period of time. This type of salary sacrifice is quite different, however, from that agreed to recently by pilots working for British Airways: they agreed to a salary cut in exchange for shares in the company. The guiding principle always should be to engage with employees

Vicki Marais-Swanepoel is the Managing Director of PAG (www.pag.co.za).

and provide them with an opportunity to come up with constructive alternatives. Where companies have exhausted all other options and retrenchment is the last resort, employers should undertake to assist employees, who are exiting the workforce. A recruitment specialist could be called in to assist with the out placement of retrenched employees. These professionals could assist candidates to put together CVs and also provide guidance in terms of the way forward. Psychological support should also be provided as retrenched employees may have issues of low self-esteem. Unless addressed, this could impact negatively on future attempts to find employment. Employees, who have been retrenched, need first and foremost, to focus on their way ahead. Personal branding is very important. Candidates need to package themselves correctly, ensuring that they project a confident, optimistic and strong self-image. Negative, depressed individuals are not attractive employment prospects, and are less likely to find employment. It is imperative that candidates put together a proper, professionallooking CV. They should also prepare themselves properly for job interviews. This includes doing some homework on the company beforehand. Candidates should prepare their responses to questions that their prospective employer is likely to ask, well in advance. Role playing, at home is very useful in this regard. There are no short cuts to success: candidates need to prepare, prepare and prepare, so that they are well-positioned to deal with anything that comes their way. Above all, candidates need to “sell themselves.” They are the brand, after all. (HRf)

“LONG VIEW” is sponsored by


HEADHUNTING

TALENT

HR FUTURE 02.2010 (27)

Chinese show interest in SA execs MORE FOREIGN COUNTRIES ARE HEAD HUNTING EXECUTIVES IN SOUTH AFRICA. NEIL MASLEN

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South African executives have become prime targets for head-hunters from all over the world, but especially Chinese recruiters have been very active in this country. We come across executive search consultants from all over the world who are actively searching for outstanding South African management talent but the Chinese are among the most aggressive recruiters. There is no doubt that the word has gone out that that this country produces first rate executive talent; moreover it produces talent that transplants well into other countries because of the flexibility of South Africans. Without exception, the people we were dealing with are optimistic that

“There is no doubt that the word has gone out that this country produces first rate executive talent; moreover it produces talent that transplants well into other countries because of the flexibility of South Africans.” the worst of the recession is over and that the economy is ready to go into growth mode, hence the need for new executives to help drive the growth cycle. Companies were also implementing serious talent retention strategies in order to retain their best people so that they could remain competitive when the recession was finally over. Candidates are facing tough times due to an ever increasing talent pool. Many thousands of excellent men and women were laid off when the American and European economies went into full-blown recession. What

is interesting is that we are getting CVs from some of these executives because they see South Africa as a growth opportunity and there is more of a willingness to locate here than to some other Third World countries. South Africa has for a long time been known as a market that has produced top class executive talent. Many South Africans are heading up major international companies around the world and South African executives had always been in great demand and have proved that they can adapt to new environments quickly and effectively. Chinese high-tech companies are just beginning to understand the need for marketing, brand-building and globalisation, and they are looking for skilled marketing executives who can help them achieve that goal. According to Michael Norman, a vice-president for Sibson Consulting, a human resources firm based in North America, foreign expat executives have fewer options today. “But,” said Norman, “for those with unique skills or knowledge, there are growing opportunities working for Chinese companies. China’s economy grew a strongerthan-expected 7.9 percent in the second quarter, which is one reason Sibson – which is looking for local partners – sees high demand from Chinese firms for executives with specific technical or marketing skills. China International Intellectech (Shanghai) Corp, an executive search and consultancy, said that last year, it recommended over 1,000 foreign executives for positions in multinationals doing business in the mainland. The list of Chinese companies taking advantage of recruiting foreign executives is growing as they expand globally. (HRf)

Neil Maslen is the Managing Director of South Africa’s largest executive search firm, Mindcor (www.mindcor.com).


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PERFORMANCE

PERSONAL MASTERY

Five coaching hazards USED CORRECTLY, COACHING CAN ENHANCE PERFORMANCE AND TALENT RETENTION. DR CAREN SCHEEPERS

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The manner in which coaching is conducted poses a threat to talent retention. Coaching is commonly utilised in South Africa for problem employees instead of an investment in talent. Numerous companies spend their learning and development budget haphazardly on coaching without proper tracking of benefits. This in turn leaves future allocation of funds to learning and development at risk. Coaches could in addition exacerbate relationship problems in organisations by unwittingly serving as surrogate managers or providing performance feedback that managers are too afraid to give. Some coachees are harmed by unprofessional coaching and labels of psychopathology on their personnel files. Equally, leaders do not always get good feedback and adequate coaching on how to manage their “derailers” effectively. In organisations today, a few dysfunctional and even emotionally abusive executives rise to

senior levels. Arrogant leaders refuse to acknowledge the viewpoint of others. Perfectionists drill down into endless details. Some use fear as a management technique and thwart or demotivate others. The impact on the organisation is far reaching. (Dotlich, Noel & Walker, 2004) The HR department, a virtual hub linking various stakeholders, is prominently placed to coordinate coaching. HR’s co-ordinating and positioning role could defy the following five coaching hazards:

HAZARD 1: LOOSE CANON VS COORDINATED COACHING EFFORTS Unco-ordinated or “loose canon” coaching efforts create considerable scope for confusion. In the case of an inconsistent approach or lack of standards to purchasing coaching across the organisation, individual departments make sporadic and ad hoc decisions on people development issues. Coaching has become something of a fad in the western world. Not infrequently, senior managers will be susceptible to such a fad (this comes as a great shock to almost no one). In some corporate circles, having their own coach is the modern day of having the keys to the “executive cloakroom” (Hunt & Wientraub, 2007). Furthermore, they perceive coaching as a “personal” purchase from a specific coach, with no need to seek approval for their decision. On the positive side, these senior managers may openly talk about their experiences and even advocate for the use of external coaches or the development of a greater internal coaching capability. Without organisational

consistency, however, opportunities to position coaching interventions may be lost as well as coordinated providers’ quality control (McAdam, 2005). In a world where one internet search will reveal over one million practitioners of coaching, with varying degrees of qualification, there is clearly a need for caution and some scepticism. The HR department plays a vital role in setting standards, screening providers, monitoring progress, building relationships and offering opportunities to a range of these coaching firms. A large number of executive coaching outfits have less than five coaches; indeed, many are one person firms. Here lies a potential dilemma since a determinant of success in coaching is “choice”. Good practice will always allow the potential coachee the choice, and right, to determine whether a particular coach is right for them. To this end, I subscribe to a co-ordinated coaching effort where HR maintains a central database on coaching providers and manage contracts.

HAZARD 2: INDIVIDUAL FOCUS VS ORGANISATIONAL FOCUS Coaching with an individual focus unintentionally colludes with the coachee in blaming the organisation for the coachee’s difficulties. Lacking a broader perspective, causes coachees to leave their current organisation. Some coaches, however, have a behavioural pattern which elicits the same responses from others yet in different organisations. Conversely, an organisational focus recognizes that for coaching to be


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effective for both the individual and the organisation, it has to manage a delicate balancing act between the two. Sometimes, individuals see their job and career growth in ways that clash with the ways the organisation needs them to develop. Coaches are to assist coachees reconcile this conflict. As coaches, we might help them to see or do things differently so that what once was a conflict now becomes a manageable paradox. As the institution commissioning and paying for the coaching service, organisations clearly have an interest. Rosinsky (2003) encourages a triangular relationship between coaches, coachees and the organisation and emphasised regular communication between these parties. Ethically the relationship requires appropriate expectations and not to portray coaching as an activity focused solely on the goals of the individual. Coaches as a result are required to demonstrate empathy with both the organisational context and the individual coachee’s needs. The issues coachees bring to the coaching session can and should be read against an organisational boundary as well as an individual one. Doing so can reveal insights for the coachee as both an individual and a member of an organisation and potentially for the organisation as a whole. To read the individual experience organisationally assists to arrive at solutions that not only deal with their own “problem” but also impact on the organisation in positive ways. (Meyer & Fourie, 2004) The effective coach must therefore, have solid understanding of business realities and organisational life. When coaching takes place in isolation, it may be less effective and the organisation may lose an opportunity to learn from experience. Coaching should promote learning in the service of the organisational’s larger goals. Coaching in an organisational context, unlike most other helping relationships, has to serve two masters: the individual and his or her organisation. (Hunt & Weintraub, 2007) Expert coaches could even feed back broader organisational themes

and comment on other aspects of the organisation from what they observe as they go about their coaching, which may assist the organisation in its development. Without HR’s coordination role, a feedback loop with regular progress updates, obviously without compromising confidentiality, is not created. Consequently, I advocate a focus on the individual’s improvement of effectiveness within the milieu of the organisation and HR to contract feedback on regular themes and progress updates with coaches and coachees alike.

HAZARD 3: THERAPEUTIC PROCESS VS ACTION ORIENTATED COACHING Therapeutic processes often do a great job of making people aware of their flaws and the issues holding them back, however, they do not necessarily help them take action (Dotlich & Cairo, 1999). Although action orientated coaching is a psychologically informed development process, it is nevertheless not a treatment for an emotional disturbance. Contracted coaching sessions, generally between four and 12, does not entail an adequate amount of sessions to bring about deep therapeutic intra psychic transformation. Even though, Hunt & Weintraub’s (2007) research emphasised that even one session can have a developmental impact, it calls for coaches to be sensitive to the possibility that some coachees will require more therapeutic support than is normally available within the coaching remit. In these cases, referral must be made to an appropriate source that is occasionally represented by Employee Assistance Programmes’ psychological support services or counsellors. Without this referral the coach may do more harm than good (Berglas, 2002). Diagnoses of psychopathology are not palatable to organisations and these labels could leak from personnel files. Consequently, coaching conducted in the Organisational Development parlance and worldview rather than medical/therapeutic parlance is less hazardous. According to Hunt and Weintraub (2007)

coaching should not be “medicalised” or equated with psychiatric treatment, despite the fact that insights from psychology and psychiatry can be valuable in coaching under some circumstances. They equate coaching to an organisational development intervention. However, they acknowledge that if every organisation required every future leader to undergo a psychiatric evaluation before participating in leadership development, very little leadership development would take place. Most employees would rightly experience such a requirement as a massive infringement on their privacy. Brunning (2006) also explicitly states that although all coaching is primarily a psychological endeavour and that coaches may have psychological background, it does not automatically lead them to “conduct psychotherapy in the workplace” at the expense of the employing organisation. Additionally, coaches from an academic environment or private practice, although highly qualified, may have lost touch with organisational life. These coaches could be unrealistic about the landscape of organisations and the wider marketplace. Flaherty (2005) and Rosinsky (2003) suggest the political perspective as a useful angle coaches can learn to adopt. HR’s coaching selection processes are required to take into account whether the coach has worked with similar situations. Is the coach familiar with the dynamics unique to the organisation or this specific type of business? Does the coach have insight into political issues as a hierarchical manifestation and have political savvy? Coaching requires supervised practice over a period of time which cannot be achieved in the kind of brief workshops that are increasingly marketed as quick transitions from the boardroom or sports – field into coaching. Many psychodynamic therapy orientated coaches believe that coaches of other persuasions, such as action orientation coaching, provide mainly advice and “quick fixes” with little long term impact


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HR FUTURE 02.2010

on development. The popularity of these less rigorous approaches in the market, may well be linked to their reliance on providing a large dose of the “feel – good factor”, involving collusion (condoning the harmful behaviour of coachee) and mutual idealisation (Brunning, 2006). Coaches from these perspectives, on the other hand, propose that a psychodynamic approach is engaging in an endless pursuit of insight at the expense of actionable outcomes and tangible results (Dotlich & Cairo,1999). Whichever coaching approach used, inadequately delivered coaching can negatively impact individuals and their organisations as well as poison the water for future coaching initiatives (Berglas, 2002). To this effect, I propose a clear distinction between therapeutic processes and coaching, unambiguous contracting on approaches and their limitations with coachees and distinct referral procedures for emotional disturbances.

HAZARD 4: PERSONAL GROWTH AIM VS PERFORMANCE IMPROVEMENT AIM Linked to hazard 3 on therapeutic processes, we occasionally hear the comment in the market: “Coaching might help someone become a better person but not a better performer.” Coaching ought to be more than empathetic support for personal growth (Law; Ireland & Hussain , 2007). For some, the issues are too complex today for a coaching intervention to do much more than help people learn more about themselves (Hargrove, 2003). This is a worthy goal in and of itself, but it does not give people a mechanism for dealing with the real – world ambiguities and paradoxes in their business environment, nor does it give a strategy for putting their self – knowledge to work to achieve individual performance and

PERFORMANCE

PERSONAL MASTERY

organisational performance goals (Law et al, 2007). The primary purpose or aim of coaching is to bring about external changes, such as measureable performance outputs or internal ones. Clearly, these are not mutually exclusive but useful as a distinction between that which is primary and which is secondary. The primary aim of coaching is to enhance the coachee’s work performance. It is not necessarily to help the coachee reach a better personal integration, to deepen personal insight, or to change self perception, per se, as might have been the case in psychotherapy. Masterful coaching is grounded in expanding people’s capacity to achieve what they need to achieve, not therapy (Hargrove, 2003). Coaching focuses on fostering insight into organisational nuances and dynamics to improve project and team delivery (Williams & Anderson, 2006). Meyer & Fourie (2004) furthermore accentuated coaching’s role in the development of skills that are applied and implemented in the workplace. It is valuable when senior management defines the skills the organisation needs its managers to possess. Such a framework provides a context within which coaches can successfully work. The process of goal setting in coaching involves a multiparty collaboration between the coachee, the manager of the coachee and the coach. The coachee could rely on previous performance appraisal and 360 – degree survey data to help focus the coaching. These individual performance goals, however need to be aligned with organisational goals. Hunt and Weintraub (2007) emphasised the importance of establishing the linkage between any coaching initiative and activities that are important to the primary task of the organisation. The value of the coaching initiative is greatly enhanced when the coaching is targeted at

helping people learn that which is important to them and the business. Accordingly, I advocate for a performance framework and specific measureable goals to focus coaching on the organisational reality.

HAZARD 5: REMEDIAL INTERVENTION VS LEARNING & DEVELOPMENT PROGRAMME There are dangers associated with coaching entering an organisation as a remedial intervention for failing executives. Those employees may be least able to benefit from such an investment and in my experience, most likely to exit the organisation in the process. Coaching, particularly since it takes place behind closed doors, can create a perception that the organisation is about to take action against a problem performer. Furthermore, coaching under these circumstances runs a greater risk of failing, due to the coachee’s resistance to the coaching process (Hunt & Weintraub, 2007). When coaching is used solely for the purpose of helping employees that are derailing, it can moreover be stigmatised. In the worst cases, coaching are used to disguise managerial and human resource failures, such as bringing in a coach since the coachee’s own manager is afraid to give honest performance feedback. On the contrary, when coaching is rather offered to high – potential talent, it becomes associated, in the minds of the larger employee population with career growth. Coaching should therefore go to people who are talented business leaders, with the result that they become better at coaching and a coaching capability is furthered. Rosinsky (2003) also emphasises coaching skills for the coachee as an ideal outcome of a coaching programme. In the absence of a tight linkage with the business needs, the coaching


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SUMMARY OF HAZARDS AND COUNTERMEASURES HAZARDS

COUNTERMEASURES

Loose canons

Co-ordinated coaching efforts

Individual focus

Balancing individual and organisational focus

Therapeutic processes

Action orientated coaching

Personal growth aim

Performance improvement aim

Remedial intervention

Learning and development programme

programme budget may be vulnerable. Such a link is usually represented by a clearly articulated leadership development strategy. This strategy connects leadership development efforts such as coaching with highly valued business goals. Positioning coaching in this manner as learning and development interventions could contribute to building a learning culture throughout the organisation and the development of a greater internal coaching capability. Coaching could be for example, strategically targeted at individuals who are going through important leadership transitions or who are expected to do so within the next few years. Under these circumstances, those participating are typically more motivated and see it as a special investment in their development on the part of the organisation. Organisations seem to be struggling to find the kind of relatedness they need to do business (Down, 2002). There is a reduction of face-to-face contact between people working together across the globe, often virtually. Coaching itself could paradoxically compound the problem if each director is getting his support from an external coach as a substitute for genuine connectedness across the team or organisation. The challenge appears to be to assist coachees in developing the kind of relationships in their organisations that will allow creativity to flourish, rather than encouraging a split – off outsourcing of support (Downs, 2002). Coachees

ought to be assisted to genuinely engage with the organisation in a collaborative way to perform in their work role. Individual coaching is therefore most valuable as an integrated organisational development process. Such a process would typically be conducted over a year and includes: < defining a framework for leadership characteristics to support the ideal organisational culture; < group coaching with the management team to facilitate the formulation of a code of conduct and strategic direction; < classroom style executive education sessions on leadership development and strategy formulation; and < individual coaching sessions with team members to align around the code of conduct and translate organisational strategy to departmental strategies. Individual coaching in this instance forms the learning bridge between strategic sessions, executive education classroom activities, alignment between team members and the practical application in the workplace. In this regard I promote HR to proactively endorse individual coaching as an integrative part of a larger process of learning and development. (HRf)

Dr Caren Scheepers is a psychologist and executive coach (www.irodo.co.za).

BIBLIOGRAPHY 1) Berglas, S. (2002) The very real dangers of executive coaching. Harvard Business Review, June: 84 – 02. 2) Brunning, H. (2006) Executive coaching. Systems – Psychodynamic Perspective. London: H. Karnac (Books) Ltd. 3) Dotlich, D. L.; Cairo, P. (1999) Action coaching. How to leverage individual performance for company success. San Francisco: Jossey – Bass Publishers. 4) Dotlich, D.; Noel, J. L.; Walker, N. (2004) Leadership Passages. San Francisco: Jossey – Bass. 5) Downs, A. (2002) Secrets of an executive coach: proven methods for helping leaders excel under pressure. New York: Amacom. 6) Flaherty, J. (2005) Coaching: evoking excellence in others. Elsevier Butterworth – Heinemann: Burlington. 7) Hargrove, R. A. (2003) Masterful coaching. San Francisco: John Wiley & Sons, Inc. 8) Hunt, J. Weintraub, J. R. (2007) The coaching organisation. A strategy for developing leaders. London: Sage Publications. 9) Law, H.; Ireland, S.; Hussain, Z. (2007) The Psychology of Coaching, Mentoring and Learning. West Sussex: John Wiley and Sons. 10) McAdam, S. (2005) Executive coaching: How to choose, use and maximise value for yourself and your team. London: Thorogood. 11) Meyer, M.; Fourie, L. (2004) Mentoring and Coaching. Randburg: Knowres Publishing. 12) Rosinsky, P. (2003) Coaching across cultures. London: Nicholas Brealey Publishing. 13) Williams, P.; Anderson, S. K. (2006) Law and Ethics in Coaching. How to solve and avoid difficult problems in your practice. Hoboken, N. J: John Wiley & Sons.


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IN THE BOARDROOM For the ceo’s desk

Executives motivated by meaning and significance CREATE CHANGE FOR THE BETTER IN YOUR OWN WORLD BEFORE YOU EXPECT SOMEONE ELSE TO DO SO. BRYAN HATTINGH

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With the economy what it is and unlikely to recover fully any time soon, it is not always possible to structure compensation packages that accurately reflect an executive’s full worth. And, even when the economy is down, business needs to do all it can to retain its top people. The vision, strategy, culture, ethos, along with the internal and external brands, emanate from the top and are most significantly influenced by who the leaders are and how they behave. It is up to them to create an environment that provides for creativity, passion, commitment, a sense of accomplishment and, most importantly, a true sense of belonging. Recent surveys have unequivocally shown that having a true sense of belonging is the primary motivator for people joining and staying with an

organisation. This in itself speaks of a spirit of collaboration and authenticity which has to emanate from the company’s leaders. Executives who are motivated produce more, deliver more, lead better and in general make for more successful and sustainable companies. But motivation does not simply occur on its own. It is the consequence of clear vision, purpose, passion and conviction. Here are five key drivers you need to consider: 1 Not all jobs are the same, and you need to match a particular post with the appropriate personality. Not all executives will be comfortable in the same position. Some people are specialists in what they do, but just because they are brilliant at a role and have been doing it for a long time does not mean they will be a good executive. Consider the example of a top software developer who has been doing the job for 15 years, and is then promoted to head up the software division; or a top sales person who always makes their numbers being promoted to sales manager or director. In both cases this could be a mistake, as the person involved loves what they do and is accordingly good at it, and should not be promoted out of their area of passion and expertise. 2 Because each person is different, you need to structure appropriate incentives and feedback mechanisms. Incentives are closely

Bryan Hattingh is the CEO of leadership solutions group Cycan (www.cycan.co.za).

aligned with motivation. Observe your people at work, and you will soon find the subliminal factors that drive them. This will give you the ability to reward them with the appropriate incentives. Similarly, the way you interact and feed back to different executives will be determined by what motivates them. A one-size-fits-all incentive and feedback system is not adequate. 3 Executives must be energised. Top positions are gruelling and exacting. Few executives work nine to five, five days a week. Rather, you’ll often find them at their desks first, leaving last, with punishing travel schedules, across multiple time zones, and with a tendency to play hard. All of this implies the expenditure of a great deal of energy, and it has the catalytic effect of energising those in the vicinity. In order to generate this energy on an ongoing basis it is essential that the executive or leader has a portfolio that offers a challenge, stimulation, a sense of value and an opportunity to continually increase their capacity to impact and influence. Roles that are not energising and impassioning then require effort in order to deliver and effort on its own is not sustainable, ultimately resulting in a mix of physical, emotional and potential psychological discomforts and ailments. 4 The almost indefinable factor,


â&#x20AC;&#x153;Now is no time to think of what you do not have. Think of what you can do with what there is.â&#x20AC;? â&#x20AC;&#x201C; Ernest Hemingway

motivation, is a key component. It has an element of chicken and egg where it is usually the individuals who find the motivation to pursue greatness who are then in turn motivated by the very things that they do, which creates a self-perpetuating and sustainable cycle. We constantly seek to increase our motivation and, importantly, as leaders the motivation of others through a variety of channels and vehicles. Truth is, however, that whether this be a carrot and stick approach or a myriad of other mechanisms, motivation on its own is not self-sustainable. It is a secondary factor stemming from the fundamental essence of a clear sense of purpose, meaning and relevance. People who have a clear sense of purpose, clarity in terms of what they do and who they are (from a meaning perspective) and feel relevant, make better leaders, workers, companions, partners and contributors to society. 5 As executives and leaders in business at all levels continue to achieve high levels of success and accomplishment, they most often find themselves arriving at a point in their careers and lives where success on its own is not sufficient and their focus moves to the importance of significance. They want their lives to reflect greater levels of meaning and purpose and find themselves wanting to focus on leaving a legacy. This focuses on their contribution to society and mankind as a whole. Executives and leaders such as these raise the bar in terms of collective energy, character and sense of purpose in their organisations. These factors in turn serve as inspiration and motivation to the people that work there. At the end of the day, it comes down to what drives, inspires and motivates executives and leaders and tapping directly into that. While in theory there are 20 factors that motivate people, with high achieving executives and leaders the two key ones are meaning and significance. The essence therefore lies in creating an environment that enables leaders and people to identify, pursue and attain the factors that will deliver meaning and significance; then there is no telling what heights they and the organisation will scale. (HRf)

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SKILLS

NQF NAVIGATION

More opportunity-driven businesses needed IF WE DEVELOP THE COUNTRY’S ENTREPRENEURIAL SKILLS WE CAN BOOST OUR ECONOMY. MARIÉTTA VAN ROOYEN

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Earlier in 2009 President Jacob Zuma called for the creation of 500,000 jobs in 2010. The campaign to create these jobs was announced as one of the priorities of the tripartite alliance. One of the proven ways to create jobs, especially such a large number of jobs, is to nurture the creation of small businesses. According to an article in the Business Day, Thami Mazwai, director of the Centre for Small Business Development at the University of Johannesburg, points out that small

businesses employing fewer than 10 people account for 66% of businesses in the United States. He also states that our economy consists of 98% small businesses employing less than 10 people, but many of these are survivalist businesses (necessity-driven) and not sustainable. It is important, however, to distinguish between necessity-driven business and opportunity-driven businesses. Entrepreneurs see opportunities, drive innovation and take risks. In necessity-driven businesses, owners are survivalists who are in business to make a living for themselves and their families. There is nothing wrong in this, and it certainly contributes to the wellbeing of the owner and his family, but it does not create more jobs. Very few survivalist business owners actually rise above their circumstances and become entrepreneurs. To understand the factors that enhance or inhibit entrepreneurship, the multinational Global Entrepreneurship Monitor (GEM) was launched in 1997. Over the years GEM has become an instrument to measure entrepreneurial spirit and activity in different countries. South Africa has participated in the survey since 2001, thanks to the Centre for Innovation and Entrepreneurship at the UCT Graduate School of Business. In 2008 South Africa ranked 23rd in the early-stage entrepreneurial activity, with 7,8% of respondents in the process of starting a business. In

the “new firms” category South Africa ranked 38 out of 43 and in the “established business” category (under four years) we ranked 41 out of 43. This indicates that we need a large number of start-up businesses, as the failure rate is rather high. Mike Herrington, lead GEM researcher and director of the UCT Centre, reckons the failure rate is largely due to a lack of skills and knowledge of business processes. It is important for all citizens in South Africa to realise the intrinsic value that small enterprises add to the economy. As a matter of fact, the survival of new businesses is the factor that can make or break an economy. There is a very narrow relationship between the level of entrepreneurship in a country and its rate of economic growth. The good news is that opportunitydriven businesses have increased, as opposed to necessity-driven businesses, whose numbers have decreased since 2004. There is a good mix of the two kinds of business in South Africa. Government can still go a long way to make life easier for opportunity driven entrepreneurs by cutting the red tape and simplifying the tax structures. Government driven organisations set up to nurture small businesses also need to be more efficient and effective in reaching their goal of supporting start-up businesses. If government is really serious about creating thousands of jobs, this is where they should begin. (HRf)

Mariétta van Rooyen is the Executive Chair of the Assessment College of South Africa (www.assess.co.za). She served on the SAQA Board for eight years and is a board member of the SA Board for Personnel Practice.


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Sophia Shadung, gold member, Assistant Accountant, Hannover Reinsurance Africa Ltd

Is your finance team as effective as it can be? AAT(SA) qualifications increase efficiency Whatever the size and nature of your organisation, training your finance staff to be more skilled increases productivity and makes good sense.

• AAT(SA) qualifications are registered learnerships

AAT(SA) provides qualifications and the expertise needed to increase the efficiency of your staff. And, as they gain knowledge and develop new skills from day one of their training, they are better equipped to make an increased contribution to the workplace immediately – which is good news for your business.

• Practical and skills-based qualifications

• Training is supported by tax rebates and SETA incentives to help with the cost of training

• Flexible learning options to fit around work • Many employers choose AAT(SA) qualifications to help train, retain and attract staff.

To find out more, call us on +2711 621 6888, email info@aatsa.org.za or visit www.aatsa.org.za AAT(SA) is a partnership between The South African Institute of Chartered Accountants and the AAT offering qualifications, professional recognition, regulation and support for people in finance roles.


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HR FUTURE 02.2010

HR SECRETS

Take the next step after blended learning

LEARNING


HR FUTURE 02.2010 (37)

FROM EVENT TO PROCESS LEARNING. DAVID CREELMAN

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Trainers have become skilled at creating training events. We do some analysis of training needs, design a workshop and then deliver the training. But we all know that workshops often don’t have a big enough impact to change behaviour. The problem is not that the workshops are badly done; it’s just that there is only so much any single training event can accomplish. The next step for training professionals is to go from delivering training events to delivering a learning process.

PROCESS LEARNING Think about how someone learns new skills or behaviours. It may start with reading about a topic, perhaps observing how something is done; then attending a workshop, practising under the direction of a mentor and refining their skills by working with peers. That extended process does work very well: that is how people learn and grow, and that’s what I mean by process rather than event learning. It is time to think about whether your training function should begin to make the shift to focusing on process learning, rather than merely providing learning events.

HOW TO BEGIN The first thing that may come to mind is that no one has asked you to do anything other than set up events like workshops or an e-learning module.

“It is time to think about whether your training function should begin to make the shift to focusing on process learning, rather than merely providing learning events.” The reason senior management isn’t asking for a different approach is that they don’t know an alternative is possible. This is the opportunity for you to be the expert in your organisation, pointing out better approaches to learning. Assuming you are willing to seize the initiative, the next step is finding the right training problem for process learning. Clearly setting up a process is a lot more work than setting up an event. You’ve got to find a problem that is important enough that your company is committed to getting more effective learning, even if it requires more work. John Darling, an expert on learning and a principal at Q2Learning says, “Very often the best place to introduce process learning is where speed to proficiency is very important. For example, if you are an insurance company bringing in new underwriters, it’s critically important you quickly get them to the point where they are capable of doing quality work. For this kind of thing you don’t just give a few workshops and cross your fingers that eventually they’ll pick up all the skills they need.”

SKILLS AND TOOLS YOU NEED While the idea of setting up a process may sound daunting, I think most training professionals will find they have most of the know-how they need when they sit down to try. The sorts of things that go into a learning process above and beyond a workshop are not unfamiliar. You will want to ensure people get on-the-job practice at the skill they are learning, you want to create opportunities for them to get together with peers to learn from each other and you may want to set them up with opportunities to work with more senior people who can act as coaches. If it’s an important issue, then getting the resources to design a truly effective learning intervention should not be insurmountable barrier. The one problem that may prevent you from acting is you know it’s just going to be an enormous amount of work coordinating all the different activities. For example, organising and tracking a series of interactions between the people being trained and their coaches can be very time consuming for HR. Luckily there are tools that can help. I’ve long been a fan of Fort Hill Company’s (www.forthillcompany.com) “Friday 5’s”, a software tool that enables people to learn from each other in the weeks following a workshop. A more comprehensive solution called “xPERT eCampus” is offered by Q2 Learning (www.q2learning.com) . If you think of an LMS as software designed to support the administration of event learning, then xPERT eCampus is designed to support the administration of process learning.

WHAT TO DO NOW It’s important for trainers to stay up to date on new approaches to learning. Process learning is the next big step beyond blended learning and it makes sense to find an opportunity to pilot this approach so that you can understand what’s involved. (HRf)

David Creelman is CEO of Creelman Research (www.creelmanresearch.com) in Canada. He helps HR VPs report to the Board about human capital, and works with a variety of academics, think tanks, consultancies and HR vendors in the US, Japan, Canada and China.


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HR FUTURE 02.2010

LEGAL

border crossing

Another centralisation attempt DEPARTMENT OF HOME AFFAIRS CENTRALISES DECISION MAKING POWERS BACK TO HEAD OFFICE – AGAIN. JULIAN POKROY

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In terms of the Immigration Act 13 of 2002 (“the Act”), the Director-General has the power to delegate certain decision making powers to the regional and district offices of the Department of Home Affairs. During the tenure of Minister Mangosuthu Buthelezi, at the time, a “decentralisation of powers” took

place and in essence this meant that officials at the various regional and district offices of the Department of Home Affairs could make decisions on applications for work permits and all other kinds of temporary residence permits and indeed permanent residence permits. The time arose when the Department of Home Affairs, on directive from the Director-General of Home Affairs withdrew certain of these delegations in complex applications such as business permits “self employment/own business” permits. This was understandable at the time. For several years the system worked well and the turnaround time in respect of work permit applications was drastically reduced and completed acceptable. The importance of this must be seen against the background of South Africa’s needs as a country to fill certain skills gaps that it was unable to fill locally. When Minister Nosiwe MapisaNqakula came into office after the 2004 election, one of the first things she attempted to implement, as Minister, centralisation of all decision making in all kinds of temporary and permanent residence applications, to head office of the Department. As head office was not capacitated, in terms of human resource capacitation, to deal with such centralisation, this became an immediate problem as the files

for permanent residence applications arrived at the Department of Home Affairs office and there was no-one to deal with the matters. A serious backlog arose. The reason for the human resource undercapacitation is that the expertise needed to handle these matters was sitting at the Embassies, High Commissions, Consular Missions and regional offices of the Department of Home Affairs country and worldwide. These people could not simply be plucked out of their positions and brought to head office of the Department on transfer, as their lives and that of their families would be affected by such transfer. In addition, numerous top officials with an enormous amount of experience and institutional memory were sidelined, and they left the Department, mostly unwillingly, through the affirmative action policies of the Department. Anecdotally, what happened thereafter has had an impact until today on the severe backlog that still exists with permanent residence applications. Not content with the damage already caused, a further attempt was made to centralise by withdrawing the delegations locked into the district offices and placing them under the hands of the regional offices of the Department of Home Affairs countrywide. Again the human resource under-capacitation became a

Julian Pokroy is one of South Africa’s leading immigration specialist Attorneys (www.immigration.org.za) and currently heads the Law Society of South Africa’s Immigration and Refugee Law Specialist Committee and is a member of the Immigration Advisory Board to the Minister of Home Affairs. He also heads up the Migration Policy Working Group of the South African Chamber of Commerce and Industry.


HR FUTURE 02.2010 (39)

problem in the regional offices which perpetuates to the current time. Backlogs in the temporary residence sections of the Department of Home Affairs became a severe problem and processing times of a week to ten days for an extension of an existing permit has moved, in some offices of the Department of Home Affairs, to periods of two to six months. Refusals on spurious grounds are not uncommon and applicants, if they have the ability to do so, are then forced into a loop of applying for reviews in terms of Section 8 of the Act against the refusal of a spurious decision by a regional office official. Alongside this, it is my belief that, because of insufficient monitoring, a lack of will, politically or otherwise, to deal with corruption in the temporary and permanent residence sections of the Department of Home Affairs, the position has deteriorated considerably further. The new Minister of Home Affairs Nkosazana Dlamini-Zuma,k who of late has been acting quite decisively in issues of this type, has now indicated that a centralisation in respect of temporary residence permits is going to be implemented. One of the major reasons for this decision has been the drastic negative effect which corruption has had on certain regional offices and an attempt is now being made to remove the delegations in respect of decision making at regional office level and draw it back to the Department of Home Affairs head office in respect of all types of work permits and other temporary residence permits. This of necessity means that the administrative personnel dealing with the processing and decision making at the regional offices will of course have to be transferred to head office to deal with these matters. This again entails in many instances disruptions in the lives of the officials concerned as they would have to be transferred to a place approximate to head office of the Department of Home Affairs. The idea of creating “zonal” hubs to process applications of this nature was mooted by the Director-General of Home Affairs Mavuso Msimang approximately one year ago. This would mean, in practical terms, that applications would be taken in at the regional offices of the Department by an administrative official whose only task would apparently be to check the list and tick off that check list insofar as ascertaining that the application is complete in all respects. The application would immediately be shifted to the processing team at head office of the Department for the making of a decision. If the Director-General’s office is to be believed, then it is conceivable that the processing times may be reduced back to seven to ten days to process an extension application and possibly nominally longer for a work or other type of permit. The most important factor is that the processing staff will have no interface with the public or any client of the Department of Home Affairs, thereby hopefully excluding any possibilities of corruption. The Minister and Director-General are certainly wished every success in this current endeavour. However only time will tell whether it will be another misspent effort or a success. (HRf)


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HR FUTURE 02.2010

LEGAL

JUST IN CASE

Can clients tell TES providers to fire staff? TERMINATION OF EMPLOYEE’S SERVICES BY TES ON GROUNDS THAT CLIENT OF TES NO LONGER REQUIRED SERVICES.

Molusi v Ngisiza Bonke Manpower Services CC (2009) 20 (6) SALLR 1 (CCMA) and April v Workforce Group Holdings (Pty) Ltd t/a The Workforce Group (2005) 6 ILJ 2224 (CCMA) and the following issues raised for consideration in these awards:

CAROL RUDD

b) where a TES supplied a person to render services to the client of the TES, would such person be an employee of the TES or an employee of the client?

a

As was evident from recent newspaper reports, the issue of temporary employment services (TES), or what were commonly referred to as labour brokers, has become a controversial one. In particular, concern has been expressed that the use by employers of TES was detrimental to the interests of affected employees in a number of respects. One such respect, highlighted in the awards dealt with below, concerned the issue of the termination by the TES of an employee’s employment contract at the behest of the client of the TES to which client the employee had been assigned. Of note, as regards the above issue, were the CCMA arbitration awards of

a) what was a temporary employment service (TES)?

c) would a clause in an employment contract between a TES and its employee, to the effect that such contract would terminate should the client, for any reason whatsoever, advise the TES that it no longer wished to make use of the employee’s services, be valid and binding? d) did the CCMA have jurisdiction to make a ruling as regards the validity or otherwise of a claim of the nature set out in question (c) above? e) where a clause, of the nature set out in question (c) above, existed in an employment contract, between a TES and its client, and the client notified the TES that it no longer required the employee’s services and the TES terminated such employee’s services as a result, would such termination

constitute a dismissal, as envisaged by s186(1)(a) of the 1995 LRA? f) what arguments could be raised in favour of a positive or a negative answer to the question in (e) above? g) if such termination did constitute a dismissal, what requirements would have to be met to render such dismissal substantively and procedurally fair? and h) what loopholes existed in the law, in particular in the 1995 LRA, as regards TES and their employees and what legislative reforms should be implemented to address such loopholes? In both of the April and the Molusi arbitration awards, the respondent temporary employment services (TES) or labour brokers had terminated the services of the applicant employees at the behest of the clients of the respondent TES and, in both such instances, the applicant employees had claimed that they had been unfairly dismissed whilst the respondent TES had denied that any dismissal had taken place and had contended that the contracts of employment had, instead, in each instance, “terminated automatically”. In the course of considering the conflicting submissions of the applicant employees and the respondent TES, in each of the April and the Molusi matters, the CCMA, per, respectively, Van Tonder C and


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Van Wyk C, had given consideration to the questions set out above. In the commentary on these awards, set out below, a critical examination was undertaken of the answers afforded by the CCMA, in each of these matters, to the questions set out above.

INTRODUCTION Section 198 of the 1995 LRA dealt with temporary employment services (TES) or what were commonly referred to as labour brokers. The said s198 was to the following effect: “198. Temporary Employment Services 1 In this section, ‘temporary employment service’ means any person who, for reward, procures for or provides to a client other persons – a) who render services to, or perform work for, the client; and b) who are remunerated by the temporary employment service. 2 For the purposes of this Act, a person whose services have been procured for or provided to a client by a temporary employment service is the employee of that temporary employment service, and the temporary employment service is that person’s employer. 3 Despite subsections (1) and (2), a person who is an independent contractor is not an employee of a temporary employment service, nor is the temporary employment service the employer of that person. 4 The temporary employment service and the client are jointly and severally liable if the temporary employment service, in respect of any of its employees, contravenes – a) a collective agreement concluded

in a bargaining council that regulates terms and conditions of employment; b) a binding arbitration award that regulates terms and conditions of employment; c) the Basic Conditions of Employment Act; or d) a determination made in terms of the Wage Act. 5 Two or more bargaining councils may agree to bind the following persons, if they fall within the combined registered scope of those bargaining councils, to a collective agreement concluded in any one of them – a) temporary employment service; b) a person employed by a temporary employment service; and c) a temporary employment service client. 6 An agreement concluded in terms of subsection (5) is binding only if the collective agreement has been extended to non-parties within the registered scope of the bargaining council. 7 Two or more bargaining councils may agree to bind the following persons, who fall within their combined registered scope, to a collective agreement – a) temporary employment service; b) a person employed by a temporary employment service; and c) a temporary employment service’s client. 8 An agreement concluded in terms of subsection (7) is binding only if a) each of the contracting bargaining councils has requested the Minister to extend the agreement to nonparties falling within its registered scope;

b) the Minister is satisfied that the terms of the agreement are not substantially more onerous than those prevailing in the corresponding collective agreements concluded in the bargaining councils; and c) the Minister, by notice in the Government Gazette, has extended the agreement as requested by all the bargaining councils that are parties to the agreement.” As was evident, from s198(1) and s198(2) of the 1995 LRA, as set out above, a TES/labour broker was an entity that supplied a person to a client of that entity to perform work for that client. The client would pay the TES for the supply of such person and, although the person effectively worked for the client, such person would, by virtue of the provisions of s198(2), be deemed to be an employee of the TES rather than to be an employee of the client. What then would happen when the client no longer wanted the person, supplied to the client by the TES, to work for them and notified the TES to this effect and the TES, in turn, notified the person that he/she was no longer required to render services to the client? In such circumstances, would the person have been dismissed? If so, by whom – the TES or the client? And, furthermore, if there had been a dismissal, what requirements would have had to have been met to render such dismissal substantively and procedurally fair? From an examination of case law, in respect of the above, it would appear that there were two main opposing lines of thought as regards the issues set out above. (HRf) For the complete version of this article, visit www.hrfuture.net, click on this month’s cover and click on “Just in Case”.

Carol Rudd is a director at law firm Van Zyl Rudd and Associates (Pty) Ltd (www.vanzylrudd.co.za).


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HR FUTURE 02.2010

PERSONAL OPINION RATTLING THE CAGE

My tax wish list guide TAX SUGGESTIONS FOR THE MINISTER OF FINANCE. Yusuf Mahomedy

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When the Minister of Finance, Pravin Gordan, presented the Medium Term Budget Policy Statement in October, we were given a preview of Government’s budget plans – on paper, job creation, quality education, improved healthcare, rural development and crime fighting are sound priorities. Unfortunately the reality on the ground leaves a lot to be desired. When he returns to the podium this month to deliver the Budget Speech for the 2010/2011 tax year, politicians, business and taxpayers will be waiting for good news, not shocks.

incur additional, non-tax deductible costs such as armed response at home, asset insurance against theft, private education for their children, additional healthcare contributions and maintenance services. To attract and retain talent in future, greater consideration should be given to these lifestyle benefit components.

preached about expanding the tax base. Notwithstanding the efforts to date, a tax base of around 10% of the population is being used to fund the other 90% and government inefficiencies. Instead of trying to squeeze out more money from the 10%, rather go after those that are escaping the tax net.

2 MARGINAL RATE OF TAX AND FISCAL DRAG

5 JOB HUNTING DEDUCTIONS

Here is my insider-gripes-wish list guide to taxation and your workforce:

The marginal rate of tax applies to each additional rand of taxable income. In the current tax year ending 28 February 2010, for each additional rand over R525,001, the fiscus took 40c and you kept 60c. From that 60c, you will pay further taxes such as VAT and the fuel levy. While the marginal rate of tax should remain unchanged this year, it could increase in coming years. Fiscal drag or bracket creep occurs when the tax thresholds are not adjusted for inflation, especially in wages. Consequently the percentage of income paid in taxes increases, without additional benefit. It remains to be seen whether the Budget will follow those of previous years and address fiscal drag.

1 TAXATION

3 PARASTATAL TAXES

For the benefits of legally living in this country, the individual is taxed on their income (primarily derived from employment), capital asset transactions (property and shares), consumption (goods and services, transport), donations and death. When you add up the various rates, taxes, levies, duties, charges, contributions and licence fees, the amount handed over to the state is enough to induce a comatose state. For the middle and wealthy class, each tax rand brings a few cents of benefits in return. Consequently they have to

The Budget can go a long way to restoring the confidence of taxpayers by shutting down proposed parastatal type taxes. Many parastatals are in a leadership crisis and financial mess. If Eskom succeed with their 400% increase in electricity tariffs, this parastatal tax will require a lot of “load shedding” in our lives. And no television is better than the proposed one percent levy on income to bail out the SABC.

4 TAX BASE For years, the Budget Speech has

I submit that additional tax deductions should be granted whenever you are trying to increase your employment income (in other words higher tax revenue in future). Job hunting expenses such as CV preparation, travelling to interviews, labour insurance, career assessments and mentoring and coaching services should be tax deductible.

6 REMUNERATION STRUCTURING AND TRAVEL ALLOWANCE The essence of remuneration structuring is configuring amounts payable to an employee for services rendered. In 2002, tax legislation was changed to severely limit the tax deductions from employment income. The last great structuring tool, the travel allowance is on the final lap. From 1 March 2010, employees that legitimately receive a travel allowance for business purposes, are likely to take home less pay. The monthly taxable portion jumps by 33% from 60% to 80%. Upon assessment, the employee can not longer use the deemed kilometre method to claim a tax deduction. They will need to keep a log book of actual business kilometres for the year. My wish list would be that travel from home to the place of work should be recognised as business travel. After all, when did you last go to work for private purposes? (HRf)

Yusuf Mahomedy (CA(SA), AdvTax) is the founder of Worksucks (www.worksucks.co.za) and a reward consultant.


A DV ERTORIAL HR FUTURE 02.2010 (43)

www.qbit.co.za

Transform your People Management function with the right methodology and not just technology.

Simply automating “precious HR processes” will get you nowhere. Quality people practices are a key ingredient in producing high quality people information for use in business. But good practice management is not enough, as true value is delivered through well integrated people practices. High quality people management information enhances a Board’s decision-making and results in improved business performance. And the Board’s view of the strategic value the Human Capital function delivers changes radically when this happens. Good Human Capital Practice Management shifts the focus away from “precious processes” to the information it is supposed to produce and thus leads to better quality decisions. But good practice management is not enough, as value is delivered through integrated practices. In a global first, QBIT has participated in the

research and development of a Standard Integrated People Practices (SIPP™) framework, featuring 47 precisely defined best practice standards that govern the management of human capital at all levels within an organisation in setting Best Practice Standards. This framework balances the focus of profitability and fair people practice to build an engaged workforce that contributes directly to the bottom line and to shareholder value. In addition, QBIT underpins the above with training and development courses designed to upskill and shape a new generation of practitioners – practitioners ready to approach human capital in the pro-active, well-equipped and well-rounded way that organisations will require in the future. QBIT is helping more and more SA companies to achieve great success in their human capital management. We can do the same for you!

Ask QBIT to help you deliver strategic value to the Board using the SIPP™ framework. Contact Gerhard Stegmann on 011 352 9345 or gstegmann@q-bit.co.za Visit www.qbit.co.za


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HR FUTURE 02.2010

MORE TO LIFE

ANTI-AGE ANALYSIS

Exposing a secret killer PART ONE

HIGH HOMOCYSTEINE LEVELS HAVE BEEN LINKED TO CARDIOVASCULAR AND ALZHEIMER’S DISEASE. DAVID ARTHUR

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Cardiovascular disease causes 44% of all deaths in the United States. Alzheimer’s dementia affects four million Americans now, and is expected to increase sharply as the population ages. Both cardiovascular and Alzheimer’s disease have now been linked to the accumulation of a toxic amino acid called homocysteine. Vitamin

supplement users have assumed they are being protected against homocysteine overload, but this article will expose that fallacy and recommend a scientific course of action to follow. The medical establishment woke up to the dangers of homocysteine when the New England Journal of Medicine (April 9, 1998) and the Journal of the

American Medical Association (JAMA, Dec. 18, 1996) published articles suggesting that vitamin supplements be used to lower homocysteine levels. This same message was published by the Life Extension Foundation 18 years earlier (Anti-Aging News, Nov. 1981, 85-86). Some cardiologists suggest that coronary artery disease patients take a multivitamin supplement to lower


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RISK

SERUM HOMOCYSTEINE

PERCENTAGE

(MICROMOLES PER LITRE OF BLOOD) OF MEMBERS IN THIS RANGE

LOW

0 – 6.3

38%

MODERATE

6.3 – 10

52%

HIGH

OVER 10

10%

Circulation, 1995, 92 2835-2930 their homocysteine levels. Patients who follow this advice, but fail to have their blood tested for homocysteine, could be making a fatal mistake. The Life Extension Foundation has uncovered a flaw in the theory that a person can blindly take vitamin supplements to adequately reduce homocysteine levels. While folic acid, vitamin B12, B6, and trimethylglycine (TMG) all lower homocysteine levels, it is impossible for any individual to know if he or she is taking the proper amount of nutrients without a homocysteine blood test. The clear message from new scientific findings is that there is no safe “normal range” for homocysteine. While commercial laboratories state that normal homocysteine can range from 5 to 15 micromoles per litre of blood, epidemiological data reveal that homocysteine levels above 6.3 cause a steep, progressive risk of heart attack (the American Heart Association’s journal Circulation, Nov. 15, 1995, 2825-30). One study found each threeunit increase in homocysteine equals a 35% increase in myocardial-infarction (heart-attack) risk (American Journal of Epidemiology, 1996, 143[9]:845-59).

LETHAL MISCONCEPTION People taking vitamin supplements think they are being protected against the lethal effects of homocysteine when, in reality, even supplement users can have homocysteine levels far above the safe level of 6.3 to 7.0. The Foundation has identified several cases in which people who were suffering from coronary artery disease had lethal levels of homocysteine despite taking the

recommended dose (and higher) of vitamin supplements. One case involved a 60-yearold man who previously had bypass surgery, but who was again suffering angina pain with significant restenosis (reclogging of the coronary arteries) verified by angiography. This man knew about the dangers of homocysteine and had been taking more than 15,000 mcg a day of folic acid, along with other homocysteinelowering vitamins. Because of the angina pain and restenosis, the Foundation recommended a homocysteine blood test. The results came back showing that this man had a shockingly high homocysteine reading of 18 in his blood. (Homocysteine levels over 15 have been shown to be extremely dangerous.) The Foundation immediately suggested this man take six grams a day of TMG (trimethylglycine), and within one month, his homocysteine level dropped to four. This case was a wake-up call that one or more homocysteine-lowering factors are not always the solution to keeping homocysteine levels in the safest range (below seven). It was also a confirmation of our position that people who want to lower homocysteine must take into account all of the factors involved. Another case involved a healthy person who daily took a 500 mg TMG supplement, 4,000 mcg of folic acid, and high doses of many other vitamins. A homocysteine blood test revealed a reading of 11.3, which is far above the safe range of under seven. Six grams of TMG and 500 mg

of vitamin B6 were added to his daily programme, and the homocysteine level dropped to under six within 60 days. In response to these individual cases, the Foundation analysed all the homocysteine tests it had conducted on Foundation members and discovered that 62% of members tested have too much homocysteine in their blood. The chart shows the breakdown of members and their coronary risk factors based on serum homocysteine readings. The most recent survey (Cardiologia, 1999, Apr, 44[4]:341-45) shows that the average American’s homocysteine level is 10, so the fact that 90% of Foundation members are below 10 is a testament to the effectiveness of dietary supplements in suppressing dangerously high homocysteine levels (Annals of Epidemiology, May 1997, 7[4]:285-93). The problem is that certain members are not being protected against the damaging effects of homocysteine, and the only way of finding out is to have a blood test. When homocysteine is too high, the addition of extra amounts of vitamin B6 and/or TMG (trimethylglycine) has reduced levels to the safest range in every case we have worked with. The Foundation has found that the addition of extra folic acid produces only a moderate reduction in elevated homocysteine levels. Folic acid is a critical component of a homocysteinelowering programme, but there is a limit to how much homocysteine can be reduced by folate and vitamin B12. Cardiologists are increasingly recommending folic-acid supplements to their coronary artery disease patients, but the results from the Foundation’s laboratory indicate that it takes more than folic acid to reduce serum homocysteine to a level where it ceases to be a risk factor for causing a heart attack. (HRf)

David Arthur (B.Pharm MPS.ABAAHP) is one of SA’s top anti-ageing pharmacists and is certified by the board of the American Academy of Anti-Ageing Healthcare Practitioners. David consults at the Integrative Medical Centre (www.imcmed.co.za).


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HR FUTURE 02.2010


MORE TO LIFE

NEXT GEN parenting

HR FUTURE 02.2010 (47)

Kids crave a dad’s touch

A FATHER WHO IS ACTIVELY ENGAGED IN HIS CHILD’S LIFE WILL PLAY A MAJOR ROLE IN THEIR BECOMING A WELL ROUNDED ADULT. ALAN HOSKING

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While moms are indispensable, a caring dad is one of the best things that can happen to a child. Child experts have traditionally placed a major focus on a mother’s role in the lives of children and tended to ignore a father’s contribution. What a tragedy. Thankfully this is changing as research is making it increasingly clear that caring and involved fathers make a massive contribution to their

children’s well being, self esteem, emotional intelligence, sexual identity and sexual behaviour, as well as giving them an excellent chance of flourishing in adulthood. And the good news is that dads can do this in very simple ways as they actively love and care for their children, and by just being who they are – men! One of the simplest things which impacts on children is a father’s touch. Children have a need to be touched by a father. Children who experience love and care by being held and spoken to by their fathers develop a very specific and unique relationship with their dads. A dad’s touch, with his strong hands and somewhat hairy arms, is very different from a mother’s touch, and babies and children who experience this touch have a better chance of growing up to become well adjusted, emotionally healthy adults. A father who openly shows physical affection to his children helps contribute to their intellectual, physical and sexual development. Boys who are touched by their fathers in a healthy and caring way show a lower tendency to become sexually promiscuous and rebellious in their adulthood and girls who experience warm, healthy physical affection from their dads are much


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HR FUTURE 02.2010

less likely to become “boy crazy” to satisfy their need to be touched and for male approval. So, when the village idiot comes calling, your teenage daughter is far less likely to crave acceptance from him because of the approval she has enjoyed from the most significant man in her life – her dad. Her relationship with her father therefore becomes a frame of reference for how she relates to other men all through her life. Skin hunger – the lack of physical contact – can have a dramatic effect on a child. In its most severe form, it can result in death. Decades ago, infants in orphanages in the Soviet Union were reported to have died as a result of not being touched. But the positive side of this coin is that infants and children who are touched appropriately and regularly flourish physically, emotionally and intellectually. As well as the need to be touched by a father, children have a need to have a father play with them. Sometimes the last thing you want to do when you arrive home after work is play with kids, but taking five minutes to chase and tickle them is worth it in the long run. (Fast fact: Children up to seven years of age have two ambitions in life – to be chased and to be tickled.) Dads play very different games with their children from the games mothers play. And the games come to fathers quite naturally. No-one tells them to play with their children in a certain way – they just do it without really thinking about it. While mothers engage in gentle, nurturing activities, fathers play games with their children that involve getting them excited, very often including the elements of risk and fear. A typical father-child game would involve a father raising his hands like claws above his head, taking giant steps toward the child and growling, “Here comes the bear! It’s going to eat you up!” The child invariably turns tail and scampers away squealing with delight. Once cornered, he is usually scooped into his father’s arms where he is supposedly eaten by the bear, something which turns out to be

MORE TO LIFE

NEXT GEN parenting

ticklish and immensely enjoyable for the child. And every time he experiences being caught, his faith in his father’s love is strengthened. Children who are exposed to such games learn a number of valuable lessons. They learn to distinguish between reality and illusion – they know their dad’s not really a bear. They also enjoy the thrill of being scared while knowing that they’re not really going to be hurt, so they learn to deal with a negative emotion (fear of the “bear”) in a supportive and positive environment – something which proves invaluable when they make their own way in the world and have to face the fears that come across their paths. Another lesson they learn is how to read their father’s face and to respond accordingly. Dads often quickly tire of children’s games (you try keeping up with an enthusiastic toddler), but the positive outcome is that from as young as six months old, children have been found to be able to read the expressions on their fathers’ faces and can tell when the game is over. These children learn how to bring themselves down from the emotional high they were on as a result of being chased, causing them to grow up with a higher level of emotional self control and emotional intelligence. Emotional intelligence is becoming a major currency in the business world. Studies have shown that of people with the same IQ, education, skills and experience, it’s the person with the highest level of emotional intelligence (also called EQ) who will get ahead of the pack in the world of work. And fathers play a role in this. Fathers also typically throw their children in the air and catch them, or encourage their children to jump from the bed or couch while they stand waiting to catch them, simple games which encourage the child to take risks and trust their fathers. Watch your child the first time you encourage her to jump into your arms. She won’t be too keen – but as she comes to understand that you’re going to catch her, she loves it! By contrast, watch a child who has never been exposed to this type of game. They are quite

obviously terrified. Another important way that fathers strengthen the bond between themselves and their children is through the use of secret signs of affection. This can take the form of a squeezed hand or a wink across a room to your child, giving them a sense of well-being and security that they get from experiencing the invisible bond that exists between them and their father. Children thrive on attention and approval from their fathers. As a child grows up, they will frequently say those immortal words, “Look, daddy!” as they attempt to perform some or other activity. This is an expression of their desire to obtain approval and recognition from their fathers, and all this requires is the necessary attention directed at them (probably for no longer than a few seconds at a time) and an appropriate comment such as, “That’s wonderful, sweetheart!” or “Well done, my boy!” Of course, one has to be realistic about this – you wouldn’t give the same attention to your child while driving your car as you would in your back yard, and explaining to your child why there is a good and a bad time to focus on him is also a valuable lesson for him. It helps him learn that he is not the only person in the world and that sometimes he has to delay gratification in the interests of other people or things. We live in a very success orientated world. While there’s nothing wrong with that, we fathers unfortunately tend to view success as something which we achieve outside the home. When we broaden our view of success to include not only that which we achieve outside the home (at work) but also that which we achieve inside the home, we find fulfilment and meaning we didn’t realise we were missing. Don’t make the mistake of losing yourself in your career in the interests of giving your family a certain lifestyle when they would rather have you around instead. A good formula to apply is: spend half the money and twice the time on your children and you will experience ten times the happiness as you see your children fly higher than you thought possible.(HRf)

Alan Hosking is the editor of HR Future and one of South Africa’s leading authorities on first-time and working parents. He is the author of the best seller for first-time dads What nobody tells a new father, and is the presenter of a Next Gen Parenting Programme for corporates.


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