Mar 2012 • Vol 30 No. 3
People
Dynamics
Moving HR into a more strategic role
Journal of the South African Institute of People Management www.ipm.co.za
Editor’s letter 2 CULTURE CAPITAL
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Culture as a Competitive Advantage TALENT MANAGEMENT
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Why shun industry outsiders if corporate re-invention is vital? By Annelize van Rensburg GOING GREEN
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New research shows HR can help save the planet By Samantha Crous HR Solutions 6 Moving HR into a more strategic role By Rob Bothma LABOUR LAW COLUMN
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CCMA guidelines on misconduct crucial By Ivan Israelstam Mentor matters 8 Should I try to get a job overseas? By Gary Taylor PERFORMANCE MANAGEMENT
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Unleashing the potential of human capital By Anja Hartman-Weitz SKILLS DEVELOPMENT
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Learnerships transform lives By Aslam Galant and Mandy Carelse PERFORMANCE APPRAISALS
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Keep employee performance reviews short and frequent By Phil Meyer DATA LEAKAGE PREVENTION
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The email you wished you had never sent By Cindy Durston LABOUR LAW
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Outsourcing and the Labour Relations Act By Osborne Molatudi
The Top Executive Survey Analyses executive compensation package data collected from 600 organisations employing 6000 senior executives. Comprehensive market pay and benefits data is provided for the 25 most commonly found benchmark executive positions in South African organisations. Research results are analysed both by executive grade and by five researched organisational size criteria that have high statistical validity – thereby allowing interpretation across different industry sectors and organisational types.
The Top Executive Survey provides the basis for: Designing market-related executive compensation packages Developing pay strategies structured to attract and retain key staff in an intensely competitive environment
TOP EXECUTIVE REMUNERATION
CONTENTS
Personalised reports comparing up to date survey data with your executives current packages are prepared for the convenience of reports include comparisons of basic salary, guaranteed pay and total package costs with market data. Individual benefit comparisons are also included. The Top Executive Survey is available in hard copy and electronic format.
Executive Pay Policy
INSURANCE 18 Time to review your insurance covers By Mandy Barrett Technology 19
P E Corporate Services offers clients a range of advisory services covering every aspect of executive pay. These Include: Pay benchmarking across all sectors of the economy
Behavioural targeting hits the mark By Richard Mullins
Package structuring
TRAINING 20
Governance and board/remuneration committee advice
Knowledge management in local government By Jan van der Westhuizen and Herman Groenewald.
Incentive scheme design and implementation
Leadership 21 The power of talent analytics By Nadene Venter, MD, SHL South Africa News and reviews 22 Ipm on the mark with leadership summit HR Practice
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Re-building HR from the bottom up By Bernard Koch Gabriel’s Horn 24 A surge of honesty at eskom? By Gabriel Mofekeng Forthcoming ISSUEs features APRIL 2012 – HR Outsourcing & Technology, Change Mangement, Performance Improvement and HR Software MAy 2012 – Labour Relations, Labour Law, Skills Management and Organisational Culture.
For more information on these services please contact either of our offices in: Johannesburg Tel: (011) 442-4334 Durban Tel: (031) 700-1597 For more assistance in the Western or Eastern Cape please contact our agents: WORK DYNAMICS Cape Town Tel: (021) 913-8371 Port Elizabeth Tel: (041) 581-0150 or visit our web site
www.pecs.co.za
Editor’s letter
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easuring staff performance and their growth and skills development can be a somewhat touchy subject for some. Appraisals seem to be the irritation of most managers and their subordinates. They are something that should be done regularly and managed well but often in turns into something that is done begrudgingly and infrequently. What is the purpose of these appraisals? Well, without them how do we address the interrelated issues of career growth, pay and work flow? We need to assess and manage both the workload and work flow of those in our team and ensure that as managers we are assisting in skills development, training and enhancing competencies for the career growth of our subordinates. Yes, they are there to do the work of the company as prescribed by their job but in turn it is the company’s task to ensure career development and growth for each of their staff members. Of course the final outcome of an appraisal has to do with the ‘pay’ do we or do we not allocate those bonuses and pay rises? Employees often feel that their pay is not linked to their workload and complain about a lack of advancement opportunities. Performance appraisals provide a platform to deal with all of these issues. For some guidance on performance reviews turn to Phil Meyer’s article on the topic on page 11. We also have two new contributors who will be joining us in future editions; Rob Bothma will share his ideas on the strategic role of human resources within the organisation and Cindy Durston, who this month shares vital information on data leakage prevention. Enjoy the last few weeks of summer.
Editorial Alex Bouche E-mail: alexandra@eaglepub.co.za Advertising Bookings Helen Bennetts Tel: 011 326 0303 Fax: 011 501 2878 E-mail: helen@eaglepub.co.za Publisher The Eagle Publishing Company Tel: 011 326 0303 Fax: 011 501 2878 E-mail: rob@eaglepub.co.za www.eaglepub.co.za Rob Furney Tel: 011 326 0303 Fax: 011 501 2878 E-mail: rob@eaglepub.co.za Tony Proudlock Tel: 011 326 0303 Fax: 011 501 2878 E-mail: tony@eaglepub.co.za Design Margie Carter Tel: 011 326 0303 E-mail: studio@eaglepub.co.za IPM Central Office 287 Kent & Harley Street, Randburg PO Box 3436, Randburg 2125 Switchboard: 011 329 3760 Keith Pietersen Tel: 011 329 3760 Fax: 011 329 3765 e-mail:keith@ipm.co.za www.ipm.co.za
People Dynamics is the monthly journal of the South Africa Institute of People Management (IPM). The IPM is dedicated to the effective development of human potential. In terms of fast emerging global challenges, it is critical to champion the strategic role of human resources and to acknowledge that both development and management are catalysts for growth. In the spirit of progress and support, the IPM provides members with effective leadership and access to appropriate knowledge, information and the opportunity to network with key local and international players. People Dynamics provide a forum for debate and discussion on all issues affecting people managers in South Africa, the African continent and beyond. People Dynamics is distributed to all members of the South African Institute of People Management (IPM), and to other key decision-makers in the industry. To receive People Dynamics regularly and enjoy additional benefits, including discounts on HR-related services, professional networking events and HR vacancy postings on the IPM web-site, contact the membership manager of the IPM.
INTERNATIONAL FEDERATION OF TRAINING AND DEVELOPMENT ORGANISATIONS
WORLD FEDERATION OF PERSONNEL MANAGEMENT ASSOCIATIONS
No part of this publication may be reproduced without prior written approval from the IPM.
ISSN 0261-2399 The views expressed in this publication do not necessarily reflect the values of the IPM.
Culture Capital
Culture as a Competitive Advantage
Chairing Transformation—How ready are you for the challenge?
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rganisations constantly battle to stay ahead of their competitor. Some focus on their marketing strategy, others focus on innovative products, hiring the best people or having the best or quickest service. Others simply try to win the price war. No matter what your business’s competitive advantage is, very few focus on their culture as a true competitive advantage. Cultural capital is a measure of the value that can be placed on the way of being or “personality” of a group, collective entity, or an organisation. The difference in performance of a strong, adaptable culture compared to a weak, rigid culture is a reflection of the level of cultural capital in the two organisations. Culture encompasses more than a product line or your speedy service – it encompasses what you stand for – the values your organisation lives by. Often, those values are carefully thought out and published in pretty documents and annual reports. That is not the culture. The culture is the real values that are displayed every day in the behaviour of every staff member from senior to lower. It is reflected in the decisions your business makes every day. However, do customers really buy into your culture, your values? A new study has shown that more and more customers are looking at the reputation of the company behind the brand. The report shows that 70% of consumers will not buy a product if they don’t like the company behind the product. 67% are checking product labels to determine who the company behind the brand is and 56% do research about the companies that make what they buy. These statistics were even higher in developing economies than the developed economies. Directly quoting one of the respondents from China: “Who you are determines what you do, and the kind of company you are will determine the kind of products you make! The quality of a product is very related to the company.” Reputation is then based on who you are, the underlying culture or personality of your organisation. So what makes up reputation? How do consumers judge “good” companies versus “bad”? The top six most talked about topics that consumers mentioned were: How they feel about the product they purchased; The quality of the customer service; How specific companies treat their employees; News about scandal or wrong-doing; How they feel about the company as a whole; News about good deeds. Customer service and quality of products are often focused on by companies but how much communication does your organisation do around ethics and employee satisfaction? You probably thought it was important in terms of attracting talented employees but did you ever think it was important to your customers too? Unfortunately, people don’t believe your company website or promotional material when making decisions about your reputation. They listen to what other people say. They go online to look for reviews and online searches. They listen to or read news stories about your company. Although executives are realizing that reputation is important, they still tend to focus on traditional means of trying to create that reputation instead of focusing on building the strong culture that will automatically results in the strong reputation they are seeking. A values-driven culture speaks volumes about your organisation. To learn how to build cultural capital through values-driven leadership, contact Mandate Molefi for more information.
Chairpersons of Employment Equity and Transformation Committees have a unique challenge—leading a diverse team and keeping transformation on track Mandate Molefi has developed an empowerment programme specifically designed to help you meet those challenges Develop your leadership skills for change Understand matrix and diverse team management In-depth understanding of Employment Equity and Transformation Join our public programme on 16 and 17 April 2012 Contact us now to book Contact us on: (011) 728-9585 (021) 434-9593 Info@mandatemolefi.co.za www.mandatemolefi.co.za
TALENT MANAGEMENT
Why shun industry outsiders if corporate re-invention is vital? By Annelize van Rensburg
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he capacity to lead successful corporate reinvention increasingly features as a core requirement in the job specifications outlined by boards of directors in search of a new CEO. At the same time, talent search professionals are left in no doubt that candidates from outside the company’s industry will be considered and may even have an advantage over industry or corporate insiders. But by the time the talent search is complete; the successful candidate almost invariably comes from the industry concerned and on occasion may come from within the company that is supposedly looking for a makeover. The mismatch between the quest for a new broom and the appointment of a tried-and-tested insider can be glaring. Apparently, a strategic imperative – the need for new blood – has been forgotten and safety-first thinking has taken root in the weeks after the brief was given to the talent search specialists.Why is this? The question comes into sharp focus in view of the spectacular international success of arch-outsider Alan Mulally as leader of the Ford resurgence. The ailing auto-maker surprised its industry by bringing in Mulally from the airlines division of Boeing. In the five years since then, he has boosted profits, rescued the share price and put Ford back on its feet without recourse to US government bailout funding. The transformation has been nothing short of remarkable. Of course, the use of industry outsiders to lead acts of corporate reinvention is almost standard practice in the USA. Warren Buffet, the world’s most successful investor, was famously brought in by Salomon Brothers to save the scandal-plagued investment bank.At the time, Buffet was billed as Wall Street’s “ultimate outsider”. A little later, Robert Eckert was hired by Mattel Inc to drive the continued growth of this iconic toys and games business. He previously led Kraft Foods. Local corporates may have missed some of the international successes, but South Africa also provides occasional examples of cross-pollination between industries. Banking industry leader Tom Boardman founded and led Boardman’s Retail Stores before moving into financial services. Peter Matlare, CEO of food firm Tiger Brands, joined the packaged goods industry from Vodacom and the SABC.Telkom chairman Lazarus Zim has a successful career in both mining and ICT. Most recently, diamond producer De Beers created a major surprise by bringing in a total outsider as its new boss. He is mechanical engineer Philippe Mellier, previously a senior executive at French engineering group Alstom, and a man with no experience of mining or southern Africa. However, cross-industry forays like this are the exception in South Africa. There are no guarantees of success, however. Outsiders don’t always
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work miracles. One US executive made a celebrated cross-industry move some years ago and was initially applauded for short-term gains, only to be named a little later by business news channel CNBC as ‘one of the Worst American CEOs of All Time’. Pros are accompanied by cons. The ‘safe’ industry insider does not have to go through a period of intensive familiarisation with a new industry and its dynamics. He or she can hit the ground running. In contrast, the outsider faces a steep learning curve. Successful crossindustry movers like Alan Mulally acknowledge that their first job is to listen, then listen some more. Their advantage is the ability to ask embarrassing questions while taking nothing for granted. The reinvigorated executive team around the new leader stops making assumptions and starts to question old habits. In the early stages of the search for a reinvention agent, a corporate chairman and directors typically acknowledge that a fresh perspective can be extremely valuable. They may also acknowledge that new technology, new legislation and the emergence of a new consumer are having major impact on their sector. Past practice has therefore become less relevant to the formation of future strategy. But by the time in-depth interviews are being conducted it is often apparent that the ‘comfort fit’ has growing appeal. Directorial decisionmakers not only draw comfort from a candidate’s familiarity with their industry, but with qualifications, work experience and career paths that are similar to their own. Suddenly, evolution seems safer than revolution. Continuity looks a better bet than a thorough shake-up. In view of this recurring pattern are we destined for a perpetuation of the old norms. Is all the talk about the need for corporate reinvention so much lip-service? Perhaps not. If the break with the past at De Beers turns out to be an overwhelming success, we could very possibly see more of the same at other large companies.Alternatively, the risk of industry casualties at the end of today’s challenging business cycle could also stiffen the resolve of directors looking for new perspectives. For the present, however, old habits die hard in the way business leaders are identified and selected. Change may be on the way, but is not with us just yet. Annelize van Rensburg is a founder and director of Talent Africa, a leading provider of integrated talent solutions and leadership development.
GOING GREEN
New research shows HR can help save the planet By Samantha Crous
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here is a finer link than one may think between human resources and natural resources – and better HR practice could help save the planet, recent research shows. According to a statistic from the CRF Institute’s latest annual Best Employers Certification Index, if employees working flexitime for the listed companies worked from home for one day a year, South Africa would save 4 366 tonnes of carbon dioxide (CO2) and 119 079 litres of petrol. That’s good news for the economy and good news for the environment. More and more often, research is showing that sensible HR practices go hand-in-hand with a greener office environment and this is just one item of research, there’s a lot more potential for innovation. The CRF Best Employers Certification identifies choice employers through administration of the International HR policy and practice research survey. For years now, a growing number of organisations have been responding to workforce developments by offering their employees flexible working arrangements – a trend that makes sense in light of technological improvements that make us more mobile every year. The obvious benefits include health, happiness and increased productivity, because happy employees are more engaged employees. For example, three years ago the city of Houston, Texas, promoted flexi-time to ease its notoriously congested commuting routes. The initial two-week trial was so successful (workers’ stress was reduced by 58% and their productivity nearly doubled) that over 200 companies immediately adopted the new system. But in addition to the benefits to businesses, the move drastically reduced the city’s issues of congestion and pollution as well. Locally, companies are starting to follow the same trend. A good example is Ernst & Young, which is ranked fifth in the 2011/2012 list of top employers and also lauded as one of the most flexible. According to People Leader for Ernst & Young, Seshni Samuel, flexible working is so entrenched in company culture that employees do not even have
permanent desks at which they work. Instead, the organisation provides each employee with a laptop and 3G wireless modem, which allows them to work from just about anywhere. As a result, the company is saving the country thousands of tonnes of CO2 and litres of petrol – and employees are saving plenty in time and travel costs as well. Accenture, which is ranked second in the overall top 10 Best Employers list and, like Ernst & Young, is also named as one of the Most Flexible Best Employers in South Africa is also in the process of piloting a three-day office week in some of their departments in their SA offices, allowing employees two days a week to work from home. Benefits such as job-sharing, compressed working hours, flexi-time working, part-time working, telecommuting and time off in lieu of overtime are some of the methods effective HR officers can use to become more planet-focused. But contributions can also be made in other ways, she says – for example, when businesses tackle strategically the widespread issues of poverty and lack of education through skill development or other social and enterprise development programmes. Even overpopulation can be tackled through employee education, empowerment programmes or community outreach initiatives. Another area of huge potential impact, though the individual actions may seem small, is the eco-modernisation of office buildings. Many top organisations in the country have automated lighting systems in place, and for companies of all sizes, there are the increasingly common practices of recycling and reducing paper wastage through accesscontrolled printer codes. What is becoming increasingly evident is that HR is no longer just the “hiring and firing” centre. HR departments can become key business partners with massive influence over the success of their organisations – and an essential role to play in growing company and employer brands as environmentally conscious employers of choice. For more information of the Best Employers Certification Index please visit http://www.bestemployers.co.za/ Samantha Crous, Country Manager, CRF Institute in South Africa March 2012 People Dynamics
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HR Solutions
Moving HR into a more strategic role By Rob Bothma
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ith the importance of the human resources department growing within organisations today coupled with the fact that HR is now seen as an integral part of the business, HR managers and executives need to now step up to the plate and start performing a more strategic role within the organisation. The business environment faced by many organisations today is currently undergoing some incredible changes and advancements and technology is moving forwards in incomprehensible leaps. Organisations are required to become more and more innovative in ever increasing steps to stay ahead of their competitors. Innovation and creativity are becoming critical; they are in fact defining how we should be approaching all aspects of our business. As an HR professional when you look at your HR function within the organisation, you need to be asking yourself “How should we be changing?” and “Is our HR department being sufficiently innovative and creative in the never ending search for new talent?” When analysing how the HR team is operating within an organisation you can basically define two types – l those focused on transactional HR (focusing on administrative functions) and l those focused on strategic HR (looking at employee and organisational growth). Although both very different, they are both in fact vitally and absolutely necessary for your business to succeed. It is the amount of time and effort invested in each that becomes the differentiator. The day to day operations of the HR professional focussed on transactional HR is filled with rules, policies, procedures, forms and continuous streams of employees requiring information – all this coupled with a high dose of stress. In this environment it is easy to see that most of the processes are of a reactive nature with very few being proactive. When looking at its counterpart, strategic HR, it is here we find activities that are almost always proactive, and in order to operate in this mode the function is usually integrated with the running of the business. We find the role of the strategic HR professional is to ensure that the HR function is prepared to support the objectives of the different business units as well as the business as a whole. If the business needs to grow or move into new spheres of business, change its image to its client base or improve its customer service the strategic HR team is there to help. It becomes the enabler to the business by providing information around workforce planning, skills and knowledge assessments and inputs into the recruitment process to ensure competent candidates are employed. So in order for HR to start implementing the changes in their roles to move from being predominately transactional to being more strategic, there would need to be a complete change of focus in their activities. For those HR teams more focused on the transactional side of work a move needs to be made to becoming more focused to those activities that centre on core aspects of the business, and are more strategic in nature. Activities that should be focused on should include: l Aligning the HR strategy to the organisation’s business strategy l HR to create a focus on talent management i.e. start focusing on items that deal with: l Attracting new talent to the organisation
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l Developing and retaining this talent l Members of the HR team need to start providing their expertise as an HR service/consultant role within the organisation l The HR team should review the current technology utilised and ensure that their systems and processes are in line with the current technology that is now available l HR to create an environment for employees to have full access to all their relevant information stored on the HRIS 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 – this can largely be achieved through the implementation of technology – self service in the case of HR. Unfortunately, administration will never disappear; it needs to be moved to where it belongs within the organisation i.e. at line management or employee level – and it is only through the implementation of a self service model that this can be achieved. In summary, although technology can now provide us with the ability to automate many of the administrative tasks through the implementation of self service models, it is the HR team that needs to take ownership of transforming their department to one that focuses on the more strategic issue of managing the talent within the organisation. Rob Bothma, HRIS Industry Specialist, Business Connexion, rob.bothma@bcx.co.za
LABOUR LAW COLUMN
CCMA guidelines on misconduct crucial By Ivan Israelstam
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umerous CCMA awards have been successfully reviewed at the Labour Court.This has resulted in the view that the quality of CCMA awards can be improved. This is possibly one reason for the CCMA’s decision to implement its CCMA guidelines: Misconduct Arbitrations in terms of the provisions of the Labour Relations Act (LRA). The stated purpose of these guidelines, applicable from 1 January 2012, is to “…promote consistent decision making in arbitrations dealing with dismissals for misconduct.” This development can only be welcomed. One of the major headaches for all those involved in discipline has been the constant shifting of the goalposts as to what constitutes fair dismissal and the resultant lack of clarity of the law. These guidelines, once they are completed, should go some way towards clearing up a number of uncertainties in this aspect of the law. Item 4 of the draft guidelines indicates, at least in part, that the guidelines represent CCMA policy and should thus be applied by Commissioners in carrying out arbitrations. However, a factor that could detract from the good intentions of the guidelines is that item 4 thereof allows Commissioners to depart from this CCMA policy where they have “…good reason for favouring a different interpretation to that which is represented in the guidelines.” However, this licence to be inconsistent is balanced by item 5 of the guidelines which requires the arbitrators to set out their reasons for adopting an approach different to CCMA policy as reflected in the guidelines. The draft guidelines further require “…Commissioners to interpret and apply the LRA and other legislation in accordance with judicial decisions that are binding on it” and that the most recent binding decisions of the highest court must be followed by Commissioners.These include decisions of the Constitutional Court, the Supreme Court of Appeal, Labour Appeal Court, High Court and Labour Court. It is not clear whether this means that all labour-related decisions made in the said courts are binding on Commissioners or whether only some are binding. As the guidelines do not discuss which decisions would not be binding, it appears likely that the guidelines intend all labour-related decisions made in the above-listed South African courts and which have not been overturned to be binding on the arbitrators. The guidelines also oblige Commissioners to favour the principles of law arising from the new labour law dispensation that was instituted after the old LRA of 1956 was repealed in 1995.
Item 10 of the guidelines makes it compulsory for arbitration awards and rulings to be lawful, reasonable and procedurally fair. This item of the guidelines draw directly on the provisions of Section 33 (1) of South Africa’s Constitution which gives everyone the right to administrative action which is lawful, reasonable and procedurally fair. It appears that this has paved the way for parties taking arbitrators to the Labour Court on review to do so on the basis that the arbitrator failed to comply with these Constitutional provisions. The greatest importance of these draft guidelines is that they deal with a wide spectrum of aspects relating to misconduct dismissal cases. These aspects include, amongst others, the manner of conducting the arbitration hearing, the nature of the arbitration, requirements for different stages, the requirement that evidence must be held anew at arbitration, explanation of the inquisitorial approach as opposed to the adversarial approach, rules for the assessment of evidence by arbitrators, the meaning and components of substantive and procedural fairness, the role of the employers’ disciplinary procedure and code and discipline of trade union representatives. The proposed guidelines reinforce the principle that the legal onus is on the employer to prove the fairness of the dismissal. It reminds employers of the need to take mitigating circumstances into account and elaborates on the remedies that arbitrators are to use in cases where dismissal has been found to be unfair. Having said this, I must stress that it still remains to be seen whether: l Commissioners will all interpret these guidelines, once they are finalised, in the same way, l the “consistent decision making” desired by the CCMA will be achieved and l whether fewer reviews at the Labour Court will be successful. I am optimistic that if these guidelines are taken seriously by Commissioners, arbitration awards will begin to be more consistent and less reviewable. To book for our seminars on NEW CHANGES AND DANGERS IN LABOUR LAW 2012 in Cape Town (9 March 2012) and Durban (15 March 2012) please contact Ronni via (011) 782-3066, 0845217492 or ronni@ labourlawadvice.co.za. Ivan Israelstam, Chief Executive of Labour Law Management Consulting. He may be contacted on (011) 888-7944 or 0828522973 or on e-mail address: labourlaw@cinet.co.za. Go to: www.labourlawadvise.co.za. March 2012 People Dynamics
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Mentor matters
Should I try to get a job overseas? By Gary Taylor
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o, I am not talking about emigration – rather whether you should consider living and working outside of South Africa as a career move. Why should you? Why wouldn’t you? It is one of the questions I get asked most frequently (having worked outside of RSA for 4 years now) and perhaps it is something you have considered. Any ambitious professional must wonder whether, in this global economy, tomorrow’s leaders should not have gained some overseas work experience in their CV. How many of us anticipated that the formerly 100% home grown companies of yesteryear would either be owned by foreign interests or expanding globally? Do South African HR professionals really understand global HR dynamics until they have experienced them? Then, which region should I go to? Should it be the US or Europe which is “first world” - but their job market will be tight for the next decade? Asia, where the new world powerhouses are blooming? The Middle East, with its irrepressible wealth and unique way of doing things? The decision is yours to make, but what are the implications of the great trek? Some of us expats start our careers with a stint overseas, while others go prior to or after retirement. Reasons vary – some hate it, while others never return. Does it take a certain type of person, and what will I gain or lose? Rather than share anecdotes, this article relies heavily on HSBC’s survey of over 4 000 expatriates in more than 100 countries. Tip #1: if you are contemplating it, start your research now – there is a lot of good information available. A somewhat startling finding is that the reasons people take overseas assignments are not quite the same as the benefits they feel they gained in retrospect. The prime drivers to seek an expat job are career and cash – not always in that order. However, the top 4 benefits perceived by those who have already been expatriates are: 81% - personal development/broadening life experience 66% - quality of life 60% - career development 55% - wealth So, we leave our homeland to build a solid CV and bank balance, but discover that we have grown as people more than anything. Hmmm – does this fact make you more eager to go overseas now, or less? Cynically, one could say that having all that foreign currency in an offshore account is what allows you to smell life’s roses. Of course, different countries have different appeals – for instance, money is the prime motivator for expats in Saudi Arabia (85%), Qatar (83%) and Russia (76%).
Downsides? Emotive worries top the list for most expats, with “fears of a worse social life” and “separation from family/friends” topping the anxiety list. Expats work hard at addressing these concerns, and studies show that 19% of expats actually spend more time contacting friends and family when abroad than they did in their home country. Skype, email and social media help a lot, but don’t replace a hug. Other issues which worry expats include (in order) career prospects, language concerns, the relocation process, healthcare, culture adjustments, standard of living, bureaucracy/corruption, children and safety. Smart employers help to address each of these, trying to turn a negative fear into a positive experience. Some of the surprises to expect if you have not lived abroad? South Africa is just not important in global affairs, and no one feels they owe us anything. Other countries are doing whatever it takes to survive and thrive – their mindset is in the future, not the past. Also, most overseas professionals are much better qualified than us, and our universities (except for UCT) generally do not even rank in the world’s Top 300. Racism abounds without shame; you can lose your job pretty easily. The world is not fair. So, why risk so much to swim in the big sea? Generally, the rewards are well worth it, at so many levels. In fact, only 6% of expats say they want to return home, never to work overseas again. The rest are keen to continue travelling and expanding their world view/careers. Outside of RSA, we do not spend headspace worrying about crime, race or Malema’s next move. Not that there aren’t similar issues in your host country, but you don’t worry about them as much, as a foreigner. Diversity takes on a different meaning in a multinational environment, but our experiences in South Africa make us more tolerant than many homogenous societies. In the HR field, we learn about appropriate best practices, truly international compensation, very different local labour laws and sourcing talent globally. You become a bit more humble when away and, ironically, maybe more intolerant of local peculiarities when returning. An expatriate assignment is not for everyone, but must be worth considering, especially in a global job market. 88% of current expatriates recommend it. Personal comment: you cannot believe just how adaptable we are as human beings, and you would probably surprise yourself at how much change you could absorb. And change is as good as a holiday.
Gary Taylor has written several articles for People Dynamics over the years. His Mentor Matters is a regular column in which he addresses topical HR issues from the perspective of a career HR practitioner (and mentor) and offers some new perspectives on regular issues that HR practitioners face daily. Gary has been in HR for 25 years, in National Mutual and Unilever, HR director at Medscheme for 14 years, and three years as Executive Director: HR at Wits University. Four years ago, he was appointed to start up HR for a new university in Saudi Arabia, where he is now Director of the Policy Office. He is registered as a Master HR Practitioner and Mentor with the SABPP, served as vice president for the IPM for two years, and received the IPM President’s Award in 2008. He has written chapters for two HR books, been published in People Dynamics and HR Future, and was the SA correspondent for the UK magazine, People Management.
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People Dynamics March 2012
PERFORMANCE MANAGEMENT
Unleashing the potential of human capital By Anja Hartman-Weitz erformance management is often viewed as yet another administrative process that needs to be completed, when it is, in fact, a golden opportunity to lay a solid foundation of growth and development for both business and employee alike. Performance management should be done with the purpose of improving a company’s performance instead of adhering to HR policies and procedures. Performance management has the potential to have a positive impact from an organisational, team and individual perspective, if executed correctly. In many instances a performance management exercise will aid an organisation to clarify its goals. It will ensure that all the different departments and areas of business are collectively working towards a single strategic company objective.The process will also highlight areas where the strategy or direction needs to be tweaked in order to achieve optimum alignment. Each team within an organisation serves a specific purpose in the grander scheme of things, but remains inter-dependant despite the fact. If any part of the business is experiencing any difficulties, it will never be able to reach its full potential and positively contribute to the organisation as a whole. For this reason it is crucial for each team to understand exactly what role it plays and how that role impacts other teams and operations around it. Human capital is the cornerstone to a company’s success. Each individual has a basic desire to fulfil a purpose and in order to do that, the individual needs to know what is expected of him/her with a clear description of what is required and where he/she is going. Performance management provides a platform for this to take place and illustrates exactly how that individual contributes by adding value to the team and organisation’s overall goal. The overall performance of an organisation will be enhanced through training and development that will ensure the growth of the individual on both a personal and organisational level. Performance management provides the input and information required to formulate a skills development strategy that combines the requirements of the individual, team and organisation in its pursuit of a single goal. The individual, team and organisational performance management process can however not be done in the absence of other HR processes and systems such as succession planning and talent management.The future and longevity of the organisation depends on it, and the individuals must therefore be managed with a long term objective in mind. The implementation of the company’s values into the performance management process will aid in the development of an organisational culture that is unique and will add value to the customers that will experience its offering. Keep it simple and form a base for recognition and reward. Performance management opens the channels for feedback where the individual, team and organisation can quickly identify obstacles, giving ample opportunity to adjust where necessary. The key to success lies in technique, it is important that the performance management process is clearly and continuously communicated from the top down in order to secure buy-in and collaboration from both management and staff alike.The value of a computerised system allows for readily available information that is invaluable when it comes to decision-making. Performance management is most effective when the process is informal with regular monthly one-on-one sessions.
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Anja Hartman-Weitz, HR Manager for Softline VIP, part of Sage Group Plc. March 2012 People Dynamics
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SKILLS DEVELOPMENT
Learnerships transform lives By Aslam Galant and Mandy Carelse
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he government continues to encourage job creation and is giving strong support to various Seta’s under its control to develop and provide learnership programmes in various sectors in order to expand the job market.This is an attempt to bring down unemployment, which is currently at an all time high. While this initiative has been welcomed by businesses and the job market has been provided with hundreds of people, there needs to be an accelerated process to get more job seekers into gainful employment. The normal process is for the Seta concerned to provide the funding for the learners’ training based on the benefits of the BEE scorecard. At present our company is dealing with the services Seta, because we are focusing on call centre support staff. We work closely with our clients to provide the link between the learner, the lead company and ourselves. We see this as a triangular relationship where all three parties are equally dependent upon each other for the success of the programme. Isilumko provides all the necessary recruitment steps to select the learners as per our client’s requirements. This includes screening, managing the whole process between the lead employers, for example company X and IS, looking after all the HR requirements, payroll and selection of hosting environments. Some of our clients have also specifically requested that disabled learners participate on this programme. The companies that we are dealing with have embraced
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People Dynamics March 2012
transformation and have accepted the responsibility to create opportunities for young aspiring individuals to develop their skills and talents. However, learners must accept responsibility to transform themselves, as they play a major role in ensuring that real transformation takes place. Learners must use this opportunity to develop their skills, gain experience and maximize their potential. They also need to use this opportunity to showcase their talents and skills to potential employers. By taking responsibility on the learnership programme during which there is free training, the learner has the opportunity to showcase his/her skills. As project managers we keep in regular contact with the learners throughout the course to ensure that they are motivated. Keeping our clients and the learners satisfied is a top priority. We have recently had a new intake of 50 learners in January 2012. To qualify they needed a matric certificate, preferably be bilingual and be numerate. On completion of the one year learnership programme there is no guarantee of a job, so the learners have to take responsibility for their own success, by transforming and empowering themselves. Many may even be offered employment in the company where they are completing their learnerships. Aslam Galant and Mandy Carelse, Isilumko Staffing, 021 461 3609 or go to www.isilumko.co.za
PERFORMANCE APPRAISALS
Keep employee performance reviews short and frequent By Phil Meyer
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taff performance reviews are critical in most businesses yet unpopular with the majority of managers who would probably admit they find conducting reviews a tedious task. However, with proper planning and the use of payroll and HR software, performance reviews can be a valuable and motivational experience for managers and employees. The key is to ensure that the performance review process is simple and quick. Avoid making the review process too complex or it could become both intimidating for employees and tedious from an execution point of view. The answer is to measure less, more frequently. Keep the process simple and develop a habit of conducting reviews more often as employees generally are more comfortable with this approach. If simplified, quick reviews that are regularly conducted enable managers to deliver more value to employees, identifying areas where improvement is necessary and providing the employee with an opportunity to improve in those areas by the next review. A combination of regular short reviews with one in more detail at longer intervals probably offers the greatest value to both employers and employees. Despite the fact that performance reviews are not intended to be a tool by which to determine salary increases, they often end up playing that role. The real objective, however, is to regularly identify areas of concern and areas of excellence to the benefit of both employee and employer. For employers, well-developed personal skills lead to positive performance review outcomes and he points out that where regular reviews are implemented, employees who have received a negative review at least have a chance to turn that into a positive outcome at the next one. Human Resources Management (HRM) is a vital component of good business practice but doing it properly and effectively is not always that easy. This is where technology in terms of payroll and HR software solutions can ensure that the correct systems and processes are firmly in place. Aligning employees to the company vision, mission and objectives is achieved through measurement and regular reviews. It is important for employees to receive recognition for achievement and are made aware of under-achievement and what they need to do to rectify it. Reviews should take five to 10 minutes. Regular appraisals and feedback is the way to keep on track. Employees have opportunities to improve and that improvement is easily traceable over shorter periods of time. Automated payroll and HRM software solutions assist managers by offering pre-defined Key Performance Area (KPA) and Key Performance Indicator (KPI) categories and review templates that are automatically kept on record. Management is therefore able to store all review records and accurately monitor staff performance improvements. Employees like to receive written feedback from reviews, even if only by email. Such brief reports provide a base for comparison and both parties know where they stand.The next review will enable both parties to identify the levels of improvement and progress achieved. Phil Meyer, technology director, Softline Pastel Payroll, part of the Softline and Sage Group plc. +27 11 304-4190, www.pastelpayroll.co.za
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11
DATA LEAKAGE PREVENTION
The email you wished you had never sent By Cindy Durston
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ave you ever hit the ‘send’ button, only to realise that you made an enormous mistake? You sent an email to an entire mailing list, but didn’t ‘bcc’ their addresses. Have you lost or misplaced a memory stick, panic striking in your heart because it contained your company’s brand new marketing campaign? Have you selected to print a highly confidential report, and arrived at the printer to discover it was not there? With the advancement of technology it is practically effortless to use and disseminate information and, with increasing frequency and severity, more and more organisations are becoming victims of highprofile data leaks that started with a simple human error. What are often inadvertent leaks are compounded by malicious activities from both insiders and external sources whose only objective it is to use the information for illicit purposes. Every device in a company that stores information exposes the business to loss, theft and corruption. Additionally, if one considers that every desktop PC typically contains important productivity outputs and confidential information, the risk potential is enormous. High quality and timely information is the lifeblood of business success, and of strong, vibrant markets. It has become a top-line asset across enterprises, critical to pursuing opportunities and gaining a competitive advantage. It is at the very core of investor confidence. Without it, stakeholder trust wanes. Economic power is eroded. Fair and efficient business practices cease to exist. As the quantity of information increases exponentially, the quality of information must be an organisation’s single priority.
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The current business climate favours the informed, making intellectual property, client records, and other sensitive information vital to staying abreast of a global competitive marketplace. A single leak can have catastrophic consequences for a company, from the cost of near-term remediation to the long-term damage to your credibility in the market place. Information security professionals face a daunting challenge: how to protect the information asset whilst providing more efficient communication technologies to allow their enterprises to stay in touch, communicate and collaborate. In the 2011 Global State of Information Security Survey, a worldwide security survey conducted by PriceWaterhouse Coopers, CIO and CSO magazines, it is reported that “for the second year in a row, increasing the focus on data protection is the single most common strategy worldwide.” This is borne out of the evidence of executive recognition that information security’s strategic value is more closely aligned with the business than with IT. As awareness grows, the information security function continues to take on a far more client-facing, business-supporting, strategic value-building role. In order to address the problem of data leakage prevention, we need to define it. “data leakage prevention” is simply defined as the practice of making sure that the sensitive data that belongs to a company is not compromised or lost when storing, managing or using it. The pressure to provide data protection is influenced by three factors:
DATA LEAKAGE PREVENTION l protection of classified/confidential data l regulatory compliance l mitigating risk and the associated cost of a breach All organisations are required to ensure that enterprise data is secure at all times. In South Africa King III, the King Code of Governance Principles, provides the framework for good governance, with significant emphasis on IT governance, Board accountability, protection of sensitive enterprise information and evidence of compliance and efficacy. The King Code expressly addresses the matter of “authenticity of system information,” including “unauthorised use, access, disclosure, disruption or changes to the information system.” It further advises that “the board should ensure that all personal information is treated by the company as an important asset and is identified.” As the enabler of due diligence and due care, King III must be interpreted in conjunction with other legislation, such as ECT, PAIA, FICA, and MISS, etc, to comprehensively grasp the legal provisions of organisational responsibility and accountability with regard to data leakage prevention. With regard to privacy, SA is lagging, but elsewhere in the world tough privacy laws are being reviewed and enforced, with significant emphasis on the obligation of companies to report data breaches as soon as possible. The aim of all legislation is to provide increased responsibility and accountability for those processing personal data. Perhaps the legislation that will finally give impetus to data protection in South Africa is the Protection of Personal Information Bill (POPI), when it is passed. For the first time South African companies will face scrutiny by a regulator. If a breach occurred, unintentionally or maliciously, would your company survive such scrutiny? Addressing privacy and security issues has become a business imperative as more data increasingly travels across boundaries for various purposes. Privacy in particular, not only requires attention to comply with laws and regulations, but is also fundamental to an organisation’s trust relationships with its clients, business partners, employees and other stakeholders. Without doubt, companies need policies that comply with privacy laws and any government data protection legislation, but the greatest driver for a robust security mandate is the economic value of the information asset. Regardless of form or ferocity, data loss could happen to any business. In fact, it goes along with the ‘rationale’ that there are only two categories of businesses: those who have already experienced the pain of losing valuable data, and those who will at some point in the future. Companies that are not at the cutting edge of implemented governance and security controls are at risk, and failure to act promptly would be at their own demise. Cindy Durston, Managing Director, Perimetrix Holdings (Pty) Ltd., cindyd@perimetrix.co.za or www.perimetrix.co.za References: PriceWaterhouseCoopers, 2010. Findings from the 2011 State of Information Survey. [online] Available at: http://www.pwc.com/gx/ en/information-security-survey/pdf/giss-2011-survey-report.pdf [Accessed 10 February 2012]. Institute of Directors in Southern Africa, 2009. King Report on Governance for South Africa.[online] Available at: http://african. ipapercms.dk/IOD/KINGIII/kingiiicode/ [Accessed 10 February 2012] Institute of Directors in Southern Africa, 2009. King Code of Governance Principles (King III). [online] Available at: http://african. ipapercms.dk/IOD/KINGIII/kingiiicode/ [Accessed 10 February 2012]
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LABOUR LAW
Outsourcing and the Labour Relations Act By Osborne Molatudi
Introduction Does second-generation outsourcing constitute a transfer of business as a going concern? In particular, does section 197 of the Labour Relations Act of 1995 apply to second-generation outsourcing? Well, that question was ultimately answered in a majority judgment handed down by the Constitutional Court on 24 November 2011. Brief background During 2000 and after the completion of a tender process, South African Airways (Pty) Ltd (“SAA”) outsourced its facilities management services to LGM South Africa Facility Managers and Engineers (Pty) Ltd (“LGM”). The duration of the outsourcing agreement was 10 years. In terms of section 197 of the Labour Relations Act of 1995, as amended (“the LRA”) employees of SAA who were engaged in the performance of the services concerned, were automatically transferred with the services to LGM. In June 2007, SAA then notified LGM of the cancellation of the outsourcing agreement with effect from 30 September 2007. NB: Section 197 deals with transfers of businesses and services, and the impact they have on the employees’ job security. The Aviation Union of South Africa (“AUSA”) later joined in the proceedings by South African Transport and Allied Workers Union (“SATAWU”), realising that it was not receiving any undertaking from both parties regarding the job security of its members who were the employees transferred from SAA to LGM, then brought an urgent application in the Labour Court requesting the Court to declare that the termination of the outsourcing agreement between SAA and LGM constituted a transfer of a business in terms of sec 197 of the LRA. AUSA also sought an order declaring that the award of tenders and appointment of third parties to provide the services covered by the outsourcing agreement, amounted to a transfer of business as envisaged in sec 197. An interdict was also sought against SAA restraining it from providing or allowing a third party to provide the services while the matter was underway. The Labour Court decision Relying on the definition of the word “transfer”, which it construed literally, the Labour Court held that sec 197 does not apply to a second or subsequent outsourcing agreement because the agreement does not involve a transfer by an old employer to a new employer. The basis for the Labour Court’s decision was that, for sec 197 to apply, the transfer must be facilitated by an old employer to the new employer. It also relied on the clear wording of the definition that sec 197 cannot be construed in a way that makes it apply to a “transfer from one employer to another as opposed to a transfer by the old employer to the new employer”. It should be noted that this approach conformed
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with the intention of the original drafters of the LRA. The Aviation Union then took the Labour Court decision on appeal to the Labour Appeal Court. The Labour Appeal Court decision In the Labour Appeal Court, the case turned on the proper interpretation of sec 197, in particular whether the word “by” in the definition of “transfer” can be read to include “from”. The Labour Appeal Court rejected the proposition that the use of “by” signifies that the transferor has a positive role to play in bringing about the transfer. The LAC held the following: l the wording of sec 197 does not support exclusively the connotation that the transferor must play an immediate and positive role in bringing about the transfer; l it rejected the literal meaning adopted by the Labour Court; l it preferred an interpretation that would advance the purpose of job protection as opposed to an interpretation that denies protection to employees affected by a second outsourcing agreement; l that the literal interpretation of the word “by” was subversive of the protection of employment; l that a departure from the literal meaning of “by” was justified because that meaning would defeat the very purpose for which sec 197 was enacted; and accordingly l the LAC concluded that sec 197 applies to a second outsourcing agreement. SAA appealed the judgment of the Labour Appeal Court to the Supreme Court of Appeal. Challenging the interpretation of sec 197 by the LAC, SAA contended that the interpretation was inconsistent with the text of the section. SAA further submitted that the LAC erred in finding on the facts that there was a transfer of business as a going concern. The Supreme Court of Appeals decision The SCA upheld the construction contended for by SAA and held the following: l by interpreting the word “by” to mean “from”, the LAC distorted the plain meaning of sec 197; l the LAC erred in finding that a transfer of services had occurred; and accordingly l the LAC decision was set aside. The unions were dissatisfied with the decision of the SCA and appealed the decision of the Supreme Court of Appeal to the Constitutional Court. The Constitutional Court judgment After examining all the facts and the legal issues presented to it, the Constitutional Court in summary held the following: l it cannot be doubted that the word “by” must be given its ordinary meaning;
LABOUR LAW l to determine whether a transfer is by the old employer to the new employer, two questions should be asked. Firstly, “does the transaction concerned create rights and obligations that require one entity to transfer something in favour of or for the benefit of another or to another?” and if so, secondly, “does the obligation imposed within the transaction, fairly read, contemplate a transferor who has the obligation to effect a transfer or allow a transfer to happen, and a transferee who receives the transfer?”; if the answer to these questions is the affirmative, then the transaction contemplates a transfer by the transferor to the transferee; l in considering an outsourcing agreement, it is important to determine whether what is outsourced is a business as a going concern, rather than merely the provision of an outsourced service. For example, if the outsourcing institution from the outset did not offer the service, it is obvious that the service cannot be set to be part of the business of the transferor; Accordingly, the Constitutional Court concluded that the termination of the outsourcing agreement between SAA and LGM would lead to the transfer of a business as a going concern and that the original transfer of the facilities management operation business to LGM by SAA was not to be permanent. In other words, the ownership of the business was not to be transferred. On that basis, LGM became obliged, on termination of the agreement, to transfer its right to provide the services either to SAA or a third party nominated by it. On that basis, the majority judgment upheld the appeal against the SCA decision and issued the following order: “it is declared that the cancellation of the agreement between SAA and LGM entered into in March 2000 obliges LGM to transfer a business as a going concern within the meaning of sec 197(1) and sec 197(2) of the LRA.”
Comment My view is that the Constitutional Court judgment has the following implications: l sec 197 is likely to apply to all outsourcing arrangements between ‘clients’ and ‘service providers’ regardless of whether it is a first, second, third, etc generation outsourcing agreement; l the nature of the outsourcing agreement in relation to employees, ownership of assets, tangible or intangible, the premises and other tools used by the service provider(LGM) will always be the determining factors; l the termination clauses in the outsourcing agreements will have to take into account the job security of employees affected thereby; l the critical aspect is that there is no need for a positive action by an old employer with reference to the rights and obligations created by the outsourcing agreement; l the judgment could be seen by some as introducing a new commercial & employment rigidity, and in that respect it will be unfortunate. I believe that for legal and policy grounds the Constitutional Court should have followed the decision of the SCA; l from a union perspective, the decision may on occasions discourage outsourcing, but this could have the unintended consequence of discouraging the creation of small businesses. Employers should therefore be alert to the implications of this judgment, carefully review the nature of their outsourcing agreements, and seek proper legal advice before finalising those arrangements with service providers. Osborne Molatudi, Cowan Harper Attorneys, omolatudi@wecan.co.za, 011 783 8711
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17
INSURANCE
Time to review your insurance covers By Mandy Barrett
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he New Year is upon us and it’s time to review your insurance covers to avoid under insurance, while at the same time ‘right sizing’ those covers. Figures show about 40% of insurance policyholders are underinsured in South Africa and this figure could be growing as household budgets come under increasing pressure. It’s scary that frequently it’s not just a matter of home theatres, Raybans, clothes and the like being under-insured. As serious as that may be, often major possessions such as cars are not properly covered either and the situation could be getting worse as consumers seek to off-set rising transport, electricity and other day-to-day cost of living expenses. It is about taking a risk management approach, what risks are you prepared to and can afford to cover yourself? Where can you reduce your risk (i.e. by increasing security or generally just being more vigilant) and what risks do you need to transfer to an insurer? When purchasing insurance cover, manage your premiums by purchasing the cover that you need, consider taking an excess as opposed to being under-insured. You can include something along the lines of catastrophe cover i.e. you can’t afford to replace your vehicle but you may be able to afford to replace a cell phone etc. The risk management approach here would be great. If you are under-insured on the other hand, in the event of a claim, you could be paid out only partially for the loss. That’s because of what the insurance industry describes as the “average” formula and it works like this: You insure household contents for, say, R250 000. But in fact their replacement value is perhaps double that amount, so you are effectively 50% under-insured. Should you suffer a loss of say,
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R40 000, the insurance company will therefore pay only 50% of the claim, i.e. R20 000 and you are out of pocket for the balance. Then consider your family vehicles. With our unenviable accident rate, poor standard of driving, car hijackings and theft, reportedly one in four vehicles is subject to a claim annually. Here it is not merely a case of possible under-insurance as replacement costs increase, but also of choosing the right cover. And don’t forget the cost of replacing investment items such as art and jewellery - the price of gold and platinum has soared in recent years - and art sales in South Africa are realising record prices, so that Maggie Laubser on your wall that you picked up quite cheaply 15 years ago, may now be worth a great deal more. While a work of art can’t be replaced as such, its market value has to be built into the calculation of your cover for household contents. And not forgetting the cost of curtaining, expensive Persian carpets, designer lounge suites and clothing. It all adds up. A few tips; Insure the contents of your entire house, not just what you think may be stolen in a burglary. Revalue your insurable goods every 12 months at least and adjust your cover accordingly. Make certain you are insured at replacement value – unless you are happy to take a risk on having to make up the shortfall in the event of a loss. Add valuable new purchases and gifts to your policy description. Have family heirlooms and art work valued and take out specialist cover where needed. Remember your individual circumstances can influence the rates you are charged. Mandy Barrett, Aon Insurance Brokers, www.aon.com
Technology
Behavioural targeting hits the mark By Richard Mullins
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ehavioural targeting is set to take off in South Africa as companies look to the technology to help them drive better return on investment from their online marketing spend. Increasingly sophisticated technology is turning behavioural targeting into an attractive and powerful tool for marketers who want to extract the maximum value from each advertising Rand. With behavioural targeting, marketers are empowered to direct their advertising at users based on information inferred from their online behaviour. Research from Emarketer in the USA indicates that one in every five dollars spent on display advertising in America will be linked to behavioural targeting by 2014, providing an indication of how quickly this technology is gaining traction around the world. Behavioural targeting isn’t new, but the technology has matured to a point where it is easy to use and offers excellent results for marketers that use it in an intelligent manner. In addition, the local online environment is now large enough to provide the volumes of user data needed to profile user behaviour with confidence. Behavioural targeting solutions enable marketers to use information gathered about users’ online behaviour - such as the pages they have visited or the searches they have conducted - to choose advertisements to display to them. They can use this information to target the right message at the right user, with the right content. This allows the marketer to target their advertising to people whose online behaviour indicates that they could be acquired as customers or converted to sales.
A simple example is a car dealership that advertises to people who have surfed across a number of websites in an ad network to read car reviews. Based on behaviour and conversion history, the technology allows the car dealership to identify prospective customers and eliminate wastage, by focusing on the segments that deliver the best return on investment, by advertising to people who are actually interested in what they are selling. The real power of behavioural targeting kicks in when companies integrate customer relationship management, web analytics, merchandising, ad-serving, email marketing and other tools to really understand how their customers and prospects are engaging with them online. They can, for example, get a view of whether a user is already a customer before serving an ad and tailor their message to new customers and prospective customers. Or they can remarket a special offer to web users who searched for the product on their website before drifting away. Privacy concerns remain an issue in behavioural targeting, although the information behavioural targeting solutions gather cannot generally be used to personally identify end-users. However, he believes that this issue will melt away as consumers are given the choice whether to allow organisations to access their tracking data. Internet Explorer 9, for example, will have ‘Tracking Protection’ functionality that allows users to manage which organisations have access to their behavioural data. We believe that many users will see benefit in seeing adverts that are tailored to their needs and preferences, as will marketers. Richard Mullins, Director, Acceleration March 2012 People Dynamics
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TRAiNING
Knowledge management in local government By Jan van der Westhuizen and Herman Groenewald. n support of the government’s initiative “Operation Clean Audit 2014”, the project manager’s role in local government has come under scrutiny. Operation Clean Audit 2014 is a bold government initiative to ensure clean audits, transparency and improved service delivery within local government across the country. The ultimate goal is that all 283 municipalities and provincial departments within the nine provinces achieve clean audits on their Annual Financial Statements by 2014.
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The project problem The challenge is that the knowledge base within this environment no longer exists and recent audits indicate that merely a small percentage of local governments made the cut. Some of the problems identified were: l Inadequate human resource capacity to perform basic financial and management functions l Lack of service delivery, planning and execution skills l Capacity building programmes are being delivered too slowly l New appointments do not meet the prescribed competency requirements l Lack of proper risk management l Inadequate leadership skills at management level. The project manager’s leadership role Looking at the problem areas identified above, one would assume that the solution would most probably reside with the management competence and structures of local government. While this is true, a project manager, has a very prominent role to play as part of the solution to this issue.The project manager’s leadership role and professional input would contribute to finding solutions to the current challenges faced by local and provincial government, especially in the area of clean audits. Areas of improvement will include the following: l Producing reliable monthly financial and management information, which is essential for the monitoring of service delivery activities l Establishing a corporate business view to managing projects in local government in order to achieve clean audits by working according to project management principles l Ensuring a continuous “clean audit” philosophy, mindset and ability, which can only be achieved when the team is trained and empowered to support, sustain and deliver a clean audit on a continuous basis within a good leadership structure. Proposed solution Although different methodologies exist for addressing the area of knowledge management and the issues previously mentioned, a computer based simulation methodology to support and leverage off, would enable the project manager to educate, train and equip staff for the challenges that they might face. The simulation can be self-administered, utilised, and reviewed. Such a simulation’s effectiveness can be measured on an ongoing basis, thereby ensuring that the team has the skill level to support the achievement of the clean audit. Herein lies the strength of the proposed solution. By blending Business simulations with assessment centre technology reflecting day-to-day scenarios a continuous business-driven coaching model can be developed. Therefore we propose a computer-based simulation that incorporates group, individual, project-process and simulation exercises, which are used for measuring project competency criteria or performance areas at both strategic and tactical levels. Feedback provides an overview of performance and as a spin-off could be used in identification of managerial potential or the diagnosis of individual management development needs.
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This is a non-competitive, computer-based simulation that allows you to create, manage, develop and implement real workplace-based scenarios developed for the local government environment according to a predetermined project plan and in the process create competency. Since real business processes and scenarios are combined with an exciting storyline to create a dynamic workplace simulation, learning is enhanced.
This powerful learning application of using a simulation, enables the delegates to apply concepts learned in the classroom / workplace and to recognise the tradeoffs surrounding major strategic business decisions. They face challenges, handle crises, set goals, develop strategies, take advantage of new opportunities and deal with uncertainty. Delegates can see the outcome of their decisions as they affect service delivery, customer satisfaction and budget. Each discovery, discussion or assessed competence can lead the way for delegate reflection sessions and action steps to improve organisational performance. The end result is a customised, computer-based simulation that will address the business challenges and analyse the issues that local governments are confronted with. Summary Effective knowledge management is therefore the key to reaching the goals of “Operation Clean Audit 2014”. Innovative solutions are necessary to address the problem areas identified at local government level. local government with higher competence levels and better service delivery will promote a positive attitude, regain the confidence of the public and go a long way in achieving the goals of “Operation Clean Audit 2014”. Jan van der Westhuizen is the Managing Director of Experiential Technologies, a technology based training provider. He can be contacted via email: jan@ experttech.com, Herman Groenewald is the Manager of the Project Management Department at Experiential Technologies. He can be contacted via email: herman. groenewald@experttech.com
Leadership
The power of talent analytics By Nadene Venter, MD, SHL South Africa
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outh Africa’s leadership potential is higher than in the other BRICS countries (Brazil, Russia, India and China) but lower than the global average. South Africa’s leadership potential is strongest in the oil and gas industries, and in the materials sector, including chemicals, industrial metals and mining. The power of SHL’s Talent Analytics was demonstrated by these statistics, included in a Leadership Index announced ahead of SHL’s LINK client conference on 23 February 2012. Talent Analytics extracts information from SHL’s global database of talent and leadership assessments compiled across multiple industries and job levels in more than 160 countries. It enables companies anywhere in the world to benchmark their talent and compare themselves against competitors, or an industry locally or globally. The Leadership Index showed what Talent Analytics can do. Eugene Burke, SHL’s chief science and analytics officer, asked the database what the chances were that a company would find in its ranks or among its applicants a person with true leadership potential. Back came the answer - in a global comparison of those going into a graduate, managerial or specialist professional position, an average of one in 15 people has what it takes to be a truly effective leader. It then extracted the average figure for South Africa (1 in 17), for the BRICS countries (1 in 19), and the G8 nations (1 in 10).This was followed by averages for various industry sectors in South Africa. This is only one example of what Talent Analytics can do. Talent Analytics is a strong new tool for HR directors. It enables them to go to the board with a benchmark of the company’s people by industry, business function and job level across the geographies in which the company operates. Human resource executives can now enter the boardroom armed to the hilt with hard numbers in support of their talent strategies that ultimately will drive real business results. Talent has become the top agenda item for most CEOs.Talent Analytics provides rigorous and objective answers to a broad range of talent-related questions, such as: l How does the calibre of my graduate applicants stack up against the applicants in my industry sector in the countries where I operate?
l At which stage(s) of the recruitment process am I losing my best candidates? l How strong is the managerial talent I am recruiting compared to industry sector benchmarks? l How does my leadership team stack up against others in my sector? l What is the bench strength of my succession pool compared to the best in the marketplace? l Are any of my teams likely to put my business at risk? l In what areas do I need to focus the development of my management team to raise their capability above the industry standard? Understanding the talent available to a company, and then being able to benchmark that talent directly against the competition, provides companies with a real insight into the one true sustainable competitive advantage – their people, and the executive responsible for HR is sure to play a more central role in shaping the future of the company. The muscle behind Talent Analytics is an extraordinary database compiled by SHL over decades (30 years), across multiple industry sectors and various management levels. Every year another 25 million data points get added ensuring that Talent Analytics users are able to make the most intelligent people decision to drive measurable business results. SHL Talent Analytics delivers an external view of how well a company’s talent compares to the market place. Companies will be able to measure the talent available within an organisation against its key competitors, but you’ll be able to guide the company strategically in developing the most appropriate talent for the future. It also enables HR executives to track the success of the company’s talent initiatives over time. And, crucially in what has become a global war for talent, it assists in identifying those with leadership potential. Every organisation wants to improve the odds that they will acquire and employ people with the potential to be an effective leader.They want to know what investment they need to make to realise leadership potential, and to identify and retain top performers. As companies look to the future, SHL will help them identify those with the ability not merely to cope with change, but to engage proactively and effectively with the rapid change that is happening in South Africa and globally and to lead others through that process. March 2012 People Dynamics
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Leadership
News and reviews
Ipm on the mark with leadership summit
IPM Events for 2012 April 18
Human Resource Development Audit Sharing best practice; international perspectives & India experience by Steve Kgatuke
May 16
Diversity Management
June 7 19
BEE Seminar 40 out of 100 of the BEE scorecard standard points focuses on people. The seminar will focus on best practice research, case studies and enabling processes and tools Mini Conference Provides the how to in terms of strategy developments, operations, systems and aims at improving the competencies of HR Practitioners as well as building capacity.
July 24-26
Human Resource Business Partner Master Class Positioning HR effectively within the organisation and Partnering with line executives on the delivery of HR services.
August 21-22
Womens Conference Driving the women’s agenda in the workplace and the barriers to progress; employment practices that facilitate gender equality in the workplace; taking responsibility for your own personal and career development; the role of the law and civil society in advancing gender equality in the workplace; and attitudes and societies that succeed versus those that fail.
September 12
DG Review Sharing best practice; Presenters are employment equity experts
November 11-14
22
Annual Convention Sun City A forum where thought leaders share leading practices, operating modules and frameworks with delegates.
People Dynamics March 2012
The IPM’s HR Directors’ Leadership Summit held last month in Sandton was yet another example of how the Institute is gaining ever-increasing relevance and profile especially in the thought leadership arena. The well attended Summit featured a galaxy of speakers drawn from the highest echelons of South African business. Delegates were given an excellent environment in which to explore and contextualise latest developments and leading business practices. The speakers were all leading professionals in their respective fields. The Summit got off to a flying start with a fascinating presentation by Greg Solomon, CEO of McDonalds SA and IPM 2011 CEO of the Year award winner. In a case study he focussed on: “Improving company and individual performance through targeted skills development”. Solomon gave delegates an insight into the culture of a company that runs 25 000 restaurants in 120 countries. From the McDonalds “enthusiasm committees” to the company’s onus on multi-tasking the underlying message was one of building confidence. That academic icon, Professor Cecil Bodibe, used his deft presentation skills to add lustre to his survey report – “How to navigate your way from artisan level to engineer level”. He gave insights from interviews conducted with 30 senior HR executives who boasted a combined experience of over 300 years on how to develop a leadership pipeline. The challenges facing emerging HR executives was a subject ably covered by Professor Shirley Zinn, HR Director, Standard Bank and Fergus Marupen – HR Director, ABSA. Professor Roy Marcus, Chairman of the Da Vinci Institute for Technology Management, presented a talk on “Design thinking: How can it be used to develop and train the critical talent required to unleash economic growth and contribute to global economic competitiveness?” Proceedings were rounded off by a far-reaching panel discussion which centred on ways to shield the SA economy from the devastating effects of the Euro-zone debt crisis. The panellists were Anne Pratt, Mamela and Pratt, David Conraide, Deloitte, Sam Alexander, TPI and Dr Albert Wocke of the Gordon Institute of Business Science. Delegates agreed that the Summit had been an unqualified success both in terms of the quality of the discussions and the personalities that attended. It was yet another feather in IPM’s cap.
HR Practice
Re-building HR from the bottom up By Bernard Koch “My top engineer is about to resign because he has just discovered he has 5 days less leave than he thought he had.” “Why have my sales reps S&T claims not been paid out?” What is the quality of the discussion at your weekly Exco meeting when your HR manager is given his or her 15 minute time slot. Having established a perfectly feasible strategy to ensure the attraction, retention and development of key talent, do you find yourselves frustrated by the inability of HR to get the basic rights, to lift their heads above the mundane issues of maintaining HR to the mission critical issue of maximising the Return on Human Capital Investment. HR professionals attend seminar after seminar discussing such issues as staff retention, talent management and aligning HR strategy with corporate strategy. To what extent are these same professionals devoting their critical and scarce time developing strategies to exploit this knowledge to the benefit of their own corporates? CEO’s are tearing their vastly diminishing hairlines out because their own HR professionals are not thinking out of the box on how best to attract and retain key talent, but how many of these same professionals are spending their days (and nights) propping up archaic admin systems, to find out why Thabo’s leave is out of date, or Jane’s travel claims were not re-imbursed. A further frustration is that aspirant HR managers are hired into organisations and then spend the first two impressionable years of their careers updating benefits or managing medical aid claims.This is seen by the larger HR departments as a “rite of passage” or an earning of the stripes. No wonder good HR talent is lost in the early years to recruitment firms where life is “on the edge” and incentives are attractive. Finally, no Exco is going to entrust a Human Capital strategy to an HR executive who is struggling to get the payroll out accurately and on-time. Rebuilding HR implies getting the basic right first. It means the following: Step 1 - Win the confidence of the users back by ensuring an efficient HR admin system that has the phrase “Accurately, On Time, Every Time” as its mantra: l Develop an administrative system that is efficient and accurate. l Systematise as much as possible. Put basic administrative functions into the hands of those that have a vested interest, ie the employees themselves. Basic information such as change of address and marital status should be able to be updated by the individuals themselves. l Take the critical functions, such as payroll processes away from HR practitioners and vest into the hands of those for whom “attention to detail” is a birthrite. Whether it vests with HR or Finance is a control issue, but the basic attribute of the person doing the job should be a left brained and not a right brained one. l Build a dashboard that gives management the confidence that the basics are under control. Ensure that this is distributed to all Exco and key department heads. When routine issues are “redlighted” on the dashboard, have a plan to take to Exco to provide the confidence that they are under control Step 2 - Develop an integrated Talent Management system that ensures that we “Gain, Train and Retain” top talent. An effective Talent Management system must have the following in place: l A Career Map that is visible to all new employees, that shows their potential track through the company. It should highlight minimum and maximum tenures at each position and should be linked to a Job Descriptions and Learning and Development Plan. l Clear Job Descriptions with Job Grades
l A Learning and Development plan linked to each job description l A Reward and Remuneration policy that takes the guess work out of compensation l A recruitment strategy that is pro-active and provides maximum talent for minimal admin Step 3 - A Performance Management system, tied in with the Talent Management system should ensure monthly interaction with management, be it formal reviews, career discussions or one-on-one mentoring discussions. Employees need to feel engaged, not by HR, but by their line managers. Much of the distrust of HR has also arisen in that employees run to HR because the lines of communication with their line managers has broken down. Managers distrust this process, and HR does not the teeth to intervene, thus losing the faith of both management and staff. Career and other issues should be picked up and dealt with at root. A good performance management system must emphasise frequent employee/employer engagement and be short on bureaucracy. Step 4 - Behaviour Change. HR managers are not traditionally skilled in addressing this issue, or else they are not empowered or supported in their efforts to do so. Once the administrative and talent management issues are taken care of and well managed, HR managers will be able to table behavioural and cultural programs to ensure that organisations are establishing an ROI on the hidden component of Human Capital ie behaviour and performance. This would inevitably involve a series of Team Alignment and Coaching interventions. As executive and line managers in many environments are not always comfortable with exposing themselves and making themselves vulnerable, this requires some credibility with the HR Executive in order to introduce this level of development. In summary, a carefully layered HR infrastructure is built rather from the bottom up than the top down as the following diagram illustrates.
A reliable, simple, integrated, user-friendly and “workflowed” Human Resource Information System is the bedrock of a reliable HR infrastructure. On top of this, HR administration that is in the right hands and left brains will restore confidence in the ability of HR to get the basics right. It is then that HR managers can begin to build their Talent Management and Performance Management processes. These should aim to facilitate the attraction, development and retention of talent as well as the ongoing interaction between manager and staff member. Once these are in place, HR Management should focus on assisting line and executive management in adopting and practicing those behaviours that are consistent with effective management of their people towards performance excellence standards. Re-claiming the credibility and authenticity of the Human Capital function means getting the basics right. Human Capital executives should recognise their own limitations in this regard and seek to insource assistance where it is strategically valuable, and outsource functions where appropriate and noncore. It is only then that the HR Executive can play a pivotal role in leveraging this powerful resource. March 2012 People Dynamics
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Gabriel’s Horn
A surge of honesty at eskom? W
hat a difference a change of attitude makes. I am sure all of us remember the dark days of 2007 when Eskom’s power grid came under huge pressure. Pressure that resulted in the dreaded load shedding and all the misery that it brought with it. Apart from the chaos the rolling blackouts caused, one of the most annoying aspects of the whole debacle was the way Eskom never really came clean on what had caused the crisis. Disappearing coal stockpiles, “mothballed” power stations, lack of maintenance, and gross incompetence were all swept under the carpet. All that was left to us poor consumers was pure speculation. The hierarchy at Eskom have obviously learnt a lot about public relations in the last five years.The present situation of tight power supply has been dealt with in a completely different manner. There has been complete openness about the situation.Yes, maintenance is behind.Yes, electricity supply will remain tight for at least the next two years.Yes there will be blackouts.Yes, work on two new additional power stations has fallen behind schedule. What a refreshing change – and a change that could actually bring about the support and understanding of a population that was previously (and literally) kept in the dark. A load of hot air Still on the subject of power, it is most interesting to note that I am not the only one who has been openly suspicious of all that fashionable rhetoric about global warming. Across the world scientists, meteorologists, environmentalists and even journalists are adding their voices to the mounting cynicism on the subject.
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People Dynamics March 2012
Now a British writer, Leo McKinstry, a columnist for the ‘Daily Express’, has penned a powerful piece on the futility of that favourite green hobbyhorse – the wind farm. He says; “The onward march of wind farms has been a disaster for the country, imposing savage increases on household electricity bills while doing nothing to enhance our energy supplies. Wind turbines are monuments to political folly, a triumph of dogma over commonsense.” He maintains that they do terrible damage to the environment. Not only are they unsightly, they create noise pollution and wreak havoc with wildlife. Over 400 000 birds are killed in the USA every year by their revolving blades. McKinstry points out that there are already 3 500 turbines in Britain but the Government wants another 10 000 onshore and 4 300 offshore by 2020.The ultimate cost will be 140 billion pounds or 5 600 pounds per British household. What makes the whole wind farm programme even more of a tragedy is that they are highly ineffective.Wind turbines in Britain presently supply just 2,7 % of the country’s electricity. “Turbines are hopelessly unreliable,” he continues. “On still days they produce nothing yet if the wind gusts at more than 56mph they have to be shut down because they become unstable. In 2010 onshore turbines operated on average at just 21% of capacity, making a mockery of the greens’ claim that wind can ever be an effective source of power.” It is to be fervently hoped that our own Government is not duped in to buying into this massive load of hot air. If the greens don’t get me, I’ll see you next month. All the best, Gabriel
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