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Reading 4 Page 1 of 26


Gregory John Lee

1 Introduction

Recall the definition of human resource strategy:

Human resource strategy…

…is the pattern of planned human resource deployments and activities intended to
enable the organisation to achieve its goals.

Human resource planning (or HRP for short) is all about the first (underlined) function in
the definition above. It is the absolutely vital function that look firstly at strategy, and
then deploys the necessary human capital (people) where it is called for in the
organisation by the strategy.

HRP therefore falls into the wider area of employee resourcing (planning for, acquiring
and allocating the desired human resources for the organisation). We saw in the
Armstrong diagram (Figure 1 of Reading 1) that employee resourcing is an arm of the
HR function. See the diagrammatic version on the next page, which serves just to
highlight the topics included in this arm of HRM.

HRP entails knowing in advance what the staffing needs of the organisation will be,
assessing the supply of the relevant workers in the organisation and labour market, and
finding ways to fulfil the staffing needs of the organisation.

Organisations are greatly affected by their demand for labour, and therefore by the supply
of labour. Firstly, formulating a strategy can only happen after you have knowledge of

Innovative excuses to miss a day of work: “If it’s all the same to you, I won’t be coming in to work. The voices told
me to clean all the guns today”.
Reading 4 Page 2 of 26

the strengths and weaknesses of the workforce, which will include these issues. Imagine,
for example, if you are going to attempt a growth strategy into more rural areas. You may
need a marketing workforce that has far more experience and contact with the black
African customer base. If your SWOT analysis shows that your marketing team is too
Western, then your HRP will have shown a demand weakness that needs to be overcome.
Your strategy formulation has been greatly affected by HRP.

Secondly, strategic plans can only be implemented successfully if the organisation is

staffed with the right number and type of human resources to provide the necessary skills,
knowledge, abilities etc. Remember that staffing falls into one of the six implementation
“musts” of strategy (Reading 2). Imagine, for instance, that your strategy includes
divestment of some unprofitable factories. HRP will be involved in the implementation,
because the major task will be either re-allocating the employees of those factories or
retrenching them.

Successfully planning for and handling labour needs can thus be a competitive advantage
or disadvantage. Companies who make and implement better HRP strategies than others
will adjust better to environmental changes and have the most suitable workforces.

It is important to note that increasingly, human resource planning, as with many HR

practises, will not necessarily be done by a central HR department. Often it is the ‘line’
managers (i.e. managers of operational departments) who will do a large part of the
planning for their workforce requirements. A central HR department may be involved in
the process in varying degrees (or, indeed, may do all the planning). This is why we see
this course as being more of a management course than a specialised HR course - many
of our students become general or operations managers in companies because what we
teach you are organisational skills.

Read pp 177-178 of the attached textbook chapter

Why do they lock gas station bathrooms? Are they afraid that someone will clean them? - George Carlin
Reading 4 Page 3 of 26

2 The HRP Process

The three broad keys to HRP are, roughly, to:

1. Know the strengths and weaknesses of your current workforce, both with regard to
number & skills etc.
2. Have a clear strategic plan for the future, and an idea of how the current staff fit in
(i.e. fulfill) that plan
3. If the current staff do not fit it in any way, a plan to alter it to do so.

These keys are achieved through the HRP process, which has four steps:

The HRP Process:

1. Deciding on strategic plans and resultant design of the organisation.

2. Out of these strategic plans, determining the organisation’s labour demand needs for
both the short & longer terms.
3. Assessing the labour supply situation (both internal and external supply), and in light
of it to draw up plans for effectively & continuously filling staffing needs.
4. Implementing the staffing plans.

A simple analogy for HRP is the building of a sports team (let us imagine a group of
people wishing to enter a rugby team in a league). Firstly the organisers must decide what
the strategy behind the team is going to be. For example:

• Is their aim going to be winning the local league, or alternatively to just play fun,
social rugby with emphasis on enjoyment not winning?
• Which version of the game will they play? Are they going to play rugby sevens,
league or union? (don’t worry about the terms)

If you ate pasta and antipasta, would you still be hungry?

Reading 4 Page 4 of 26

Another consideration is the design of the team:

• Firstly, the version of the game will determine the number and deployment of
players needed on the field: rugby sevens needs seven roughly similar players,
league needs thirteen players (mostly similar too), while union requires fifteen very
different players (many of whom are specialists in their position).
• A second design question could involve whether they going to have a large squad
so that each player only plays one half of the game, or are they going to play with
just a few reserves, so that roughly the same team plays though the match?

Other questions might be asked, but you can hopefully see how strategy and design are
the initial considerations.

Having determined their approach with regard to the above, the organisers now need to
assess their demand for the number and type of players, based on the strategy and design.
Perhaps they wish to play:

• social
• sevens rugby, with
• few reserves.

For this strategy and design, they will need about ten players at any one time (seven
players and three reserves). These ten players need to be of a certain type (i.e. sociable
rather than too serious; and all fast, given the nature of sevens rugby). They also need
one or more coaches and/or trainers. This then is your demand for this strategic scenario.
Alternatively, however, they may wish to play with an alternative strategy and design:

• league-winning
• fifteen-a-side rugby (union rules), with
• plenty of reserves for replacements

Innovative excuses to miss a day of work: “When I got up this morning, I took two Ex-Lax in addition to my
Prozac. I can’t get off the toilet, but I feel good about it”.
Reading 4 Page 5 of 26

You’ll need a large squad of probably thirty or more at any one time (enough to replace
most players once). The culture will require players who are serious and focussed on
winning. In addition, you need to seek out specific types of players for each set, as the
design of union rugby requires far more specialist players than sevens (where all players
do roughly the same thing). Can you see how the demand is altered considerably
depending on strategy and design?

However this does not end the demand step. Perhaps the more experienced organisers
know that more and more players get injured as the season progresses. If you only recruit
ten players for sevens, you’ll be short before long. Thus more that ten need to be
acquired either at the beginning or later to adjust for this forecasted shortage. Likewise
for union: you’ll need to adjust for forecasted injuries. This process of forecasting
changes is also part of the demand step.

The next step, having looked at demand, is supply considerations. You need to look at
three things:

• The first is to assess what players you currently have remaining from last season.
You may only have a handful of players left over, filling only a few of the
• Secondly, you need to assess how well these current players fill their positions.
Some may fill the position perfectly, meaning that supply is just right there.
However you may compare yourself with the other teams in the league, and realise
that even though you have three ‘wings’, they are all too slow compared to the
opposition. Also, you may have too many ‘centers’ (another particular position).
Thus your current supply may not be good enough.
• The third thing therefore is to take this information and assess for each position
whether (1) there is an adequate supply in that position, or (2) whether there are
too many or too few players currently in those positions, or (3) whether some
players must shift to new positions in the team.

If the #2 pencil is the most popular, why is it still #2?

Reading 4 Page 6 of 26

The final thing to do is find plans to implement the assessment (i.e. shortage, surplus or
shift) made at the end of the supply stage. To play union you need a back line with two
‘wings’, two ‘centers’, two ‘halfbacks’ and a ‘fullback’ (don’t worry about the technical
terms). Perhaps you are completely deficient in ‘halfbacks’ and ‘fullbacks’ this season,
and need to find some. You also have too many ‘centers’. You have wings, but they are
all too slow. Perhaps your plan might include relocating two wings to other positions
(one to fullback the other to halfback), but maybe the third needs to be asked to leave the
team and offered the job of peeling oranges. Then you need to find new wings. You may
find that some of your overflow of centers are actually too old to be competing at this
level, and need to be retired. Others may be relocated or just asked to leave. For the other
deficient positions you may need to find new players and train them up. Thus the final
step in HRP is to find ways to fill gaps, reduce surpluses or relocate people.

Each of these four steps will now be looked at individually in the business context:

3 Strategy, Design & HRP

In order to serve as a competitive advantage, the acquisition of staff must first and
foremost be strategic, i.e. based on strategy (proactive) & not reactive (i.e. solving
problems in staffing as they arise). One cannot hire, fire or relocate staff without there
being a strong link to the core business needs.

Remember from Readings 3 and 4 that strategic plans translate into:

 specific, quantifiable objectives for every level

 a specific, desired organisational design.

The objectives and design will allow those doing human resource planning to know the
number and type of employees needed at each horizontal and vertical level. For example,
a strategy to increase product range, with growth objectives, may require further hiring.

Can vegetarians eat animal crackers? - George Carlin

Reading 4 Page 7 of 26

The design of the company will determine where the employees need to be increased
(e.g. production if objectives are production oriented, marketing if necessary, etc.) An
organisational design based on autonomous work teams may require the hiring of far
more multi-skilled staff than in the case of a more traditional hierarchical organisation.

No more need be said about the strategy and organisational structure, as the literature has
already been covered in previous readings. The next logical step is to look at the labour
demand issues that may arise. Note that the demand for less labour is also a possibility
under any given strategy or design.

4 Forecasting Labour Demand Arising From

Strategic Objectives

To fulfil strategic objectives you need to ask several questions:

 How many employees are needed to enable the strategy & design?
 Of what types and quality?
 Where (in what departments / jobs / positions)?

The demand step is done both for the short and longer -term strategic horizons. Thus this
step in the HRP framework potentially requires one to do a bit of forecasting, as demand
is a future orientated concept (even if its for the immediate future). We therefore look at
several methods of forecasting demand.

One of the interesting things about demand for labour is that it is a derived demand. In
other words, the demand for labour is dependent on more primary demands. We have
already seen how strategy creates demand for a certain level of labour. More specifically,
business strategy leads to consumers demanding the organisation’s products, and a
greater internal demand for capacity. It is from this and other ‘primary’ demands that the

Practical Management Philosophy 101: “I can please only one person per day. Today is not your day, Tomorrow
is not looking good either”.
Reading 4 Page 8 of 26

demand for labour is derived. Thus the demand for labour is a secondary, dependant
(derived) demand.

4.1 Methods of Forecasting Demand

There are two major ways to forecast demand:

4.1.1 Judgemental Forecasting Methods:

Judgemental methods reply primarily on the subjective but informed ‘guesses’ of experts.
These people, often in managerial or other positions of knowledge, use that knowledge to
make forecasts about labour demand when the future is not necessarily expected to
follow the past. In other words, if you think environmental or internal changes are going
alter the trends of the past (regarding staffing), then you need to make estimates that are
based on human judgement. Two examples may be a change in legislation (e.g. the
implementation of the Employment Equity Act on affirmative action) or a change in
corporate strategy (maybe from product growth to vertical acquisition of other
companies). Both these scenarios potentially render any staffing trends in past years all
but meaningless as specifications have changed.

There are two major forms of judgemental methods, viz:

• Delphi: A panel of ‘experts’ each make their own judgements of what staffing
demand will be in the applicable areas, along with the reasons for their judgements.
Then each member of the panel is shown (usually in a presentation) what the other
experts guessed, and why. They are then allowed to revise their own judgements
based on the others. This continues until most experts roughly agree on the
• Managerial estimates: These are more ‘line management’ forecasts, i.e. they are
made more by the managers on the front line (either top or bottom managers, or

Innovative excuses to miss a day of work: “I can’t come to work because I’ll be stalking my previous boss, who
fired me for not showing up to work. OK?”.
Reading 4 Page 9 of 26

both). The key thing here is that the decisions are made by those with the direct
experience of dealing with staffing. They may just meet together, or it may be left
to individual managers.

However quite often the managerial and external environments are stable enough with
regard to a particular job type within a company to justify using mathematical or
statistical techniques to forecast demand for that job type based on past trends. These
types of method are discussed next.

4.1.2 Mathematical Methods:

As stated above, these methods tend to focus upon past trends, and are almost wholly
reliant on things remaining the same. Byars and Rue give the following methods:

• Time series on staffing levels: the past trends of staffing are extrapolated to the
future. Time series takes into account past cycles, seasonal ups and downs, long
term trends etc.
• Personnel ratios: Sometimes there is a consistent proportion between the numbers
of staff in one job and the numbers in another (e.g. between sales and inventory
staff). Thus, although this method does not estimate total staffing, it can be used to
allocate staff between jobs or estimate for one job based upon another.
• Productivity ratios: Productivity ratios look at the number of people required to
deal with different levels of workload. Thus, as workload alters, the ratio is
maintained by altering staffing levels. The equation is Productivity Ratio (P) =
Workload / Number of staff. Thus if the historical productivity ratio is .5 (2 staff
members for every unit of work), then if workload drops by .2 (20%) then staffing
must drop by .4 (40%). Workload can be measured in any unit, it is the ratio that
• Regression on leading indicators: The attached textbook chapter p147 talks about
leading indicators as being an important business criterion that actually causes
labour demand (remember labour is a derived demand). For instance, increased

A four year old went to see a litter of kittens. On returning home, he breathlessly informed his mother that there
were two boy and two girl kittens. “How did you know?” his mother asked. “Daddy picked them up an looked
underneath”, he replied, “I think it’s printed on the bottom”.
Reading 4 Page 10 of 26

sales may be a leading indicator because they potentially lead to increased demand
for production and inventory staff among others. Other leading indicators may be
production levels, value added, financial indicators etc. Regression analysis looks at
past statistical relationships between these indicators and staffing levels in different
jobs. If a strong enough relationship is found (close to 1 or -1) then a relationship is
assumed. Forecasts on these leading indicators are then entered into the regression
equation to derive a forecasts for labour. For instance, a regression relationship of .
65 might be found between past levels of accounting staff and sales figures. In
other words, there is a fairly strong direct relationship between sales and accounts
staffing. Either this information can be used on its own, or a multiple regression
model can be set up incorporating other leading indicators, and forecasted sales
figures used as one piece of information in forecasting accounts staff figures.

It must again be emphasised that the difficulty with these methods is that they are only
strategic if strategy is stable (which, as you know, it often is not)! It is probably wise to
use both methods therefore, depending upon any knowledge of future changes (again, the
SWOT analysis is vital as an information source).

Now read pp 179-180 in your texts (till the end of “Determining Labour Demand”)

Now that you have demand for employees, you need to assess the ability of the
organisation and the labour market to supply the right number and type of staff.

5 Plans to Fulfil (Supply) Staffing Demand

There are three steps in assessing supply capability, viz:

1. Assess what HR capabilities currently exist in the organisation to fulfil needs

2. In light of this, assess how adequately the current workforce supplies needs (is there a
shortage or surplus of the right kind of staff based on forecasted demand?)

Why do they put Braille on the drive-through bank machines? - George Carlin
Reading 4 Page 11 of 26

3. Therefore, assess what changes need to be made to perfect the HR supply (strategic
staffing goals and plans - do we hire / downsize / relocate / etc.)

5.1 Organisational Supply Capabilities

The step looks at current people & skills. There are several (hopefully) readily available
information sources within the organisation that make it possible to do this. These

 Skills inventory: (a register of current HR capabilities, incorporating information on

each employees’ skills, demographics, test scores etc.)
 Management inventory: (similar to skills inventory, but tailored to management, often
including subjective assessments of ability etc.)

There are also various ways to forecast the supply of future people or skills:

 Markov analysis: A Markov analysis uses historical flow rates of workforce to

predict future rates. Remember that we are looking at the current internal supply, not
external labour market supply. Thus the organisation uses its own internal workforce
movements as a proxy for future movements.
 Transitional matrices: See attached textbook chapter pp 148-149.
 Replacement planning: Replacement plans are short term replacement schedules that
plot who can replace whom within the organisational hierarchy (mostly if
replacement is needed quickly). They can be useful in predicting internal supply,
especially as regards managerial positions.
 Succession planning: Succession plans take a longer term career development
approach. They effectively ‘earmark’ employees for development through the
hierarchy. Thus they show something of the more long-term internal supply situation.
 Vacancy analysis: Vacancy analysis is essentially Markov analysis based on
judgement instead of history.

Practical Management Philosophy 101: “I love deadlines. I especially like the whooshing sound as they go by”
(From Douglas Adams).
Reading 4 Page 12 of 26

 Benchmarking: Benchmarking is a very different approach. it involves proactively

comparing HR in your organisation to those of your competition. In this way, one can
ascertain especially the quality of your internal supply (as opposed to the quantity).
 Best practises benchmarking: Similar to the plain benchmarking, but in this case the
comparison is with successful HR practises in any organisation. In other words, the
organisation seeks out excellence in the staffing of other organisations, and thus
assesses its own internal supply. For example, you may assess an organisation known
for its extreme efficiency in production lines. You note that they have combined man
and machinery to require half the workers that you need for the same job. You may
then make plans to follow suit.

This first step in assessing supply thus gives us only an indication on internal capabilities.
These then need to be compared to need, which is discussed next.

5.2 Assessing Adequacy of Current Staff

Once one has assessed the current or future workforce capabilities, one needs to assess
those capabilities against demand. There are three possibilities in each case:

 Too few people / skills (shortage - we need to add)

 Too many people / skills (surplus - need to remove employees from this sector)
 Need to reduce some staff & hire others (it is even possible that the number of people
will remain the same in this case, but the type / quality will have changed).

The third option normally involves skills (not numerical) deficiencies, where current staff
lack necessary skills and cannot be trained, necessitating replacing them with adequately
skilled staff for the situation. There are however potential legal problems in this regard,
which should be understood and managed (see second block work).

Now read p 181-182 in your attached textbook chapter

Innovative excuses to miss a day of work: “My stigmata’s acting up”.

Reading 4 Page 13 of 26

HR Quotes: Hiring Good People

“Here lies a man who knew how to enlist the service of better men than himself” (Tombstone of
Andrew Carnegie).

“When you hire people who a smarter than you are, you prove you are smarter than they are” (R. H.

“Eagles don’t flock - you have to find them one at a time” (H. Ross Perot).

HR Quote: Personnel Surpluses

“It isn’t the people you fire who make your life miserable, it’s the people you don’t” (Harvey

“The thing that really worries businesses today is the great number of people still on their payrolls
who are unemployed” (Dale Carnegie, 1895-1955).

5.3 Strategic Staffing Goals & Plans

The comparison of demand and internal supply data will lead to quantifiable objectives
for strategic staffing (i.e. ‘we need to add XYZ number of so-and-so quality to our TYU
division / job level’ or ‘we need to remove ABC number of staff from FGH department’).
Whoever is fulfilling the HRP process will need to fulfil these objectives through choice
of methods.

Your attached textbook chapter covers the method section quite well, so:

Now read pp 183-193 in your attached textbook chapter

Note especially the tables on p184.

Only a few points need to be made:

• Overtime is one of the methods given for filling a labour shortage in the short run.
As indicated in the attached textbook chapter, it is more expensive for the company.
Specifically, the Basic Conditions of Employment Act (BCEA) regulates pay for

Practical Management Philosophy 101: “Am I getting smart with you? How would you know?”
Reading 4 Page 14 of 26

overtime - you will learn more about it later in the year. For now it is useful to
know that in terms of the Act and its amendments, employers must either pay 1.5
times the normal rate for every hour of overtime or give extra leave. Also, no more
than 12 hours total (normal & overtime hours) can be worked in any day, and no
more than 10 hours a week overtime can be worked (unless a trade union and the
employer have agreed for more in a collective agreement, in which case it can be
extended to 15 hours a week).
• The Labour Relations Act contains quite stringent laws for the retrenchment of
workers (i.e. downsizing) in South Africa. This topic will be dealt with in detail in
the second block. It is not as easy to retrench in South Africa as in the U.S.!
• Also important are the SA laws for discrimination contained in the Employment
Equity Act. These laws will be fully explicated in the reading on selection - for
now, realise that in all staffing decisions you must ensure that no particular group is
being discriminated against without good reason (see Reading 6). Of particular
application here is ensuring that the criteria for who will be downsized in particular
are fair and non-discriminatory. Also, retirement must not be done in a way that
discriminates against elder people (i.e., you cannot ‘force’ premature retirement).

HR Quotes: The Usefulness Of Older Workers - Both Sides Of The Stick (See textbook chapter 187-189)

“Old age and the wear of time teach many things” (Sophocles).

“Nobody can be so amusingly arrogant as a young man who has just discovered an old idea and
thinks it is his own” (Sydney J. Harris).

“When a man fell into his anecdotage it was a sign for him to retire from the world” (Benjamin
Disraeli). (Anecdotage = telling ‘war’ stories).

“The older I grow the more I distrust the familiar doctrine that age brings wisdom” (H. L.

“It isn’t the incompetent who destroys an organization. The incompetent never gets in a position to
destroy it. It is those who have achieved something and want to rest upon their achievements who
are forever clogging things up” (F.M. Young).

How do they get deer to cross at that yellow road sign anyway? - George Carlin
Reading 4 Page 15 of 26

6 Implementing & Evaluating HR Staffing Plans

Now read pp 193-194 in your attached textbook chapter

7 Affirmative Action Planning

Now read p 194-195 in the attached textbook chapter on Affirmative Action

This topic is very important in South Africa! As you no doubt are aware, the Employment
Equity Act 55 of 1998 legislates for a certain measure of affirmative action (AA). The
Act has two main sections:

• Chapter II, which deals with anti-discrimination measures. This is not really what
we mean by ‘affirmative action’ (Chapter II will get more attention in the next
reading on recruitment).
• Chapter III, which deals with real affirmative action. It is this chapter that we focus
on here, as it directly impacts on HRP

Although AA is a vital topic, I do not cover all aspects of it in this reading. Later on in
your study of HRM you do get to go into it in more detail, including the philosophical
arguments and backgrounds, different socio-political and economic implications and
other aspects. In this reading you will only be given enough of an introduction to enable
you to see AA as an aspect of HRP. At this point we need to look at a definition of
affirmative action:

“…Affirmative Action is a pro-active, conscious effort to redress disadvantages of the

past and to increase the representation of marginalised groups of the population in
leadership position in society” (Wingrove, 1993: 7).

Innovative excuses to miss a day of work: “I have a rare case of 24-hour projectile leprosy, but I know that we
have that deadline to meet. You decide.”.
Reading 4 Page 16 of 26

Thus we see that AA is designed to ensure not only legal equity in organisations (where
everyone has an equal chance for opportunity), but it also includes the concept of active
preference towards certain groups in order to aid their advancement.

In terms of the Act, only ‘designated’ employers are required to implement AA. Section 1
(you need to know the sections!) states that a designated employer is:

• Any employer who employs more than 50 employees; or

• Any employer who earns annual revenue above that designated by the Act1; or
• Any municipality or State body; or
• Any employer that is bound to implement affirmative action by a collective
agreement (i.e. an agreement with employee bodies); or
• An employer who, because of a discrimination indictment in the Labour Court, has
been ordered by the court to undertake AA; or
• An employer who voluntarily agrees to undertake AA by a notice to the Director

Non-designated employers (those who fall into none of the above) do NOT have to
implement AA (although they do fall into the non-discrimination clauses of Chapter II).

Who is the focus of AA? As stated in the definition, AA is targeted at advancing

‘marginalised’ groups (which, in South Africa, are more commonly referred to as
‘historically disadvantaged’ groups). Section 1 states that three groups of employees or
people applying for jobs in the organisation who are not yet employees are accepted as
‘historically disadvantaged’, and it is these three groups that are given preference by an
AA program. These three groups are:

• ‘Black people’ (defined in the Act as ‘Africans, Indians or Coloureds’),

The annual turnover limits are R2m for agriculture; R5m for construction, catering, accommodation, other
trade, and community and social services; R7,5m for mining and quarrying; R10m for manufacturing,
utilities, transport, storage, communications, and finance and business services; R15m for retail, motor
trade and repair services; and R25m for wholesale trade, commercial agents and allied services.
Reading 4 Page 17 of 26

• Women (of all races) &

• People with disabilities (of all races)

What exactly are the AA requirements for designated employers? Section 13 of the
Employment Equity Act gives the general AA requirements:

(1) Every designated employer must, in order to achieve employment equity,

implement affirmative action measures for people from designated groups in
terms of this Act.
(2) A designated employer must:
(a) consult with its employees as required by Section 16;
(b) conduct an analysis as required by Section 19;
(c) prepare an employment equity plan as required by Section 20; and
(d) report to the Director-General on progress made in implementing its
employment equity plan, as required by Section 21.

The first subsection is quite general. The term ‘affirmative action measures’ used in
Section 13 (1) is defined further in Section 15 (2), and includes:

• doing away with employment barriers against designated groups,

• furthering workplace diversity,
• making reasonable accommodation2 for people from designated groups in order to
ensure that they enjoy equal opportunities and are equitably represented in the
• AA measures (including preferential treatment) to appoint and promote designated
groups to ensure equity, and
• measures to retrain, train and develop people from designated groups.

“any modification or adjustment to a job or to the working environment that will enable a person from a
designated group to have access to or to participate or advance in employment’. Thus, for example, if the
disabled are unable to participate effectively in a company’s traditional management training exercise
involving outdoor team-building activities, then this should be altered to include them.
Reading 4 Page 18 of 26

Section 15 (4) does, however, stipulate that non-designated groups do not have to be
completely prejudiced. Thus employers should NOT take AA in terms of this Act to
mean that they must retrench white, male or abled workers to replace them with
designated groups (or similar measures).

Section 13 (2) above is most connected to HRP. It includes the following provisions:

1. Designated employers must consult with employees or their representatives about

the employment equity process, audit, plan and reports (Section 16 & 17). This
means, in practise, that some form of consultative team or committee should be
set up, to which the employer is obliged to disclose all information. Note that
consultation does not mean that the employer finally the agreement of the
employees in conducting AA, only that their opinions must first be heard and
taken into consideration, and that agreement should be sought.

2. Secondly, designated employers must conduct an analysis of their company,

which is essentially (1) a count of the different race, gender and ability/disability
proportions in all horizontal and vertical levels of the organisation, and (2) an
audit of all potentially discriminatory policies and procedures that may hinder
designated group advancement (Section 19). The attached textbook chapter
mentions that this internal audit can then be compared with the applicable national
and industry labour market figures (a work-force utilisation review) - this is a
logical step, as it gives a benchmark against which you can compare your
proportions and practises at every level.

3. Thirdly, designated employers must, using the audit as a reference, draw up a

formal plan (Section 20) to redress any past inequalities in staffing or procedures
at ALL levels (i.e. you can’t avoid AA at one or more horizontal or vertical
levels). This entails the organisation assessing where in its hierarchy there are not
enough blacks, women or disabled, and begin making plans to hire or train up
‘historically disadvantaged’ people into those positions over time. Where
Reading 4 Page 19 of 26

discriminatory procedures are to be found, they should be changed. The plans

should include:

• organisationally-set objectives for each year, and what AA measures are

to be adopted,
• numerical targets (e.g. as to demographic representation in various
levels and timeframes) for filling positions,
• strategies and structures to be used for AA implementation (including
senior management names who are responsible for AA),
• a total duration for the plan (longer than 1 year but no longer than 5
• methods of enforcement, monitoring and resolving disputes.

4. Fourthly (section 22), designated employers must submit progress reports to the
Director General of Labour (once every two years if the employer has less than
150 workers, once a year if 150 or more workers). These plans must be drawn up
in consultation with employee representatives.

5. Finally (section 27), designated employers must submit an report on the income
(i.e. pay and benefit) differentials between levels and occupations to the
Employment Conditions Commission (not the Director General as with the AA
report). Any ‘disproportionate’ proportions are to be rectified.

Although these requirements may seem to be quite strict, AA is actually not legislated as
stringently as it could be (or as you may think it is). There is one noteworthy omission
from these laws. Although it is law to introduce a certain measure of affirmative action
into your Human Resource Planning, there are no ‘quotas’. A quota is a government-
induced percentage of staff at certain levels that have to be of historically disadvantaged
background. Thus, if there were quotas (which again there are not) one example might
Innovative excuses to miss a day of work: “I am stuck in the blood pressure machine down at Hyperama”.
read: “Top-level managers must comprise at least 50% black, 20% women and 3%
disabled. However the government has not done this! There are no quotas at present, and
Reading 4 Page 20 of 26

currently companies can set their own targets (as long as they do so, and register the
reports). Of course, if in the future companies fail to do adequate AA, then the
government is quite likely to force its hand with quotas.

As regards the actual HRP process for the affirmative action situation, roughly the same
steps as are used for normal HRP (in fact the AA plan and audit cover most of the needs).
Thus one does:

• a strategy and design analysis specifically for AA (most of which is probably in

the plan),
• a demand analysis (again, most of which is in the plan),
• an internal supply analysis (the audit), and
• specific plans are made to rectify any needs (also in the plan).

The final topic to be discussed here is the enforcement of the Act and sanctions against
non-complying companies. There are various ways that the Act is policed: the employees
or their representatives can bring a complaint, labour inspectors can inspect the employer,
the Director General can instigate investigation, and of course the reports serve as an
enforcement. If employers are found to have contravened any requirements, they can be
required to take remedial steps, and can incur fines of no less than R500 000 for the first
offence and more thereafter. Also, no tenders for government / State work will be given
to employers unless a certificate of AA compliance is presented (thus this is an incentive
to comply).

Again, it must be stressed that this section is only a small (albeit important) cross section
of the exciting and internationally relevant study that can be done on AA. We are only
looking at it from a purely technical HRP viewpoint here, but later you may look at it
from many other aspects.

Is it true that cannibals don’t eat clowns because they taste funny? - George Carlin
Humour In HR: Affirmative Action (True Story)
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“An Affirmative Action official of the State of Pennsylvania wrote to a business officer of a company
whose policies were being investigated: `Please send to this office a list of all your employees broken
down by sex”. Some time later, this reply was received: “As far as we can tell, none of our employees
is broken down by sex - and while none of us is broken down by sex, we are sometimes worn down by
filling in all those forms....”.

HR Quotes: For And Against Affirmative Action

“It is less important to redistribute wealth than it is to redistribute opportunity” (Arthur H.


“I don't believe in quotas. America was founded on a philosophy of individual rights, not group
rights” (Clarence Thomas).

Innovative excuses to miss a day of work: “I set half the clocks in the house ahead an hour and the other half back an
hour Saturday, and spent 18 hours in some kind of space-time continuum loop, relieving Sunday (right up until the
explosion). I was able to exit the loop only by reversing the polarity of the power source of exactly e*log(pi) clocks in
the house while simultaneously rapping the dog on the nose with a rolled up Times. Accordingly, I will be in late, or
Reading 4 Page 22 of 26


AbelTech Games (ATG) is a leading global software company currently
specialising in the design and programming of high-tech computer games for
personal computers. They have had great market success and popularity due to the
distinctive nature and style of their games.

They are divided up into the following divisions:

• The research and scriptwriting division, who are responsible for the actual
stories and themes in the games themselves. After researching and assessing
market trends in games, they write scripts similar to those of a stage play. The
scripts are then passed onto the programmers to be turned into a game. These
employees tend to move only within jobs involving creativity and writing, and
frequently spurn offers to move into management positions due to the
perceived lack of creativity.
• The core group of programmers, who write the software code for the games.
The programmers are the ‘heart’ of the company. They are generally highly
trained, and voluntarily work extremely hard (often up to 16 hours a day). The
programmers tend to interact socially mainly in their own group. To become an
ATG programmer is not easy. It is boasted that you only become a real
programmer 6 months after starting work. This is because it is considered vital
for new recruits to learn the distinctive style and mindset of ATG games before
they be allowed to work on new code. There are also certain skills specific to
ATG programming that can only be learned inside. Newcomers are therefore
put through an extensive orientation that involves analysing in depth the code
for older games, and learning the ATG history. They are also socially
integrated, and exposed to the broader cultural influences that have helped to
form the ATG style (such as certain ‘cult’ movies etc.) It is therefore part of
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the ATG culture and structure that only people who are ‘sold into’ the
organisation can work on programming in ATG. Few programmers leave.
• The management divisions. The biggest management divisions are the
accounting and HR groups. The accounting group are largely composed of
bookkeeping staff, who often have no special qualification but are trained on
the job.
• The sales division, who sell the games to games distributing companies all
over the world, and to various levels of market. The sales staff take broad
direction from management, but their major contact in the organisation is with
the accounting division (whose work is linked largely to the amount of
turnover generated by sales). Each salesperson works closely with a group of
employees in the accounting division, handing in reports of operations and
frequently co-operating on the accounts. In fact, salespeople often do some of
the accounting work if their contacts in the accounting department are away
sick or for some other reason. Accounts people may also sometimes field calls
for the salespeople with whom they work if needs be. The two groups therefore
associate frequently outside of work and identify with each other at work.
The following are the staffing numbers, also broken down by age:

Age Age Age Age Age Age TOTAL

0-20 21-30 31-40 41-50 51-60 61 +
Scriptwriting 3 20 23 10 7 3 66
Programmers 11 61 36 21 2 0 131
Sales 2 16 18 12 8 8 64
Accounting 0 7 13 10 9 1 40
Other 0 2 9 13 4 1 29

At the beginning of this year (2000), top management outlined the future
directions for the company. The focus for the immediate future is going to be
breaking into new technology mediums such as cell-phone and palmtop games etc.
This expansion will require cutting back somewhat on new game development,
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and a consolidation of older games into new technologies. It will also require a
review and overhaul of the accounting systems of ATG.

Having announced the strategic shift in their quarterly reports, some companies
have approached ATG with contract proposals:

• PHD, who are programming specialists in the type of new mediums that ATG
are looking at, have proposed that ATG outsource all of their programming in
the new technologies to them. They are willing to do this for less than it will
probably cost ATG.
• A software company has proposed that ATG buy an invoicing program that
should reduce accounting work by 10%.

Another problem to be faced is the fact that ATG has decided to cease sales in
China (due to copyright problem there) and in other regions (such as Eastern
Europe and South America), due to the cost ineffectiveness of ATG doing their
own sales there, as well as political problems. However it is expected that sales
will be resumed in these regions in a few years time, perhaps as soon as two-three
years for some.

Based on this strategy, the HR division has identified the following planning
discrepancies for next year (2001):

• There will be an expected shortage of approximately 23 software

• There will also be an expected shortage of accounting staff. Numbers are
somewhat uncertain, but it seems as if sales turnover will increase
approximately 50%.
• On the other hand, there are expected surpluses in sales staff of approximately
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• There are also projected surpluses of approximately 14 market and script

You have been hired as an HR consultant to analyse the situation and suggest HR
planning tools to reconcile staff shortages and surpluses. The company have
always had a rather good relationship with employees, and therefore wish a
minimum of suffering to occur (however they are willing to see a minimal level of
suffering if necessary). Therefore they are also willing to take it fairly slowly.







(30 MARKS)


You are the HR director for a large advertising agency. Due to the impact of
growth strategies from the mid-1990’s into the international arena, you are
constantly having to take on new staff. Below is a transitional matrix for certain of
the main jobs in the firm:

1997 (1) (2) (3) (4) (5) (6) (7) (8)
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(1) Admin staff .5 .15 .2 .15

(2) Account assistant .1 .45 .1 .35
(3) Account manager .4 .1 .5
(4) General manager .6 .4
(5) Creative assistant .05 .25 .5 .2
(6) Creative manager .1 .85 .05 .05
(7) Creative director .90 .1
(8) Not in firm .45 .75 .15 .00 .65 .1 .05

Answer the following questions, including calculations and numbers where


(15 MARKS)