BCOMH Human Resource and Labour Relations Management

HUMAN RESOURCE AND LABOUR RELATIONS MANAGEMENT
BACHELOR OF COMMERCE (HONOURS)

DEGREE
HUMAN RESOURCE AND LABOUR

RELATIONS MANAGEMENT
Copyright © 2019
REGENT Business School
All rights reserved; no part of this book may be reproduced in any form or by any means, including
photocopying machines, without the written permission of the publisher.
BACHELOR OF COMMERCE HONOURS 0

TABLE OF CONTENTS
Introduction to the HRLRM Study Guide 2
Chapter 1: Introduction to Human Resource Management 8
Chapter 2: SHRM and Job Design 27
Chapter 3: Recruitment and Selection 43
Chapter 4: Training and Development 69
Chapter 5: Performance Management 116
Chapter 6: Compensation Management 143
Chapter 7: Labour Relations 167
Bibliography 207

INTRODUCTION TO THE
HUMAN RESOURCE AND LABOUR RELATIONS
STUDY GUIDE
1. Introduction
Human beings are social beings and hardly ever live and work in isolation. We always plan,
develop and manage our relations both consciously and unconsciously. The relations are the
outcome of our actions and depend to a great extent upon our ability to manage our actions.
From childhood each and every individual acquire knowledge and experience on
understanding others and how to behave in each and every situations in life. Later we carry
forward this learning and understanding in carrying and managing relations at our workplace.
The whole context of Human Resource Management revolves around this core matter of
managing relations at work place.
2. Structure of this Study Guide

This Study Guide is structured as follows:
Provides an overview of the Study

Introduction to the HRLRM Study Guide
Guide and how to use it.
1. Introduction to HRM This part of the Study Guide details

what you are required to learn.
2. SHRM and Job Design
Each section details:
3. Recruitment and Selection
• Specific learning outcomes
4. Training and Development
• An overview of relevant theory
5. Performance Management
6. Compensation Management
7. Labour Relations

3. Structure of each Section

Each section is structured as follows:
• Specific Learning Outcomes
• Essential (Prescribed) Reading
• Brief Overview of Relevant Theory
• Questions for Reflection
3.1 Module Outcomes
Once you have completed this module, you should be able to:
• Critically reflect on the evolution of the functions and roles of human resource management
in an organisation
• Propose a process of integrating the human resource plan with the overall strategic plan of
the organisation
• Conduct a detailed evaluation of the impact of job design on employee satisfaction
• Evaluate organisational recruitment and selection processes and policies
• Delineate the processes, methods and approaches to training and development in an
organisation
• Assess the importance of skills development in developing countries
• Propose an appropriate compensation system in an organisation
• Present a performance management model in an organisation
• Analyse the various approaches to measuring performance and their appropriateness to
different organisations.
• Propose a basic benefits and service package for employees of a medium-sized business
• Provide a theoretical exposition of historical and current views of labour relations
• Evaluate the role of the various role-players in the labour relations arena
• Analyse the impact of labour legislation on organisational HR functions

3.2 Specific Outcomes and Chapter Alignment
PROGRAMME SPECIFIC OUTCOMES SPECIFIC OUTCOME ALIGNMENT

SO 1: Critically reflect on the evolution of the Chapter 1 – Introduction to HRM
functions and roles of human resource
management in an organisation
SO 2: Propose a process of integrating the Chapter 2 – SHRM and Job Design
human resource plan with the overall strategic
plan of the organisation
SO 3: Conduct a detailed evaluation of the Chapter 2 – SHRM and Job Design
impact of job design on employee satisfaction
SO 4: Evaluate organisational recruitment and Chapter 3 – Recruitment and Selection
selection processes and policies
SO 5: Delineate the processes, methods and Chapter 4 – Training and Development
approaches to training and development in an
organisation
SO 6: Assess the importance of skills Chapter 4 – Training and Development
development in developing countries
SO 7: Propose an appropriate compensation Chapter 6 – Compensation Management
system in an organisation
SO 8: Present a performance management Chapter 5 – Performance Management
model in an organisation
SO 9: Analyse the various approaches to Chapter 5 – Performance Management
measuring performance and their
appropriateness to different organisations.
SO 10: Propose a basic benefits and service Chapter 6 – Compensation Management
package for employees of a medium-sized
business
SO 11: Provide a theoretical exposition of Chapter 7 – Labour Relations
historical and current views of labour relations
SO 12: Evaluate the role of the various role- Chapter 7 – Labour Relations
players in the labour relations arena
SO 13: Analyse the impact of labour legislation Chapter 7 – Labour Relations
on organisational HR functions

3.3 Specific Outcomes and Assessment Criteria
PROGRAMME SPECIFIC OUTCOMES ASSESSMENT CRITERIA: Student must have

SO 1: Critically reflect on the evolution of the Understood the basic concepts of human resource
functions and roles of human resource management (HRM); explained what human
management in an organisation resource management is and how it relates to the
management process; provided an overview of
functions of HRM; described how the major roles
of HR management are being transformed; and
critically discussed the role of HRM in the present
millennium.
SO 2: Propose a process of integrating the Critically discussed the process of Strategic Human
human resource plan with the overall strategic Resource Planning; discussed the impact of the
plan of the organisation organisational vision, mission and values on
Human Resource Planning; explained the role of
the external analysis in the Strategic Human
Resource Planning process; discussed the
forecasting techniques utilised to predict employee
demand and employee supply; critically discussed
strategy formulation as part of the Strategic Human
Resource Planning process; identified the
implications which various organisational strategies
have for Human Resource Planning; critically
discussed the generation of a Human Resource
Plan; and identified the role of evaluation and
assessment in the Strategic Human Resource
Planning process.
SO 3: Conduct a detailed evaluation of the impact Delineated the various factors impacting on job
of job design on employee satisfaction design; explained the methods that may be used to
address the intrinsic motivation needs of
employees; and critically discusse how work
schedules and alternative work schedules may be
utilised to promote both employee satisfaction and
organisational goals
SO 4: Evaluate organisational recruitment and Evaluated the importance of recruitment and

selection processes and policies selection; delineated the structure of a recruitment
policy; analysed the influence of legislation on
recruitment; discussed the various sources of
recruitment and selection and the advantages and
disadvantages thereof; assessed the factors
impacting on recruitment and selection
SO 5: Delineate the processes, methods and Distinguished between the focus, approach and
approaches to training and development in an aims of education, training and development;
organisation outlined the purposes of training and
development; described the evaluation of training;
explained how one determines the need for
training; evaluated the various methods of training
and their effectiveness thereof
SO 6: Assess the importance of skills Critically discussed the importance of skills
development in developing countries development in developing countries; outlined the
factors impacting on skills development in
developing countries; and delineated the various

pieces of legislation impacting on skills

development in South Africa
SO 7: Propose an appropriate compensation Critically discussed the objectives of
system in an organisation compensation management; explained the types
of compensation (pay) systems; and evaluated
the critique surrounding executive compensation
SO 8: Present a performance management model Distinguished between the processes of
in an organisation performance management and performance
appraisal; presented an organisational model of
performance management; explained the
purposes of performance management; and
discussed the process of performance
management
SO 9: Analyse the various approaches to Critically discussed the various approaches to
measuring performance and their appropriateness measuring performance; and evaluated the
to different organisations. importance of the appraisal interview
SO 10: Propose a basic benefits and service Described the key types of employee benefits;
package for employees of a medium-sized explained the benefits organisations are required
business to provide by law in your country; and evaluated
the various types of services employees may offer
to facilitate retention and commitment
SO 11: Provide a theoretical exposition of Discussed the origins of labour relations both
historical and current views of labour relations globally and particularly in South Africa; and
differentiated between the various theories on
labour relations
SO 12: Evaluate the role of the various role- Describe the tripartite relationship in employment
players in the labour relations arena relations; discussed the role of the state in
employment relations; discussed the role of the
employee and trade unions in employment
relations; and discussed the role of the employer
and employer organisations in employment
relations
SO 13: Analyse the impact of labour legislation on Described the levels of law in South Africa;
organisational HR functions evaluated how the Constitutions protects Labour
Relations; defined common law; identified the
different pieces of labour legislation in South Africa;
outlined the various aspects covered by the Labour
Relations Act; described the concept of freedom of
association; analysed instances of both fair and
unfair dismissal; understood strike action in South
Africa; and differentiated between disputes of right
and disputes of interest with examples
3.4 Essential (Prescribed) Reading

Your essential (prescribed) reading comprises the following:
Nel, P.S., Werner, A., Haasbroek, G.D., Poisat, P., Sono, T. & Schultz, H.B. (2014) Human
Resources Management. Ninth Edition. Cape Town: Oxford University Press

3.5 Brief Overview of Relevant Theory
Each section contains a very brief overview of theory relevant to the particular Change Management
topic. The purpose of the overview is to introduce you to some of the general and emerging market
issues regarding each topic. Once you have read the overview, you need to explore the topic
further by reading the prescribed textbooks.
3.6 Questions for Reflection

At the end of every section there are questions for reflection. You need to attempt these on
completion of your study of the entire section. The questions are designed to enable you to reflect
on what you have learnt, and consider how what you have learnt should be applied in practice.
4. Assessments
The formal assessment of Change Management takes the form of an assignment and an exam

CHAPTER 1
INTRODUCTION TO HUMAN RESOURCE
MANAGEMENT
1.1. LEARNING OUTCOMES
After completing this chapter, students should be able to:
• Understand the basic concepts of human resource management (HRM).

• Explain what human resource management is and how it relates to the management
process.
• Provide an overview of functions of HRM.
• Describe how the major roles of HR management are being transformed.
• Critically discuss the role of HRM in the present millennium.

1.2. INTRODUCTION
Human beings are social beings and hardly ever live and work in isolation. We always plan, develop
and manage our relations both consciously and unconsciously. The relations are the outcome of our
actions and depend to a great extent upon our ability to manage our actions. From childhood each
and every individual acquire knowledge and experience on understanding others and how to behave
in each and every situations in life. Later we carry forward this learning and understanding in carrying
and managing relations at our workplace. The whole context of Human Resource Management
revolves around this core matter of managing relations at work place.
Since mid 1980’s Human Resource Management (HRM) has gained acceptance in both academic
and commercial circle. HRM is a multidisciplinary organisational function that draws theories and ideas
from various fields such as management, psychology, sociology and economics. There is no best way
to manage people and no manager has formulated how people can be managed effectively, because
people are complex beings with complex needs. Effective HRM depends very much on the causes
and conditions that an organisational setting would provide.
Today, companies that offer products with the highest quality are the ones with a leg up on the
competition; But the only thing that will uphold a company’s advantage tomorrow is the caliber of
people in the organisation. That predicted future is today’s reality. Most managers in public- and
private sector firms of all sizes would agree that people truly are the organisation’s most important
asset. Having competent staff on the payroll does not guarantee that a firm’s human resources will be
a source of competitive advantage. However in order to remain competitive, to grow, and diversify an
organisation must ensure that its employees are qualified, placed in appropriate positions, properly
trained, managed effectively, and committed to the firm’s success.
The goal of HRM is to maximize employees’ contributions in order to achieve optimal productivity and
effectiveness, while simultaneously attaining individual objectives (such as having a challenging job
and obtaining recognition), and societal objectives (such as legal compliance and demonstrating
social responsibility). HRM is the study of activities regarding people working in an organisation. It is
a managerial function that tries to match an organisation’s needs to the skills and abilities of its
employees.

1.3. WHAT IS HUMAN RESOURCE MANAGEMENT?
Human resources management (HRM) is a management function concerned with hiring, motivating
and maintaining people in an organisation. It focuses on people in organisations. Human resource
management is designing management systems to ensure that human talent is used effectively and
efficiently to accomplish organisational goals.
HRM is the personnel function which is concerned with procurement, development, compensation,
integration and maintenance of the personnel of an organisation for the purpose of contributing
towards the accomplishments of the organisation’s objectives. Therefore, personnel management is
the planning, organizing, directing, and controlling of the performance of those operative functions
(Edward B. Philippo)
According to the Invancevich and Glueck, “HRM is concerned with the most effective use of people to
achieve organisational and individual goals. It is the way of managing people at work, so that they
give their best to the organisation”.
According to Dessler (2008) the policies and practices involved in carrying out the “people” or human
resource aspects of a management position, including recruiting, screening, training, rewarding, and
appraising comprises of HRM.
Generally HRM refers to the management of people in organisations. It comprises of the activities,
policies, and practices involved in obtaining, developing, utilizing, evaluating, maintaining, and
retaining the appropriate number and skill mix of employees to accomplish the organisation’s
objectives. The goal of HRM is to maximise employees’ contributions in order to achieve optimal
productivity and effectiveness, while simultaneously attaining individual objectives (such as having a
challenging job and obtaining recognition), and societal objectives (such as legal compliance and
demonstrating social responsibility).
In short Human Resource Management (HRM) can be defined as the art of procuring, developing and
maintaining competent workforce to achieve the goals of an organisation in an effective and efficient
manner.

1.4. THE NATURE OF HUMAN RESOURCE MANAGEMENT

HRM is a management function that helps manager’s to recruit, select, train and develop members
for an organisation. HRM is concerned with people’s dimension in organisations. The following
constitute the core of HRM
1. HRM Involves the Application of Management Functions and Principles. The functions and
principles are applied to acquiring, developing, maintaining and providing remuneration to
employees in organisation.
2. Decision Relating to Employees must be Integrated. Decisions on different aspects of
employees must be consistent with other human resource (HR) decisions.
3. Decisions Made Influence the Effectiveness of an Organisation. Effectiveness of an
organisation will result in betterment of services to customers in the form of high quality
products supplied at reasonable costs.
4. HRM Functions are not Confined to Business Establishments Only but applicable to
nonbusiness organisations such as education, health care, recreation and like.
HRM refers to a set of programmes, functions and activities designed and carried out in order to
maximize both employee as well as organisational effectiveness.

1.5. THE SCOPE OF HUMAN RESOURCE MANAGEMENT
The scope of HRM is indeed vast. All major activities in the working life of a worker – from the time of
his or her entry into an organisation until he or she leaves the organisations comes under the purview
of HRM. The major HRM activities include HR planning, job analysis, job design, employee hiring,
employee and executive remuneration, employee motivation, employee maintenance, industrial
relations and prospects of HRM. The scope of Human Resources Management extends to:
• All the decisions, strategies, factors, principles, operations, practices, functions, activities and
methods related to the management of people as employees in any type of organisation.
• All the dimensions related to people in their employment relationships, and all the dynamics
that flow from it.
Labour
Relations
Compensation
HR Planning
and Benefits
Performance Employee
Management HRM Assistance
Recruitment Organisational
and Selection Development
Training and
Development
All major activities in the working life of a worker – from the time of his or her entry into an organisation
until he or she leaves it comes under the purview of HRM. American
Society for Training and Development (ASTD) conducted fairly an exhaustive study in this field and
identified nine broad areas of activities of HRM. These are given below:
• Human Resource Planning
• Design of the Organisation and Job
• Selection and Staffing
• Training and Development

• Organisational Development
• Compensation and Benefits
• Employee Assistance
• Union/Labour Relations
• Personnel Research and Information System
a) Human Resource Planning: The objective of HR Planning is to ensure that the organisation has
the right types of persons at the right time at the right place. It prepares human resources inventory
with a view to assess present and future needs, availability and possible shortages in human resource.
Thereupon, HR Planning forecast demand and supplies and identify sources of selection. HR Planning
develops strategies both long-term and short-term, to meet the man-power requirement.
b) Design of Organisation and Job: This is the task of laying down organisation structure, authority,
relationship and responsibilities. This will also mean definition of work contents for each position in
the organisation. This is done by “job description”. Another important step is “Job specification”. Job
specification identifies the attributes of persons who will be most suitable for each job which is defined
by job description
c) Selection and Staffing: This is the process of recruitment and selection of staff. This involves
matching people and their expectations with which the job specifications and career path available
within the organisation.
d) Training and Development: This involves an organized attempt to find out training needs of the
individuals to meet the knowledge and skill which is needed not only to perform current job but also
to fulfil the future needs of the organisation.
e) Organisational Development: This is an important aspect whereby “Synergetic effect” is

generated in an organisation i.e. healthy interpersonal and inter-group relationship within the
organisation.
f) Compensation and Benefits: This is the area of wages and salaries administration where wages
and compensations are fixed scientifically to meet fairness and equity criteria. In addition labour
welfare measures are involved which include benefits and services.

g) Employee Assistance: Each employee is unique in character, personality, expectation and

temperament. By and large each one of them faces problems everyday. Some are personal some
are official. In their case he or she remains worried. Such worries must be removed to make him or
her more productive and happy.
h) Union-Labour Relations: Healthy Industrial and Labour relations are very important for enhancing
peace and productivity in an organisation. This is one of the areas of HRM.
i) Personnel Research and Information System: Knowledge on behavioral science and industrial
psychology throws better insight into the workers expectations, aspirations and behaviour.
Advancement of technology of product and production methods have created working environment
which are much different from the past. Globalisation has increased competition many fold. Science
of ergonomics gives better ideas of doing a work more conveniently by an employee. Thus, continuous
research in HR areas is an unavoidable requirement. It must also take special care for improving
exchange of information through effective communication systems on a continuous basis especially
on moral and motivation.
HRM is a broad concept; personnel management (PM) and Human resource development (HRD) are
a part of HRM.
1.6. OBJECTIVES OF HUMAN RESOURCE MANAGEMENT
The primary objective of HRM is to ensure the availability of competent and willing workforce to an
organisation. The specific objectives can be summarized under four headings: societal,
organisational, and functional and personnel.
1) Societal Objectives: seek to ensure that the organisation becomes socially responsible to the
needs and challenges of the society while minimising the negative impact of such demands
upon the organisation. The failure of the organisations to use their resources for the society’s
benefit in ethical ways may lead to restriction.
2) Organisational Objectives: it recognizes the role of HRM in bringing about organisational

effectiveness. It makes sure that HRM is not a standalone department, but rather a means to

assist the organisation with its primary objectives. The HR department exists to serve the rest
of the organisation.
3) Functional Objectives: is to maintain the department’s contribution at a level appropriate to

the organisation’s needs. Human resources are to be adjusted to suit the organisation’s
demands. The department’s value should not become too expensive at the cost of the
organisation it serves.
4) Personnel Objectives: it is to assist employees in achieving their personal goals, at least as

far as these goals enhance the individual’s contribution to the organisation. Personal
objectives of employees must be met if they are to be maintained, retained and motivated.
Otherwise employee performance and satisfaction may decline giving rise to employee
turnover.
HRM Objectives Supporting Functions

1 Societal Legal compliance
Benefits
Union- management relations
2 Organisational Human Resource Planning Employee
relations Selection Training and
development Appraisal Placement
Assessment
3 Functional Appraisal Placement Assessment
4 Personnel Training and development Appraisal
Placement Compensation Assessment
1.7. FUNCTIONS OF HUMAN RESOURCE MANAGEMENT
Human Resources management has an important role to play in equipping organisations to meet the
challenges of an expanding and increasingly competitive sector. Increase in staff numbers, contractual
diversification and changes in demographic profile which compel the HR managers to reconfigure the
role and significance of human resources management. The functions are responsive to current
staffing needs, but can be proactive in reshaping organisational objectives.
HR management can be thought of as seven interlinked functions taking place within organisations.
Additionally, external forces—legal, economic, technological, global, environmental,

cultural/geographic, political, and social—significantly affect how HR functions are designed,

managed, and changed. The functions can be grouped as follows:
• Strategic HR Management: As a part of maintaining organisational competitiveness, strategic

planning for HR effectiveness can be increased through the use of HR metrics and HR
technology. Human resource planning (HRP) function determine the number and type of
employees needed to accomplish organisational goals. HRP includes creating venture teams
with a balanced skill-mix, recruiting the right people, and voluntary team assignment. This
function analyzes and determines personnel needs in order to create effective innovation
teams. The basic HRP strategy is staffing and employee development.
• Equal Employment Opportunity: Compliance with equal employment opportunity (EEO)

laws and regulations affects all other HR activities.
• Staffing: The aim of staffing is to provide a sufficient supply of qualified individuals to fill jobs
in an organisation. Job analysis, recruitment and selection are the main functions under
staffing. Workers job design and job analysis laid the foundation for staffing by identifying what
diverse people do in their jobs and how they are affected by them. Job analysis is the process
of describing the nature of a job and specifying the human requirements such as knowledge,
skills, and experience needed to perform the job. The end result of job analysis is job
description. Job description spells out work duties and activities of employees. Through HR
planning, managers anticipate the future supply of and demand for employees and the nature
of workforce issues, including the retention of employees. So HRP precedes the actual
selection of people for organisation. These factors are used when recruiting applicants for job
openings. The selection process is concerned with choosing qualified individuals to fill those
jobs. In the selection function, the most qualified applicants are selected for hiring from among
the applicants based on the extent to which their abilities and skills are matching with the job.
• Talent Management and Development: Beginning with the orientation of new employees,
talent management and development includes different types of training. Orientation is the first
step towards helping a new employee to adjust himself to the new job and the employer. It is
a method to acquaint new employees with particular aspects of their new job, including pay
and benefit programmes, working hours and company rules and expectations. Training and
Development programs provide useful means of assuring that the employees are capable of
performing their jobs at acceptable levels and also more than that. All the organisations provide

training for new and in experienced employee. In addition, organisation often provide both on
the job and off the job training programmes for those employees whose jobs are undergoing
change. Likewise, HR development and succession planning of employees and managers is
necessary to prepare for future challenges. Career planning has developed as result of the
desire of many employees to grow in their jobs and to advance in their career. Career planning
activities include assessing an individual employee’s potential for growth and advancement in
the organisation.
Performance appraisal includes encouraging risk taking, demanding innovation, generating or

adopting new tasks, peer evaluation, frequent evaluations, and auditing innovation processes.
This function monitors employee performance to ensure that it is at acceptable levels. This
strategy appraises individual and team performance so that there is a link between individual
innovativeness and company profitability. Which tasks should be appraised and who should
assess employees’ performance are also taken into account.
• Total Rewards: Compensation in the form of pay, incentives and benefits are the rewards
given to the employees for performing organisational work. Compensation management is the
method for determining how much employees should be paid for performing certain jobs.
Compensation affects staffing in that people are generally attracted to organisations offering a

higher level of pay in exchange for the work performed. To be competitive, employers develop
and refine their basic compensation systems and may use variable pay programs such as
incentive rewards, promotion from within the team, recognition rewards, balancing team and
individual rewards etc. This function uses rewards to motivate personnel to achieve an
organisation’s goals of productivity, innovation and profitability. Compensation is also related
to employee development in that it provides an important incentive in motivating employees to
higher levels of job performance to higher paying jobs in the organisation. Benefits are another
form of compensation to employees other than direct pay for the work performed. Benefits
include both legally required items and those offered at employer’s discretion. Benefits are
primarily related to the area of employee maintenance as they provide for many basic
employee needs.
• Risk Management and Worker Protection: HRM addresses various workplace risks to
ensure protection of workers by meeting legal requirements and being more responsive to
concerns for workplace health and safety along with disaster and recovery planning.
• Employee and Labour Relations: The relationship between managers and their employees
must be handled legally and effectively. Employer and employee rights must be addressed. It
is important to develop, communicate, and update HR policies and procedures so that
managers and employees alike know what is expected. In some organisations,
union/management relations must be addressed as well. The term labour relation refers to the
interaction with employees who are represented by a trade union. Unions are organisation of
employees who join together to obtain more voice in decisions affecting wages, benefits,
working conditions and other aspects of employment. With regard to labour relations the major
function of HR personnel includes negotiating with the unions regarding wages, service
conditions and resolving disputes and grievances.
1.8. CURRENT CLASSIFICATION OF HR ROLES
According to R.L Mathis and J. H. Jackson (2010) several roles can be fulfilled by HR management.
The nature and extent of these roles depend on both what upper management wants HR management
to do and what competencies the HR staff have demonstrated. Three roles are typically identified for
HR:

Administrative
Employee
Advocate
Strategic
1. Administrative Role of HR
The administrative role of HR management has been heavily oriented to administration and
recordkeeping including essential legal paperwork and policy implementation. Major changes have
happened in the administrative role of HR during the recent years. Two major shifts driving the
transformation of the administrative role are: Greater use of technology and Outsourcing. Technology
has been widely used to improve the administrative efficiency of HR and the responsiveness of HR to
employees and managers, more HR functions are becoming available electronically or are being done
on the Internet using Web-based technology. Technology is being used in most HR activities, from
employment applications and employee benefits enrollments to e-learning using Internet-based
resources.
Increasingly, many HR administrative functions are being outsourced to vendors. This outsourcing of
HR administrative activities has grown dramatically in HR areas such as employee assistance
(counseling), retirement planning, benefits administration, payroll services, and outplacement
services.
2. Operational and Employee Advocate Role for HR
HR managers manage most HR activities in line with the strategies and operations that have been
identified by management and serves as employee “champion” for employee issues and concerns.
HR often has been viewed as the “employee advocate” in organisations. They act as the voice for
employee concerns, and spend considerable time on HR “crisis management,” dealing with employee
problems that are both work-related and not work-related. Employee advocacy helps to ensure fair
and equitable treatment for employees regardless of personal background or circumstances.

Sometimes the HR’s advocate role may create conflict with operating managers. However, without
the HR advocate role, employers could face even more lawsuits and regulatory complaints than they
do now. The operational role requires HR professionals to cooperate with various departmental and
operating managers and supervisors in order to identify and implement needed programs and policies
in the organisation. Operational activities are tactical in nature. Compliance with equal employment
opportunity and other laws is ensured, employment applications are processed, current openings are
filled through interviews, supervisors are trained, safety problems are resolved, and wage and benefit
questions are answered. For carrying out these activities HR manager matches HR activities with the
strategies of the organisation.
3. Strategic Role for HR

The administrative role traditionally has been the dominant role for HR. However, as a broader
transformation in HR is needed so that significantly less HR time and fewer HR staffs are used just
for clerical work. Differences between the operational and strategic roles exist in a number of HR
areas. The strategic HR role means that HR professionals are proactive in addressing business
realities and focusing on future business needs, such as strategic planning, compensation strategies,
the performance of HR, and measuring its results. However, in some organisations, HR often does
not play a key role in formulating the strategies for the organisation as a whole; instead it merely
carries them out through HR activities.
Many executives, managers, and HR professionals are increasingly seeing the need for HR
management to become a greater strategic contributor to the “business” success of organisations. HR
should be responsible for knowing what the true cost of human capital is for an employer. For example,
it may cost two times key employees’ annual salaries to replace them if they leave. Turnover can be

controlled though HR activities, and if it is successful in saving the company money with good retention
and talent management strategies, those may be important contributions to the bottom line of
organisational performance.
The role of HR as a strategic business partner is often described as “having a seat at the table,” and
contributing to the strategic directions and success of the organisation. That means HR is involved in
devising strategy in addition to implementing strategy. Part of HR’s contribution is to have financial
expertise and to produce financial results, not just to boost employee morale or administrative
efficiencies.
Therefore, a significant concern for chief financial officers (CFOs) is whether HR executives are
equipped to help them to plan and meet financial requirements. However, even though this strategic
role of HR is recognized, many organisations still need to make significant progress toward fulfilling it.
Some examples of areas where strategic contributions can be made by HR are:
• Evaluating mergers and acquisitions for organisational “compatibility,” structural changes, and
staffing needs
• Conducting workforce planning to anticipate the retirement of employees at all levels and
identify workforce expansion in organisational strategic plans
• Leading site selection efforts for new facilities or transferring operations to international
outsourcing
• locations based on workforce needs
• Instituting HR management systems to reduce administrative time, equipment, and staff by
using HR technology
• Working with executives to develop a revised sales
• compensation and incentives plan as new products
It is the era when for the competitive triumph of the organisation there is a need to involve HRM
significantly in an integrated manner, which demands such capabilities from the HR specialists. The
role of HR shifted from a facilitator to a functional peer with competencies in other functions, and is
acknowledged as an equal partner by others. The HR is motivated to contribute to organisational
objectives of profitability and customer satisfaction, and is seen as a vehicle for realization of quality
development.
The department has a responsibility for monitoring employee satisfaction, since it is seen as substitute
to customer satisfaction.

According to McKinsey’s 7-S framework model HR plays the role of a catalyst for the organisation.
According to this framework, effective organisational change is a complex relationship between seven
S’s. HRM is a total matching process between the three Hard S’s (Strategy, Structure and Systems)
and the four Soft S’s (Style, Staff, Skills and Super-ordinate Goals). Clearly, all the S’s have to
complement each other and have to be aligned towards a single corporate vision for the organisation
to be effective. It has to be realized that most of the S’s are determined directly or indirectly by the
way Human Resources are managed, and therefore, HRM must be a part of the total business strategy
1.9. HRM IN THE NEW MILLENNIUM

Human Resources have never been more indispensable than today. The competitive forces that we
face today will continue to face in the future demanding organisational excellence. In order to achieve
this extended quality, organisation’s need to focus on learning, quality development, teamwork, and
reengineering. These factors are driven by the way organisations implement things and how
employees are treated.
1. HR Can Help in Dispensing Organisational Excellence: To achieve this paradigm shift in

the organisation excellence there is a need for organisations to reform the way in which work

is carried out by the Human Resource department. By designing an entirely new role and
agenda that results in enriching the organisation’s value to customers, investors and
employees, HR can help in delivering organisational excellence. This can be carried out by
helping line managers and senior mangers in moving planning from the conference room to
the market place and by becoming an expert in the way work is organized and executed.
HR should be a representative of the employees and should help the organisation in improving
its capacity for change. HR will help the organisations in facing the competitive challenges
such as globalization, profitability through growth, technology, intellectual capital, and other
competitive challenges that the companies are facing while adjusting to uncontrollably
challenging changes in business environment. The novel role of HR is to rapidly turn strategy
into action; to manage processes intelligently and efficiently; to maximize employee
contribution and commitment and to construct favorable conditions for flawless change.
2. Human Resource Should be a Strategy Partner: HR should also become a partner in

strategy executions by propelling and directing serious discussions of how the company should
be organized to carry out its strategy. Creating the conditions for this discussion involves four
steps. First HR need to define an organisational architecture by identifying the company’s way
of doing business. Second, HR must be held responsible for conducting an organisational
audit. Third, HR as a strategic partner needs to identify methods for restoring the parts of the
organisational architecture that need it. Fourth and finally, HR must take stock of its own work
and set clear priorities. In their new role as administrative experts they will need to shed their
traditional image and still make sure all routine work for the company is done well.
3. HR Accountability Should be Fixed to Ensure Employee Commitment: HR must be held

accountable for ensuring that employees feel committed to the organisation and contribute
fully. They must take responsibility for orienting and training line management about the
importance of high employee morale and how to achieve it. The new HR should be the voice
of employees in management discussions. The new role for HR might also involve suggesting
that more teams be used on some projects or that employees be given more control over their
own work schedules.
4. The New HR Must Become a Change Agent: The new HR must become a change agent,
which is building the organisation’s capacity to embrace and capitalize on change. Even

though they are not primarily responsible for executing change it is the duty of the HR manager
to make sure that the organisation carries out the changes framed for implementation.
5. Improving the Quality of HR: The most important thing that managers can do to drive the
new mandate for HR is to improve the quality of the HR staff itself. Senior executives must get
beyond the stereotypes of HR professionals as incompetent support staff and unleash HR’s
full potential
6. Change in Employment Practices: The balance sheet of an organisation shows human

resource as an expense and not as a Capital. In the information age, it is perceived that the
machines can do the work more efficiently than most people however; technology to work is
dependent on people. The challenges for Employment Practice in the New Millennium will
require that there should be strategic involvement of the people and labour-management
partnerships as they both have to take organisation ahead.
7. Benchmarking Tool Must be Mastered by HR Professionals: HR professionals must

master benchmarking, which is a tool for continuous improvement- directing the human side
associated with the strategic path adopted by the organisation. Through this, HR department
will start appreciating the changes happening within and outside the environment while
expanding the knowledge about how to add value to decision making at the highest level of
the organisation.
8. Aligning Human Resources to Better Meet Strategic Objectives: Too often

organisations craft their strategy in a vacuum. Some organisations don’t even include key
people during strategy formulation resulting in lacunae between the actual problems and the
solutions implemented- as critical inputs are not sought from those individuals who are
supposed to implement the new strategies. A past CEO of Sony once said that organisations
have access to the same technology and the same information. The difference between any
two organisations is the “people”- the human resource. Empowering the workforce is an
essential tool for aligning human resources with the achievement of corporate objectives. It is
the duty of HR manager to hire talented human resource and to provide them with a positive
environment where they will be able to utilize their skills and potentials and to create an
environment in which these individuals are comfortable taking risks

9. Promote from within and Invest in Employees: Promoting employees from within sends
a powerful message that the organisation’s employees are valued. New blood and fresh ideas
often come from newcomers to the organisation. To avoid stagnation of the firm, new ideas
and approaches are critical. Yet to improve employee morale, promoting individuals from
within the organisation is essential. This communicates that the organisation values their
employees and invests in their human resources.
10. Review the Recruitment and Selection Process: A key element of human resource
planning is ensuring that the supply of appropriate employees (with the right skill mix) is on
board when needed. This requires a proactive approach whereby the organisation anticipates
its needs well in advance. It is important to identify the competencies being sought. That is,
the criteria upon which selection decisions are to be made should be decided in advance. A
firm must identify those skill sets required by employees to be successful. Charles O’Reilly
suggests that companies should hire for attitude (perhaps even more so than technical skills).
That is, the fit of the individual with the values of the organisation and the culture of the firm
should also be considered when selecting employees. This has been referred to as the person-
organisation fit. It is no longer enough to simply consider the person’s fit (and technical skill
set) with the job. Part of the employee’s fit with the organisation should focus on the core
values and beliefs of the organisation. This will increase employees’ contributions to the overall
success of the organisation if they already embrace the core values of the organisation prior
to their selection
11. Communicate Mission and Vision: If employees are expected to contribute to the
attainment of the organisation’s strategic objectives, they must understand what their role is.
This can be achieved in part by clearly communicating the mission and vision statements of
the firm. The old adage is certainly true. If a person does not know where he or she is going,
any road will get him or her there. The mission communicates the identity and purpose of the

organisation. It provides a statement of who the firm is and what their business is. Only those
employees who understand this purpose can contribute to the fullest extent possible. The
vision statement provides a picture of the future state of the firm. It should be a stretch to attain.
This keeps all the organisation’s employees pulling in the same direction with a common end
point. It is much easier to align human resources with corporate objectives when these
employees are familiar with the mission and vision of the firm. As the mission and vision
statements are articulated, organisational members begin to more closely embrace their very
meaning on an individual level. These statements provide a road map leading employees down
the road to achieve organisational objectives. Employees then identify how they can contribute
their unique talents toward the attainment of these goals.
12. Use Teams to Achieve Synergy: Synergy can be concisely defined as “two plus two
equals five”. In other words, the whole is greater than the sum of the parts. So much more can
be achieved as people work together. Through the effective use of teams, organisations can
often achieve synergy. Team goals, however, must be aligned with the organisation’s strategic
objectives. Aligning team objectives with overall corporate objectives ensures that people are
working toward the same goal

CHAPTER 2
STRATEGIC HUMAN RESOURCE
PLANNING AND JOB DESIGN
• Provide a definition of Human Resource Planning.

• Define Strategic Human Resource Planning.
• Critically discuss the process of Strategic Human Resource Planning.
• Discuss the impact of the organisational vision, mission and values on Human Resource
Planning.
• Explain the role of the external analysis in the Strategic Human Resource Planning process.
• Discuss the forecasting techniques utilised to predict employee demand and employee supply.
• Critically discuss strategy formulation as part of the Strategic Human Resource Planning
process.
• Identify the implications which various organisational strategies have for Human Resource
Planning.
• Critically discuss the generation of a Human Resource Plan.
• Identify the role of evaluation and assessment in the Strategic Human Resource Planning
process.

2.2. DEFINITION OF HUMAN RESOURCE PLANNING
Definitions of Human Resource Planning include:
• “the process of anticipating and providing for the movement of people into, within, and out of
an organisation” (Snell and Bohlander, 2007: 48).
• “labour demand (the number of employees needed in the organisation) and labour supply (the
number of qualified employees available to the organisation). It further involves the entry of
people into the organisation (acquisition), the development of employees (development), and
the exit of employees (departure). It is therefore a systematic, fully integrated organisational
process that involves proactive planning ahead to avoid talent surpluses or shortages.” (Nel,
Werner, Haasbroek, Poisat, Sono and Schultz, 2008: 216-217).
• “to estimate future needs for different types of human resources and to predict areas in the
organisation where there will be future labour surpluses (extra unneeded labour) or shortages
(not enough labour) (Kleynhans, Markham, Meyer and Aswegen, 2007: 69).
All three definitions indicate that HR Planning involves ensuring that human resources or skilled staff
are available to fill positions within an organisation as and when they are needed.
2.4. WHAT IS STRATEGIC HUMAN RESOURCE PLANNING (SHRP)?

As can be seen from the three case studies presented in the previous “Activity”, it is imperative that
Human Resource Planning is linked to Strategic Planning. HR Planning should therefore be integrated
with the Strategic Planning processes of an organisation.
Strategic Human Resource Planning may be defined as:
• “the process through which company goals are put forward in mission statements and
company plans are translated into HR objectives” (Dyer cited in Grobler et al, 2006: 105).
• “the pattern of human resources deployments and activities that enable an organisation to
achieve its strategic goals” (Snell and Bohlander, 2007:48).

2.5. THE STRATEGIC HUMAN RESOURCE PLANNING (SHRP) PROCESS

Figure 1.1 on this page provides an overview of the steps in the HR Planning process and how they
integrate with the Strategic Planning process.
2.5.1 Step 1: Mission, Vision and Values

The first step in the organisation’s strategic planning process is to establish the organisation’s mission,
vision and values. While the mission defines the purpose of the organisation and the scope of its
operations, the vision defines the long term direction of the company (Snell and Bohlander, 2007).
The values are “strong and enduring beliefs and principles that the company uses as a foundation for
its decisions” (Snell and Bohlander, 2007: 50). These values often capture the underlying culture of
the company and inform employee behaviour.

It is important that the HR function is actively involved in the generation of the mission, vision and
values as, in terms of HR Planning, this provides the HR function with a thorough understanding of
where the organisation is going and the human resources that are required to support the mission,
vision and values.
2.5.2 Step 2: External (Environmental) Analysis

The external analysis focuses on identifying both opportunities and threats in the organisation’s
external environment. Strategic planning will focus on scanning the general opportunities and threats
brought about by economic forces, industry trends, technological changes, legislative forces, social
factors as well as demographic and labour market trends (Snell and Bohlander, 2007). Environmental
scanning will lead to the identification of forces which will impact the organisation and appropriate
strategies can be put in place to address these.
The monitoring of the external labour market is particularly important for Human Resource Planning.
There are various forces which impact the external labour market supply which include demographic
changes in population, education level of the workforce, demand for specific employee skills, the
mobility of the population as well as government initiatives and legislation (Snell and Bohlander, 2007).
The nature of the labour market will impact on HR Planning at both an operational and a strategic
level:
• At an operational level, HR Planning will need to ensure that recruitment, development and talent
management plansare out in place which take into account any changes or areas of lack and
surplus in the external labour market (Snell and Bohlander, 2007).
• At a strategic level, the external labour market may cause an organisation to adjust its strategy,
particularly in instances where there is a high skills shortage in a particular area (Snell and
Bohlander, 2007).
2.5.3 Step 3: Internal Analysis

An internal analysis focuses on an organisation’s strengths and weaknesses. This involves the
organisation in analysing the effectiveness of its current resources in providing its competitive
advantage (Snell and Bohlander, 2007).
An important internal analysis activity for HR Planning is forecasting.
Forecasting involves the HR practitioner in looking towards the future of the organisation in terms of
its mission and vision and determining:

• The demand for employees

• The supply of employees
In simple terms, forecasting involves predicting or estimating “future needs for different types of human
resources [and predicting] areas in the organisation where there will be future labour surpluses (extra
unneeded labour) or shortages (not enough labour)” (Kleynhans et al, 2007:69).
2.5.3.1 Forecasting Demand for Employees

Forecasting labour/employee demand involves determining the estimated number of staff which an
organisation requires in the future (Nel et al, 2008). There are various forecasting techniques which
are available, some of which use sophisticated computer software. Both quantitative and qualitative
techniques are available for use.
2.5.3.2 Forecasting Supply of Employees

Once the future demand for employees is known, the HR practitioner needs to forecast whether there
will be sufficient skilled employees available to meet the demand. This requires both an internal and
an external analysis.
2.5.4 Step 4: Strategy Formulation

As a result of step 3 (internal analysis) the HR practitioner would have a forecast of employee demand
as well as a forecast of employee supply. The next step is that of strategy formulation where the HR
practitioner would seek strategies to address the discrepancies which exist between the demand
forecast and supply forecast. However, the HR practitioner cannot do this without understanding the
overall strategy of the organisation.
2.5.4.1. Organisational Strategies

The organisational strategies which an organisation may formulate and implement could include:
• Growth and Diversification: A growth and diversification strategy requires increased productivity,
a greater number of employees as well as new skills (Snell and Bohlander, 2007). Therefore, in terms
of HR Planning the demand for employees will be far greater than the existing supply of employees.
Furthermore, there will be a demand for employees with skills that are different to what the
organisation currently has.

• Mergers and Acquisitions: Mergers and acquisitions are likely to produce a duplication of jobs in
certain areas which would create a situation of employee supply exceeding employee demand in
certain areas.
• Strategic Alliances and Joint Ventures: This organisational strategy may be used to address a
HR Planning situation where employee demand exceeds employee supply.
• Low Cost Strategy: This strategy has the following implications for HR Planning:
• Employee Demand Could Equal Employee Supply: this would mean that the workforce would
remain as is, but each individual job incumbent would need to find more efficient and
productive ways of performing their jobs.
• Employee Supply Exceeds Employee Demand: this would result when the management of the
organisation believe that a reduction in the number of employees will lead to greater efficiency
and productivity. Retrenchments would need to be implemented and outsourcing may have to
be implemented.
• Differentiation Strategy: If the focus of the differentiation strategy is improved service and/or
improved quality, it is probable that employee demand will exceed employee supply. Steps would
need to be taken to recruit more employees from outside and / or train the existing employees.
2.5.4.2 Formulating the HR (Workforce) Plan

The formulation of the HR Plan will need to take into consideration:
• The results of the employee demand forecast
• The results of the employee supply forecast

• The organisational strategy
After considering the above, the HR practitioner will be clear as to whether:

• The employee demand will exceed the employee supply
• The employee supply will exceed the employee demand
• The employee demand equals the employee supply (Nel et al, 2008)
The table below lists the various HR activities which are appropriate to address the various HR
Planning scenarios
2.5.5 Step 5: Strategy Implementation

Step 5 involves the implementation of the organisational strategy, supported by the HR planning
strategy which will focus on “reconciling human resources demanded and human resources available”
(Snell and Bohlander, 2007:73).
2.5.6 Step 6: Evaluation and Assessment

The effective implementation of the organisational strategy, supported by HR planning, should be

monitored and evaluated on an ongoing basis. Ultimately, successful HR Planning should help
“increase organisational capability – the capacity of the organisation to continuously act and change
in pursuit of sustainable competitive advantage” (Wright and Snell cited in Snell and Bohlander, 2007:
79).
2.6. JOB DESIGN

Job design may be defined as:
• “the manipulation of the content, functions and relationships of jobs in a way that both
accomplishes organisational goals and satisfies the personal needs of individual job
holders”(Grobler, et al, 2006: 137).
• “structuring jobs in order to improve organisation efficiency and employee job
satisfaction”(Snell and Bohlander, 2007: 149).
• “identifying and organising tasks, duties and responsibilities that have to be carried out, and
the methods used in carrying them out so as to make a productive unit of work”(Kleynhans,
Markham, Meyer and van Aswegen, 2007: 45).
These three definitions point to the importance of jobs being designed in a manner which promotes
the effective and efficient achievement of organisational goals while at the same time promoting
employee satisfaction.
2.6.1. Factors which Impact on Job Design

The diagram below provides an overview of the factors which impact on job design.

Organisational Objectives
The job needs to contribute to the achievement of organisational objectives. The job will comprise
tasks, duties and responsibilities which will feed into the achievement of the departmental goals.
These will ultimately contribute to the achievement of the organisation’s goals (Snell and Bohlander,
2007).
Industrial Engineering Concerns

Industrial engineering is a field of study which focuses on analysing work methods and determining
the time in which work should be performed (Snell and Bohlander, 2007). It involves observing and
analysing work cycles to determine whether the process of work could be simplified and made more
efficient.
The danger of industrial engineering is that it could result in repetitive tasks and in so doing remove
the motivational aspects of the job.
Ergonomics
Ergonomics is an “interdisciplinary approach to designing equipment and systems that can be easily
and efficiently used by human beings” (Snell and Bohlander, 2007: 153).
It focuses on ensuring that the equipment which employees use to perform their work promote
productivity and morale.

Behavioural Concerns
Job Enrichment and the Job Characteristics Model are two job design methods which focus on
addressing the intrinsic motivation needs of employees.
Job Enrichment
Job enrichment focuses on making jobs more rewarding through increasing the number of meaningful
roles which an employee is required to perform, i.e. vertically expanding the job (Snell and Bohlander,
2007).
There are five factors which can be used to enrich the jobs of employees:
• Increasing levels of difficulty and responsibility
• Giving employees greater control over work outcomes
• Providing performance feedback directly to the relevant employee
• Adding new tasks to the job which require further training and growth from the employee
• Allowing the development of expertise through assigning individual specific tasks (Snell and
Bohlander, 2007).
Job Characteristics Model

Hackman and Oldham’s Job Characteristics Model identifies three psychological states which a job
must address in order to ensure employee motivation. These psychological states of the job holder
include:
• Meaningfulness of the work performed
• Responsibility for work outcomes
• Knowledge of the results of the work performed (Snell and Bohlander, 2007).
There are five job characteristics which lead to the achievement of these three psychological states:
• Skill Variety: The extent to which the job requires the application of a varied number of skills
in the performance of job related tasks.
• Task Identity: The extent to which the job requires the completion of a “complete” or
identifiable piece of work.
• Task Significance: The extent to which the job has an impact on other people whether within
the organisation or the greater community.
• Autonomy: The extent to which the job provides for the job holder’s discretion and
independence in making decisions related to the carrying out of the work.
• Feedback: The extent to which the job holder is provided with clear and direct feedback about
his / her performance (Snell and Bohlander, 2007).

The Job Characteristics Model will not improve motivation in instances where employees do not wish
for enhanced autonomy and variety. The model will also fail in instances where employees do not
have the requisite skills to perform the greater variety of tasks (Snell and Bohlander, 2007). In such
instances the Job Characteristics Model will result in demotivated and dissatisfied employees.
2.6.2. Work Schedules and Alternative Work Locations in Job Design

Work schedules and alternative work locations may also be utilised in job design as a means to
promote employee satisfaction, while serving organisational goals. Figure 2.3 provides an overview
of the different scheduling and location arrangements which impact on job design.

Flexitime
Traditionally organisations required that all employees work the same work schedule (e.g. 9am to
5pm, Monday to Friday). In contrast to the traditional approach, flexitime allows employees to work
according to flexible schedules on condition that they are present at the workplace during certain core
times (Grobler, et al, 2006). For example, a financial institution may require that employees are
present at the workplace during the core time of 10:00 – 14:00. The remaining four hours which the
employees are required to work each day will be determined by the needs of each individual
employee. For example, Employee A may choose to work from 07:00 – 15:00, while Employee B may
choose to work from 10:00 – 18:00.
The advantages and disadvantages of flexi-time are discussed below:

• Advantages of Flexitime: Flexitime has been shown to reduce employee turnover, absenteeism
and tardiness and increase productivity (Kleynhans et al, 2007).
Some of the reasons for this include:
• Employees have control over their work schedules and therefore short term absences (e.g. as

• a result of a dental appointment, picking up a relation from the airport, etc.) are reduced.
• Employees begin work when they arrive at the workplace which reduces tiredness.
• Employees are able to work during their most productive hours (e.g. certain employees are
• more productive in the morning and others are more productive in late afternoon).
• Employees focus on getting the work done rather than just ‘being at the office’ (Kleynhans et
al, 2007).
Ultimately, flexitime allows employees to integrate family and social commitments into their daily
schedules. It can also reduce pressure on public services, such as transportation (Kleynhans et al,
2007). Flexitime is also a helpful tool for the organisation to recruit and retain high performing
employees (Snell and Bohlander, 2007).
• Disadvantages of Flexitime: Disadvantages of flexitime include:

• It is not suited to some jobs.
• It presents challenges for managers to communicate effectively with all employees.
• It may require that managers extend their workweek so as to ensure that they have adequate
contact with, and control over, employees (Snell and Bohlander, 2007).
Compressed Workweek
The compressed workweek is a scheduling arrangement which allows employees to complete their
work within less than the standard five day working week. A common example of the implementation
of the compressed workweek concept is where employees work four days per week at ten hours per
day (Kleynhans, 2007).
The advantages and disadvantages of the compressed workweek are discussed below:
• Advantages of the Compressed Workweek: The compressed workweek provides for better use
of family and recreational time. It has been reported to lead to greater job satisfaction amongst
employees which impacts positively on productivity and reduces employee turnover and absenteeism

(Kleynhans et al, 2007). Further advantages include reduced transport costs, better utilisation of
equipment and employee retention (Grobler et al, 2006; Snell and Bohlander, 2007).
• Disadvantages of the Compressed Workweek: The disadvantages of the compressed workweek

relate to the limitations on working hours per day as per the Basic Conditions of Employment Act, No.
75 of 1997 (Grobler et al, 2006). A further disadvantage is that it increases the stress and pressure
on both managers and employees, as longer work days are generally very tiring.
Telecommuting
Telecommuting may be defined as “the use of personal computers, networks and other
communications technology such as fax machines to do work in the home that is traditionally done in
the workplace” (Snell and Bohlander, 2007:163). Email and groupware networking are the tools used
for telecommuting (Grobler et al, 2006).
Not all employees can work as telecommuters. Qualities required include:
• Little face-to-face contact required with colleagues and / or customers
• Is able to work independently and without supervision
• Access to equipped home office which is free from interruptions (Grobler et al, 2006).
In his journal article Harpaz (2002) identifies the advantages and disadvantages of telecommuting for
the individual, organisation and society. These advantages and disadvantages are summarised in the
table below.

Hotelling
Hotelling is another alternative work arrangement which involves the employee in “booking office
space or a workstation on site that can be utilised for a few hours, days or weeks” (Nel et al, 2008:406).
This enables the organisation to cut down on costs associated with infrastructure and office space.
Employees generally do not need their own permanent workstation as the nature of their work requires
that they frequently work on site at a client’s offices.

CHAPTER 3
RECRUITMENT AND SELECTION
After completing this chapter, students should be able to:

• Evaluate the importance of recruitment and selection
• Delineate the structure of a recruitment policy
• Analyse the influence of legislation on recruitment
• Discuss the various sources of recruitment and selection and the advantages and
disadvantages thereof
• Assess the factors impacting on recruitment and selection

3.2. THE IMPORTANCE OF THE RECRUITMENT FUNCTION

Human beings are a vital resource in any organisation. The calibre of its manpower will contribute
significantly to an organisation's profitability and capacity to survive. By ensuring that recruitment takes
its rightful place as a central management function one can hope to:
• Maintain an adequate supply of individuals of the calibre required to meet the organisation's
strategic objectives;
• Achieve a matching of individual abilities and needs with organisational requirements;
• Create a favourable image of the organisation in the employment market;
• Usually an organisation recruits because it is expanding or because vacancies have arisen.
To wait for vacancies before thinking about recruitment however, is to risk:
• Losing out on the supply of high calibre people which a planned recruitment policy may afford
• Incurring unnecessary staffing costs through poor or bad hiring decisions
• Losing the opportunity to utilise available manpower resources efficiently through advanced
planning
Organisations are likely to be involved in both, the recruitment of staff for specific jobs and in the
implementation of planned recruitment policies.
3.3. RECRUITMENT POLICY

Every organisation must be able to attract a sufficient number of job candidates who have the abilities
and aptitudes that will help the organisation achieve its objectives. Recruitment policy reflects the
organisations general business strategy (Nel, van Dyk, Haasbroek, Schultz, Sono and Werner, 2004).
Usually a company’s recruitment policy includes information on the following aspects:
Whether internal or external recruitment will take place

Internal recruiting refers to recruiting within the organisation, whereas external recruiting refers to the
recruiting of people from outside the organisation. It is usually advisable to recruit initially from within
the organisation so that current employees feel that they have an opportunity for advancement within
the organisation.

Nepotism
It is important to determine the circumstances under which relatives of existing employees can be
employed. Some companies prefer not to have relatives employed in the same department because
if problems have to arise with one of the relatives this could very well influence or affect other relatives.
Organisations also try to prevent favouring of relatives above other more suitable applicants.
Whether part time, or any flexi time workers will be considered

It is possible that part time employees might be employed on a permanent basis but do not work a full
day or a full week. An example of this would be employment of a woman on a morning only basis,
which allows her to take care of her children in the afternoon.
Whether people over retirement age may be employed

Some organisations continue to employ people even if they are over retirement age. Some type of
contract is arranged between these pensioners and the organisation.
Employment equity
Organisations must have employment equity policies and plans and these must be taken into
consideration prior to commencing with any recruitment programme.
The use of the company logo

The policy should clarify whether the logo should be used and if so how it should be used in
employment advertising (especially in newspaper advertising).
Confidential advertising
The policy needs to indicate under which conditions confidential advertising must be carried out. This
type of advertising is usually carried out if the company wants to advertise the salary or if they do not
want their opposition to know about the vacancy that has occurred.
Employee Recruitment and Selection Policy Sample

This Employee Recruitment and Selection Policy template is ready to be tailored to your company’s
needs and should be considered a starting point for setting up your recruiting policies.

Policy brief and purpose

Our employee recruitment and selection policy describes our process for attracting and selecting
external job candidates. This recruitment policy sample can serve as a rubric that our recruiters and
hiring managers can use to create an effective hiring process.
We are committed to our equal opportunity policy at every selection stage. Hiring teams should aim
for a well-planned and discrimination-free hiring process.
Scope
This recruitment and selection policy applies to all employees who are involved in hiring for our
company. It refers to all potential job candidates.
Policy elements
What is the recruitment and selection process?
Generally, hiring teams could go through the following steps:
1. Identify need for an opening
2. Decide whether to hire externally or internally
3. Review the job description and compose a job ad
4. Select appropriates sources (external or internal) for posting the opening
5. Decide on the selection stages and possible timeframe
6. Review resumes in company database/ATS
7. Source passive candidates
8. Shortlist applications
9. Proceed through all selection stages
10. Run background checks
11. Select the most suitable candidate
12. Make an official offer
Stages may overlap. Hiring managers may remove/add steps as appropriate. The first five stages are
mandatory in every hiring process.
Posting jobs internally

Hiring managers can post a job opening internally before starting recruiting external candidates. If
they decide to post internally, they can:
• Set a deadline for internal applications

• Communicate their opening through newsletters, emails, word-of-mouth or an Applicant

Tracking System’s automated emails
Creating job descriptions

Hiring managers can create job ads based on full job descriptions of each role. Job ads should be
clear and accurately represent the open position. They should include:
• A brief description of our company and mission

• A short summary of the role’s purpose
• A list of responsibilities
• A list of requirements
• How to apply
The job ad’s style should be consistent with our company’s unique voice. It should be addressed to
‘you’ in a polite and engaging tone. Jargon, complicated phrases and gender-specific language should
be avoided.
Employee selection stages

Our company has a standard hiring process that may be tweaked according to a role’s requirements.
Our standard process involves:
• Resume screening
• Phone screening
• Assignment
• Interview
Hiring managers may choose to add/remove stages depending on the role they’re hiring for. For
example, they can add the following selection stages/methods:
• Assessment centers
• Group interviews
• Competency/Knowledge or other selection tests
• Referrals Evaluation
• In most cases, the stages of resume screening and interview are compulsory.

Interview Feedback
Recruiters/ hiring managers should always inform candidates they interviewed that they decided to
reject them. Leaving candidates in the dark can be damaging to our employer brand.
Also, we encourage hiring managers to send interview feedback to candidates. They should first
though check with HR to make sure they won’t invite legal action. Being brief, respectful and keeping
feedback job-related are the general rules for writing feedback emails to candidates.
Revoked offers
In case when a formal has to be revoked, the hiring manager and human resources department should
draft and sign an official document. This document should include a legitimate reason for revoking the
offer. Legitimate reasons include:
• Candidate is proved to not be legally allowed to work for our company at a specific location
• Candidate has falsified references or otherwise lied about a serious issue
• Candidate doesn’t accept the offer within the specified deadline (deadline must have been
included in the offer letter)
• Hiring managers and HR must notify the candidate formally as soon as possible.
(Source: https://resources.workable.com/recruitment-company-policy)
3.4. THE INFLUENCE OF LEGISLATION ON RECRUITMENT

Here we shall consider where the sources of law impact on recruitment policies with regards to unfair
discrimination. The introduction of the Labour Relations Act has drastically influenced recruitment with
the definition of “discrimination”. Human resource managers need to review all their policies to ensure
there are no discriminatory practices.
3.4.1 The Labour Relations Act

According to Section 2 of the Labour Relations Act 66 0f 1995:
(a) "employee" includes an applicant for employment;
(b) an employer is not prevented from adopting or implementing employment policies and
practices that are designed to achieve the adequate protection and advancement of
persons or groups or categories of persons disadvantaged by unfair discrimination,
in order to enable their full and equal enjoyment of all rights and freedoms.
(c) any discrimination based on an inherent requirement of the particular job does not
constitute unfair discrimination.

3.4.2. Equal Opportunities Legislation
Affirmative action
Affirmative action is a labour market policy and programme applied by an employer, aimed at
redressing the inequalities that exist within the workplace as a direct result of past discriminatory
practices on the basis of race, ethnicity, gender and disability. Such a policy or programme shall have
the long-term objective of creating an enabling environment for subsequent implementation of
employment equity.
Employment equity
The objective of any employment equity programme is to achieve diversity and equality in the work
place not only by eliminating discriminatory employment barriers but also to correct conditions of
disadvantage experienced by individuals in employment practices (Willson-Kirsten, 2001).
Organisations are compelled to adhere to a proportional representation of all employees that includes
persons from designated groups. Training and development also play an important role in the
correcting of inequality.

Affirmative Action and Employment Equity: Definitions and Differences
Affirmative Action is the process of creating employment equity. Affirmative action, moreover, is not merely a
process of recruiting greater numbers of historically disadvantaged employees: it is part and parcel of a holistic
system of human resource management and development and impacts on all of the processes, policies and
procedures relating to the selection, recruitment, induction, development, promotion and severance of people.
The term "affirmative action" refers to “the purposeful and planned placement or development of competent or
potentially competent persons in or to positions from which they were debarred in the past, in an attempt to
redress past disadvantages and to render the workforce more representative of the population.”
This brings us to the question: “How is affirmative action related to employment equity?” Employment equity is
the point reached where affirmative action has eliminated all the disparities between diverse employees and all
employees have been brought to a level at which they can compete equally and are afforded an equal
opportunity to do so. Employment equity provides equal access for all people to participate in the empowerment
process and advance on the basis of merit, ability and potential.
The relationship between AA and employment equity can thus be summarised as follows: Affirmative action
forms part of an employment equity programme. Employment equity will exist when all discrimination barriers
and past imbalances have been eliminated and everyone is able to compete on an equal footing. Hence the
need to make use of fair discriminatory interventions (affirmative action) to achieve employment equity would
no longer exist.
Affirmative Action Employment Equity

Preferential treatment when appointing or Merit as a criterion when appointing or
promoting promoting
Preferential treatment Makes no distinction
Ensures access into an organisation Promotes equal access to an organisation
Has a limited lifespan Does not have a limited lifespan because it
forms part of an organisation’s culture
(Source: Adapted from Coetzee (2005) University of Pretoria)
3.5. SOURCES OF RECRUITMENT

Once management has determined an organisation’s staffing requirements, the recruitment process
begins. The first decision made is whether a particular job opening should be filled by someone
already employed (internal – transfer or promotion) or by an applicant from the outside (external).
Normally, companies recruit both internally and externally. Companies tend to start with recruitment
from within the company, followed by external recruitment, or both processes are run at the same

time. In each case, the advantages of recruiting outside the organisation must be weighed against
advantages of recruiting inside the organisation.
3.5.1. Advantages and Disadvantages of Internal and External Recruitment
3.5.2. Internal Recruitment
It is normal for current employees to first be considered for vacancies that arise before recruiting
externally. There are fewer costs associated with individuals with whom the organisation has an
already established relationship.

• The use of current employees

A very effective and inexpensive technique for advertising a vacancy is to ask current employees to
tell their friends or relatives who might be interested in the vacancy. Filling open positions with inside
candidates has many benefits. First, there’s really no substitute for knowing a candidate’s strengths
and weaknesses. It is often therefore safer to promote employees from within, since you’re likely to
have a more accurate view of the person’s skills than you would of outsiders. Inside candidates may
also be more committed to a company. Morale may rise, to the extent that employees see promotions
as rewards for loyalty and competence. Internal candidates may also require less orientation and
training than outsiders.
However, hiring from inside can also backfire. Employees who apply for jobs and don’t get them may
become discontent (Dessler, 2003), and the use of current employees discourages diversity and new
ideas being brought into the organisation.
• Referrals from current employees

Referred employees tend to stay with the organisation longer and display greater loyalty and job
satisfaction than other categories of new- hires. However, current employees tend to refer people who
are demographically similar to themselves, which can lead to complexities, especially if the
organisation has an affirmative action hiring policy (Nel et al., 2004).
• Former employees
Organisations should keep on file the application forms and/ or Curriculum Vitaes (CVs) of previous
promising applicants for future reference. People, who were laid off during economic downturns, or
those who have worked seasonally, are easily recruited and become productive quickly. They tend to
be very safe hires, because the employer already has experience with them.
3.5.3. External recruitment sources

Where internal recruitment has been ruled out as a source of suitable candidates, most organisations
will make use of the following external methods of recruitment. It is important for the costs of the
sources to be compared before selecting one or a combination of them that will best suit the
organisation’s staffing needs.
• Employment agencies

Organisations often use employment agencies to recruit and screen applicants for a position.
Typically, agencies are used when the company is too small to have its own human resources
department that can carry out the recruiting process, or when the vacant position is one that will attract
many applicants, resulting in a time consuming selection process. Employment agencies also
sometimes headhunt talented candidates who are presently employed and are not looking for a new
job. Most agencies also assist with the recruitment of temporary workers.
• Campus recruiting
Pre-screening programmes in universities, technikons and colleges are designed to identify top
students who are completing their final year of study and to introduce them to organisations. Often
these students will be offered a place on the company’s graduate programme, which allows the
organisation to fill vacant positions and mould the new recruit into a company employee while
exposing the graduate to a number of different areas (Nel et al., 2004).
While educational institutions are usually viewed as sources for young, inexperienced entrant to the
workforce, it is not uncommon to find individuals with considerable work experience using an
educational institutional placement service. They may be workers who have recently returned to
school to upgrade their skills, or former graduates interested in changing jobs and utilising their
school’s placement centre. Thus, employers seeking applicants can find not only new diploma
recipients at the school, college, or university placement bureau, but also former graduates interested
in pursuing other opportunities (DeCenzo and Robbins, 2002).
• Customers
One area that organisations often neglect to use in recruitment, is their customers, who are already
familiar with the organisation and what it offers. If these people have been satisfied with the company’s
products and service in the past, they will usually bring more enthusiasm to the workplace than other
applicants who are less familiar with the organisation. Customers, who may not wish to apply for
vacant positions themselves, could offer valuable referrals for consideration.

• Direct Mail
Direct mail recruitment is aimed at gaining the attention of professionals who are generally employed
and who would not normally be seeking employment through other media. Attractive advertisements
can be included as loose- leaf flyers in professional journals, such as “People Dynamics”, the monthly
publication of the Institute of People Management in South Africa. Alternatively, flyers can be handed
out at conferences.
• E-Recruitment
Internet recruitment is growing exceptionally fast as more and more members of the population gain
access to technology. Even those who do not possess their own personnel computers are able to
utilize this means of job searching by using cyber- cafes. Organisations and employment agencies
can display their vacancies and work seekers can get their CV’s on the World Wide Web at a relatively
inexpensive price. Local examples of these include CareerJunction, PNet, as well as organisational
recruitment databases.
• Headhunting
Top professional people are hunted through specialised agencies. The persons are approached
personally with an offer to fill a vacancy. Alternatively, an advertisement is written with the specific
person’s CV in mind.

• Employee referrals
One of the best sources for individuals who will perform effectively on a job is a recommendation from
a current employee. An employee will rarely recommend someone unless he or she believes that the
individual can perform adequately. Such a recommendation reflects on the recommender, and when
someone’s reputation is at stake, we can expect the recommendation to be based on a considered
judgement. For example, because of the difficulty in finding computer programmers with specific skills
required by the organisation, some organisations have turned to their employees and have asked for
assistance.
Both the organisation and the employee benefit, the employee receives a monetary reward and the
organisation receives a qualified candidate without the major expense of an extensive recruiting
search. There are, of course some potentially negative features of employee referral. For one thing
recommenders may confuse friendship with job performance and competence. Individuals often like
to have their friends join them at their place of employment for social and even economic reasons.
For example, they may be able to share rides to and from work.
Employee referrals may also lead to hiring individuals who are related to persons already employed
by the organisation. The hiring of relatives is particularly widespread in family owned organisations.
While such actions do not necessarily align with the objective of hiring the most qualified applicant,
interest in the organisation and loyalty to it may be long-term advantages.
• Walk-ins
This merely refers to people who come to the organisation on their own accord and apply for a position.
They usually complete application forms and these are filed for future reference.
• Professional associations
Most professions such as accounting, human resource management, production management and
marketing management have professional associations that assist members of the profession in
finding suitable employment. Examples of professionals’ institutions are the Institute of People
Management and the Institute of Marketing Management (Nel et al., 2004).
• Other employees
The person who is responsible for recruitment could develop a network of contacts at various
companies in his/ her area or in the industry and advise them of vacancies. Care should be taken
about which companies are approached because some of them might be direct competitors and senior
management might not want to have such close relationships with the competitors.

Applications should be treated in the strictest confidence and the best approach is for the person
responsible for recruitment to contact the applicant and advise him or her of the vacancy, which has
occurred in the other organisation. The applicant can then decide whether to apply or not.
• Advertisements
When an organisation desires to communicate with the public that it has a vacancy, advertisements
are one of the most popular methods used. However, where the advertisement is placed, is often
determined by the type of job. The higher the position in the organisation, the more specialised the
skills or the shorter the supply of that resource in the labour force, the more widely dispersed the
advertisement is likely to be.
3.6. FACTORS THAT INFLUENCE RECRUITMENT
The Recruitment Process is influenced by a number of factors. These may be internal or external
factors.

Internal Factors External Factors
• Organisational • Government or
Policy Trade Union
• Organisational Restrictions
Culture • Labour Market
• Pay and Working • Image of the
Conditions Company
Organisational Policy
The content of the organisation’s recruitment policy determines the way in which this factor influences
the recruitment process. statement of intent in the policy dictates the parameters of the recruitment
effort.
Organisational Culture
The internal culture frames how the organisation responds to the external stakeholders. The strength
of the culture defines the consistency of mindset of employees through the core values and beliefs
within the recruitment policy.
Pay and Working Conditions
People have perceptions of what they are worth and of what their work is worth. Organisations place
values on what roles, positions and people are worth. The reward system and pay structures influence
the applicant and are fundamental in attracting candidates with suitable credentials.
Government or Trade Unions Restrictions
Government policy plays an increasing role in recruitment practice. The Labour Relations Act
(66/1995) and the Employment equity Act (55/1998) govern the way in which organisations employ
new staff. Trade unions also want to be involved in the recruitment process.
Labour Market
Labour market conditions also affect the availability of staff. If there is a surplus of skills, many
applicants will be available; if there is a shortage of skills, few applicants will be available. It is vital
that the HR departments know the latest trends in the labour market.

Image of the Company
Many organisations are well known in their communities. The way in which the work seeker perceives
the company influences the calibre of potential staff. These days, companies cannot rely on
established names, or the length of time they have been in existence. An organisation with a positive
image that practices equality, fairness and supportive work environments attracts good employees in
the labour market.
3.7. INTRODUCTION TO SELECTION

Selection means a process by which the qualified personnel can be chosen from the applicants who
have offered their services to the organisation for employment. The selection process divides the
candidates for employment into two classes—those who will be offered employment and those who
will be rejected. Thus the selection process could be construed as a negative function because it
attempts to eliminate applicants, leaving only the best to be placed in the organisation. Selection is
the process in which candidates for employment are divided into two classes— those who are to be
offered employment and those who are not" (http://www.educationobserver.com)
Selection is the process of selecting a qualified person who can successfully do a job and eliver
valuable contributions to the organisation. A selection system should depend on job analysis. This
ensures that the selection criteria are job related and will provide meaningful organisational value. The
requirements for a selection system are knowledge, skills, abilities, and other characteristics.
Personnel-selection systems employ evidence-based practices to determine the most qualified
candidates, which can include both new candidates and individuals within the organisation.
(Source: Boundless. “Employee Selection.” Boundless Management. Boundless, 21 Jul.

2015. Retrieved 24 Oct. 2015)
Once the applicant has become a candidate, it means she has the requisite skills to warrant an
investment of resources necessary to schedule, prepare and conduct an interview. These days
interviews are one of the most important factors in the selection process because the recruiter and
hiring manager are looking at more than what can the candidate do for the company. They are looking
for soft skills the candidate may have in terms of building teams, working in collaboration with other
professionals, and what the candidate can bring to the company that no other candidate can.
Interviews may be one-on-one for administrative and support positions; however, candidates for
management and director level positions can expect to be panel interviewed and judged on their

capability to interact with a variety of personalities while presenting her qualifications in a manner that
sells her capabilities to the prospective employer.
3.8. FACTORS INFLUENCING SELECTION

Certain factors that are internal and external to the organisation may have an impact both on the
success of the selection decision, and the level of difficulty involved in working through the entire
process.
3.8.1. External Factors that Affect Selection

There are many factors that affect selection such as legislation, community, political stability, cultural
background, the labour market and geographical location. However, only South African legislation and
the labour market will be discussed.
Legislation
The Employment Equity Act 55 of 1998 has a number of provisions which impact the selection of
individuals and these in the main refer to the prevention or deterrence of discrimination. Post
democracy, South African organisations are faced with the reality of affirmative action. In order to
achieve employment equity, it has become incumbent upon employers to entrench or put in place the
following measures. Employers must:
• Consult with unions and employees in order to make sure everybody accepts the
organisations employment equity plan.
• Analyse all employment policies, practices and procedures, and prepare a profile of their
workforce in order to identify any problems relating to employment equity.
• Prepare and implement an employment equity plan setting out the affirmative action
measures they intend taking to achieve employment equity goals.
• Report to the Department of Labour on the implementation of their plan in order for the
Department to monitor their compliance.
• Display a summary of the provisions of the Act in all languages relevant to their workforce.
The Government Printer will make these summaries available (Nel et al., 2004).
The labour market

The labour market from which the enterprise recruits its employees for vacancies is influenced by
labour market conditions that affect the whole country (Nel et al.2004). Political scenarios, legalities,

economic conditions, social challenges, technological advancements and globalisation affect the
labour market.
3.8.2. Internal Factors that Affect Selection

There are many internal factors that affect selection such as motivation and interest, job environment,
organisational culture, organisational objectives, the size of the organisation, type of organisation,
speed of decision-making, applicant pool and selection methods. However, only the size of the
organisation, type of organisation, speed of decision-making, applicant pool and selection methods
will be discussed.
The size of the organisation

The size of the organisation usually determines the level of formality of the selection process. Different
approaches to selection are generally taken for filling positions at different levels in the organisation.
For example, extensive background checks and interviews are conducted when hiring someone for a
senior or executive position. On the other hand, an applicant for an administrative or clerical position
would normally proceed swiftly through the selection process.
Type of organisation
The sector of the economy in which individuals are to be employed can also affect the selection
process. For instance in the public sector it is commonplace for a manger to select only from among
the top three applicants for a position. In the private sector other criteria may prevail depending on the
type of business. In a non –profit organisation a person who fills one of these positions must not only
be qualified, but also dedicated to this kind of work. Non-profit organisations may not be able to
compete on the same salary levels as private or public sector companies (Nel et al., 2004).
Speed of decision-making
The time available to make the selection decision can also have a major effect on the selection
process. At time speed is crucial in the selection process, especially where production may come to
a standstill if there is no one to do a certain job (Nel et al., 2004). Schools and hospitals need essential
staff like teachers and nurses. Therefore, there is an urgency when vacancies arise in these sectors.
Applicant pool
The number of applicants for a particular job can influence the selection process. The process can be
truly selective only if there are several qualified applicants for a job. However, if there are only a few
people available with the required skills, it becomes a matter of choosing whoever is at hand (Nel et
al., 2004).

Selection methods
The selection methods chosen can also affect the entire process. Selection methods could depend
on the nature of work, the amount of pay and training the job provides.
3.9. SELECTION PROCESS

The selection process is a series of steps through which applicants pass. These steps represent the
tools or methods of selection. The steps are essentially a number of eliminators as applicants drop
out of the process at each step, so the application pool becomes smaller.
PRELIMINARY SCREENING
SELECTION METHODS
Provisional Selection
Interview APPOINTMENT
Testing
Application Form Interview
References
Medical Exam
Phase 1: Initial Screening

This represents the first phase in the selection process and involves the provisional selection interview
and the completion of a company application form. Individuals who are not qualified for the job opening
should be immediately eliminated from the application pool. However, the criteria for deciding that
someone is not sufficiently qualified needs to be established carefully, especially in terms of South
African legislation. The provisional selection interview usually lasts in the region of 10 minutes and is
used to determine whether the applicant meets the minimum requirements (Nel et al, 2004:234). The
selection interview has two purposes: to get information from the applicant, and to judge the applicant
on the basis of this information. The application form is designed to meet the needs and requirements
of the organisation, and provides information as to the applicant’s qualification, experience, interests,
etc. (Nel et al, 2004:235)

Phase 2: Selection Methods

During this phase of the selection process various selection methods are applied including testing,
interviews, reference checking and the medical examination.
Phase 3: Appointment
The final phase in the selection process involves making a choice between the applicants. Various
selection strategies can be utilised to assist the organisation in making this decision (Nel et al
2004:242). These strategies include the multiple predictor approach, the placement approach and
cost benefit analysis (Nel et al, 2004:235).
3.10. SELECTION METHODS
Testing Interviews Medical Exam
CV /
Reference
Application
Check
Form
3.10.1. Testing
Testing is not an alternative to interviewing. It is another step in the selection process, which we can
use to gather information on candidates. In most companies the personnel department conducts
psychological tests.
Types of tests
There are many types of tests
1. Performance/ competency tests (physical or motor skills tests)

Subjects are given tasks that are simulations of real situations and their behaviour is
observed. This is suitable for very technical tasks that can be observed.

2. Aptitude tests
The individual’s ability to do a task is tested and may include
I. verbal ability,
II. manual aptitude (ability to make or fix things by hand),
III. spatial visualisation (placing physical objects),
IV. clerical speed (filing, answering the phone, etc.),
V. mechanical aptitude (use of machinery/equipment),
VI. co-ordination (measurement of hand-eye movement)
and
VII. numerical skills.
3. Intelligence tests
Measurement of thinking processes such as comprehension, reasoning skills and problem solving.
4. Dexterity test
I. How good is your hand-eye coordination?
II. Draw a continuous line around the circles but make sure not to touch them.
III. You have 20 points and 20 seconds to complete this task.
IV. For each time you touch the circles minus a point.
5. Sample test for on-the-job accident proneness

ANSWER YES OR NO
i. You like a lot of excitement in your life
ii. An employee who takes it easy at work is cheating the employer
iii. You are a cautious person.
iv. In the past three years you have found yourself in a shouting match at school or work
v. You like to drive fast just for fun.
According to John Kamp, an industrial psychologist, applicants who answered no, yes, yes, no, no
to questions 1,2,3,4 and 5 are statistically likely to be absent less often, to have fewer on the job
injuries or driving accidents. Actual scores are based on answers to 130 questions
6. Interest tests
These tests measure the type of work that a person is interested in or has a preference for.

7. Personality tests
Personality tests help determine the characteristics of a person and are utilised to ascertain whether
the character of the person will complement the organisational culture. Below is an example of a
grouping of five dimensions of personality on which the Myers-Briggs personality test also known as
the MBTI is based (Amos, Ristow and Ristow, 2004).
3.10.2. Medical Checks

The last pre-employment tests that we shall discuss are medical tests. Not all companies require new
employees to undergo medical tests. Medical testing is only permitted if necessary as required to
successfully perform the job but many organisations tend to bend this rule by using the results of a
medical check for medical aid as a benefit on which to base selection decisions. In some cases it is
advisable to arrange a medical, such as the following:
• to safeguard the health of those engaged in hazardous work. For example asthmatics
cannot work with certain chemical sprays
• to safeguard the health of the vulnerable groups, for example epileptics should not be engaged
where they are required to work near movable machinery
• to ensure a specific job requirement is met, for example an electrician cannot be colour blind
One thing must be borne in mind when conducting medical tests; each employee’s right to
confidentiality is entrenched in the Constitution. The most effective way to deal with a medical is to
ensure strict confidentiality at all times. Only the doctor should have access to the information on the
medical reports. The employee may give the doctor permission to disclose records to the employer.
3.10.3. Curriculum Vitaes and Application Forms

A Curriculum Vitae (CV) is a summarised version of a potential employee’s personal information,
qualifications and previous experience and are often submitted in response to job vacancy. A CV often
preceded the completion of an application form. A well-designed application form will aid the selection
of candidates as data can be compared. Application forms have a number of uses. They provide
information on the labour market at large. They also inform whether the applicant meets the minimum
requirements for experience, education, etc. Further to this, they provide a basis for questions which
are asked in the interviews about the applicant’s background. They also provide the information which
is necessary to carry out reference checks. However, it must be kept in mind that at the end of each
application form there should be a statement that the applicant declares all information on the

application form to be accurate and true. This applies to the applicant’s qualifications and experience.
The application form when signed becomes a legal document and if it is found that the information
provided is not accurate then legal steps can be taken against the applicant. An application form
provides a framework for the subsequent interview. (Saves time collecting facts regarding previous
employers e.g. phone numbers). Gaps can be studied prior to the interview and probed at the
interview.
3.10.4. Interviews
Interviews are commonly used in the selection process. Indeed, it is rare that a new hire is selected
without an interview (Snell andBohlander, 2007). Interviews may be conducted by the HR practitioner
together with the relevant manager, members of the work team and other relevant individuals within
the organisation.
The selection interview has two purposes:

✓ To get information from the applicant, and
✓ To judge the applicant on the basis of this information
The evaluation of the interview can also be combined with other assessment of the applicant and used
later to make a hiring decision. Interviews can be used to assess the applicant’s social ease and
confidence, speaking ability, and manner of interacting.
However, many jobs not reliant on interpersonal skills such as these, and in such a case, the selection
interview is normally used to expand the information obtained from the application blank, particularly
if any of the details supplied need further probing.
Interviews provide an opportunity to sell the organisation and promote a good image by supplying
information regarding the company’s services, policies, and job opportunities. If nothing else, the
interview should be friendly, interpersonal exchange (Akoorie and Scott-Kennel, 2005).
Traditional versus Competence-based Employment Interviewing

The traditional view of organisations is built around the concept of a job for which the best-qualified
individual is selected. This works well in a traditional organisation, but the new organisational model
is based on open communication and participation of all members. In the past a job description was
the basic document for ascertaining what dimensions were job related.
Now an employee may be expected to perform a wide range of roles as a member of a team. Role
description has replaced job description in many organisations. By adopting the concept of

competences (such as the ability to make rational decisions when under pressure), the HRM functions
assesses a job applicant not only on his or her ability to perform certain tasks, but also on the ability
to take on changes in work as they occur.
Shortcomings of Interviews as a Selection Tool

Barclay (1999) indicates that there have been many studies that have highlighted the shortcomings
using an interview as a staff selection tool, these shortcomings are:
• Stereotyping of candidates
• Primacy effects (for example, the first information which the job applicant presents will be more
influential than information given later in the interview).
• Similarity effects (for example, this may lead to the interviewer to selecting a job applicant on
the basis that he/she has similar characteristics to the interviewer).
• Negative information weighting bias (for example, unfavourable aspects of the job applicant
are given greater weighting than favourable aspects).
Popularity of Interviewing as a Selection Tool

Barclay (1999) asserts that “interviewing is still the most commonly used method in spite of the fact
that many studies have shown it to be a very flawed technique.” (Barclay, 1999:134). The reasons for
the popularity of the interview include the following:
• HR practitioners tend to be unaware of the shortcomings of the interview as a selection
technique
• Some HR practitioners are aware of the interview’s shortcomings, but believe that the interview
effectively ‘works for them’ within their context (Barclay, 1999)
• The interview has the strength of providing a valid assessment of a job applicant’s
• interpersonal skills.
• The interview is used by HR practitioners not only as an assessment tool, but as an opportunity
to provide the job applicant with further information about the job, promoting the organisation
and addressing any question which the applicant may have (Barclay, 1999)
• Interviews are easy and cost effective to implement
• Interviews are also used as a “tradition” (Barclay, 1999)

Use of Structured Interviews rather than Unstructured Interview

Studies have shown that structured interviews using the situational and behavioural approaches are
more valid than unstructured interviews (Barclay, 1999). According to Barclay (1999:137) “the
traditional or more casual interview fails because it often focuses on the ‘here and now’: how the
applicant responds to the stresses and demands of the interview itself, which is too narrow a focus.”
Interviewers in unstructured interviews are not always fully aware of what is required for successful
job performance and will often ask for opinions and generalities rather than specifics around the job
applicant’s technical competence (Barclay, 1999). In contrast, structured interviews focus on the job
and the majority of questions asked are job related. Structured interviews “work because they force
attention to job relevant variables, rather than irrelevant variables...and also ‘prevent a degeneration
of the interview into a quasi-personality test’” (Barclay, 1999:137).
3.10.6. Reference Checks

There are two key reasons for conducting pre-employment background investigations:
✓ To verify the accuracy of factual information previously provided by the applicant, and
✓ To uncover any damaging background information such as criminal records and suspended
driver’s license.
The actual reference check can take many forms. Most employers at least try to verify an applicant’s
current position and salary if he or she has agreed to this. Others call the applicant’s current and
previous supervisors in an attempt to discover more about the person’s motivation, technical
competence, and ability to work with others. Handled correctly, the background check can be useful.
It is an inexpensive and straightforward way of verifying factual information about the applicant.
How to check an applicant’s current employer:

• Ask the applicant for permission
• Ask the applicant for the name of someone who was associated with him or her at his or her
current company, but who has left the company
• Ask the applicant if he or she is willing to accept a job offer on condition that a satisfactory
reference will be forthcoming after the applicants has tendered his or her resignation.
Letters of recommendation are not highly related to job performance because most are highly positive.
For this reason, most HR managers do not have a great faith in letters of recommendation. However,

a poor letter of recommendation may be very predictive and should not be ignored. Three areas in
which applicants are most likely to falsify information are:
• Education
• Criminal Records, and
• Salary
Each of these areas impinges on the future performance of the applicant; discrepancies should not
be overlooked as the consequences could be serious.

CHAPTER 4
TRAINING AND DEVELOPMENT
• Distinguish between the focus, approach and aims of education, training and development
• Outline the purposes of training and development
• Critically discuss the importance of skills development in South Africa
• Describe the evaluation of training
• Explain how one determines the need for training
• Evaluate the various methods of training and their effectiveness thereof

4.2. DEFINITIONS AND BASIC CONCEPTS

Education
The concept of education refers to the activities directed at providing the knowledge, skills, moral
values, and understanding required in the normal course of life (Nel, Werner, Haasbroek, Poisat,
Sono and Schultz, 2004). Education is developing a person’s body of knowledge and understanding.
Education creates a general base that prepares the individual for life without any specific job related
skill being developed (Nel et al, 2004). In other words education refers to furthering someone’s
knowledge rather than acquiring a skill. Examples of education would be a university education,
gaining a matric at school or clinical knowledge about AIDS.
Training
Training is the process by which people learn knowledge, skills, attitudes and values in an organised
way so that they will be able to perform a job or task competently. The training might be aimed at
improving the trainee’s performance in their current jobs or providing them with skills and knowledge,
which will enable them to perform new jobs (Nel et al, 2004). An example of training would be
training a telephonist in telephone skills, or training a welder how to weld.
Development
Development is a systematic effort “affecting individuals’ knowledge or skills for purposes of
personal growth or future jobs and/or roles” (Warnich, Carrell, Elbert and Hatfield, 2015).
Development must take place continuously through an employee’s career and be an integral,
ongoing part of the employee’s job. It is an important managerial function to preserve and enhance
employees’ competence in their jobs. The terms ‘training’ and ‘development’ are related, but also
different.
Training Development
Training focuses on improving employees’ Development focuses on developing
performance in their current jobs (Nel et al, employees’ competencies which will
2008: 446) enable them to perform in future job
roles (Nel et al, 2008: 446)
An example of training would be An example of development would be selecting
facilitating a two-day workshop to train two call centre staff who have potential and
call-centre staff on how to use the new enrolling them on a one-year supervisory
information system that has been installed. development programme. In addition, these
two staff would be provided with the opportunity
to perform in an “acting” supervisor position
when the team’s supervisor is away.

The following table outlines the focus, approach, aims and outcome of education, training and
development:
Education Training Development

Focus Learning focused on a Learning related to Learning experiences
future job present jobs
Approach Change in knowledge Provided by Employer to employees
employers to Employer to employee
employee Employer to client
Aims - Helps individuals in - Planned learning - Long term learning
qualifying for (acquisition of intervention
advancement knowledge and skills) - Stimulating new
- Initiated by - Short term learning ideas/insights through
individuals rather than intervention planned learning
organisations - Focus on the creativity
- Primary emphasis and experience of the
on career preparation individual
Outcome Intermediate learning Change in skills Not always job-related
intervention change in attitudes or
values
Education, training and development (From Warnich et al, 2015)

4.2. PURPOSES OF TRAINING AND DEVELOPMENT

The purposes of training and development are as follows:
Promotion and
Succession Update Skills
Prevent
Performance
Managerial
Improvement
Obsolescence
Orientate New Personal

Employees Growth Needs
Solve
Organisational
Problems
• Performance Improvement: The performance management and performance appraisal will identify
those employees who are underperforming. If underperformance is due to a lack of skills, targeted
training may be used to rectify this (Grobler et al, 2011: 302).
• Update Skills: Organisations often need to upgrade their technology in order to remain competitive.
Technology upgrades result in the need for employees to be upskilled.
• Prevent Managerial Obsolescence: Managers must continually seek to update their skills so that they
may continue to make impactful contributions to the organisation.
• Solve Organisational Problems: Organisational problems and challenges present themselves in many
forms. Training programmes can be helpful in providing employees and managers with the necessary
skills to address these problems (Grobler et al, 2011: 303).

• Orientate New Employees: Orientation programmes are implemented to socialize newly recruited
employees into the organisation. Orientation training focuses on assisting the employee to understand
the culture and integrate into the organisation.
• Prepare for Promotion and Managerial Succession: Training and development are key for the
implementation of organisational succession plans, which are in turn important for retention (Grobler
et al, 2006: 303).
• Satisfy Personal Growth Needs: Many managers and professional employees have a need for
achievement, which may be satisfied through challenging training and development interventions
(Grobler et al, 2006: 303). This in turn promotes employee satisfaction and retention
THE IMPORTANCE OF TRAINING and DEVELOPMENT IN THE HOSPITALITY INDUSTRY
Hotel Training Programmes
Running a hotel is not an easy task. With turnovers, a competitive marketplace and high customer
expectations, hotels have a lot on their plate, and we aren't talking about a buffet! An Oculus hotel
training and mystery shopping program can help you bring your sales and reservations teams up to
speed on what needs to get done to convert more reservations, up sell your rooms and sell more in-
room dining.
The chief function of businesses in the hospitality industry is to serve people -- whether it's food,
lodging or a combination of these and other services. The importance of employee training and
development in hospitality can’t be overstated, because every job ultimately aims for guest
satisfaction. Workers in every facet of hospitality, from dishwashers to managers and owners, affect
the guest experience. Without proper training, employee-guest encounters can go off track, affecting
your bottom line. Training can be expensive, but the benefits can outweigh the costs involved.
Needs Assessment
You can get the best results from a training program by targeting specific areas that need
improvement. For example, if you’ve noticed an increase in complaints from guests about food
quality and service, your training efforts might concentrate on these two areas. You might compel
your cooks to enroll in company-paid culinary classes or bring in servers from notable established
restaurants to provide instruction for your wait staff. The importance of these efforts will be apparent
when customer complaints turn to praises and you begin to notice an increase in repeat business.

New Recruits
It’s important to begin training your new recruits soon after hire, instructing them on your standard
operating procedures and the specifics of their jobs. Doing so places them on the right path from the
beginning of their employment and thwarts the development of bad habits. Job training for new hires
should go well beyond the initial orientation, which typically focuses on your company policies and
employee benefits; consistent training can contribute considerably to the advancement of your
organization. When you invest in new employees by providing learning opportunities, they may be
inspired to do more than the minimum required of them. Adequate and appropriate training furthers
your ability to determine the potential superstars who might be shaped into leaders. And focused
training has a trickle-down effect: New employees learn from well-trained workers optimum ways to
advance customer satisfaction. Human resources professionals, seasoned employees or
consultants can train new workers.
Development
Developing your employees is essential to providing a consistent level of guest satisfaction over
time. After you’ve built a reputation for excellent service, you might select your top performers to
take part in advanced training that may be associated with promotions. The importance of
progressive employee advancement is not lost on your workers. Your investment in fostering new
supervisors and managers demonstrates your confidence in the people who work for you. The
hospitality industry, with its high turnover rates, can benefit from grooming outstanding individuals.
Doing so retains consistency within the business as well as enhancing your future work force.
Additional Benefits
Providing ongoing attention to training and development affects your business’s ability to remain
competitive. Hospitality is fast paced and constantly evolving. The best way to beat your competitors
may be through ensuring your employees' expertise in performing the day-to-day necessities, such
as maintaining exceptionally high levels of housekeeping or making sure front desk employees are
adept with computers and other technological tools required in their jobs. Frequently revisiting
customer service training, such as how to address visitors in both positive and negative situations,
can ensure your guests enjoy their stay and depart with plans to return.
Every hospitality organisation needs well-trained employees. Guests expect it, and employees are
now choosing employers based on the training and professional development they offer.

Source: https://www.linkedin.com/pulse/importance-training-development-hospitality-industry-utpal-
bhoyar
4.3. APPROACHES TO TRAINING INTERVENTIONS IN ORGANISATIONS
There are various generalized approaches to training interventions in organisations. Each approach
has its unique advantages and disadvantages, and may or may not be successful, depending on the
circumstances in the organisation. An organisation may also utilise a few approaches at the same
time in order to achieve their strategic objectives. These approaches are as follows (Erasmus,
Loedolff, Mda and Nel, 2013):
Learning by Problem-
Competence
exposure centred
Action Training
Educational
learning process
Knowledge
Systems Analytical management
system
The ‘Learning by Exposure’ Approach
Although this is not an actual approach to employee development and training, because learning takes
place by chance, it is therefore considered a management option and is very popular. It entails
individual learning, where the student gathers knowledge and then uses it only with the help that may
be offered by colleagues.
The ‘Educational’ Approach
This approach helps to meet individual’s needs. The learning or training content of most formal

educational programmes is externally developed and in most cases, leads to recognised

qualifications. It is normally a long-term planning process and involves attending classes and open or
distance learning.
The Systems Approach
A ‘system’ is a set of interdependent components forming a unit. An open system means there is
interaction between the system and its environment while a closed system means the absence of any
such interaction. An organisation is therefore an open system as it obtains its resources (inputs) from
the environment, is directly or indirectly affected by environmental factors, and then provides outputs
(products and services) to the environment.
How does this approach link with training and development? Training and development receives its
input from the internal and external environment of the organisation.
With regards to the external environment, the market and technological environments affect training
as follows:
• Decline in market share

• Changing needs of consumers
• Increased competition
• Latest technology
With regards to the internal environment, input for training and development comes from two
categories:
• Technical input: job description, hr planning, recruitment, assessment

• Organisational functioning: has a negative influence on the organisation for example, low
productivity, turnover, absenteeism, lack of morale and motivation
The Problem Centred Approach
This approach solves short-term problems, and in particular, operational problems that affect
individual or group needs. The approach is acceptable as it is considered to be a practical approach
and there are budgets allocated for such operational problems.

The Action Learning Approach
This approach focuses on managers who study real-life problems and how to solve these problems
in a real-life situation. It offers a challenge to managers and this therefore provides motivation and
demands that problems be instead regarded as opportunities to develop and grow.
The Analytical Approach
This approach is generally associated with organisational training needs assessment as well as an
analysis of the knowledge, skills and attitudes required for specific jobs. Information comes from job
descriptions and job specifications and is used to develop courses for new job entrants into the
workplace. When job performance is measured however, then the training gap is determined and
training programmes are created using this information.
The Competence Approach
This approach focuses on the ‘outcome’ for a job and does not focus on the learning method. The
student together with the trainer will decide how the student becomes competent in a specific
performance outcome or standard.
The Training Process or Procedural Approach
The procedures that go together with this approach are:
• Existence of a training policy

• Inclusion of training responsibilities in job descriptions
• Regular and periodic definition of training needs
• Creation of training plans
• Provision of training resources
• Implementation of training plans
• Assessment of training results
These procedures set out the basic requirements to follow when training and is a widely used
approach.

Knowledge Management System
This has come about with the increase in information technology. A knowledge management system
necessitates a well-planned and structured information system where information is stored. The
information is available to those who wish to access it and assists employees to find information that
helps them in their own personal needs and development.
4.4. SKILLS DEVELOPMENT IN SOUTH AFRICA
A country’s economic wellbeing depends on the levels of education, skill, knowledge and
productivity of its citizens. Thus, education and training are powerful levers for improving:
• Individual opportunity
• Organisational competitiveness
• Economic growth
Skills development is important in South Africa due to:
• Educational system
• Low productivity
• Unskilled labour
• Illiteracy
• Unemployment
• Unequal development
• Unequal opportunities
• Changing economic environment
• Need to be competitive
In South Africa skills development affects a range of things, such as:
• Economic growth
• Political stability
• Social upliftment
Some of the factors impacting on skills development in South Africa are (Warnich et al, 2015)
• Education levels and unemployment

• Technological acceleration and globalisation
• Continuously changing work environment

• Productivity and flexibility

• Industrial policy, state intervention and state policy
• Black economic empowerment
Discussion: The Most Wanted
Johannesburg - It’s the government’s Top 100 most-wanted. These are not criminals. They’re the
sort of people who are really needed but just can’t be found.
This is the “National Scarce Skills List: Top 100 occupations in demand”. The list was released by
Minister of Higher Education and Training Blade Nzimande a week ago. It’s a draft and is open for
public comment until June 20.
Engineers of various types dominate the list – there are 11 in the top 20.
These are the top 10: electrical engineers, civil engineers, mechanical engineers, quantity
surveyors, programme or project managers, financial managers, physical and engineering science
technicians, industrial and production engineers, electricians and chemical engineers.
The list includes medical superintendents or public health managers at number 18, public health
physicians (22), nursing professionals (23), general medical practitioners and veterinarians (jointly at
25), carpenters and joiners (33), plumbers (37), primary school maths teachers (52), high school
maths teachers (72), earthmoving operators (78), local authority managers (86), ship’s engineers
(93) and forestry technicians (97), and ends with medical scientists (100).
“This document provides a list of the top 100 occupations that are considered to be in short supply,”
says the document. “The purpose of the list is to inform human resource planning and development;
resource allocation and prioritisation; the development of relevant qualifications, programmes and
curricula; and international recruitment strategies.”
(Adapted from www.iol.co.za)
Discussion Point: What do you think of the most wanted occupations in the above article?
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Post 1994, the government realised that Skills Development needed to take place with labour.
Employers, government and labour developed the National Skills Development Strategy (NSDS)
The vision and strategy is the foundation for the following legislation:
- South African Qualifications Authority Act
- Skills Development Act
- Skills Development Levies Act
The Skills Development Act No 97 of 1998 was passed in order to develop and improve the skills
of people in the workplace. The Act does the following (paralegaladvice.org):
• Provides a framework for the development of skills of people at work

• Builds these development plans/strategies into the National Qualifications Framework
• Provides for learnerships that lead to recognised occupational qualifications
• Provides for the financing of skills development by means of a levy-grant scheme and a
National Skills Fund
The Skills Development Levies Act No. 9 of 1999 was implemented in April 2000. The SDLA
stipulates that every employer in South Africa who is registered with the South African Revenue
Service for PAYE or has an annual payroll in excess of R500 000 must pay the levy.
One of the uses of the money is to fund sector education training authorities (SETA) and
training. The employer must choose one SETA which is most representative of its activities. The list
of SETAs include accounting and other financial services sector, banking, chemical and allied
industries, clothing textile and footwear, construction, defence, education training and development
practices, energy and so forth.

The South African Qualifications Authority Act No. 58 of 1995 is the key legislation for education
and training. SAQA provided for the National Qualifications Framework (NQF) which is a credit
system for achieving learning outcomes.
SETAs are responsible for learnerships in their respective sectors: A learnership is a contractual
agreement to provide skills development that leads to a national qualification. Thus, a learnership is
a partnership between: Employer; Learners; and the Provider institution (or accredited service
provider).
Case Study: DVT launches first Learnership Programme to address SA's skills shortage
Software and solutions company DVT has launched a new Learnership Programme as part of the
company's continued efforts to nurture business and software development skills, particularly in South
Africa's previously disadvantaged communities.
The new programme is similar to DVT's existing Internship Programme, except it is open to school-
leavers with a passion for business and IT, who are unable to pursue a career in these fields because
of financial constraints.
"One of our biggest and most important challenges in South Africa is reversing the high unemployment
rate, particularly among the youth and disempowered," says DVT CEO Jaco van der Merwe.
"As an industry, we feel the skills shortage more than most, which is why we started the now
successful and thriving Internship Programme a few years ago. This new programme is a first for us,
with the demographic we're targeting, and is a great opportunity for school-leavers to pursue their
dream of a career in one of the fastest growing global industries."
Partly funded by MICT SETA, with support from Torque IT and MSC Business College, DVT's
Learnership Programme comprises two streams – systems development and bookkeeping – running
over a 12-month period in Johannesburg and Cape Town. Learners attain NQF Level 5 certification
on successful completion of the course, with DVT hoping to increase this to a Level 6 Diploma for the
2016-17 programme.
"It's not a given that all the learners will finish the programme – it's up to the individuals to show that
they have the right attitude and aptitude, having been given this unique opportunity," says Prudence
Mabitsela, BBBEE, EE and SD Specialist at DVT.
"They can expect a structured learning process for gaining theoretical knowledge and practical skills
in the workplace, with access to the best mentors in the company and hands-on experience with our

clients throughout the process," she says. "NQF recognition is the prize, but the real reward is the
exposure they get and the contacts they make which open the door to a rewarding career."
Van der Merwe says the programme ties in with the other initiatives that advance DVT's commitment
to building communities through training while embracing BBBEE codes and empowerment initiatives
as part of the company's social responsibility philosophy.
"From our earliest days we've been invested in developing the youth of this country," he says. "There's
so much latent talent at our doorstep, but it's not always easy to find and nurture, especially given the
odds so many learners need to overcome just to make the grade.
"If there's any advice I can offer, it's this: have a clear picture in your mind and visualise where you
want to be. Also, work hard and don't be afraid to ask for help. You're entering a field where things
change and change often, so look to this as a stepping stone, because you'll never stop learning."
There are currently 28 learners enrolled in the inaugural DVT Learnership Programme
(Adapted from: http://www.itweb.co.za)
In groups, or individually, answer the following questions
1. Provide an overview of the above learnership programme.

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2. In your opinion, is this programme a positive or negative move for South Africa? Discuss.
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3. Can you find other companies in South Africa that have similar learnership initiatives?
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4.5. TYPES OF TRAINING METHODS
On-the-job
training Off-the-job
training
On the job training is a popular approach of training where training takes place at the site or place
of work. It allows one to learn by actually performing the tasks of the job. On-the-job training (OJT)
refers to “new and inexperienced employees learning through observing peers or managers
performing the job and trying to imitate their behaviour” (Noe et al, 2008: 294).
OJT proves to be very useful in:
• Training newly hired employees;
• Upskilling existing employees in new technologies;
• Cross-training employees within a work unit;
• Orienting promoted employees or transferred employees to their new jobs (Noe et al, 2008:
294)
There are various forms of OJT which range from job rotation to internships to coaching and
mentoring. It is a form of training and development which is relevant to all levels of employees, from
operators and administrative staff to all levels of management. OJT is especially beneficial for upper
levels of management whose first choice of learning intervention is often executive coaching.
Some popular methods include:

• Mentoring
• Coaching
• Job Rotation
• Job Enlargement/Enrichment
• Learnerships / Apprenticeships

• Internship
• Understudies
• Committee assignments
Off the job training refers to training that takes place away from the employees workplace.
It “includes any form of training performed away from the employee’s immediate work area” (Grobler
et al, 2006: 314). Some popular methods include:
• Lectures
• Conference
• Simulation
• Case Study
• Role Play
• University / College Non-degree
• Programmed Learning
• E-learning
4.5.1. ON THE JOB TRAINING METHODS
Job Rotation
This method is used to develop employees quickly by providing them with a broad range of skills in a
relatively short period of time. The employee will be moved from one department to another for short
periods. By rotating through various jobs, learners cultivate a fresh approach, which will enable them
to establish new procedures and make changes in their existing jobs. This method enables trainees
to acquire specific practical experience quickly, instead of having to wait for opportunities to present
themselves over a long period of time through transfers and promotions (Nel et al, 2004). While this
OJT method ensures that learners gain practical experience quickly, it needs to be continuously
guided and monitored in order for it to succeed. The hotel industry frequently uses job rotation to train
learners and new employees, providing them with exposure to all work streams from housekeeping,
to catering, to finance (Kleynhans et al, 2006: 125).
Internships
An internship often takes the form of ‘vacation work’ during a learner’s studies towards a formal
qualification, or ‘graduate workplace experience’ on completion of a learner’s studies. The purpose of
the internship is to expose the learner to the dynamics of the workplace.

Professional persons (for example aspirant doctors, psychologists, lawyers, accountants, and
engineers) undertake what are known as internships. Time is spent between classes and the actual
working environment. This enables the learner to integrate knowledge gained and practice. In order
to qualify, a certain number of hours and certain practical skills must be achieved.
Apprenticeships / Learnerships
An apprenticeship is a “work-study training method with both on-the-job training and classroom
training” (Noe et al, 2008: 296). It is used to train workers in technical trades such as tool making,
electronics and diesel mechanics. The apprenticeship clearly defines the period of time on-the-job
which must be devoted to the development of a specific skill.
A learnership is specific to the South African context. It is similar to an apprenticeship but is not
restricted to trades (as the apprenticeship is) and encompasses most occupations, including those at
a professional level. Learnerships follow a set programme where they acquire all the skills to obtain a
certain qualification. With National Qualifications the framework determines the learnership content.
Discussion
Learnership programme to aid development of

young professionals
With South Africa's continued skills deficit being compounded

by a lack of technical skills, on-the-job training and
mentorship should be a priority in each organisation. In a step
to close this skills gap, REDISA has launched a Learnership
Programme at its head office in Cape Town.
The 12-month programme, valued at R460,507, will provide

learners with the opportunity to gain a recognised qualification while gaining work experience. The
five selected learners, Dillan Little (19), Litha Plaatjie (22), Melissa Jacobs (19), Aphiwe Gaqa (21)
and Nolukhanyo Sibonda (22), all went through an interview process that included Personality
Assessment and Learning Style Assessment.
“The launch of this programme is part of our on-going efforts to promote skills development amongst
the youth,” said Stacey Davidson, director at REDISA. “Mentoring is something I am passionate
about, especially for young people. I think that the economic emancipation of young people cannot
remain a song; it has to become a reality. This means that, as a country and as business, we must
encourage our youth to prioritise education in order to pull themselves and their families out of

poverty and hopelessness,” she said.
The programme will develop young minds by imparting knowledge and skills that further their
education and experience across various industries and sectors. In order to gain a certificate,
learners will be required to complete both a theory component and a practical component. The
programme will follow a strict module plan which includes practical work experience. The learners
will perform administrative roles while gaining exposure to key areas across the REDISA business.
In three years, REDISA has already seen 18 interns gain valuable experience, and 10 of them are
employed permanently at REDISA and 8 have moved on to formal employment and other projects.
“We look forward to continuing to work with our partners in government, business and trade unions,
as well as consumers and NGOs, as we continue to create jobs and develop small businesses,” said
Davidson.
(Source: http://www.bizcommunity.com/Article/196/500/149045.html)
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Coaching
Coaching is a planned one-to-one instruction. The coach sets a good example of what is to be
done, answers questions and generally offers counsel to the trainee (Nel, et al,2004). Coaches
assist employees with setting development goals, achieving these goals and providing constructive
feedback (Grobler et al, 2006: 313).
Executive coaching is a development intervention often selected by individuals holding top
management level positions as it enables them to receive focused training which has direct relevance
to their day-to-day work. While coaching can be a very effective method in facilitating the development
of competence, if an appropriate relationship is not established between the coach and learner then
the coaching intervention will fail (Grobler et al, 2006: 314).
Mentoring
A mentor is usually “an experienced manager who provides guidance to a junior manager or
professional and facilitates his or her personal development” (Nel et al, 2008:314). While informal
mentoring arrangements always emerge within organisations, formal mentoring interventions may be
set up by organisations as part of their orientation and affirmative action strategy. Research has shown
that informal mentoring arrangements, where there is genuine commitment from both the mentor and
protégé, are more successful than formal mentoring arrangements.
Understudies
In this technique trainees are appointed to work closely with experienced workers or managers in
order to learn through observation and by asking questions of the experienced person. In this
situation the learner is made an assistant so that he may acquire the skills from the person who is
able to undertake the job. For example, you may want to promote someone in the organisation to a
supervisory position, they might have the knowledge but need the supervisory experience. You
would then attach this person to a supervisor for a period of time, with set objectives for task
accomplishment. This learner will acquire the skills of the other supervisor.
Committee Assignments
Managers tend to spend alot of their time on committees which are set up to “solve problems, plan for
the future and discuss and act on issues critical to the organisation” (Grobler et al, 2006: 314). These
committees provide learning opportunities, especially for newly appointed managers and junior
managers. For example, a committe may ask a newly appointed HR manager to investigate and make
recommendations regarding the upgrading of the HR information management system. While working
on this assignment the HR manager would gain valuable insights into the workings of the organisation

Job Enlargement and Enrichment

Enlarging and enriching job responsibilities is a very useful OJT method for existing employees,
particularly those in front-line and management positions. Grobler et al (2006: 313) points out that “by
giving an employee added job duties and increasing the autonomy and responsibilities associated
with the job, the firm allows an employee to learn a lot about the job, department and organisation.”
While providing for learning and development, job enlargement and enrichment can also provide for
enhanced employee motivation and job satisfaction (Grobler, 2006: 313).
Advantages And Disadvantages Of On-The-Job Training
Advantages Disadvantages
The learner is involved in doing the actual The trainer (experienced employee /
work (which is better than doing a simulated supervisor) may not be motivated to train and
task). develop the learner.
An experienced employee / supervisor guides While the trainer may be an expert at the job,
the learner through the tasks. he/she may not have the ability to effectively
train others.
No special training facilities are required as the The trainer may not have the time to train
learning takes place in the actual workplace. and could ‘rush’ the training process
The learning intervention builds a cooperative While the learner is learning on-the-job,
working relationship between the learner and performance will initially be low, resources
the experienced employee / supervisor. may be inefficiently used and costly errors
may be made.
Inexpensive and easy to schedule.
4.5.2. OFF-THE-JOB TRAINING METHODS

Lecture
The lecture is a frequently used training method. It is a one-sided method of training which involves the trainer
or lecturer presenting information to a large group of learners. Lectures are structured presentations of
information and are generally most effective when it is necessary to present information to a large
audience.
Straight Lecture (linked.com): Straight lecture method consists of presenting information, which the
trainee attempts to absorb. In this method, the trainer speaks to a group about a topic. However, it

does not involve any kind of interaction between the trainer and the trainees. A lecture may also take
the form of printed text, such as books, notes, etc. The difference between the straight lecture and the
printed material is the trainer’s intonation, control of speed, body language, and visual image of the
trainer. The trainer in case of straight lecture can decide to vary from the training script, based on the
signals from the trainees, whereas same material in print is restricted to what is printed.
A good lecture consists of introduction of the topic, purpose of the lecture, and priorities and
preferences of the order in which the topic will be covered.
Some of the main features of lecture method are:
• Less expensive
• Can reach a large number of people at once
• Knowledge building exercise
• Less effective because lectures require long periods of trainee inactivity
Despite the complications that come with the lecture method, there are ways to make its pros and its
cons work to your advantage (Udemy.com).
• Discussions: Many colleges require students to attend a supplementary discussion or lab

session in addition to the mandatory lectures. This is a way for students to interact with other
students from their class, on a much more personal level. Discussions are scaled down in
size to aid this. For instance, a lecture might have 300 students, but a discussion section will
have just 10 or 20. Discussions are led by a teacher’s assistant, who is there to get a
discussion of the lecture going, and give students the opportunity to engage with the material
and ask questions.
• Seminars: A seminar is a much smaller, more focused version of a lecture. They differ from
lectures not only in size, but also because they are usually followed by a question and answer
session at the end, allowing students to participate and engage with the course material so
that the academic takeaway is more in their favour.

Discussion
As a learner you have probably listened to many lectures, as lectures are a frequently used training
method. Consider the diagram. From your perspective, what are the advantages and disadvantages of this
method?
Advantages
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Disadvantages
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Conference
Group discussions are conducted according to an organised plan in which the trainer seeks to
develop knowledge and understanding by obtaining verbal participation from all the trainees. This
method has advantages over the lecture method, because each trainee plays an active role.
Learning is achieved by building on the idea contributed by the various participants. This method

of instruction should be limited to 15-20 persons to allow for maximum participation who should sit
facing one another around a conference table, rather than in rows as in a classroom.
The conference / discussion method provides a forum for problem solving and innovation through
engagement with other learners, which is key for adult learning (Grobler et al, 2006: 315). The two-
way conversation achieved through the conference / discussion method provides
learners “with immediate feedback on their questions and ideas and heightens the motivation
for the learner” (Grobler et al, 2006: 315).
Simulation
A simulation is a training method that “represents a real life situation, allowing trainees to see the outcomes
of their decisions in an artificial environment” (Noe et al, 2008: 297). These are simulated situations away
from the work environment, using equipment very similar to real life situations. This type of learning
is suitable where learning in the real life situation could be hazardous or where there are too many
distractions in the real situation for proper learning to take place. For example, a learner aircraft pilot
will use a flight simulator.
Simulated training has the advantage of making it easier for trainees to transfer what they have
learned during training to the work situation but it has the obvious disadvantage of being very
expensive (Noe et al, 2008).
Case Study
Case studies are very useful in classroom based training, and are extensively used as a key
management training and assessment methodology. The trainees read, study and analyse a
hypothetical business problem that contains elements of real-life situations. They are then required
to choose the best solution and then implement it (Nel et al 2004). Generally the case study will be

completed after a piece of instruction where the learner is given the theoretical knowledge and is
required to apply the required knowledge.
Case studies are very useful in classroom based training, and are extensively used as a key
management training and assessment methodology. Case studies enable learners to “learn how to
analyse (take apart) and synthesise (put together) facts, to become conscious of the many variables
on which management decisions are based, and, in general, to improve their decision making skills”
(Snell and Bohlander, 2007: 307).
It is most appropriate to use a case study in learning situations where:
• Competence in analytical thinking, problem solving and decision making need to be
developed.
• Active participation is desirable (such as in the case of adult learning).
• The process of learning (e.g. questioning, interpreting, etc.) is just as important as the content
of the training.
• Learners may be grouped into teams for the purposes of analysing the case study
Role-Play
Role-playing is a form of training that involves the learner in real work situations where they are
required to act out a part in a certain scenario. In this technique each trainee is assigned a role such
as a supervisor, employee, or a salesperson and is given instructions relating to a particular situation.
The trainees then play out their roles as realistically as possible. Role playing is used for developing
interpersonal skills such as those used in selling, interviewing, counseling, conducting disciplinary
hearings negotiations and employee problem solving.
Role play is used widely in the training of managers and supervisors, as well as the training of health
care professionals (such as psychologists, social workers, etc.).

Task: Case Study on Simulation
Read the following training scenario and answer the questions that follow
In the USA, in a Stanford University virtual hospital training room, residents and medical
students rush to save a virtual patient. They use virtual reality handsets to control their on-
screen avatars. The avatars are computerised simulations of medical personnel dressed in their
uniforms. Each avatar has a different role, such as nurse or emergency room technician. The
residents and medical students use their key pads to control their avatars in a virtual reality
trauma centre. One avatar props up the patient; another rushes to clear his airway. On the
screen, the patient’s vital signs react fittingly to the medical students’ decisions. Then
instructors replay the scenario, showing trainees what they did right and wrong.
1. Analyse the above scenario with reference to the following
• Method of training utilised in the scenario

• The effectiveness of utilising the method in 1.1.1. to train learners in a situation like the
above
• Other methods of training that could be utilised in the same scenario
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Task: Case Study on Simulation
2. Write a training scenario (similar to the one above) on ANY topic/career/situation of your
choice. Your scenario may utilise one training method or a combination of training methods.
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2.5.5. Role Play
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Programmed Learning
This is a self-instruction method where the learner works through a book or manual at his or her
own pace. The information is broken down into sections, which are presented, in a set sequence,
each section building upon the information contained in the preceding section. The learner studies
each section until he feels that he understands the content fully and is then tested. If he passes
the test he moves on the next section but if he fails the test he is requested to study the material
again.
University/College Non Degree Programmes

Universities and colleges offer numerous part-time courses, which enable managers to obtain
information on what is happening in the broader organisational context. These courses are

particularly suitable for senior managers for career development into higher positions within the
company.
Management Games
Management games are frequently used as a training method in management development
programmes. These games give learners the task of making decisions which will affect a hypothetical
organisation (Snell and Bohlander, 2007: 308). A key advantage of the management games is the
high level of participation and application that it provides for, which are key for effective adult learning.
Example of management games include:
• Lufthansa Airlines has developed a management game which makes learners aware of the
high levels of competition within today’s airline industry. Learners are required to work in teams
and compete with other teams in running a fictitious airline company. Teams of learners are
involved in managing routing, airline schedules, costs, profits, etc (Snell and Bohlander, 2007:
309).
• Motorola developed a game called ‘EEO: It’s Your Job’ which develops learners’
understanding of equal employment opportunity and is implemented as part of the
organisation’s affirmative action strategy (Snell and Bohlander, 2007: 309).
Membership of Professional Organisation

Membership of professional organisations can provide for ongoing informal development, where
learners stay abreast with recent developments in their field (Grobler et al, 2006: 317). Professional
organisations provide learners with the opportunity to network through regular meetings, exchange
ideas and discuss mutual challenges.
Learners’ responses will differ depending on the country in which they are based. Examples of
professional organisations relevant to HR practitioners within South Africa include:
• The South African Board for People Practices (SABPP) which seeks to professionalise the
HR function in South Africa to ensure that it is a recognised and respected profession
(www.sabpp.org.za, 2011)
• The Institute of People Management (IPM) which seeks to provide its members “with easy
access to the latest information, knowledge, expertise, training and development, systems,
including processes and networks in people management” (www.ipm.co.za, 2011).
Wilderness Training
Wilderness training, also known as adventure training, seeks to develop teamwork and leadership
skills through structured outdoor activities (Noe et al, 2008: 305). Wilderness training ranges from

strenuous, challenging physical activities such as mountain climbing or abseiling to less strenuous
activities such as climbing walls and going through obstacle courses. For wilderness training to
succeed, it is important that it is carefully linked to the training needs and required learning outcomes.
It is also important that after each exercise, a skilled trainer facilitates a discussion about key learning
points which the exercise demonstrated.
While sound research has not been conducted into the effectiveness and impact of wilderness training,
learners frequently report that “they have gained a greater understanding of themselves and the ways
they interact with co-workers...one key to the success of an adventure learning programme may be
the insistence that whole work groups participate together so that group dynamics that inhibit
effectiveness can emerge and be discussed” (Noe et al, 2009: 306).
Behaviour Modelling
Behaviour modelling combines a number of different training methods and therefore supports multiple
principles of learning (Snell and Bohlander, 2007: 310).
It involves four key components:
• Learning Points: At the beginning of the behaviour modelling session, the learning outcomes
will be highlighted, clearly informing learners about the purpose of the session.
• Modelling: Learners view a DVD in which a model employee is shown demonstrating model
behaviour appropriate for a particular situation (e.g. a manager providing constructive
feedback to an employee on his performance).
• Practice and Role Play: Learners then practice and role play the behaviour that was modelled
in the DVD. Much time is spent on this skills practice component of the behaviour modelling
session.

• Feedback and Reinforcement: As the learners’ behaviour increasingly mirrors that of the
modelled behaviour so learners will receive positive reinforcement from the trainer as well
his/her fellow learners.
Research into behaviour modelling has shown it to be effective, particularly with respect to military
training, helping managers better interact with their employees, increasing productivity and introducing
change (Snell and Bohlander, 2007: 311).
E-Learning (Technology Based Training)

There are four main forms of technology based training, which is also known as e-learning (Nel et al,
2008):
• CD-Rom approaches
• Web based training
• Video conferencing
• Mobile learning or m-learning
CD-Rom approaches often use off-the-shelf training CDs which may contain a wealth of information,
but may not be sufficiently customised to the needs of a group of learners.
Web based training uses the internet and company based intranets to overcome time and location
based barriers to training. Web-based training is delivered using networks and is displayed on a web
browser.
Video conferencing is also popular as an organisational communication and training tool. Video
conferencing can make traditional classroom based training more cost efficient as it enables learners
in locations other than where the classroom based training is taking place to participate in the training
‘M-learning’ means ‘mobile-learning’ and involves learning through using a mobile device such as a
Smartphone, MP3 player, Kindle or iPad. Brink (2011: 27) asserts that “for the past few years, m-
learning has been on the cusp of becoming a mainstream practice in the training profession....now,
with new technologies and the wide availability of mobile devices – particularly those that are web-
enabled – m-learning will soon realise its full potential.”
There are three types of m-learning:

• Formal m-learning which involves learning which is informed by notifications and reminders.
These may be in the form of SMS messages to confirm participation in a learning event or
confirm the completion of an assignment. Formal m-learning also includes e-learning
courseware which is accessed and viewed on a mobile device (Brink, 2011: 27)
• Informal m-learning involves “engaging in interactive messaging, fostering two-way

communication, and soliciting user feedback or data collection” (Brink, 2011: 27). Social
media, such as blogs, Facebook and Twitter support informal m-learning.
• Self-Directed m-learning involves “user directed learning, reference and performance support
materials, content and courseware, and media-based content such as podcasts or videos”
(Brink, 2011: 27).
M-learning has a number of benefits for both the trainer and the learners:
• It is an easy and quick way to provide learners with up-to-date information.
• It provides for the reinforcement of a completed learning programme and aids the
implementation of follow up strategies.
• It may be used to reach groups of people who may not have been able to access the training
in another format.
• It is learner centred and efficient – learners complete the training at their own pace.
• It saves costs and increases productivity when compared with other training methods
(Brink, 2011:28).

If m-learning is to be effective it needs to be short, accessible and relevant (Brink, 2011: 218). This
can be achieved through:
• Designing the m-learning differently to conventional training: The content should be short
and the length of any training should be limited to 5 – 10 minutes. This is because learners
using m-learning will not be able to spend extended lengths of time on their mobile device (e.g.
cell phone).
• Make the visual design simple: “Training via the BlackBerry succeeds or fails based on
design. The technology can be revolutionary, but if people can’t pick it up and use it with little
to no explanation then they won’t use it” (Rosenfeld cited in Brink, 2011:28).
• Consider the needs of your learners and functionality of mobile devices: Issues to
consider which will inform the design of the m-learning intervention include:
o The way in which learners currently use their mobile devices.
o The information would be sufficiently valuable for the learners to have a need to access it on
their mobile devices.
o Consider the functionality of mobile devices as not all of them support PDF, movie formats,
etc.
ADVANTAGES AND DISADVANTAGES OF OFF-THE-JOB TRAINING

Advantages Disadvantages
The interventions tend to be more cost Away-from the job training results in an
effective as groups of employees are trained immediate decrease in productivity
(rather than individual employees). (however, productivity should increase in
the short term – medium term as a result of
the training)
Trainers tend to be more competent than on- Presents challenges for the transfer of
the-job trainers as training is their core job learning. In being removed from the workplace
responsibility. for the training, the learners may experience
difficulty in translating what they have learnt
into improved job performance.
The learner is able to learn in a pleasant Involves more planning and organisation than
environment, away from the pressures and on-the-job training.
interruptions of the workplace (Grobler et al,
2006: 320).

Task: Case Study on E-learning
Classrooms of the e-future will be virtual with life-like reality
Sheryl Buckley, Moses J. Strydom | 30 July, 2015 (Adapted from www.timeslive.co.za)

Groundbreaking 3D hologram technology will create a virtual classroom. The new hologram is a
creative innovation that will transform electronic modes of teaching. It will give lecturers and
students a semblance of the classroom when they may be at home or anywhere else.
The 3D technology operates by creating the illusion of three-dimensional imagery. A light

source is projected onto the surface of an object and scattered. A second light illuminates the
object to create interference between both sources. Essentially, the two light sources interact
with each other and cause diffraction, which appears as a 3D image.
This form of mobile-learning has been hailed as an effective teaching tool of the future. It allows
teachers to provide instruction from home with holographic images of students via an electronic
multimedia device.
The 3D hologram provides a lifelike experience. Students will also be able to see the teacher
and fellow learners using mobile devices. This will give teachers and students the impression
that they are in the same physical space. Testing has taken place at South Africa’s largest
distance education provider, Unisa and at universities around the world. The main barriers to
integrating the technology into learning environments are the high costs of setting it up and the
lack of fast internet connection.
How the world is changing
Since the start of the 20th century major progress has been made in how electronic media is
used. The advantages offered by this media have persuaded most educational institutions to
integrate e-learning in their teaching.
At the same time, advancements in technology have enabled teachers, academics and
students to move from traditional chalkboards and opt for interactive white boards or smart
boards. Various network–based methods are used to complement classroom education to
reduce the effects of distance, making it independent of time and physical location.
Now, the 3D hologram technology promises to be able to group all parties for an even more
lifelike experience. Future e-learning will use technology that will deliver a course in the same
way as happens in a physical classroom.

The inherent characteristics of the lesson sequence in a face-to-face classroom which would be
reproduced in the e-learning framework will be so accurately replicated so that the learner will
feel physically in the presence of both his or her teacher and fellow students.
The student will be consequently unaware of the distance and the technical device that
separates him or her from the teacher and other students.
Drivers of change
Technological developments tend to spawn new working methods that, in turn, require new
skills. This will spur workers to embrace distance learning as it would allow them to continue
their education while pursuing their professional activities. They will not need to take time off
from work to attend evening classes - the class can take place at home or their place of work.
Telecommunications networks will become dense and easily available at lower prices.
E-Learning as practised today emphasises written communication – messaging, chat, forum,
and wiki - to the detriment of audio-visual communication. But the arrival of smartphones and
tablets, given their popularity within the student community, will boost audio-visual
communication.
Although smartphone and tablet screens might appear inadequate for audio-visual
communication, with the extension of the projection of holographic images in three dimensions
a great revolution is being ushered-in. It is now possible to project the image of a smartphone
or tablet as a 3D holographic image.
The virtual world gives a greater sense of presence than discussion boards. The result is that
the students get a better feel for the teacher and subject matter. Studies have indicated that this
style of learning results in better retention and understanding of a given topic.
This will unquestionably make a pre-eminent contribution to the field of e-learning.
1. Provide an overview (summary) of the above training method

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2. What are some possible advantages AND disadvantages of this method?

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3. Would you like to study using this method? Discuss why or why not.
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4. Do you think this method will be a success? Discuss why or why not.
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4.6. SELECTING TRAINING and DEVELOPMENT METHODS APPROPRIATE FOR THE

TRAINING NEED
Given the wide range of training methods, HR practitioners may find it challenging in selecting the
most appropriate technique. The following guidelines should assist in ensuring that the training and
development method chosen is appropriate:
• Consider the learning outcomes which the training is required to achieve: It is likely that
the learning outcomes for a programme include practical skills, cognitive skills, attitudes and
knowledge. The training methods chosen must address all aspects of the learning outcomes
(Noe et al, 2008: 308). For example, a chef needs both theoretical knowledge about
ingredients as well as the practical skill to bake the cake, and therefore training methods
chosen in this instance should ensure both the knowledge component and the practical
component of the learning outcome is achieved.
• Consider the extent to which the selected training method:

o Facilitates learning and development of competence: For learning to occur, the training
method should promote an understanding of learning outcomes, training content should be
meaningful, and learners should have the opportunity to practice their newly developed skills
and receive feedback. Interacting and observing others is also important for adult learning.
o Facilitates transfer of training to the workplace: It is important that the selected training
methods not only provide for the learning, but facilitate the application of the learner’s newly
developed competence on the job (Noe et al, 2008: 308).
o Will be affordable: Two types of costs are involved in learning interventions: development
costs which involve the costs associated with creating or buying the programme, and
administrative costs which include costs related to implementing the programme (e.g. trainers
fees, training facility costs, learning materials). The training budget available for a learning
intervention can influence the type of training method chosen (for example, e-learning methods
have much higher development costs than face-to-face methods). Noe et al (2008:309)
advises that “if you have a limited budget for developing new training methods, use structured
on-the-job training – a relatively inexpensive yet hands-on method....if you have a larger
budget, you might want to consider hands-on methods that facilitate transfer for training such
as simulation.”
o Will fit with the workplace culture: Grobler et al (2006: 320) points out that “it is impossible
to escape job duties when on the property of some employers...an effective transfer climate is
one in which the environment – including leadership, rewards and punishments – assists rather

than hinders training and development efforts.”

o Will be effective: Certain training methods have proven to be more effective in specific
situations. For example, on-the-job training methods (e.g. coaching, internships, job rotation,
etc.) are more effective than away-from-the-job training methods in ensuring transfer of training
to the workplace and application of newly developed competence on the job. Another example
is e-learning which, when compared with face-to-face training methods, is much more cost
effective in terms of eliminating travel and accommodation costs (Noe et al, 2008: 309).
4.7. MANAGEMENT DEVELOPMENT

Management development is similar to training but it is a planned decision to develop managers within
the organisation. Management development is the total process of planning and programming for
growth and improvement of managers within the organisation, in order to enhance productivity and
bottom line profitability.
Management development involves many processes, which include mentoring, coaching, on-the-job
training, job rotation, career pathing, management succession and special assignments. The
development process involves formal and informal assistance to help managers develop by providing
opportunities for personal growth and career advancement.
Management development programmes not only provide a continued supply of qualified and highly
trained managers from line management through to top management but also create motivation and
satisfaction for the managers concerned. The objectives of management development are as
follows:
• Increased productivity and effectiveness of managers in their jobs;
• Higher levels of self-confidence, which means that managers are able to assist subordinates
in their development;
• Continued leadership accustomed to the company’s culture through the identification of
future leaders;
• Increased stability in the organisation as managers are encouraged to self-manage their
development;
• Managers have a greater responsibility to develop to their full potential;
• Provide new ideas and management theories which can be applied and practised in the
organisation;
• Encourage participative management, which means the organisation’s goals are mutually
agreed upon; and
• Increase motivation.

4.7.1. Levels of Management and Skills of Managers

Top management
Top management consists of a relatively small group of managers controlling the organisation. These
include the board of directors, the managing director and the chief executive. They determine the
organisation’s missions and long term goals and are involved in the grand strategy selection for the
enterprise. Top management needs well-developed conceptual skills, to be able to view the
organisation as a whole.
Middle management
They are responsible for the specific departments in the organisation, for example human resources,
production and marketing. They are responsible for the medium term planning and control in their
departments. Middle managers require good technical and interpersonal skills.
Lower management
These are managers responsible for smaller segments of the organisation, for example in a marketing
department there may be a sales manager and a promotion manager. Lower management also
includes supervisors. Their tasks include day-to-day planning and control of the daily activities in their
departments. They are also responsible for organising daily activities and tasks. Lower management
also requires good technical skills.
LOWER MANAGER MIDDLE MANAGERS TOP MANAGERS

Conceptual skills
Because top managers spend most of the time looking at the organisation as a whole, planning
mission and strategies for the organisation and spend little time using technical and interpersonal skills
prospective top managers would require training in:
• Analysis
• Strategic planning;
• Profit planning
• Financial analysis
Interpersonal (Human) skills

Middle managers have acquired the technical skills for their jobs but prospective middle managers
would need interpersonal skills such as:
• Listening
• Negotiating and conflict management
• Decision making
• Team management
• Consulting
• Motivation
• Delegating.
Technical skills
Technical skills refer to the knowledge of techniques in a specialised discipline. Lower managers
require skills such as:
• Functional knowledge
• Establishing procedures
• Scheduling and budgeting
• Setting priorities
• Time management
• Problem identification and analysis
• Leadership
• Performance evaluation

4.8. THE TRAINING PROCESS
The training process which has been commonly accepted and used within organisations is based on
Instructional Systems Design (Filipczak, 1996; Gordon and Zemke, 2000; Noe et al, 2000) and
involves five phases. These five phases are diagrammatically reperesented below:
Training Needs Analysis
Design Training
Develop Training
Deliver Training
Evaluate Training
Figure 3.1. The Training Process
4.8.1. PHASE 1: TRAINING NEEDS ANALYSIS

Training needs analysis is the first stage in the training process and involves a procedure to
determine whether training will indeed address the problem, which has been identified. A needs
analysis involves the following:
• Organisational analysis where aspects of the organisational context (such as the firm’s
strategic impact, the training resources available and the support of managers and peers)
are considered (Noe et al, 2003).
• Person analysis where the employees who require training are identified
• Task analysis which involves identifying the tasks, knowledge, behaviour and skills which
need to be emphasised in conducting the training.

Despite being a critical part of the Training and Development Cycle, Training Needs
Assessment is often neglected by organisations. The reasons for this are varied, and include:
• Lack of time to conduct the Training Needs Assessment and limited availability of resources;
• The incorrect belief that training will address all performance problems;
• Inadequate knowledge about the benefits of a Training Needs Assessment, and what it entails (Muller,
2010: 32).
4.8.2. PHASE 2 and 3: DESIGN AND DEVELOPMENT TRAINING

The second and third phase of the training process involves the design and development of training.
The information from phase one is used for the second and third phase to:
• Formulate learning outcomes and objectives
• Prepare lesson plans
• Develop training materials
There is a difference between objectives and outcomes (Kleynhans et al, 2006).

• Training Objectives focus on what the trainer plans to do during the training process.
• Learning Outcomes focus on what the learner should be able to do on completion of the training
programme
In detailing what a learner is expected to achieve on completion of training, it is important that learning
outcomes are well-written. Learning outcomes need to specify:

• Outcome Behaviour which refers to the way a learner should act or behave following the
learning programme. For example, outcome behaviours expected of employees at a fast food
outlet could be “know all the ingredients of every menu item”; “greet the customer” and “record
a sale on the cash register” (Kleynhans et al, 2006: 122 – 123).
• Performance Conditions which refers to the circumstances in which the learner is required
to perform the outcome behaviour. The performance conditions may make the performance of
the outcome either more difficult or easy. For example, performance conditions under which
an employee will have to perform outcome behaviours at a fast food outlet would include
“courteously, accurately and efficiently take orders from customers in pressurized situations
(e.g. when the there is a long queue and customers are in a hurry)”.
• Performance Standards which specifies how well a learner should perform (Kleynhans et al,
2006: 123). For example, “courteously, accurately and efficiently” are the performance
standards specified in the learning outcome “courteously accurately and efficiently take orders
from customers in pressurized situations”. Clear and concise specification of the learning
outcomes is most useful in that:
o They concisely consolidate the findings of the Training Needs Assessment;
o They guide the design and development of the learning programme and learning materials;
o They form the heart of the design of the assessment process and activities; and
o They make the learner aware of the competence which he / she will develop through
embarking on the learning programme.
Employee Readiness for Learning

In designing the training intervention, it is also important that consideration is given to the targeted
employees’ readiness and motivation to learn. Readiness for learning refers to whether:
• Employees have the personal characteristics (e.g. ability, attitudes, beliefs and motivation)
necessary to learn through participating in the training intervention, and to apply what they
learn to their jobs.
• The work environment will support employees’ learning and will not impede their attempts to
apply what they have learnt to their jobs (Noe et al, 2008: 279).
It is important that managers and HR practitioners ensure that employees’ motivation to learn is as
high as possible through ensuring employees’ beliefs of self-efficacy, creating an understanding of the
benefits of the training, linking training interventions to employee training needs and career interests,
ensuring a supportive work environment and ensuring that employees have basic skills necessary to
perform effectively on the programme.

Basic Skills Self efficacy
Work Understanding
environment benefits of
characteristics training
Link to
training needs
and career
goals
✓ Self-Efficacy
Self-efficacy is “the employees’ belief that they can successfully learn the content of the training
programme” (Noe et al, 2008: 280). Employees may have low self-efficacy if they perceive the learning
intervention to be threatening, possibly because they have little experience in the skills area which the
training is to focus on and / or they have limited exposure to an education and training context (e.g.
they may not have gone to university or college after school).
✓ Understanding the Benefits of Training

Noe et al (2008:280) points out that “employees’ motivation to learn can be enhanced by
communicating to them the potential job-related, personal and career benefits they may receive as a
result of attending the training programme.” Examples of benefits include networking with other
employees within the organisation and learning a more efficient approach to performing a procedure.
✓ Awareness of Training Needs and Career Goals

Showing an employee the link between his / her training needs and career goals and the training
programme for which he / she is enrolled is important in enhancing motivation to learn (Noe et al,
2008: 280). This may be achieved through performance appraisals, discussing career goals, and / or
asking employees to complete a self-evaluation on their perceived strengths and weaknesses and
career goals.

✓ Work Environment Characteristics

The work environment, as perceived by employees, has a significant impact on motivation to learn.
Motivation is affected by:
• Situational Constraints: such as the lack of proper tools and proper equipment, materials,
supplies, time and budgetary support.
• Social Support: such as managers’ and colleagues’ willingness to support the employees’
participation in the training programme and support the on-the-job application of employees’
newly developed skills (Noe et al, 2008: 281).
To ensure that the work environment enhances employees’ motivation to learn, it is important that
managers and HR practitioners:
• Provide the equipment, work aids and information necessary for employees to apply their new
skills within the workplace;
• Engage in positive discussion with employees regarding the training intervention and its
benefits;
• Provide employees with positive reinforcement for on-the-job application of their new skills;
• Provide employees with time and opportunities to apply their new skills in the workplace (Noe
et al, 2008: 281).
✓ Basic Skills
Motivation to learn can be greatly impacted by an employee’s existing level of fundamental skills.
Fundamental skills encompass both cognitive ability and reading ability:
• Cognitive Ability which includes understanding the use of written and spoken language
(verbal comprehension), accuracy and speed in solving maths problems (quantitative ability)
and logic in solving problems (reasoning ability) (Noe et al, 2008: 281). Employees with low
levels of cognitive ability are more likely not to complete a training intervention and to receive
low gradings on their assessments.
• Reading Ability which refers to the ability of the learners to read and interpret the language
used in the learning materials. It is important that the readability of the learning material is
assessed during the phase of Training Design to ensure that it does not exceed that required
by the job (Noe et al, 2008: 282).

4.8.3. PHASE 4: DELIVER TRAINING

The fourth phase of the training process involves the actual presentation of the training. The trainer
must pay attention to the factors affecting the transfer of training, such as technology support, peer
support and management support (Noe et al, 2003).
The trainer also makes use of various training methods to facilitate the transfer of training.
4.8.4. EVALUATE TRAINING

Many organisations invest considerable amounts of money in training and development initiatives to
facilitate the implementation of the company’s strategy and to gain competitive advantage.
Therefore it is imperative that after trainees complete their training the organisation evaluates the
programme to see how well its goals have been met and whether this is the best method for reaching
the goals.
3.6.1. Reasons for Evaluation of Training
• To determine a training intervention’s strengths and weaknesses.

• To identify whether the training intervention’s content, structure and administration contributes
to learning and application of new skills.
• To identify which learners benefited the most from the training intervention, and which learners
benefited the least.
• To gather market related data through asking the learners why they attended the training
intervention and whether they would recommend it to their colleagues.
• To identify the financial costs and benefits of the programme.
• To compare the costs and benefits of the training intervention with other potential training
interventions.
• To compare the costs and benefits of the training interventions with the costs and benefits of
other organisational development interventions (e.g. job redesign) which may be used as an
alternative to training
(Noe et al, 2008: 310).

Kirkpatrick's Four-Level Training Evaluation Model can help an organisation objectively analyse the
effectiveness and impact of the training programme (Kirkpatrick, 2010).
Reaction Learning Behaviour Results
Level 1: Reaction
Assessing learners’ reactions is one of the simplest ways of assessing the impact of a training
intervention. Reactions provide an indication of the effectiveness of the training because a satisfied
learner is more likely to apply the principles learnt in the workplace than a dissatisfied learner (Snell
and Bohlander, 2007: 312). The evaluation of learner reactions usually takes the form of a one-page
questionnaire which learners complete immediately following the completion of the training
programme. It's important to measure reaction, because it helps you understand how well the training
was received by your audience. It also helps you improve the training for future trainees, including
identifying important areas or topics that are missing from the training.
Level 2: Learning
While Level 1 (Reactions) focuses on evaluating what learners think about the training, it is also
important that a Level 2 evaluation is conducted. A Level 2 evaluation seeks to determine the degree
to which the learners acquired the “intended knowledge, skills and attitude based on their participation
in the learning event” (Kirkpatrick and Kirkpatrick, 2009: 21).

Level 2 evaluations of learning may be structured as follows:

• A Pre-Test and a Post-Test, in which an assessment of the learners’ knowledge is conducted
prior to the training programme, and then again after the learning programme. This is done to
measure the extent of improvement in the learners’ knowledge and skills (Snell and Bohlander,
2007: 312)
• Use of a Control Group, in which a group of employees who did not undergo the training are
subjected to the same assessment as the group of employees who did receive the training.
Using a control group shows whether the improvements in knowledge and skills are due to the
training and not some other factor (such as changes in the job). (Snell and Bohlander, 2007:
312).
Level 3: Behaviour
Research shows that “much of what is learned in a training programme never gets used back on the
job” (Snell and Bohlander, 2007: 312). Evaluations of learner reactions and learning may well be high,
but for various reasons, learners may experience challenges in applying what they have learnt in the
workplace.
This stage measures the actual on-the-job changes in behaviour which result from attending the
training programme (Kirkpatrick, 2010). It is recommended that this appraisal of behaviour should be
made by a couple of individuals including the learner, his superior, his subordinates and his peers.
Such an appraisal should only be conducted weeks or months after the training was presented.
Level 4: Results
Training is ultimately meant to contribute to the implementation of an organisation’s strategy and the
achievement of sustainable competitive advantage. Therefore, it is important that HR practitioners and
trainers are able to prove the extent to which investment in training positively impacts on the
organisation’s bottom line, and this can be achieved through a Return on Investment (ROI) evaluation.
A company’s ROI refers to the “benefits derived from training relative to the costs incurred...the
benefits can include higher revenues generated, increased productivity, improved quality, lower costs
and more satisfied customers, higher job satisfaction and lower employee turnover.” (Snell and
Bohlander, 2007: 313).

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CHAPTER 5
PERFORMANCE MANAGEMENT
• Distinguish between the processes of performance management and performance appraisal

• Present an organizational model of performance management
• Explain the purposes of performance management
• Discuss the process of performance management
• Critically discuss the various approaches to measuring performance
• Evaluate the importance of the appraisal interview

5.2. Introduction
Performance management is a key Human Resource Management (HRM) function which, when
aligned with an organisation’s strategy, contributes much to the sustainability and success of the
organisation. If implemented correctly, performance management can be very effective in assisting
individuals, teams and organisations in achieving their goals.
Performance Management Vs. Performance Appraisal
If the above definitions of ‘performance management’ and ‘performance appraisal’ are

considered, it become evident that ‘performance management’ refers to an ongoing, holistic
process that focuses on achieving optimal employee and team performance. ‘Performance
appraisal’ is more of a specific, stand alone practice that forms an integral part of the greater
performance management process. It is imperative that the practice of performance
appraisal is implemented within the context of a greater, strategically-aligned performance
management system. Research and experience has shown that performance appraisals
implemented in the absence of a greater performance management system are flawed,

ineffective and often lead to discouragement and emotional anguish (Noe et al, 2008: 342).
5.3 An Organisational Model of Performance Management
It is important that performance appraisals are implemented as part of a greater organisational

performance management system. Figure 1.1 below depicts a process model of performance
within an organisation.
▪ Individual Performance: As depicted in Figure 1.1, employees bring with them

individual attributes, such as knowledge and skills, which they apply through individual
behaviours to produce objective results. For example, an individual employed as a sales
consultant who has good product knowledge and interpersonal skills can display
behaviours such as answering customers’ questions in a knowledgeable and
professional way and making the customer feel at ease. Such behaviour is likely to
lead to objective results such as achieving a certain number of sales.

▪ Organisational Strategy: Not only are individual employees (or teams of employees)
important to effective performance management, but so is the organisational strategy. It is
very important that the goals of individual employees, teams and departments are aligned
to and facilitate the achievement of the greater organisational strategy (Noe et al, 2008:
346).
▪ Situational Constraints: Situational constraints also have a considerable impact on

performance management within organisations. For example, if the economy is bad, it is
unlikely that a sales consultant’s excellent interpersonal skills and product knowledge
will lead to the expected number of sales.
5.4 The Purpose of Performance Management

Performance management systems have three key purposes: strategic, developmental and
administrative, as illustrated below.
5.4.1 Strategic Purpose

It is imperative that an organisation’s performance management system aligns the activities of
employees with the strategic goals of the organisation. Noe et al (2008: 346) explain that “one of
the primary ways strategies are implemented is through defining the results, behaviours, and, to
some extent, employee characteristics that are necessary for carrying out those strategies, and
then developing measurement and feedback systems that will maximise the extent to which

employees exhibit the characteristics, engage in the behaviours and produce the results.”
Performance management is particularly important in the execution of an organisation’s talent

management strategy, and talent management is critical to attaining a competitive advantage.
Performance management enables the execution of a talent management strategy through
facilitating the identification of employee strengths and weaknesses, providing appropriate training
and development for employees, as well as encouraging good performance through incentives
(Noe et al, 2008: 347).
5.4.2 Developmental Purpose

Performance management also has a developmental purpose within an organisation.
The developmental purpose of performance management provides for both the development of:
▪ Employees who perform well in their jobs; and
▪ Employees who are not performing as well as they should in their jobs (Noe et al, 2008:
348).
The developmental purpose of performance management is fulfilled through:

• Managers, colleagues and/or customers providing employees with performance
feedback
• The identification of individual strengths and weaknesses
• The recognition of individual performance; and
• The identification of individual and organisational training needs (Snell and Bohlander,
2007: 333).
5.4.3 Administrative Purpose

The third purpose of performance management is administrative in nature.
The information which a performance management system produces (typically through the
performance appraisal) assists the HR department and managers with many administrative
decisions. These include:
• Compensation decisions (e.g. increases in salary)
• Promotions
• Retention and terminations

• Recognition of individual performance
• Project and task assignment
• Transfers (Noe et al, 2008: 348; Snell and Bohlander, 2007: 333)
Of all the administrative decisions which performance management facilitates, the information
provided through performance appraisals is most widely used for making compensation-related
decisions (Snell and Bohlander, 2007: 334).
5.5. The Performance Management Process

The performance management process can be broken down into a number of distinct activities,
each of which overlaps, to some degree, with the others. The process entails four distinct,
though related, stages.

5.5.1 Stage 1: Performance Planning

A performance management process cannot be implemented in an ad hoc manner, and
therefore requires adequate planning for it to be effective. The following is addressed during the
performance planning stage:
• Setting direction and defining expectations: The employee and manager meet to
share information around the organisational strategy and the departmental goals which
have been put in place to support this strategy (Nel et al, 2008: 494).
• Determining employee goals and objectives: Individual work goals of each employee
will need to be aligned to both the departmental goals as well as the overall
organisational goals.
• Determining the evaluator and the evaluation method to be used: During the

planning stage it is important to determine who will be the evaluator/appraiser (e.g.

manager, self, peers, customer) as well as the measure that will be used to evaluate
performance.
• Developing an action plan: On conclusion of this planning phase, the manager and
employee agree on specific timelines for formal checks to be made against the set
goals. The manager and employee “draft a document containing all the key points of
their discussions and agreement, sketching their different roles and responsibilities
regarding the achievement of these shared goals. This written document that is duly signed
by both parties is useful in checking the progress made towards the achievement of added
value, and can be referred to for clarification and in times of conflict” (Nel et al,
2008: 495).
5.5.2 Stage 2: Performance Coaching and Mentoring

The following takes place during the Performance Coaching and Mentoring stage of the
performance management process:
• Conducting interim, informal checks on progress: The manager conducts interim

checks on the progress employees are making towards achieving their goals that were
set during Stage 1. Informal, day-to-day performance checks are more important than
the annual performance review (Nel et al, 2008: 495). These informal checks enable the
manager to identify and address performance problems at an early stage.
• Exploring causes of poor performance: Employees may experience problems with

their performance for a host of reasons, from fear of failure, to lack of competency, to
personal problems (e.g. divorce, substance abuse). Interim progress checks enable the
manager to identify performance problems, determine the cause of poor performance, and
coach/mentor the employee to overcome the performance challenge (Nel et al,
2008: 496).
5.5.3 Stage 3: Performance Measurement and Evaluation

This stage involves the annual (or 6 monthly) formal performance appraisal. During this stage, a
particular evaluation method is applied (e.g. Management by Objectives, Critical Incidents,
Graphic Rating Scales etc.) by a specific evaluator (e.g. manager, self, peers, customers etc.). This
will be explored in greater detail in Section 4: Approaches to Measuring Performance and Section 5:
Who Appraises Performance?

5.5.4 Stage 4: Performance Feedback and Documentation

Stage 4 of the performance management process involves the provision of performance
feedback to the employee. This is usually through a face-to-face appraisal interview where the extent
to which the employee has met his/her performance goals is discussed (Nel et al, 2008:
504). Plans are then put in place to address any shortcomings and/or to build on the employee’s
existing strengths.
Performance results are recorded using the appropriate company forms and are forwarded to
the HR Department. These performance results are then used to aid decisions around
promotions, personal development, salary increases and career planning (Nel et al, 2008:504).
Performance feedback will be addressed in greater detail in Section 6: Performance Feedback
and Improving Performance.
5.6. Designing an Effective Performance Management Systems

Effective performance management systems need to be aligned to the legal requirements of the
country in which the organisation is operating; they need to have clearly defined performance
standards, and they have to uphold key principles of good assessment (strategic congruence,
validity, reliability, acceptability, specificity).
5.6.1 Legal Considerations

7
Grobler et al (2006: 267) point out that “with new legislation pertaining to Labour relations,
employment equity, and the constitution, the possibility of legal review of terminations, promotions,
pay decisions, and other HR issues is becoming a reality in South Africa.” Examples in this
regard are provided below:
▪ Dismissal: The Labour Relations Act (No 66 of 1995) in South Africa clearly indicates
that dismissal must be procedurally and substantively fair. Therefore, when an organisation
decides to dismiss an employee on the grounds of poor performance, it is important that
the outputs of performance management process have been documented, recorded and
reflect the following:
• The extent to which the employee has failed to achieve the agreed performance
standard; and
• The interventions put in place to manage and improve the employee’s poor
performance (Nel et al, 2008: 504).

▪ Employment Equity: The Employment Equity Act of 1998 prohibits managers from
discriminating on any of the ground listed in Section 6 (1) of the Act (e.g. race, gender,
pregnancy, marital status, etc.). It is important, therefore, that the evaluation criteria used
to rate employee performance are not unlawfully discriminatory (Grobler et al, 2006:
268).
5.6.2 Clearly Defined Performance Standards

Snell and Bohlander (2007: 336) point out that “before any appraisal is conducted, the standards
by which performance is to be evaluated should be clearly defined and communicated to the
employee....these standards should be based on job-related requirements derived from job analysis
and reflected in an employee’s job description and job specifications. When performance
standards are properly established, they help translate organisational goals and objectives into job
requirements that convey acceptable and unacceptable levels of performance to employees.”
Kleynhans (2006: 162) point out that clearly defined performance standards are “the most basic
feature of a good performance appraisal.”
5.6.3 Strategic Congruence

Strategic Congruence refers to “the extent to which the performance management system elicits job
performance that is consistent with the organisation’s strategy, goals, and culture” (Noe et al,
2008: 351.)
It is imperative that performance management systems have strategic congruence with the overall
organisational vision, mission and strategy. For example, if customer service is key to the effective
implementation of an organisation’s strategy, it would be important for the organisation’s
performance management system to assess how well employees are serving customers.
Strategic congruence ensures that the performance management system guides employees in terms
of appropriate workplace behaviours and results, which are going to drive the implementation of
organisational strategy. This requires that the performance management system is sufficiently
flexible to quickly adapt to changes in the organisation’s strategic posture which become necessary
due to change in the macro and market environment (Noe et al, 2008:351).
5.6.4 Validity
Validity is a commonly known as an important assessment principle and refers to the “extent to which
a performance measure assesses all the relevant – and only the relevant – aspects of job
performance” (Noe et al, 2008: 352). A measure of performance is considered deficient if it does not

measure all aspects of performance relevant to an employee’s job. A measure of performance may
be considered contaminated if it evaluates irrelevant aspects of performance or aspects that are
not job related.
5.6.5 Reliability
Reliability is another well-known assessment principle and refers to “the consistency of a
performance measure” (Noe et al, 2008: 353).
In performance management, an important type of reliability is inter-rater reliability. A performance

measure is considered to have inter-rater reliability “if two individuals give the same (or close
to the same) evaluations of a person’s job performance” (Noe et al, 2008: 353). Test-retest reliability
requires that a measure be reliable over a period of time. If a measure provides dramatically different
ratings depending on the time at which the rating was made, then the measure lacks test-retest
reliability (Noe et al, 2008:353).
5.6.6 Acceptability
Acceptability refers to “whether the people who use a performance measure accept it” (Noe et al,
2008: 353). While a performance measure may be valid and reliable, it will lack acceptability if the
managers view it to be too onerous and simply reject it. Employees may also reject a performance
measure if they believe that it is not fair.
5.6.7 Specificity
Specificity refers to “the extent to which a performance measure gives detailed guidance to
employees about what is expected of them and how they can meet these expectations” (Noe et al,
2008: 353). Specificity is particularly important to both the strategic purpose and developmental
purpose of performance management. For example, if a performance measure does not detail what
an employee needs to do to support the organisation in the implementation of its strategy, then the
performance measure does not have a strategic purpose. A poorly defined performance measure
may also lack specificity if it is unable to identify an employee’s specific performance problem (Noe
et al, 2008: 353).

5.7. Measuring Performance
5.7.1. The Comparative Approach
According to Noe et al (2008: 356) the Comparative Approach to the measurement of performance
“requires the rater to compare an individual’s performance with that of others…this approach
usually uses some overall assessment of an individual’s performance or worth and seeks to
develop some ranking of the individuals within a work group.”
Types of Comparative Methods
There are three types of comparative methods:

• Ranking: When this method is applied, all employees within a department or section are
ranked according to their performance relative to their fellow employees. The employee
who demonstrates the best performance will be ranked highest; and the employee who
demonstrates the worst performance will be ranked the lowest (Kleynhans, et al, 2006:
156). A criticism of the ranking method is that “there is no way of knowing precisely what
criteria of job performance that supervisors were considering,, whether each supervisor was
considering the same criteria – or whether, indeed, any of the supervisors actually applied
a focused and stable body of criteria of any kind” (Noe et al, 2008: 356).
• Paired Comparison: This method is a variation of the ranking method and requires the
manager to compare an employee’s performance with the performance of all other
employees within a group. The employee who receives the highest number of positive
ratings receives the highest ranking. (Kleynhans et al, 2006: 157). A disadvantage of this
approach is that it can be time-consuming for managers, especially for flat organisations
where managers have a greater span of control (Noe et al, 2008: 358).
• Forced Distribution: This method also utilises ranking, but instead of the individual
ranking of employees (as with ‘ranking’ and ‘paired comparison’), forced distribution
requires that employees are ranked in groups. Managers are provided with the percentages
of employees which need to fall within certain performance categories, for example:
✓ 20%: Top Performing Employees

✓ 70% Average Performing Employees
✓ 10% Poor Performing Employees (Noe et al, 2008: 356)
The forced distribution method was popularised by Jack Welch, the CEO of General Electric in the
USA. Welch was adamant that the 10% of poor performing employees should be removed from
the workforce. Supporters of the forced distribution method argue that it forces managers to make
difficult decisions about an employee’s performance (Noe et al, 2008: 358). Unfortunately, though,
little research has been conducted into the effectiveness of the forced distribution method.
Critics of this system argue that force distribution is arbitrary, is potentially illegal and may
contribute to poor employee morale (Noe et al, 2008: 358). For example, during a particular
year, employees within a department may all have average to high performance, fulfilling the
requirements of the top performing category and average performing category. However,
despite the lack of poor performers amongst employees, the manager conducting the rating is

forced to identify those employees who may be placed in the grouping of poor performers.
Advantages and Disadvantages of Comparative Methods

The Comparative Approach towards Performance Measurement has both advantages and
disadvantages

5.7.2. The Attribute Approach
The Attribute Approach towards performance measurement focuses on “the extent to which
individuals have certain attributes (characteristics or traits) believed desirable for the company’s
success” (Noe et al, 2008: 359).
Examples of attributes which employees may need to display at work, and against which they
may be evaluated are:
• Dependability
• Creativity
• Leadership
• Initiative
• Problem solving
Types of Attribute Methods
There are two types of Attribute Methods:
▪ Graphic Rating Scales: This method uses a rating scale to evaluate the extent to which
an employee displays certain attributes in the performance of his/her job (Snell and
Bohlander, 2007: 349). The rating instrument (or rating form) may be very simplistic or very
detailed, with more detailed forms usually providing for more reliable assessment. It is also
beneficial for forms to include space for comments to be made.
▪ Mixed Standard Scales: This method is a modification of the basic rating scale in that:
• Rather than evaluating an attribute according to a single scale, three specific
descriptions of each attribute are provided
• The three specific descriptions of each attribute reflect three levels of performance:

superior, average, inferior
• The three specific descriptions of each attribute are randomly ordered on the
performance appraisal form in the structure of a mixed-standard scale
• Managers then evaluate employees by indicating whether the employees’
performance is better than, equal to, or worse than the standard for each behaviour
Advantages and Disadvantages of Attribute Method
5.7.3. The Behavioural Approach

The Behavioural Approach towards performance management seeks to “define the behaviours an

employee must exhibit to be effective in the job….the various techniques define those behaviours
and then require managers to assess the extent to which employees exhibit them” (Noe et al, 2008:
362).
Types of Behavioural Methods
There are five Behavioural Methods of performance management:

▪ Critical Incidents: A ‘critical incident’ may be defined as “an unusual event that denotes
superior or inferior employee performance in some part of the job” (Snell and Bohlander, 2007:
353). This method requires the ongoing recording of an employee’s actual behaviours that
are typical of success or failure, and incidents that demonstrate both good and poor
performance are noted (Nel et al, 2008: 500). The key disadvantage of this method is that it
is time-consuming as a manager is required to maintain a log for each employee throughout
the appraisal period, in which critical incidents are recorded. When filling in the performance
appraisal form, the manager will then consult the employee’s log of critical incidents. The
information is used to substantiate the manager’s rating of the employee’s performance as
outstanding, satisfactory or unsatisfactory (Snell and Bohlander, 2007: 353). While this method
is time-consuming, a key advantage is that it increases the objectivity of the appraisal in that
the manager uses actual job-related performance evidence to justify the rating of the
employee.
▪ Behaviourally Anchored Rating Scales (BARS): This method builds on the critical
incidents technique. It involves the specific definition of performance dimensions through the
development of behavioural anchors associated with different levels of performance (Noe et
al, 2008: 362). BARS are developed by classifying a collection of critical incidents, reflecting
both effective and ineffective job performance, into behavioural anchors at different performance

levels (e.g. 1 – 7) within a particular performance dimension (e.g. “preparing for duty”). The
manager applies the BARS by considering at which level (as defined by the
behavioural anchor) an employee’s performance falls within a particular performance
dimension.
▪ Behavioural Observation Scales (BOS): This method is a variation of the BARS.

The BOS method is similar to the BARS in that both BARS and BOS are based on critical incidents.
However, the BARS and BOS methods are different from each other in that “rather than asking the
evaluator to choose the most representative behavioural anchor, a BOS is designed to measure
how frequently each of the behaviours has been observed” (Snell and Bohlander, 2007: 355). A key
advantage of the BOS is that, in appraising an employee, the manager fulfills the role of ‘observer’
rather than the role of ‘judge’ (as with the BARS) and this in turn creates a conducive climate for
constructive feedback to the employee. Research has shown that managers tend to prefer the BOS
of the BARS in that it provides for:
• Greater objectivity
• A reliable means to distinguish good performers from poor performances
• Ease in the provision of constructive feedback;
• The identification of training and development needs
• Ease of use for both managers and employees (Snell and Bohlander, 2007: 355; Noe et
al, 2008: 365).
▪ Organisational Behaviour Modification (OBM): This method is based on the behaviourist

view of motivation. Behaviourism places emphasis on the principle of ‘positive reinforcement’
which involves “providing employees with outcomes they desire when they perform
organizationally functional behaviours” (George and Jones, 2006: 356). In terms of
motivating employees, therefore, an employee’s future behaviour will be determined by past
behaviour which has been positively reinforced (Noe et al, 2008: 365). The method of OBM,
therefore, focuses on the following:
• Defining a set of key behaviours necessary for performance on the job:;
• The application of a performance measurement system to determine whether the
identified behaviours have been exhibited;
• Informing employees of the behaviours that are required and setting goals as to how
often the behaviours need to be exhibited; and
• The provision of feedback and reinforcement to employees (Noe et al, 2008: 365).

▪ Assessment Centres: Assessment Centres are usually used during the HRM processes of
recruitment and promotion (Kleynhans et al, 2006: 158). However, they have also been used
as a way of measuring managerial performance. The Assessment Centre requires that
managers or employees perform a range of simulated tasks (e.g. role plays, in-basket
management, group discussion). A number of evaluators observe the managers’/employees’
performance in completing the tasks to determine their level of managerial skill (or their
potential to develop into a managerial position). Assessment centers provide an objective
measure of an individual’s performance at managerial tasks in particular, allowing for
specific feedback and the design of individual development plans (Noe et al, 2008: 365).
Advantages and Disadvantages of Behavioural Methods
5.7.4. The Results Approach

The Results Approach towards performance management focuses on managing objective,
measurable results of a job and in so doing assumes “that subjectivity can be eliminated from
the measurement process and that results are the closest indicator of one’s contribution to
organisational effectiveness” (Noe et al, 2008: 367).

Types of Results Methods
Productivity Measures
Productivity measures to evaluate performance can take various forms. For example:
✓ Sales consultants may be evaluated on the basis of the sales volumes that they
achieved (both the number of units sold as well as the monetary value of the units)
✓ Production workers may be evaluated on the number of units produced within a certain
time frame, as well as the scrap rate and number of defects that are found
✓ Executive managers may be evaluated on the company growth rate and company profits
generated (Snell and Bohlander, 2007: 356).
The productivity measure method can be very effective in linking the results achieved by the
employees to the overall strategy of the organisation. However, the weakness of this method is
that “results appraisals may be contaminated by external factors that employees cannot influence”
(Snell and Bohlander, 2007: 356). For example, when there is a shortage of raw materials,
production workers would not be able to perform to the full level of their abilities and may be
unfairly penalized for this during the results appraisal. A further shortcoming of results appraisals
is that they may encourage employees to focus on results which will make them ‘look good’ in the
short-term, with no consideration for the potential long-term ramifications which short-termism
brings(Snell and Bohlander, 2007: 356).
Management By Objectives (MBO)

This method is a philosophy of management which was first proposed in 1954 by the well
known management guru, Peter Drucker. It focuses on rating
“performance on the basis of employee achievement of goals set by mutual agreement of
employee and manager” (Snell and Bohlander, 2007: 356). MBO is popular in both public and
private sector organisations (Noe et al, 2008: 367).

The MBO performance management process involves:

• Defining the organisation’s annual strategic goals by the top management team
• Defining departmental goals, which support the annual strategic goals
• Defining managerial goals and employee goals which support departmental goals as
well as the overall strategic goals of the organisation
Three components which are key to all MBO performance management systems are:
Goals specified are clear, difficult and objective. They should be quantifiable and measurable for
both the long and short term.
• Goals are not set unilaterally by managers, but are defined through considerable
manager-employee interaction
• Managers provide subordinates with objective feedback throughout the rating period so
as to monitor progress towards the set goals (Noe et al, 2008:367)
• Expected results must be within the control of the employee and employees should not
be penalised for the impact of external factors over which they have no control (Snell and
Bohlander, 2007: 356)
MBO, if implemented correctly, can have a very powerful impact on an organisation, and can be
very effective in aligning individual employee goals with the overall strategic goals of the
organisation.
The Balanced Scorecard

This method may be used to appraise individual employees, teams, business units as well as
the organisation itself (Snell and Bohlander, 2007: 358).
The evaluation of performance addresses four key categories: financials, customer, internal
business processes, and learning and growth. Kaplan and Norton (2007: 150) assert that this
method enables organisations to “track financial results while simultaneously monitoring progress
in building capabilities and acquiring intangible assets they would need for future growth.”
Kaplan and Norton (2007: 152) identify the following four management processes that are essential
to linking an organisation’s long-term strategic objectives to short-term actions of departments and
employees:

▪ Translating the Vision: The vision and strategy of an organisation is often described in lofty
terms and is difficult to translate into operational terms to guide the actions of departments,
managers and employees. The Balanced Scorecard overcomes this shortcoming through
defining the organisational vision through four operational measures:
• Financial (“to succeed financially, how should we appear to our shareholders?”)
• Customer (“to achieve our vision, how should we appear to our customers?”)
• Internal Business Processes (“to satisfy our shareholders and customers, what business
processes must we excel at?”)
• Learning and Growth (“to achieve our vision, how will we sustain our ability to change
and improve?”) (Kaplan and Norton, 2007: 153)
▪ Communicating and Linking: This process “lets managers communicate their strategy up
and down the organisation” and enables them to “link it to departmental and individual
objectives” (Kaplan and Norton, 2007: 152). Indeed, Kaplan and Norton (2007: 152)
acknowledge that “traditionally departments are evaluated by their financial performance
and individual incentives are tied to short-term financial goals…the scorecard gives
managers a way of ensuring that all levels of the organisation understand the long-term
strategy and that both departmental and individual objectives are aligned with it.”
To align the performance of individual employees with the organisational strategy the following
processes are necessary:
▪ Communicating and Educating: The effective communication of the organisation’s
scorecard is imperative to ensure commitment and accountability to the business’s long-

term strategy on the part of both employees and management. Indeed, “the balanced
scorecard is both motivating and obligating” (Kaplan and Norton, 2007: 154).
▪ Setting Goals: Kaplan and Norton (2007: 155) point out that “mere awareness of
corporate goals, however, is not enough to change many people’s
behaviour…somehow, the organisation’s high-level strategic objectives and measures
must be translated into
▪ objectives and measures for operating units and individuals.” To achieve this
the scorecard is divided into three levels of information:

• First Level: Corporate objectives, measures and targets
• Second Level: Business unit targets
• Third Level: Individual and team objectives, initiatives to achieve these objectives,
up to five performance measurements per objective, targets for each measure
The personal scorecard “helps to communicate corporate and business unit objectives to the
people and teams performing the work, enabling them to translate objectives into meaningful
tasks and targets for themselves” (Kaplan and Norton, 2007: 154).
Linking Rewards to Performance Measures: The balanced scorecard contributes to
decision making around rewards and compensation systems.
▪ Business Planning: The goals set in the balanced scorecard enable managers to be focused
in their allocation of resources and identification of priorities. Indeed, an organisation’s
scorecard will provide direction in terms of the initiatives that should be undertaken in order to
ensure that progress is made towards achieving the long-term strategic objectives (Kaplan and
Norton, 2007: 152).
▪ Feedback and Learning: The feedback processes facilitated by the balanced scorecard
ensures that organisations and individuals can monitor their performance from a financial
perspective, customer perspective, internal business processes perspective and learning and
growth perspective. This in turn allows for the evaluation of strategy and modification of
strategies, if and where required (Kaplan and Norton, 2007: 152).
“The balanced scorecard provides a framework for managing the implementation of strategy while
also allowing the strategy itself to evolve in response to changes in the company’s
competitive market, and technological environments” (Kaplan and Norton, 2007: 161).

Advantages and Disadvantages of Results Methods
5.7.5. The Quality Approach

The Quality Approach to performance management relies primarily on the Attribute Approach
and Results Approach, and is defined by two key characteristics:
• A strong customer orientation with the primary goal of increasing customer satisfaction
• A focus on the prevention of errors (Noe et al, 2008: 370).

Characteristics of the Quality Approach
Performance management systems that are implemented in accordance with the Quality
Approach involve the following:

• Focus on the assessment of both person and system factors
• Emphasise that managers and employees need to interact and work together to address
performance problems
• Address both internal and external customers
• Evaluate person and system factors through the use of multiple sources
• Feedback on performance focuses on areas of improvement. This feedback takes the

form of subjective feedback from managers, peers and customers about the personal
qualities of the employee, as well as objective feedback addressing the work process itself.
Such objective feedback is received through statistical quality control methods such
as process-flow analysis, cause-and-effect diagrams, and pareto charts (Noe et al,
2008: 370 - 371).
Advantages and Disadvantages of the Quality Approach

5.8 The Appraisal Interview

The appraisal interview is regarded by many to be the most important part of the entire
performance appraisal process. The appraisal interview enables the manager to:
• Discuss the subordinate’s performance record with him/her
• Explore areas of improvement and growth with the subordinate; and
• Understand the subordinate’s attitudes and feelings, and improve communication (Snell
and Bohlander, 2007: 361).
However, the manager may find it challenging and time-consuming to discuss both the
subordinate’s performance record as well as a development plan during the same interview.
The appraisal interview is therefore often divided into two parts, with the first focusing on a
review of performance, and the second addressing the development plan (Snell and Bohlander,
2007: 361).
It is important that appraisal interviews are timeously scheduled, so as to provide the employee with
sufficient time to prepare for the interview. Ten to fourteen days is considered to be sufficient
lead time (Snell and Bohlander, 2007: 361).
Types of Appraisal Interviews

Details on various types of appraisal interviews
The choice of appraisal interview is dependent on the topic being discussed or on the behaviour
of the employee being appraised. The interview approach adopted by managers, therefore, should
be flexible and appropriate to the nature of the performance feedback being given.

CHAPTER 6
COMPENSATION MANAGEMENT
• Critically discuss the objectives of compensation management

• Explain the types of compensation (pay) systems
• Evaluate the critique surrounding executive compensation
• Describe the key types of employee benefits
6.2. Compensation Objectives
Both employers and employees have compensation-related objectives, and it is important that
both parties’ objectives are considered when planning the organisation’s strategy.
Employee’s objectives revolve around the purchasing power and standard of living that their pay
will afford them; the fairness of the pay level; the extent to which the compensation recognises their
performance; and the composition of the compensation package (Torrington, Hall, Taylor and
Atkinson, 2011: 523).
The compensation objectives of employers are different, although in many instances

complementary, to those of employees.

6.2.1 Objective 1: Attracting Employees

Torrington et al (2011: 520) point out that an organisation’s compensation and benefits package
“must be sufficiently attractive vis-a-vis that of an organisation’s labour market competitors to
ensure that it is able to secure the services of the staff it needs.” The more attractive the
compensation and benefits package, the greater the number of job applicants. Attractive
packages therefore provide for the selection and appointment of high-calibre employees and the
speedy filling of vacancies (Torrington et al, 2011: 520).
Grobler et al (2011: 402) identifies that the practice of conducting external salary surveys to
benchmark salaries against those offered by competitors is one of the key ways of achieving
this objective of attracting employees.
6.2.2 Objective 2: Retaining Employees
The compensation and benefits package has an important role in facilitating the retention of
effective performers, and should be attractive enough to prevent staff from becoming

dissatisfied and seeking career opportunities elsewhere (Torrington et al, 2011: 521). For
example Dimension Data MEA, an ICT company which regularly achieves a ‘Best Employer’ award
from the Corporate Research Foundation Institute (CRF), uses its reward and remuneration
strategy to retain high-performing employees. When achieving this award yet again in 2011
/ 2012, Dimension Data indicated that its reward and remuneration policy “is aimed at driving
a high-performance culture. The company takes a differentiated approach to ensure retention of
high performing employees and those with critical skills.
Total remuneration consists of monetary rewards including fixed pay and short-term incentives;
non-monetary rewards include benefits, learning and development, and finally performance
dependant wealth creation opportunities through long term financial incentives” (CRF, 2011:
139).
Grobler et al (2011: 402) identifies that to achieve the objective of retaining employees, job
evaluation should form part of the compensation strategy in that it ensures internal and
individual equity across jobs.
6.2.3 Objective 3: Motivating Employees
While the reward and remuneration package has an important role in attracting and retaining
employees, it also needs to positively impact the motivation of employees. Research shows that
the power of monetary reward to motivate is limited. On the other hand, poorly designed and
implemented compensation strategies and practices can have a considerable demotivating
effect on employees, especially when staff perceives them to be inequitable (Torrington et al,
2011: 521).
It is therefore imperative that “employers who want their workforces to be positively engaged
with their work, to participate in continuous improvement programmes, and to work beyond
contract when required must have in place a reward package which does not demotivate and
which, as far as possible, motivates positively” (Torrington et al, 2011: 521). When putting such
a package in place, it is important that the principles of Equity Theory (Section 2.5.1) and
Expectancy Theory (Section 2.5.2) are given due consideration.
Grobler et al (2011: 402) argues that to achieve the objective of motivating employees,
compensation systems need to reward good performance through the offering of incentives.

6.2.4 Objective 4: Alignment with Legislation
When planning compensation systems, it is imperative that organisations comply with the
requirements of legislation. In South Africa, there are various laws that impact on compensation
and reward:
• The Basic Conditions of Employment Act regulates working time, leave, employment
contracts, remuneration and termination (Dessler et al, 2011: 385)
• The Labour Relations Act provides for collective bargaining between employers and
trade unions to determine wages and terms and conditions of employment
• The Compensation for Occupational Injuries and Diseases Act provides for the
payment of compensation to employees who are injured, or who contract diseases, in
the performance of their work
• The Unemployment Insurance Act provides for the protection of workers who become
unemployed and regulates the claiming of unemployment benefits (Dessler et al, 2011:
385)
• The Employment Equity Act protects employees and job seekers from unfair
discrimination in employment practices, including remuneration and reward
• The Income Tax Act regulates the deduction of employees tax liabilities from their
salaries; and
• The Skills Development Act provides for the payment of 1% of payroll as a Skills
Development Levy which is used to improve the skills of the South Africa workforce
(Dessler et al, 2011: 385). It is important that all the legal requirements of the above pieces
of legislation are addressed through the organisation’s compensation strategy. Grobler
et al (2011: 402) notes the importance of documenting HR and compensation records
to facilitate compliance with government legislation.
6.4. What are Compensation Systems?

“The method by which individuals are paid for performing their jobs constitutes the pay system
of the organisation” (Grobler et al, 2011: 410). A compensation system may therefore include a
time-based salary, supplemented annually with merit based pay.


6.4.1 Time-Based Compensation Systems

Time-based compensation systems include hourly-pay, daily-pay, weekly-pay, as well as
monthly (salaried) pay.
The purpose of job evaluation is to determine the relative value of jobs within the organisation,
so as to establish a compensation structure showing the rates of pay for various jobs. Job
evaluation, therefore, provides the foundation for time-based pay.
Grouping Jobs into Pay Grades

On completion of the job evaluation, attention will need to be given to the task of grouping jobs
into pay grades, and then assigning pay rates to each job. Dessler et al (2011: 399) explains
that a pay grade “is comprised of jobs of approximately equal difficulty or importance
as established by job evaluation.”
The job evaluation method used will impact on the way jobs are placed into pay grades. For
example, if the ranking method was used, then the pay grade would be structured to comprise
all jobs that fall within two or three ranks (Dessler et al, 2011: 399). If the classification
method is used, the jobs would have been automatically classified into grades (as part of the
classification process). And if the point method was used then the pay grade would comprise
jobs which fall within a range of points (Dessler et al, 2011: 399).
Assigning Pay Rates to Pay Grades

Once jobs have been grouped into pay grades, pay rates will need to be assigned through the
application of the wage curve (Dessler et al, 2011: 399). The wage curve plots the actual pay
rates currently paid by the employer for jobs which are now classified within a particular job
grade
Developing Pay Ranges

Following the assignment of pay rates to job grades, fine-tuning of the pay rates will need
to take place through the development of pay ranges.
Pay Increases
Pay increases within a time-based compensation system may either be across-the-board

increases or they may be merit increases.

6.4.2. Person-Based Compensation Systems
While time-based compensation systems are widely used in practice, the do have their
limitations.
Noe et al (2008: 502) point out that a key limitation of time-based compensation systems is
that they promote bureaucracy in that the “job descriptions set out specific tasks and activities
for which the incumbent is responsible and, by implication, those for which the incumbent is
not responsible. Although this facilitates performance evaluation and control by the manager,
it can also encourage a lack of flexibility and a lack of initiative on the part of employees”
(Noe et al,
2008: 502). This limitation is highlighted by employee comments such as “If it is not in my
job
description, why should I do
it?”
A further limitation of time-based compensation systems is that their hierarchical structure

reinforces status differentials as well as top-down decision-making and communication. This
hierarchical structure also encourages promotion-seeking behaviour, thereby discouraging
lateral movements by employees. Furthermore, the generation and updating of job
descriptions and job evaluations requires considerable effort, administration and cost. Time-
based pay structures also do not necessarily reward desired behaviours, particularly in
environments that are rapidly changing and where the competencies required in the past are
not very helpful in the present and the future (Noe et al, 2008: 503).
Person-based compensation systems overcome the limitations of time-based systems. They

include Broadbanding and Competency Based Pay.
Broadbanding
Broadbanding entails the collapsing of salary grades into just a few wide levels or bands,
each of which contains a relatively wide range of jobs and salary levels” (Dessler et al, 2011:
409). In so doing broadbanding is effective in addressing some of the limitations of time-based
pay systems (such as inflexibility and a focus on being promoted rather than performing well
in one’s current job).

Broadbands may be created for all jobs within a company, or only for specific groups of
jobs such as professionals (Dessler et al, 2011: 409). For example, IBM went through a
process of delayering its job levels, moving from 5,000 job titles and 24 salary grades to a
simpler 1,200 jobs and 10 bands (Noe et al, 2008: 503).
Traditional Job Frame Vs. Banded Job Framework
Despite its advantages in addressing a number of the limitations of traditional, time-based

compensation systems, broadbanding does have a number of disadvantages. These include:
▪ A reduced opportunity for promotion which may be perceived negatively by employees
▪ Weaker budgetary control and raised labour cost (due to the greater spread
between minimum pay and maximum pay within bands) (Noe et al, 2008: 503)
▪ Organisational culture may undermine and impede the effective implementation of

a broadbanding system (Nel et al, 2008: 297).
Competency Based Pay

Like broadbanding, competency based pay systems (also known as ‘Skills Based Pay’
and
‘Knowledge Based Pay’) represent a response to the limitations of the traditional time-
based pay systems.
Competency based pay provides for payment of employees based on the competencies

which they acquire and the consequent greater flexibility which they exercise in their jobs
(Noe et al,
2008: 504). It represents a fundamental departure from the traditional, time based system of
pay in that employees are now “paid for the skills they are capable of using, not for the job
they are performing at a particular point in time” (Ledord cited in Noe et al, 2008: 504).
Competency-based pay encourages employees to acquire a wider range of competencies

by offering increased remuneration for increasing the breadth of one’s competency. For
example, an employee who currently holds a grade 8 job and is performing grade 8 tasks,
will be paid the compensation for a job at a higher grade if he/she has acquired the skills to
perform that job. While competency based pay systems overcome many of the limitations
of the traditional time based compensation systems it does have a number of disadvantages:
▪ While the system may indeed promote the acquisition of new skills, the organisation
may find it a challenge for employees to actually apply these new skills. If skills
are to change, work design also needs to change so that the skills may be applied
(Noe et al,
2008: 505)
▪ Employees may acquire all the skills too quickly which would result in ‘top-out’ with
no room for further pay growth. This would impact negatively on motivation.
▪ Ironically, competency based pay may result in a large bureaucracy as the system
requires that training programmes be developed; competencies be described and
assigned monetary value; and competency assessments be developed (Noe et al,
2008:
505).
6.4.3 Performance Based Compensation Systems (Variable Pay)

Performance-based compensation systems are underpinned by theories of motivation
and relate an employee’s performance directly to his / her remuneration (Grobler et al, 2011:
416). Many employers nowadays incorporate performance-based compensation systems into
their traditional time-based compensation systems. Performance-based compensation is also
commonly referred to as variable pay.

Performance based compensation systems may be divided into three main

categories:
▪ Individual Incentive Systems
▪ Team-Based Incentive Systems
▪ Organisational Incentive Systems
An overview of these three categories of performance-based compensation is provided
Individual Incentive Plans

Various individual incentive plans may be used to motivate employee performance.
These range from piece-rate systems appropriate to factory settings, to commissions relevant
to the sales environment. Figure 8.3 provides an overview of the various individual incentive
plans.

For example, at a furniture manufacturer, individual employees may be expected to upholster

seven chairs per day for a rate of R140/day. If the employee exceeds this specified number
per day and upholsters eight chairs he will receive a piecework incentive of an additional R20.
While piece-rate systems are simple to compute and enable organisations to accurately
calculate their labour costs, they are only implementable in certain environments where units
produced can be measured readily (Snell and Bohlander, 2007: 422). With their focus
on individual output, they also have the drawback of potentially working against an
organisational culture which seeks to promote cooperation and creativity.
▪ Standard Hour Plans: This individual incentive system sets incentives based on
the standard time it takes to complete a particular task. If the task is completed ahead of
time, employees still receive their hourly rate multiplied by the standard time for the
task completion (Snell and Bohlander, 2007: 423).
For example, if the standard time for a motor mechanic to install an engine on a truck is 4
hours at a rate of R100/hr and the motor mechanic installs it in the space of 3 ½ hours he will
still receive pay of R400 (i.e. R100 @ 4 hours).
The mechanic therefore will receive an incentive of R50. This will also give him the
opportunity to start working on the installation of the next truck’s engine earlier than
anticipated, for which he will also be paid standard time.

▪ Commissions: These are individual incentive plans widely used in the sales environment.
Straight commission plans reward employees only for results, while combination plans
provide a basic salary plus commission. In combination plans, a 70% base salary and 30%
individual commission is most common (Dessler et al, 2011: 441).
▪ Special Incentive Programmes: Some employers also offer various special

incentive programmes, such as paid vacations for the highest performing employee.
Team Based Incentive Plans

In certain situations, team-based incentive plans may be more appropriate than individual
incentive plans.
Individual incentive systems may lead to unhealthy competition among employees, and
undermine teamwork, cooperation and creativity, ultimately leading to the disruption of the
organisation’s operations (Grobler et al, 2011: 418). Individual incentive systems may also
undermine the objectives of certain initiatives implemented within an organisation, such as
Total Quality Management, which are reliant on effective team performance.

One of the ways to overcome these disadvantages of individual incentive plans is to implement
team based incentive plans. Team-based incentive plans differ from traditional individual
incentive plans in that:
▪ Performance goals are set for the team, rather than individuals. These performance
goals, and how the team incentive is to be applied, need to be carefully
communicated to the team (Grobler et al, 2011: 418)
▪ Incentive awards are comparable across team members (unlike individual incentive
schemes where there is considerable disparity across individuals). Incentives to be
paid out to team members are usually calculated using a specific formula. Research
indicates the importance of providing team members with the same incentive rewards,
as disparity could result in discontent and undermine the team’s cohesion, which in turn
would negatively impact the team’s performance going forward (Grobler et al, 2011:
419).

Social loafing is dynamic that sometimes occurs within a team where certain members do not
contribute as they should. In this regard, the 360 degree feedback tool is useful in obtaining
constructive feedback from various sources (e.g. peers, customers, suppliers, other managers)
so as to reach an informed decision about the incentives due to team members (Grobler et al,
2011: 419)
6.4.3 Organisational Incentive

Plans
The potential shortcomings of individual incentive plans, coupled with the interdependent
nature of many jobs, have resulted in the increased use of organisational incentive plans
(Grobler et al,2011: 419). Organisational incentive plans also seek to make employees aware
of the link between their compensation and their individual performance, their department’s
performance and the performance of the organisation as a whole.
▪ Gainsharing: Gainsharing refers to “programs under which both employees and

the organisation share financial gains according to a predetermined formula that reflects
improved productivity and profitability” (Snell and Bohlander, 2007: 434). Gainsharing links
employee compensation with specific productivity measures such as time, materials
and cost savings (Grobler et al, 2011: 419).
Gainsharing is based on the assumption that engaged and involved employees will focus on
the efficient use of organisational resources in an effort to improve productivity. A mathematical
formula is used to determine the difference between a baseline of performance and actual
productivity during a specified period. When productivity exceeds the baseline, employees
share in the savings (Snell and Bohlander, 2007: 419).

▪ Profit-Sharing: This organisational based incentive scheme refers to “any procedure

by which an employer pays, or makes available to all regular employees, special current
or deferred sums based on the organisation’s profits” (Snell and Bohlander, 2007: 438).
The intention of profit-sharing is to give employees the opportunity to increase their
earnings through contributing to the success of the organisation and the growth of its
profits. Employees’ efforts in this regard need not just be focused on increasing the rate of
production, but could also be focused on improving the quality of products and services,
decreasing operation costs, and finding ways to improve work methods (Snell and
Bohlander,
2007: 438). Profit-sharing aims to get employees to think of themselves as partners of the
organisation and motivate them towards total commitment.
Profit-sharing payments are made once a year. The proportion of profits shared with
employees differs from plan to plan, and can range from 5% to 50% of net profit. Profits
may be distributed to all employees on an equal basis, or they may be based on a formula
which takes into consideration merit and/or seniority (Snell and Bohlander, 2007: 439).
Despite profit-sharing’s advantages, the system does have potential shortcomings

and disadvantages. These include:
• Profits achieved by the organisation may have very little to do with employee
contribution and may be a result of economic conditions and other factors
• The organisation may make a loss during a year where employee contributions
have been very focused and high
• As profit-sharing payments are only made once a year this impacts negatively on
their motivational value. Furthermore, if payments are not possible for a number of
years this will negatively influence employee morale and productivity (Snell and
Bohlander, 2007:
439).
▪ Employee Stock Ownership Plans (ESOPs): Noe et al (2008: 541) point out
that Employee Stock Ownership Plans (ESOPs) are the most common employee
ownership plan. ESOPs enable employees to buy stock in the company by borrowing
against corporate assets. Participating employees can accumulate considerable wealth
when the company does well (Grobler et al, 2011: 420).

ESOPs are implemented on the assumption that employees who share ownership in a
company will be focused on its efficiency and profitability (Grobler et al, 2011: 420).
An example of a South African organisation that has implemented an ESOP is Foskor, a
producer of phosphates and phosphoric acid, which introduced the ESOP in April 2009,
granting employees’ ownership of a 6% stake in the company (CRF, 2011: 185). Another
example is that of Sasol’s Inzalo ESOP which was launched in 2008, and thus far 27,984 have
benefited from R320 million paid which this ESOP has paid in dividends (Mathews, 2011).
6.4.4. Executive Compensation

Given the critical and strategic nature of their role within an organisation, the compensation
of top level management generally differs from the compensation of middle level and lower
level management (Grobler et al, 2011: 421).
• Base Salaries form the centre of the executive compensation package, and it is
around this that all other incentives and benefits are structured.
• Annual Bonuses are tied to the performance of the company (or major division)
and usually comprise both stock payments as well as cash (Grobler et al, 2011: 422).

• Long-Term Incentives provide for the executives accumulation of wealth. Such

long- term incentives often take the form of share options and are included in
the remuneration package.
• Based on the principle that the executive is likely to make good decisions in the
interest of the company’s long-term performance if he/she has a personal stake in it
(Dessler et al, 2011: 443).
• Benefits and Perquisites (or ‘perks’) include motor vehicles, company dining
rooms, country club memberships, personal, legal and financial counselling, and
private use of the company’s plane (Grobler et al, 2011: 422). A popular perquisite
is that of the Golden Parachute which assures the executive of compensation should
his/her employment be terminated as a result of an acquisition, merger or demotion
Interestingly, a recent survey found that the average pay mix for CEOs comprised 16% basic
salary, 22% bonus and 62% long-term incentives (Dessler et al, 2011: 443).
When structuring a CEO’s remuneration package, it is essential that it is linked to performance

and that it is aligned to the overall company strategy, with the rule being “each pay component
should help focus the manager’s attention on the behaviours required to achieve the
company’s strategic goals” (Dessler et al, 2011: 446).
Both globally, and in South Africa, there is a considerable degree of dissatisfaction about the
large wage gap between executives and workers. Research in South Africa by the Labour
Research Service found that workers earning a low wage “would have to work 145 years
after 2009 to earn what an executive director earns in one year” (Steyn, 2011)
6.5. What are Employee Benefits?

Employee Benefits are an important component of compensation.
Definitions of employee benefits include:

▪ “Items in the total package offered to employees over and above salary that increase
their wealth or wellbeing at some cost to the employer” (Nel et al 2008: 297 – 298).
▪ “Indirect financial and non-financial payments employees receive for continuing their
employment with the company” (Dessler et al, 2011: 264).
▪ “An indirect form of compensation intended to improve the quality of work lives
and the personal lives of employees” (Snell and Bohlander, 2007: 448).
Employee benefits are important to both job seekers and employees and they have been found
to influence whether a job seeker accepts a position with a company, as well as whether an
employee decides to stay with a company (Noe et al, 2008: 561). Different job seekers and
employees look for different types of benefits, and therefore it is important that companies
regularly review the benefits which they offer. The motivational value of a benefits package is
determined by how it is designed and communicated.
Employee benefits first emerged in the 1930s as part of the USA’s legislative programme to
counteract some of the devastating effects of the Great Depression. In addition, wage and
price controls during World War II coupled with labour market shortages required that
employers find new ways to attract and retain employees. Employee benefits have
experienced tremendous growth since the 1930s, and continue to be motivated by the
cost advantage which organisations (representing large groups of employers) can realise
over individuals in, for example, the buying of insurance. Another reason for the growth
in employee benefits commonly used by employers of choice today is to provide unique
benefits as a means to differentiate themselves from their competitors and in so doing
attract and retain employees who “fit” with the organisational culture (Noe et al, 2008: 564).
6.5.1. Types of Employee Benefits

Employee benefits may be categorised into five key
types:
▪ Mandatory Benefits
▪ Retirement Benefits
▪ Leave
▪ Insurance
▪ Services

6.5.2 Mandatory Benefits

Mandatory benefits refer to the benefits that a company is required to provide to its
employees by law. In South Africa these benefits include Unemployment Insurance and
Compensation for Injuries and Diseases.
▪ Unemployment Insurance: The Unemployment Insurance Act of 2001 provides for

the provision of insurance to employees contributing to the fund against the risk of loss of
income as a result of loss of employment, pregnancy and illness (Nel et al, 2008: 298).
Unemployment benefits may not be claimed if an employee voluntarily resigned from
his/her job, but they may be claimed if an employee was dismissed, retrenched, or if
his/her work contract expires. The Act also makes provision for the payment of benefits to
dependents of deceased employees.
Employees contribute 1% of their salaries every month to the Unemployment Insurance

Fund (UIF) and employers also contribute an additional 1%, equivalent to the amount
contributed by the employee. Employees who have contributed to the UIF for four years or
more, may claim benefits for 238 days, with those who contributed for less than four years
may claim one day for every six days they have worked while contributing to the fund

▪ Compensation for Injuries and Diseases The Compensation for Occupational Injuries
and Diseases Act of 1993 provides protection to employees who have been injured or
contracted a disease during the course of carrying out their work for an employer (Dessler
et al, 2011: 466). Employers register with the Compensation Fund and pay annual
assessment fees.
6.5.3. Retirement Benefits
In South Africa, individuals are expected to provide for their retirement through personal
savings and/or private or state pensions. In order to have sufficient funds for retirement,
employees need to save 15% of their salary for 30 years and more (Dessler et al, 2011:
475).
Retirement planning can be complicated and may be marred by lay-offs and frequent
job moves. Many employees also focus their attention in funding their children’s education
and providing their families with a comfortable lifestyle, with retirement planning
unfortunately taking second place (Grobler et al, 2011: 427).
▪ Pension Plans “are financial programmes that provide income to individuals in

their retirement” (Dessler et al, 2011: 477), and they are regulated by the Pension Funds
Act and its amendments. Most organisations provide a pension fund towards which
employees contribute a percentage of their salary, a portion of which is usually subsidised
by the employer. Types of pension plans vary from company to company (Dessler et
al, 2011:477). There are two main types of plans:

• Contributory Plan where the employee and the employer share the cost of the
pension benefits; and
• Non-Contributory Plan where the costs of the pension plan for an employee are
financed entirely by the employer (Grobler et al, 2011: 427).
• Upon retirement, employees may receive up to a third of their pension in cash, with
the balance paid out in the form of pension.
▪ Provident Funds fulfil the same purpose of pension plans, but they are more flexible.
There are no limitations regarding age as well as how to withdraw the funds (Dessler et
al, 2011:
477). Upon retirement, employers are entitled to withdraw the entire benefit in cash.
▪ Retirement Annuities “have the same type of structure as pension funds but are
personal pensions” (Dessler et al, 2011: 478). Individuals use retirement annuities as
additional retirement funds (to for example supplement an existing pension plan) or as
a retirement fund in instances where an employer does not offer a pension or provident
fund.
However, the management charges for retirement annuities are usually significantly higher
than those for pension funds (Dessler et al, 201: 478).
6.5.4. Leave
While the Basic Conditions of Employment Act in South Africa specifies minimum requirements
which employers need to meet with respect to leave (time taken off of work by employees),
employers may choose to enhance their benefits offering to employees by providing more than
these minimum requirements.
South Africa’s Basic Conditions of Employment Act lays out basic requirements which South
African organisations need to comply with respect to paid time off (Nel et al 2008: 299). These
include:
• 21 days annual paid leave (vacation leave);
• Paid sick leave equal to the number of days the employee would usually work during
a period of six weeks within a 36 month period of employment;

• Four months maternity leave (unpaid);
• Up to three days paid leave for family responsibility (e.g. on the birth of a child; if
the
child is ill; and/or if a member of the employee’s immediate family dies).
In addition, employers are required to pay employees for public

holidays.
Employers may choose to provide more than these minimum leave requirements through, for
example:
• Providing employees with more than 21 days of annual paid leave (vacation leave);
• Providing employees with paid maternity leave (for example, ABSA provides
employees with four months paid maternity leave, effective from the day that they start
working for the organisation); and
• Providing a greater number of family responsibility leave days (for example, BHP
Billiton allows up to 6 days family responsibility leave, which is double the
mandated requirement of 3 days). (Dessler et al, 2011: 463 – 469).
6.5.5. Insurance
Many employers provide their employees with medical aid, as well as life and disability
insurance. The employers pay a portion of the insurance plan’s costs (Dessler et al, 2011:
472).
▪ Medical Aid
A recent survey found that 75% of employees found medical aid to be their most important
benefit (Dessler et al, 2011: 472). An employee’s contributions to medical aid vary depending
on the type of benefits they want from the plan. For example, a medical aid plan which covers
only hospitalisation will require lower contributions than a medical aid plan which covers
hospitalisation in addition to out-of-hospital health care (e.g. visits to the GP, dentists,
physiotherapist, etc.).

▪ Disability and Life Insurance

Large organisations often provide employees with group disability and life insurance,
which cover employees while they are in the employment of the company for death, disability
(temporary and permanent), dreaded disease and death of a spouse (Dessler et al, 2011: 472).
6.5.6 Employee Services

While retirement benefits, leave and insurance usually comprise the bulk of the benefits
package which employers offer to employees, employee services are also offered by certain
employers to facilitate employee commitment and retention.
Some of the employee services which organisations may offer are discussed
below.
▪ Personal Services for employees are provided by an increasing number of employers.

For example, Ericson SA provides car washing services, dry cleaning facilities and a gym
for its employees, while Siemens has set up its own ‘Trim Park’ with golf driving nets and
outdoor exercise equipment. Other personal services include parenting courses and a
restaurant for staff catering for three meals a day (Dessler et al, 2011: 481).

▪ Family Friendly Benefits are offered by certain companies to employees to help

them achieve greater work/life balance. Benefits offered include childcare, elder care,
fitness facilities and flexible work schedules. In a benefits survey conducted by SHRM, it
was found that 29% of employers provided childcare benefits and 55% offered
flexible-schedule working arrangements (Dessler et al, 2011: 482).
• Childcare Benefits: Companies providing childcare benefits seek to alleviate the

distractions which employees oftentimes experience in finding reliable and quality
childcare. Childcare benefits range from companies investigating and recommending
specific day-care facilities in the vicinity of the company to setting up a company sponsored
day-care facility on the company’s premises. Ernst and Young is an example of a
company that provides an onsite Homework Centre and a Kids Holiday Club in
December for the children of employees (Dessler et al, 2011: 482).
• Eldercare Benefits: Some companies recognise that just like caring for children can
impact an employee’s performance, so too can caring for an elderly relative. An example
of an eldercare programme is that of the Ford Motor Company which provides eldercare
referral services for its employees, involving the assessment of the aging relative’s
needs and recommendations as to the care which would be most suitable (Dessler et al,
2011: 482).
▪ Job-Related Benefits include transportation to and from work, housing subsidies, and
food services providing meals and snacks at relatively low prices.
▪ Educational Subsidies range from the company refunding employees’ tuition fees
for personal studies to financing development programmes (e.g. Executive Masters in
Business Administration) relevant to the organisation’s work (Dessler et al, 2011: 484).
▪ Executive Perquisites, also known as ‘Executive Perks’ are usually offered to the
top management within an organisation. They may range from the use of the company
plane, to private bathrooms and private dining rooms. Popular executive perks include
financial counseling to assist executives with their investments; relocation benefits
including the purchase of the executives existing house; subsidising the bond for the new
house and paying for the actual move; salary guarantees (golden parachutes) to protect

executives if the company is subjected to a merger or acquisition; company cars; legal

services; tax assistance; and generous expense accounts (Dessler et al, 2011: 484).

CHAPTER 7
LABOUR RELATIONS
• Discuss the origins of labour relations both globally and particularly in South Africa
• Differentiate between the various theories on labour relations
• Describe the tripartite relationship in employment relations.
• Discuss the role of the state in employment relations.
• Discuss the role of the employee and trade unions in employment relations.
• Discuss the role of the employer and employer organisations in employment relations.
• Describe the levels of law in South Africa
• Evaluate how the Constitutions protects Labour Relations
• Define common law
• Identify the different pieces of labour legislation in South Africa
• Outline the various aspects covered by the Labour Relations Act
• Describe the concept of freedom of association
• Analyse instances of both fair and unfair dismissal
• Understand strike action in South Africa
• Differentiate between disputes of right and disputes of interest with examples

7.2 THE ORIGINS OF LABOUR RELATIONS

Labour relations is a product of industrial relations, which has its roots in the industrial revolution
which created the modern employment relationship by spawning free labour markets and large-
scale industrial organisations with thousands of wage workers (Kaufmann, 2004). As society
wrestled with these massive economic and social changes, labour problems arose. Low wages,
long working hours, monotonous and dangerous work, and abusive supervisory practices led to
high employee labour turnover, violent strikes, and the threat of social instability.
During the Middle Ages, and before the start of the Industrial Revolution, labour was performed
for either the benefit of the family or for the benefit of the owner of the land and the community at
large in which the worker has lived, but it was mostly the latter.
This period was the onset of the Industrial Revolution or the Factory System which occurred
from the 18th to the 19th century where major changes in agriculture, manufacturing, mining and
transport had a profound effect on the socioeconomic and cultural conditions starting in the United
Kingdom, and then subsequently spreading throughout Europe, North America, and eventually
the world. The onset of the Industrial Revolution marked a major turning point in human history;
almost every aspect of daily life was eventually influenced in some way.
The impact and consequences of the Factory System were the feeling of dehumanisation of
workers. Workers found a new identity within the newly emerging working class and began to
organise themselves in supportive groups to voice their dissatisfaction of treatment from
employers and management. This become the era of Collective Bargaining.
Workers' groups have been around since the Middle Ages, in the form of professional guilds for
blacksmiths, carpenters, etc. These guilds established wage, product, apprenticeship, and
competition standards - many of which still exist today.
Workers began to agitate for more rights in their places of employment. Many skilled trades
started using their skills as bargaining tools to force their employers to meet their workplace
needs. Other workers relied on sheer numbers, creating general strikes to protest poor working
conditions. Several labour pioneers started to establish a collective bargaining system so that
labour negotiations could run more smoothly.

In organised labour/industrial relations, collective bargaining involves workers organising together

(usually in unions) to meet, discuss and negotiate upon the work conditions with their employers.
Such bargaining normally results in a written contract setting forth the wages, hours, and other
conditions which the parties agree on for a stipulated period (Kaufmann, 2004).
7.3. THE MAJOR THEORIES ON LABOUR RELATIONS
Unitarist
Pluralist
Marxist
The Unitarist Approach

This approach upholds that the organisation is a cohesive, unified unit comprising a common set
of values and goals subscribed to by all members. Authoritative management styles are accepted
as legitimate and the managerial prerogative is therefore rarely challenged.
In unitarism, the organisation is perceived as an integrated and harmonious system, viewed as

one happy family. A core assumption of unitary approach is that management and staff, and all
members of the organisation share the same objectives, interests and purposes; thus working
together, hand-in-hand, towards the shared mutual goals. Furthermore, unitarism has a
paternalistic approach where it demands loyalty of all employees. Trade unions are deemed as
unnecessary and conflict is perceived as disruptive (Venter and Levy, 2014).

The Pluralist Approach

In pluralism the organisation is perceived as being made up of powerful and divergent sub-groups,
each with its own legitimate loyalties and with their own set of objectives and leaders. In particular,
the two predominant sub-groups in the pluralistic perspective are the management and trade
unions.
Consequently, the role of management would lean less towards enforcing and controlling and
more toward persuasion and co-ordination. Trade unions are deemed as legitimate
representatives of employees, conflict is dealt with by collective bargaining and is viewed not
necessarily as a bad thing and, if managed, it could in fact be channeled towards evolution and
positive change (Venter and Levy, 2014).
The Marxist Approach
In contrast with pluralism, Marxism has the following central tenets:

• Organisations are all about wealth creation for the few – capitalism.
• Productive capacity and the fruits thereof must be owned and shared among the
people.
• The overthrow of capitalism through social revolution
• Trade unions are vehicles for fundamental societal change.
7.4. THE PARTIES IN THE TRIPARTITE RELATIONSHIP
Traditionally the labour relationship is described as a ‘tripartite relationship’. The parties to the
tripartite relationship are the state (government), the employer (represented by employer
organisations) and the employee (represented by unions). The primary parties to the employment
relationship are the employer and the employee, with the state being a secondary party to the
primary employer employee relationship.

THE STATE
The employee and the employer are the main parties to the employment relationship, the state is
a secondary partner and fulfils a regulatory and protectionist role (Bendix, 2010:11). However,
there is one instance where the state becomes a full partner in the employment relationship, and
that is when it also fulfils the role of employer in the public sector.
The State is made up of three parts:
Executive Judiciary
Legislature
• Executive: refers to the government made up of the elected political leaders

• Legislature: develops the legislation to regulate the employment relationship, for example, the
Labour Relations Act
• Judiciary: the courts that apply legislation for the employment relationship, for example,
the Labour Court and the Labour Appeals Court

How Does the State Regulate Employment Relations?

The South African state provides for the regulation of employment relations primarily through two
contributions:
• Including labour rights in the country’s Constitution, and ensuring the observance of these
rights through the development of a labour legislation (Kleynhans et al, 2011: 272); and
• Setting up the National Economic Development and Labour Council (NEDLAC) where
“employees, employers and the state regulate the employment relationship through
cooperating, negotiating and making decisions together” (Kleynhans et al, 2011: 272).
THE EMPLOYEE AND TRADE UNIONS

The employee is a primary party to the tripartite relationship. Employees are often collectively
represented by trade unions and so the employer-employee relationship is also frequently
referred to as the management-union relationship.
Origins of South African Trade Unions

Its role in dismantling apartheid legislation and practices in the workplace remain one of its major
achievements. During the apartheid era it succeeded in showing employers the benefits of
negotiating with employees through their representative unions. The fruits of these negotiations
included agreements on union recognition, wages, conditions of service, workplace restructuring
and retrenchments.
Trade unions are recognised in the Constitution, which provides for the right of workers to join
trade unions, and for unions to collectively bargain and strike. The Labour Relations Act has given
workers and their unions redress through mediation, conciliation and arbitration.
South Africa accepts that strong trade unions are necessary for effective collective bargaining,
which is an important way of regulating industrial relations and of determining workers' wages and
benefits.
Trade union representation is now an accepted facet of industrial practice. Almost all sectors of
the economy, including the public service, have representative unions which engage employers
over issues affecting their workforce.

All workers and active job seekers have the right to join and be active in trade unions. And they
are legally protected against discrimination by employers for being union members.
(http://www.southafrica.info/business/economy/policies/tradeunions)
7.5. LEVELS OF LAW IN SOUTH AFRICA
The Constitution of South Africa Act 108 of 1996 is the supreme law of the land. All other South
African legislation must be aligned to the principles outlined in the Constitution. With regards to
labour relations, the Constitution provides plain guidelines.
Section 23 of the Constitution is entitled Labour Relations. Section 23 of the Constitution makes
the following provisions:
• Everyone has the right to fair labour practice

• Every employee has the right to form and join a trade union; to participate in the activities
of a trade union; and to strike
• Every employer has the right to form and join an employers’ organisation; and to
participate in the activities of an employers’ organisation.
• Every trade union and every employers’ organisation has the right to determine its own
activities; to organise; and to form and join a federation
• Every trade union, employers’ organisation and employer has the right to engage in
collective bargaining
Chapter 2 of the Constitution deals with the Bill of Rights. In the years since the Constitution came
into force, our courts and our legal systems have had to consider the impact of these fundamental
and protected rights, some of which impact directly on labour law. In the context of a contract of
employment, for example, the constitutional right to fair labour practices may give employees
additional rights or it may even have the effect of changing harsh terms and conditions of
employment applicable between the employer and employee (Basson et al 2009).
Section 9 of the Constitution deals with equality. It provides for equality and freedom from
discrimination. This provides a framework for any discussion of employment equity, discrimination
in employment and even affirmative action.

Constitution
Labour Relations Act
Basic Conditions of Employment Act
Contracts of Employment
Common Law
Figure 3.1 Levels of Law in South Africa
As is evident in the above figure, the Constitution is followed by the Labour Relations Act, which
is superior to other labour laws such as the Basic Conditions of Employment Act and the
Employment Equity Act. Labour legislation also regulates the contract of employment which
details the relationship between employer and employee. The lowest level of law is the common
law.
As employment relations are based on the primary relationship of employer-employee, the

contract of employment is considered to be an important regulatory component of the employment
relationship and is also subject to labour legislation.
The contract of employment is the foundation of the relationship between an employee and his or
her employer. The contract of employment links the employee and employer in an employment
relationship, irrespective of the form that employment relationship takes. The existence of an
employment relationship is the starting point for the application of all labour rules (Basson et al
2009).

In addition to the usual requirements of a valid contract, that is:

1. The agreement must be lawful.
2. The contracting parties must have capacity to contract.
3. They must seriously intend to contract.
4. They must communicate their intentions to each other.
5. The agreement must be sufficiently certain in its terms.
6. The parties must be of the same mind as to the subject matter.
7. The contract must be possible to perform.
8. The agreement must comply with any formalities required for that type of contract.
Duties of the Employer

The employer has a number of duties arising from the contract of employment. Should the
employer neglect to comply with these obligations, he would be committing breach of contract
and the employee will then have certain remedies at his disposal.
The employer has the following duties:

• To accept the employee into his service.
• To provide the employee with work.
• To pay the agreed remuneration.
• To pay a quantum meruit (a reasonable sum of money to be paid for services rendered
or work done when the amount due is not stipulated in a legally enforceable contract).
• To provide safe working conditions.
• To comply with statutory duties.

The Employer’s Remedies
If the employer fails to comply with any of his obligations or fails to comply with them properly,
he is in breach of contract. The employee will then have certain remedies against the employer
at his disposal.
Remedies of the Employee

• Claiming specific performance.

• Claiming damages.
• Refusal to work.
• Statutory remedies.
The Employee’s Duties

A contract of employment creates (expressly or tacitly) the following obligations for the
employee:
• To make his personal services available.
• To “warrant” his competence and reasonable efficiency.
• To obey the employer.
• To be subordinate to the employer.
• To maintain bona fides.
• To exercise reasonable care when using the employer’s property.
• To refrain from misconduct.
The Employer’s Remedies

If the employee does not comply with his obligations, he is in breach of contract and the
employer will have the following remedies at his disposal:
• Summary termination (cancelation).
• Specific performance.
• Damages.
• Statutory remedies.
Termination of the Employment Contract

The contract of employment may be terminated in the following ways:
• By notice.

• By the conclusion of a specified period.
• By agreement.
• By death of the parties.
• By the insolvency of the parties.
• By the illness of the employee.
• By impossibility of performance.
• By cancelation (summary termination)
• Redundancy of a post.
• By completing a specific task.
Definition: Common Law

The common law is the set of laws not made by Parliament or any level of government. Crimes
like murder, theft and treason are part of the common law. The common law has developed
through the decisions of judges in the Courts. The Roman Dutch and English law brought by the
Dutch and British settlers is also part of the common law. The common law can be changed by
new decisions in the courts. The common law applies to everyone equally in the whole country.
But statutory law is stronger than common law. It is only when there is no statutory law about
something that the common law will apply.
Source: http://www.paralegaladvice.org.za/
Source: www.ccma.org
Task: Common Law
Research some examples of aspects governed by common law in your country. You may also
find a recent
7.6 article of a LAWS
EMPLOYMENT case of common law.
The following is an overview of the labour legislation in South Africa

• Labour Relations Act 66 of 1995
Applies to all workers and employers and aims to advance economic development,
social justice, labour peace and the democracy of the workplace.
• Basic Conditions of Employment Act 75 of 1997
Applies to all employers and workers and regulates leave, working hours, employment
contracts, deductions, pay slips, and termination.
• Compensation for Occupational Injuries and Diseases Act 130 of 1993
Workers who are affected by occupational injuries and diseases are entitled to
compensation.
• Employment Equity Act 55 of 1998
Applies to all employers and workers and protects workers and job seekers from unfair
discrimination, and also provides a framework for implementing affirmative action
• Occupational Health and Safety Act 85 of 1993
Aims to provide and regulate health and safety at the workplace for all workers.
• Skills Development Act 97 of 1998
Aims to develop and improve the skills of the South African workforce.
• Skills Development Levies Act 9 of 1999
Prescribes how employers should contribute to the National Skills Fund.
• Unemployment Insurance Act 63 of 2001
Provides security to workers when they become unemployed.

Compensation
for
Labour
Occupational
Relations Act
Injuries and
Diseases Act
Basic
Skills
Conditions of
Development
Employment
Levies Act
Act
Skills
Employment
Development
Equity Act
Act
Occupational
Unemployment
Health and
Insurance Act
Safety Act
Figure 3.2 Legislation Regulating the Employment Relationship

Task:
Briefly describe the purpose of each of the Acts of South Africa’s labour legislative framework.
Task:
Name the Act that should be consulted when:
o One wants to ensure that employees are not working longer than they should?
o An employee has been dismissed and is of the opinion that he was not treated fairly?
o An accident occurred at the place of work?
o An employee has requested maternity leave?
o HR wishes to draw up a recruitment and selection policy?
o The Department of Labour demands the organisation’s equity plan?
o Management seeks advice on payment for overtime?
o Gas emissions from the production process are being questioned by the union?
o The workforce is being downscaled?
o One is requested to draw up a programme for career management?
o Management wishes to make deductions from the wages of employees?
o An employee has an illness which, he says, was caused by conditions at the workplace?
o A union wants to gain access to employees during working time?
o The union has declared a dispute?
o A company wishes to implement skills programmes in the workplace?
7.6. THE LABOUR RELATIONS ACT
The Labour Relations Act was promulgated in 1995, with amendments being effected in 1996,
1998, 2000 and 2002. A further Labour Relations Amendment Bill was published on 17 December
2010.
The Labour Relations Act’s stated purpose is:

“The purpose of this Act is to advance economic development, social justice, labour peace and
the democratisation of the workplace by fulfilling the primary objects of this Act, which are-:
(a) to give effect to and regulate the fundamental rights conferred by section 27 of the Constitution;
(b) to give effect to obligations incurred by the Republic as a member state of the International
Labour Organisation;
(c) to provide a framework within which employees and their trade unions, employers and
employers' organisations can
i. collectively bargain to determine wa1ges, terms and conditions of employment and other
matters of mutual interest; and
ii. formulate industrial policy;
(d) to promote
i. orderly collective bargaining;
ii. collective bargaining at sectoral level;
iii. employee participation in decision-making in the workplace; and
iv. the effective resolution of labour disputes”
(Republic of South Africa, 1995: Section 1)
In terms of the scope of the Labour Relations Act, it applies to all employment relationships
between employers and employees, in both the public and the private sector (only the National
Defence Force, the National Intelligence Agency and the South African Secret Service are
specifically excluded). In the original publication of the Labour Relations Act, certain groups of
employees were excluded (such as domestic workers and farm workers). However, these groups
are now included (Nel et al, 2008: 87).
The LRA covers the following aspects:
• rights of employees to form and join a union

• rights of employers to form and join an employers' organisation
• the rights of trade unions in the workplace
• collective bargaining
• Bargaining Councils and Statutory Councils
• the establishment of workplace forums, which allow employees to participate in
management decisions at work
• what are fair and unfair labour practices

• procedures that must be followed for dismissals to be fair

• dispute resolution structures and procedures, including the Commission for Conciliation,
Mediation and Arbitration (CCMA)
• industrial action

Constitution and
Fundamental Rights
Labour Relations International

Nedlac
Act Conventions
Rights and
Promotion of
Obligationsof
Collective
Employees,Unions, Dispute Resolution
Bargaining and
Employers and and Labour Peace
Worker
Employer
Participation
Organisations
Commission for
Freedom of Collective Conciliation,
Association Agreements Mediation and
Arbitration (CCMA)
Organisational
Bargaining Councils Labour Court
Rights
Labour Appeals
Unfair Dismissal Statutory Councils
Court
Unfair Labour
Workplace Forums
Practice
Figure 4.1 Building Blocks of the Labour Relations Act

Strikes and
Lockouts (from Finnemore cited in Grobler et al, 2011: 495).

FREEDOM OF ASSOCIATION
While the Labour Relations Act provides employees with the right to freedom of association to
form, join and participate in the lawful activities of unions, employers are provided with the right
to form, join and participate in the lawful activities of employer organisations. The right to freedom
of association does not only extend to existing employees, but also to applicants seeking
employment. This implies that an employer may not refuse to appoint a job applicant purely on
the grounds that he / she belongs to a union and / or has participated in union activities previously
(Grobler et al, 2011: 496).
Freedom of association essentially means:
• Every employee has the right to form

and join a trade union, to participate in
the activities of the trade union, and to
strike.
• Every employer has the right to form
and join an employer’s organisation,
and to participate in the activities of
the orgnisation.
• Every trade union and employer’s
organisation has the right to
determine its own administration,
programmes and activities, and to
form and join a federation.
• Every trade union, employer’s organisation and employer has the right to engage in
collective bargaining.

STRIKES AND LOCKOUTS
While employees have the right to strike, employers have the right to lockout. Both strikes and
lockouts are considered to be essential tools for collective bargaining.
Definitions:
Strike
Means the partial or complete concerted refusal to work, or the retardation or obstruction of
work, by persons who are or have been employed by the same employer or by different
employers, for the purpose of remedying a grievance or resolving a dispute in respect of any
matter of mutual interest between employer and employee, and every reference to “work” in this
definition includes overtime work, whether compulsory or voluntary.
Lockout
The exclusion by an employer of employees from the employer’s workplace, for the purpose of
compelling the employees to accept the demands in respect of any matter of mutual interest
between employer and employee. This is whether or not the employer breaches those
employees’ contracts of employment in the course of or for the purpose of that exclusion.
Picketing
A picket is a statement which takes place where striking employees and/or their supporters
station themselves at or near the place of work and attempt to persuade other parties such as
non-strikers, customers and suppliers of the employer not to enter the premises, not to work or
do business with the employer

For a strike to be protected, the following procedure must be followed:
• The issue in dispute must be referred to the CCMA or a bargaining council

• If the dispute remains unresolved after a 30 day period or after attempts have been
made to resolve the strike a certificate is issued;
• Extension on the 30 days may be obtained;
• The representative trade union must give the employer 48 hours notification of the
intention to strike and in the case of government departments 7 days notice;
• If the bargaining council issues the certificate the notice must be served to the
employer’s organisation;
• The employees may embark on a protected strike.
Strikes are unprotected when:
• The procedural provisions of the Act have not been complied with
• They are essential service employees
Types of Strikes
Employees’ refusal to work takes various forms:

• Complete Refusal to Work: this is what is generally understood to be a strike and occurs
when employees completely refuse to perform their jobs.
• Partial Refusal to Work: in this form of strike, employees perform some of their duties but
refuse to perform others.
• Retardation of Work: there are two forms of strike involving retardation of work, the ‘go-
slow’ and the ‘work-to-rule’. During ‘go-slow’ strikes employees continue to work but at a
much slower pace. During ‘work-to-rule’ strikes employees work strictly according to their
employment contracts and refuse to do nothing more than that which is stated in their
contract.

• Obstruction of Work: during obstruction of work strikes employees continue to work, but
they do things to obstruct production, such as loading trucks in a way that causes them to
be delayed (Dessler et al, 2011: 542).
Task:
Comment on the infographic below.
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South Africa’s Most Disastrous Strike: Platinum belt Strike
Five months of striking in South Africa’s platinum belt have brought South Africa’s economy to
its knees, and platinum mineworkers will never recover from the five-month strike in the
platinum mining sector, says SA Communist Party general secretary Blade Nzimande.
The Association of Mineworkers and Construction Union (Amcu) embarked on a strike at

platinum mines on January 23 for a R12 500 monthly salary, which only ended on June 23 with
an agreement that provides for a R1 000 increase for the first three years for the two lowest
bands of categories. Other categories will receive between 7.5% and 8%, while benefits and
allowances will be fixed or rise with inflation.
“The strike was disastrous, and workers will not recover from the five months lost,” Nzimande
said.
This infographic represents a timeline of strike-related events in South Africa’s platinum belt,
from the tragic events at Marikana in 2012 to the end of the most recent wage-related strike in
2014.
What is your opinion on the infographic below?
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DISMISSALS
Unfair Dismissals and Unfair Labour Practice
Chapter 8 of the Labour Relations Act deals with unfair dismissal, as does Schedule 8: The Code
of Good Practice on Dismissal (Nel et al, 2008: 101). The Act specifically states that every
employee has the right not to be unfairly dismissed.
The Labour Relations Act identifies specific dismissals which are regarded to be automatically
unfair. These include instances where:
• Employees are dismissed as a result of their membership of a union (this is a breach of
freedom of association);
• Employees are dismissed as a result of their participation in a protected strike;
• Employees are dismissed because the employee became pregnant, or expressed their
intention to become pregnant; and
• Employees are dismissed as a result of unfair discrimination on the part of the employer
(e.g. on the grounds of race, gender, religious beliefs, age, marital status, language,
culture, family responsibility, political opinion and disability)
Dessler et al (2011: 551) points out that “unfair labour practice is a concept that has been
recognised in labour law internationally for a long time, but was only recognised in South Africa
for the first time in 1979.”
The definition which the Labour Relations Act provides for ‘unfair labour practice’ is a closed
definition. This means that only the unfair labour practices specified in the Act are recognised
(Dessler et al, 2011: 551). These include unfair conduct regarding:
• Promotions and demotions;

• Employees on probation;
• The provision of benefits to employees;
• The training of employees;
• Suspension of employees;

• Disciplinary action;
• The failure or refusal to reinstate a former employee for which there was an agreement of
reinstatement;
• Occupational detriment experienced by an employee as a result of making a protected
disclosure (i.e. the disclosure of information about an employer or another employee which
is protected under the Protected Disclosure Act).
In all the above instances it would need to be proven that the conduct was unfair (Dessler et
al, 2011: 552).
The Labour Relations Act specifies that dismissal includes:

• dismissal for misconduct (e.g. drunkenness, theft, insubordination, assault, failure to come
to work)
• dismissal for incapacity of the worker (e.g. poor work performance)
• dismissal for operational requirements (e.g. retrenchments stemming from poor company
performance) (Dessler et al, 2011: 550).
Incapacity
Operational
Misconduct
requirements
Dismissal

Dismissal for the above reasons may either be fair or unfair, and both the reason for the dismissal
as well as the procedure that was followed in dismissing the employee needs to be given attention.
For example, if an employee comes to work inebriated on a number of occasions and is dismissed
for this reason, the dismissal may be considered potentially unfair if the organisation’s disciplinary
code did not state that workers need to be sober at work. The dismissal could also be considered
unfair if other workers’ drunkenness was tolerated and overlooked, but one particular worker was
singled out and dismissed for drunkenness.
The procedure that was followed in dismissing a worker will also determine whether the dismissal
was fair or unfair. The Labour Relations Act provides the following guidelines to ensure procedural
fairness in dismissals:
o The employer needs to first conduct an investigation into whether there are grounds for
dismissal of an employee (Dessler et al, 2011: 550).
o The employer should provide the employee with notice of the charge against him / her and
inform him / her that an investigation will take place.
o The employee should be given sufficient time to prepare a response to the charge.
o The employee may be represented by a colleague or a union representative at the investigation
hearing.
o An independent third party should chair the investigation hearing. The chair should decide
whether the employee is guilty and whether he / she should be dismissed.
o The employer must communicate the decision made to the employee. If the decision is
dismissal, the employer must inform the employee of the reasons for the dismissal
Dismissal for Misconduct
The law is clear on what constitutes gross misconduct. Examples include purposely damaging
the employer's property or endangering the safety of others, physically assaulting the employer,
a colleague or a client, gross insubordination and gross dishonesty.
"Misconduct" can be defined as conduct on the part of the worker which shows wanton disregard
of an employer’s interest that it deliberately violates those standards of behaviour which the
employer has the right to expect of his employee.

"Misconduct" can also be negligence. If the worker is negligent to such a degree, or if his
negligence recurs to such an extent, that it shows culpability, wrongful intent, or evil design, or
shows an intentional disregard of the employer’s interests, then it may be misconduct.
On the other hand, mere inefficiency, or unsatisfactory conduct, or failure to perform up to

employer expectations which the worker cannot meet, inadvertent mistakes, ordinary isolated
instances of behaviour, or good faith errors in judgment, are not considered as "misconduct".
There is a simple test you can apply to determine whether an employee is guilty of misconduct.
You must be able to show that:
1. The accused employee did in fact commit the misconduct

2. The employee knew or should have known that the conduct was an infringement of your
rules
3. The rule or standard was valid or reasonable
4. The rule was consistently applied
5. The misconduct was serious enough to merit the harsh penalty of being fired
(Adapted from: http://southafrica.smetoolkit.org/)
Dismissal for Incapacity
The Code of Good Practice in Chapter 8 of the Labour Relations Act 1995 (LRA), distinguishes
between incapacity in the form of poor work performance and incapacity as a result of ill health
or injury.

Poor Work Performance
A situation of poor work performance arises where an employee does not meet the performance
standards or level of competence required by an employer. The poor work performance may be
a result of the employee not having the necessary skills or qualities to perform the tasks expected
of him/her effectively.
Ill Health or Injury
Dismissal of an employee who is not able to perform his/her functions due to ill health or injury
will be fair, provided that there is a fair reason for the dismissal (substantive fairness) and fair
procedures are followed in implementing the dismissal.
Poor Work Performance Ill health or Injury

e.g. – Intermittent illness – physical incapacity
e.g. -Incompetence – lack of skill or knowledge
– long term illness – alcohol or drug addiction
- Incompatibility –carelessness – Inaccuracies
– serious or contagious disease – injury –
– incomplete work – poor social skills – Failure
mental illness – continuous or intermittent
to comply with reasonable standards
absenteeism due to illness.
(Adapted from www.bregmans.co.za)
Dismissal based on operational requirements
All the steps of Section 189 of the LRA must be followed. Quite obviously, the reason for the
retrenchments must be based on the restructuring or resizing of a business, the closing of a
business, cost reduction, economic reasons – to increase profit, reduce operating expenses, and
so on, or technological reasons such as new machinery having replaced 3 employees and so on.
Re-designing of products, reduction of product range and redundancy will all be reasons for
retrenchment.
The employer, however, must at all times be ready to produce evidence to justify the reasons on
which the dismissals are based.

The most important aspects of procedural fairness would be steps taken to avoid the
retrenchments, steps taken to minimise or change the timing of the retrenchments, the
establishing of valid reasons, giving prior and sufficient notice to affected employees, proper
consultation and genuine consensus-seeking consultations with the affected employees and their
representatives, discussion and agreement on selection criteria, offers of re-employment and
discussions with individuals.
THE NATURE AND SCOPE OF LABOUR DISPUTES
A labour dispute is a dispute that arises between employers and employees, or employers and
the unions. Generally, the topics of these disputes are issues that are normally regulated by both
the employer and his/her employees.
Definition
A LABOUR DISPUTE is “a continued disagreement between employers
and employees or their unions as regards any matter of common
interest , any work-related factor affecting their relationship, or any processes and structures
established to maintain such relationship” (Bendix 2010:611).
Disputes can arise from many factors, including:
• Failure to agree to the formation of a relationship
• Disagreement over procedures that may be implemented
• An inability to agree on the terms and conditions of employment
• Refusal to keep to the terms of agreements
• Refusing to accept the rights of either party
• One party treating another party poorly
• Any action or incident that would negatively impact on the employment relationship
In the definition of the labour dispute, ‘continued’ is central – a grievance or demand does not
have to be simply raised for it to be considered a labour dispute. If there is no mutual agreement

on a demand, or if grievances are not settled in a way that satisfies both parties, then only will a
dispute arise. A dispute only occurs if previous attempts at negotiation did not achieve any
resolution. The dispute is central to a collective bargaining or negotiation process. A labour
dispute can lead to legal action or strikes. The process of negotiation will however, always
continue. Therefore, before a dispute begins there is negotiation, and after a dispute has been
established there is still negotiation.
Bhorat et al (2007:4) outlines the structure of the dispute resolution system in South Africa:

TYPES OF LABOUR DISPUTE
A dispute can either be a dispute of right or a dispute of interest (Bendix, 2010).
Disputes of Right
A dispute of right in the workplace is a right that has been established and set down by the law,
by contract, by an agreement or by practice. In the labour relationship, rights are established by
the common law, by labour legislation, by contract terms, by legally binding agreements, or by
practices that have become a custom in the workplace.
Disputes of right are generally about:
• The failure of one party to follow the terms on the contract of employment
• Failure to apply legal conditions and procedures, for example, those in the Basic
Conditions of Employment Act – minimum working hours, prescribed notice periods,
overtime pay
• Failure to carry out the terms of a legal environment
• Failure to implement an arbitration award or wage determination
• Violating a legal determination, for example, forbidding victimisation or hindering freedom

of association
• Disobeying common law
• Changing accepted or traditional practices
• Unfair dismissals and unfair labour practices
Disputes of Interest
A dispute of interest is a dispute that is about an issue that a person would like to be entitled to,
but is not as yet set down by a law, agreement or custom (Bendix, 2010). For instance, by law, a
person may be entitled to two weeks leave per year, but feels he should be granted four weeks
leave per year. Therefore, this would be a matter of interest that the employee or his/her union

will negotiate with the employer. If the employer agrees and the new terms are included in a
contract or collective agreement then the issue of interest would become a right.
Food for Thought: “Employment Law - Dispute of Rights v Dispute of Interest”
In the case of Polokwane Local Municipality vs SALGB and Others (2008) 8 BLLR
783, this issue was brought to light.
The facts of this case were that the employee had been employed since 1992 as a
Chief Clerk. In 1999 she applied to have her post upgraded due to the fact that there had been a gradual
addition of her responsibilities to her post over the years. A more senior post was created, one of the
requirements of which was a B. Com degree which the employee did not have. Although she was
shortlisted for the position it was awarded to someone else.
The employee then objected that the employer had failed to upgrade her position and had failed to pay
her an allowance for performing duties allocated to the higher position. The arbitrating commissioner
agreed with the employee and held that the employer had committed an unfair labour practice.
The matter was however taken on review to the Labour Court which set aside the commissioner's
findings. The court drew the distinction between a dispute of right and a dispute of interest. A dispute of
right concerns the infringement, application of or interpretation of an existing rights contained in a contract
of employment. A dispute of interest however involves the formulation of new rights such as higher
wages. Disputes of rights are resolved by adjudication whereas disputes of interest are resolved by
means of negotiation and industrial action if necessary.
The court found that in demanding that her position be upgraded the employee was seeking to
create a new right through adjudication. The commissioner did not therefore have the jurisdiction to
arbitrate the matter.
Source: Adapted from Kwa Zulu-Natal Master Builders Association

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DISPUTE SETTLEMENT PROCEDURES
Establishing Procedures
It is generally the employers, employees, and their unions who decide on what procedures must
be followed should a dispute arise. Procedures often detail the following:
• The ways in which disputes are declared – giving a notice to the other party, and stating
whether or not declarations of disputes should be verbal or in writing
• A time limit to reply to the claims or allegations that have been made by the first party
• Arranging negotiation meetings to try and reach settlements
• Time limits for negotiation – for example, if processes of negotiation do not reach a
settlement in two weeks, then parties can move to other measures, for instance,
strikes/lockouts
• Methods of dispute settlement that may be used by parties, for instance, mediation or
arbitration
• If a distinction will be made between a dispute of right and a dispute of interest, and if so,
whether or not different settlement procedures will be used in each type of dispute
• Whether dispute settlement mechanisms set up by the government will be used as a final
option, or whether parties will resort to legal action
• Whether a right to strike or lockout is allowed, if it is legally allowed, what are the limitations
and the precautions set. For instance, an employer may agree not to dismiss illegal strikers
before a certain period of time, or a union may decide to remove illegal strikers from the
employer’s place of work.
Dispute settlement procedures are private, plant-level or bargaining level procedures. If there is
no procedure, parties may immediately make use of established government mechanisms to
settle labour disputes.
The role of the State in labour disputes
The State plays an important role in the conduct and settlement of labour disputes. The aim of
the State in labour disputes is to preserve industrial peace and promote the interest of the general

public. Therefore, the State will support negotiation processes, even after the dispute has
occurred, and will provide a dispute procedure for this. This procedure will attempt conciliation in
order to reach a compromise between both parties. The State can also enforce limits in relation
to the freedom to strike and may also, in some cases, forbid strike action, and necessitate
arbitration.
DISPUTE SETTLEMENT IN TERMS OF THE LABOUR RELATIONS ACT OF 1995
The Labour Relations Act (LRA) maintained most of the dispute settlement procedures pre-1995.
However, it did make an effort to hasten the dispute settlement process. It also tried to lessen the
burden of the Labour Court (formerly known as the Industrial Court) by firstly, making a
differentiation between unfair dismissals and unfair labour practices, and secondly, referring most
of these to mediation and arbitration by the Commission of Conciliation, Mediation and Arbitration
(CCMA) or by bargaining councils. The CCMA replaced the former conciliation boards, and was
created for the purpose of providing help in the conduct of labour relations and acting as a dispute
settlement mechanism. The Labour Court was given superior status and was only allowed one
level of appeal at the Labour Appeal Court.
DISPUTES CONCILIATED BY THE BARGAINING COUNCIL OR CCMA
Type of Dispute Route if unresolved

Freedom of association (freedom from
To Labour Court
victimisation)
Dispute of interest in essential services Arbitration by Council or Commission
Dismissals relating to incapacity,

Arbitration by Council or Commission
incompetence or misconduct
Automatically unfair dismissals To Labour Court
Dismissal for participating in unforced strike

To Labour Court
for reasons relating to a closed shop
Dismissals relating to reason for
To Labour Court
retrenchment
Unfair labour practices (excluding
discrimination)
Arbitration by Council or Commission

Unfair labour practices entailing

To Labour Court
discrimination
Strike action (excluding disputes regarding a
Interest disputes
refusal to bargain)
Source: Adapted from Bendix (2010)
DISPUTES CONCILIATED ONLY BY THE CCMA
Type of Dispute Route if unresolved
Organisational rights Arbitration by CCMA
Collective agreements (interpretation and

Arbitration by CCMA
application where no agreed procedure)
Closed-shop agreements and agency shop
Arbitration by CCMA
agreements
Advisory Arbitration by CCMA – then
Disputes relating to refusal bargaining
possible strike action
Request for picketing agreement Determination by CCMA
Breach of picketing agreement or refusal of

To Labour Court
right to picket
Determination by Statutory Councils To Labour Court
Application and interpretation of law

regarding organisational rights and To Labour Court
bargaining councils
Workplace forums Arbitration by CCMA
Source: Adapted from Bendix (2010)

DISPUTE RESOLUTION INSTITUTIONS
The key institutions which were created to address disputes include:

Commission for
Labour Appeal Conciliation,
Court Mediation and
Arbitration
Bargaining and
Labour Court Statutory
Councils
Private
Agencies
Commission for Conciliation, Mediation and Arbitration (CCMA)

The CCMA is a governing body that comprises representatives from unions, employers and
government. The CCMA and related functions will be discussed in detail in the next chapter.
Bargaining and Statutory Councils

This has been discussed above
Private Institutions
May be accredited as private dispute resolution agencies by the CCMA (Dessler et al, 2011: 545).
The Labour Court and the Labour Appeals Court

These are courts of law and were established by the Labour Relations Act to address specific
issues which the Labour Relations Act and other legislation determines should be referred to
them.
According to Slabbert and Swanepoel (2008:63) the labour court (LC) is a higher court and its
decisions are equal to those of a higher court regarding matters within its jurisdiction. The court
may:
Issue any appropriate court order within any procedures in terms of the LRA regarding:
• Granting of interim relief;
• An interdict/prohibition;
• A court order in respect of the performance of any act which will rectify an injustice and
execute the primary objective of the Act;
• A declaratory order;
• The granting of compensation in line with LRA;
• The granting of damages in line with LRA;
• A court order for the payment of costs or for the fulfilment of stipulations in LRA;
• Execute any settlement agreement, except collective agreement or arbitration decision;
• Request the commission to lodge an investigation that will assist the court;
• Settle a dispute between registered TU or registered employer’s organisation and one of

its members about alleged disregard of the organisation’s constitution
• Revise any decision or act of the State in its capacity as employer, on the basis allowed
by law
• Hear appeals in terms of Occupational Health and Safety Act

The Labour Appeal Court (LAC) has jurisdiction to:

• Hear and rule on appeals against final sentences or final orders of the Labour Court
(LC);
• Make decisions about questions arising from procedures which were followed in LC and
which were left to LAC;
• They have authority to hear an appeal through hearing further evidence or to refer a
matter back to LC.
• To confirm, adapt or set aside a sentence or court order against which the appeal is
lodged and to issue any sentence or court order demanded by the circumstances.
Task: Labour Court

Find a recent ruling made by the Labour Court in South Africa and summarise the decisions
made by the court.

BIBLIOGRAPHY
Cascio, W. (2003). Performance Management. Managing Human Resources. Fifth
International Edition. US: Irwin/McGraw-Hill Publishers.
Erasmus, B.J., Loedolff, P.V.Z., Mda, T.V. and Nel, P.S. (2012). Managing Training and
Development. Sixth Edition. South Africa: Oxford University Press.
Filipczak, B. (199). "Putting the Learning into Distance Learning." Training, 32 (10),111-
118.
Fasset (2010). The Role of the SDF and New Developments in Skills Development.
Accessed from:
http://www.fasset.org.za/downloads/events/SDF_May_2010_Article_2010_Final.pdf
Gailbraith, D.D. and Fouch, S.E. (2007). “Principles of adult learning.” Professional
Safety, 52 (9), 35-40.
Gordon, J., and Zemke, R. (2000). The attack on ISD. Training, 37(4), 42-53.
Grobler, P.A. and Warnick S., M.R. Carrel N.F., Elbert, and Hartfierd, R.D. (2006).
Human Resource Management in South Africa. (2nd ed). UK London, Cornwall Institute
of Management.
Grobler, P., Wärnich, S., Carrell, M.R., Elbert, N.F. and Hatfield, R.D. (2011). Human
Resource Management in South Africa. Fourth Edition. UK: Cengage Learning.;
Kirkpatrick, D. (2010) “The Four Levels Are Still Relevant.” T + D. 64 (9), 16.
Kleynhans, R., Markham, L., Meyer, W., Van Aswegen, S. with Pilbeam, E. (2006)
Human Resource Management: Fresh Perspectives. Cape Town: Pearson Education
South Africa.

Lawson, K. (2008). The Trainer’s Handbook. Second Edition. UK: Pfeiffer.
Nel, P.S., Werner, A., Haasbroek, G.D., Poisat, P., Sono, T. and Schultz, H.B. (2004)
Human Resources Management. Sixth Edition. Cape Town: Oxford University Press
Southern Africa.
Human Resources Management. Seventh Edition. Cape Town: Oxford University Press
Human Resources Management. Eighth Edition. Cape Town: Oxford University Press
Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M. (2008) Human Resource
Management: Gaining a Competitive Advantage. Sixth Edition. Boston: McGraw-Hill
Irwin.
Snell, S. and Bohlander, G. (2007) Human Resource Management. Mason: Thomson.
Warnich, S., Carrell, M.R., Elbert, N.F. and Hatfield, R.D. (2015). Human Resource
Management in South Africa. Fifth Edition. UK: Cengage Learning.
A. LAW
The Constitution of the Republic of South Africa

Labour Relations Act 66 of 1995
Basic Conditions of Employment Act 75 of 1997
Employment Equity Act 53 of 2003
Unemployment Insurance Act 63 of 2001

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HUMAN RESOURCE AND LABOUR RELATIONS MANAGEMENT

BACHELOR OF COMMERCE (HONOURS)

HUMAN RESOURCE AND LABOUR

REGENT Business School

BACHELOR OF COMMERCE HONOURS 0

Chapter 1: Introduction to Human Resource Management 8

Chapter 2: SHRM and Job Design 27

Chapter 3: Recruitment and Selection 43

Chapter 4: Training and Development 69

Chapter 5: Performance Management 116

Chapter 6: Compensation Management 143

Chapter 7: Labour Relations 167

BACHELOR OF COMMERCE HONOURS 1

2. Structure of this Study Guide

Provides an overview of the Study

1. Introduction to HRM This part of the Study Guide details

BACHELOR OF COMMERCE HONOURS 2

3. Structure of each Section

BACHELOR OF COMMERCE HONOURS 3

3.2 Specific Outcomes and Chapter Alignment

PROGRAMME SPECIFIC OUTCOMES SPECIFIC OUTCOME ALIGNMENT

BACHELOR OF COMMERCE HONOURS 4

3.3 Specific Outcomes and Assessment Criteria

PROGRAMME SPECIFIC OUTCOMES ASSESSMENT CRITERIA: Student must have

SO 4: Evaluate organisational recruitment and Evaluated the importance of recruitment and

BACHELOR OF COMMERCE HONOURS 5

pieces of legislation impacting on skills

3.4 Essential (Prescribed) Reading

BACHELOR OF COMMERCE HONOURS 6

3.5 Brief Overview of Relevant Theory

3.6 Questions for Reflection

BACHELOR OF COMMERCE HONOURS 7

1.1. LEARNING OUTCOMES

After completing this chapter, students should be able to:

• Understand the basic concepts of human resource management (HRM).

BACHELOR OF COMMERCE HONOURS 8

BACHELOR OF COMMERCE HONOURS 9

1.3. WHAT IS HUMAN RESOURCE MANAGEMENT?

BACHELOR OF COMMERCE HONOURS 10

1.4. THE NATURE OF HUMAN RESOURCE MANAGEMENT

BACHELOR OF COMMERCE HONOURS 11

1.5. THE SCOPE OF HUMAN RESOURCE MANAGEMENT

BACHELOR OF COMMERCE HONOURS 12

e) Organisational Development: This is an important aspect whereby “Synergetic effect” is

BACHELOR OF COMMERCE HONOURS 13

g) Employee Assistance: Each employee is unique in character, personality, expectation and

1.6. OBJECTIVES OF HUMAN RESOURCE MANAGEMENT

2) Organisational Objectives: it recognizes the role of HRM in bringing about organisational

BACHELOR OF COMMERCE HONOURS 14

3) Functional Objectives: is to maintain the department’s contribution at a level appropriate to

4) Personnel Objectives: it is to assist employees in achieving their personal goals, at least as

HRM Objectives Supporting Functions

1.7. FUNCTIONS OF HUMAN RESOURCE MANAGEMENT

BACHELOR OF COMMERCE HONOURS 15

cultural/geographic, political, and social—significantly affect how HR functions are designed,

• Strategic HR Management: As a part of maintaining organisational competitiveness, strategic

• Equal Employment Opportunity: Compliance with equal employment opportunity (EEO)

BACHELOR OF COMMERCE HONOURS 16

Performance appraisal includes encouraging risk taking, demanding innovation, generating or

BACHELOR OF COMMERCE HONOURS 17

1.8. CURRENT CLASSIFICATION OF HR ROLES

BACHELOR OF COMMERCE HONOURS 18

BACHELOR OF COMMERCE HONOURS 19

3. Strategic Role for HR