Entrepreneurship Basics

Human Resource Management only Study Guide for
for Entrepreneurs ETP2602
Department of Entrepreneurship, Supply Chain,

Transport, Tourism and Logistics Management
University of South Africa, Pretoria

© 2017 University of South Africa
All rights reserved
Printed and published by the

University of South Africa
Muckleneuk, Pretoria
ETP2602/1/2018
70508267
InDesign
MNB_Style
CONTENTS
Page
PREFACE iv
Topic 1: Foundations of human resource management 1
Introduction to human resource management 2
Topic 2: Employment and onboarding 9

Talent planning and recruitment 10
Selection 23
Induction and socialisation 29
Remuneration and reward 36
Topic 3: Talent management 45

Employee development and career management 46
Performance management 54
Diversity management and retention 61
Topic 4: Behavioural aspects of human resource management 69

Motivation 70
Leadership 80
Groups and teams 90
Change management 99
Topic 5: Labour legislation 109

Laws impacting on human resource management 110
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PREFACE
1 FOREWORD
Dear student
We have pleasure in welcoming you to the module Entrepreneurship II: Module 2: Human
Resource Management for Entrepreneurs (ETP2602). We that you will find it a rewarding
and interesting area of study and appreciate the undeniable value of managing human
resources from an entrepreneurial perspective.
This module will be presented online and all your study material will be available on
myUnisa. You are therefore encouraged to visit the myUnisa site and create your myLife
account. Once you have a myLife account you will be able to register and login to the
myUnisa site. Remember that you can only access your study material on myUnisa if you
are a registered student for the module and once you have created your myLife account.
2 MODULE-RELATED RESOURCES
Prescribed book
You cannot complete this module successfully without the prescribed book. This book
is not included in your study pack and you need to buy it. Your prescribed textbook for
this module for this semester is:
Nel, P.S., Werner, A., Botha, C., du Plessis, A., Mey, M., Ngalo, O., Poisat, P., and van
Hoek, L. 2014. Human Resource Management. 9th edition. Cape Town: Oxford
University Press.
(ISBN 978-0-19-905840-2).
Please refer to the list of official booksellers in the my Studies @ Unisa brochure.
Which parts of the prescribed book must I study?
Topic Study unit Chapter
Topic 1 Study unit 1

Foundations of Human Introduction to Human Chapter 1
Resource Management Resource Management
(iv)
Study unit 2
Chapter 3
Planning and recruitment
Study unit 3
Chapter 4
Topic 2 Selection
Employment and onboarding Study unit 4
Chapter 5
Induction and socialisation
Study unit 5
Chapter 6
Remuneration and reward
Study unit 6
Development and career Chapter 8
management
Topic 3
Study unit 7
Talent management Chapter 9
Performance management
Study unit 8
Chapter 10
Diversity and retention
Study unit 9
Chapter 11
Motivation
Study unit 10
Topic 4 Chapter 12
Leadership
Behavioural aspects of human
resource management Study unit 11
Chapter 13
Groups and teams
Study unit 12
Chapter 15
Change management
Study unit 13
Topic 5
Laws impacting on human Chapter 2
Labour legislation
resource management
3 MODULE-SPECIFIC STUDY PLAN

Since this is only one of many modules you might be registered for, you will have to
schedule and plan your time this year in order to complete this diploma successfully.
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We all have different learning styles and preferences. However, consider the following
guidelines:
• Allocate time to work through each workbook and study unit and to do the activities.
• Allow extra time for work that seems difficult or with which you know you have a
problem.
• When you compile a study plan, allow time for personal responsibilities (e.g. family
responsibilities, work obligations, social obligations, leave).
• Make use of your most productive time for study (e.g. late evening after the children
have gone to bed or early morning before the rest of the family wake up).
• Remember that it is more effective to study for one hour on a regular basis (e.g. every
day) than for ten consecutive hours every two weeks. Decide now how many hours
you are going to spend on your studies per week. We recommend that you put one
to two hours aside each day.
• Keep a record of your progress. It will be gratifying to see what you have accomplished,
and it will inspire you if you fall behind. Be prepared for disruptions to your study
programme due to unforeseen circumstances. You should therefore monitor your
progress so that you can catch up immediately if you fall behind. Remember that it is
easier to catch up the lost hours of one week than the time you lost during an entire
month.
• Examination dates are subject to change, which means that you will have to adapt
your study plan accordingly if any changes occur.
• The textbook provides the framework of what we will cover during the semester. Work
through it from the beginning, one chapter at a time.
The following is a recommended time schedule which can be used as a guideline for
studying this module:
Activity Hours
Reading of relevant chapters in the prescribed book 40
Completing the activities in the prescribed book 10
Completion and submission of assignments 10
Studying the relevant chapters in the prescribed book 50
Final revision 10
Total time spent on the module 120
You can also use the electronic schedule on myUnisa or the study plan document in the
brochure My Studies @ Unisa to compile a comprehensive plan for all your modules if
you prefer. Your approach to this module should start with understanding the learning
outcomes. You will also need to master the key concepts listed in the prescribed textbook
to achieve the learning outcomes for this module.
(vi)
4 ICONS
As you work through this study guide, you will see that we make use of a number of icons.
We have provided a list of these icons and a brief explanation of each one below – keep
this in mind when working through the study guide. We have listed these in alphabetical
order.
Icon Description
Learning outcomes. The learning outcomes indicate what aspects

of the particular topic or learning unit you have to understand. You
should be able to demonstrate your understanding.
Study. This icon indicates the relevant sections of the prescribed

book or the study guide that you need to study and internalise.
Key concepts. The key concepts indicate which terms or keywords

are important for a particular learning unit.
Read. This icon will direct you to read certain sections of the
prescribed book for background information.
Activity. This icon refers to activities that you must do to develop

a deeper understanding of the learning material.
Assessment. When you see this icon, you will be required to test
your knowledge, understanding and application of the material you
have just studied.
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Feedback. This icon indicates that you will receive feedback on your
answers to the self-assessment activities.
Website link. This icon indicates a website link that you can access
for more information on the topic currently being discussed.
YouTube video link. This icon indicates a link to a YouTube video

that you can access for more information on the topic currently
being discussed.
Did you know.

...
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Topic 1
Foundations of human resource
management
Topic 1 will outline the foundations of human resource management and will give you
a brief overview on how human resource management can add value to your business.
The entrepreneur fulfils a very important role in managing the business and to coordinate
the management of people with the everyday functioning of the business activities.
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Introduction to human resource management
CONTENTS
1.1 Introduction
1.2 HRM at a glance
1.3 Challenges facing HRM in South Africa
1.4 Current focus areas in HRM
1.5 The role of HR in creating an ethical organisation
1.6 Conclusion
1.7 Self-evaluation
WORK THROUGH CHAPTER 1 OF YOUR PRESCRIBED BOOK.
Learning outcomes
At the end of this workbook you should be able to:

• Provide an overview of the field of HRM
• Sketch the challenges facing HRM in South Africa
• Give an overview of the current focus areas in HRM
• Explain the concept of empowerment
• Provide an overview of strategies aimed at achieving excellence and quality in
organisations
• Explain the importance of ethics in organisations and HRM
Key concepts
Read through the list of key concepts in the beginning of Chapter 1 of your prescribed
book.
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Key words and concepts
– Buy-in
– Employer of choice
– Engagement
– Employee value proposition
– Human capital development
– Learning organisation
– Onboarding
– Organisational behaviour management
– Organisational citizenship behaviour
– Performance management
– Psychological employment contract
– Scarce skills
– Staff function
– Talent management
– Team
1.1 INTRODUCTION
Human resource management is a specialised field of management and its focus is on the
management of processes, systems and the employment relationship. Today’s complex
and ever-changing environment means that every single business activity will play a vital
role in the success of the business, and that implies that the human resource function
can make a significant contribution to organisational success.
Success is no longer measured in terms of profits but also to the extent to which customers
are satisfied, and that the organisation can provide meaningful places of work. Organisations
are also expected to ensure employee development and advancement, create employment
opportunities and make a meaningful contribution to the community and its stakeholders
while keeping the preservation of the environment in mind.
The role of human resource management has evolved and it encompasses more than just
filling vacant positions. Today, the function of human resource management is done with
purpose to achieve organisational success and build on the talents of its employees. The
management of people is not an easy task and there are various challenges encountered
along the employment relationship.
Study Section 1.1 in your prescribed book
1.2 HRM AT A GLANCE

“Human resource management refers to the development and application of policies,
systems, practices and procedures that direct the thinking, attitudes and behaviour of
people in the organisation towards performance to support the vision and objectives of
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the organisation, while satisfying personal needs” (Nel & Werner, 2014). This definition of
HRM means that managing people is a mix of complex activities that make up a holistic
value chain. Figure 1.2 provides a summary of the basic HRM value chain.
The people employed by an organisation are a potential source of competitive advantage,

but effective management is required if their full potential is to be realised. Management
needs to develop HRM systems to manage the human aspects of business, but also
to support the achievement of business objectives. According to Amos et al (2004:5),
HRM is the system of philosophies, policies, programmes, practices and decisions that
affects the attitudes and behaviour of people, which in turn affect people’s performance
in the business. In the next topic, students will be introduced to HRM practices such
as human resource planning, job design, recruitment, selection, orientation, training
and development. You will learn more about performance management, performance
appraisals, compensation, labour relations and labour legislation.
A business can have all the resources and capital it needs but it won’t be very successful
without the people it needs to manage and direct those resources and business functions.
No business can function in isolation and it needs individuals who collectively contribute to
achieving organisational objectives. It is therefore important that employees are managed
in such a way that they fulfill their maximum potential. In this module you will learn that
performance levels of a workforce have a direct impact on the overall performance of the
business measured in terms of productivity and profits. Successful, qualified staff provides
a competitive advantage for the organisation. In short, HRM focusses on three focus areas,
namely, employment and onboarding, talent management, and organisational behavior
management. These focus areas will all be dealt with in greater detail throughout the book.
Study Section 1.2 and 1.3 in your prescribed book
1.3 CHALLENGES FACING HRM IN SOUTH AFRICA

It goes without saying that any organisation, regardless of size, will be affected in some
way by its external environment. In the same way, the HR function of a business will also
have to understand the challenges in the external environment and what the impact will
be on the business and the HR activities.
Businesses do not function in isolation. They form part of a broader business environment.
The external environment and its potential influence on the business need to be understood.
This includes the effect of the economic, political and international environments on a
business. Any small business will serve as a practical example. The owner has bought the
premises from which he conducts his business and pays monthly instalments on his bond
to the bank. The owner uses money from his monthly profits to pay this instalment. If there
is an interest rate increase the bank has to increase their rates as well, which means the
owner’s monthly instalments will increase. As a result of this, he has to take more money
4
from his monthly profits to cover this expense. Assuming that the interest rate has an
effect on the spending power of the consumer, one can expect a decrease in sales with
a consequent drop in profits. The owner of the business will then end up with less profit
and more expenses (higher bond repayment).
One also needs to consider the micro environment by assessing the internal strengths (for
example qualified staff, motivated workforce) and weaknesses (for example, unsatisfactory
performance levels) of the business. Strategies need to be formulated to achieve objectives
and maintain a competitive advantage.
The external environment is plagued with various challenges such as legal considerations
and labour relations, the economy, competition, market forces and education levels, to
name a few. Another challenge is to ensure that the right person is placed in the right
position to do the right job and that the person is happy in his work environment.
It is therefore very important that the HR manager or business owner stay abreast with
current affairs in order to develop a proactive approach to managing people within the
business.
Activity
Interview a few small business owners of your choice in your vicinity. Ask them to
identify some of the challenges that they encounter in human resources management.
Then click on the link below and compare your answers to the challenges shared by
the author of the slides.
Internet source
Click on the link below to view the power point presentation that will give you an in-
dication of some challenges that are encountered in human resource management.
http://www.slideshare.net/jacobjm47/hr-manager-challenges-ppt
1.4 CURRENT FOCUS AREAS IN HRM

Due to the resulting impact of the external environment on organisational effectiveness,
organisations are forces to continuously evolve to overcome the challenges faced on
a daily basis. Organisations thus strive towards effectiveness and efficiency to remain
competitive in ever-changing market conditions.
Small business owners do not always have a dedicated HR department and therefore
the manager must design and implement systems to manage the most important assets
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of the business, its people. The HR function within any business helps the business to
organise itself in order to execute its strategy. It therefore needs to align its own strategies
with the business strategies. The effectiveness of the HR function can actually have an
impact on the overall financial well-being of the business and this means that employees
must constantly remain productive and maintain high levels of performance. Emphasis is
therefore placed on strategic human resource management, and aligning the HR functions
with organisational goals.
1.5 THE ROLE OF HR IN CREATING AN ETHICAL

ORGANISATION
Ethics is such a crucial aspect of a successful and competitive organisation that it has
to be approached in a strategic and scientific manner. This means that all role players
within the organisation have to ensure that an ethical culture is established. Ethics is a
fundamental aspect of organisational culture.
Activity
Read Encounter 1.1 (Ethics and the use of technology) in your prescribed book and
comment on the questions that are asked.
1 Feedback
It is considered unethical practice for employees to access any social media during working
hours. Engaging on social networks has an impact on productivity and also on the costs
of the business so it is only fair that management should monitor this usage. It not only
costs the business money, but also time since the time you could have spent doing your job
has been wasted on “surfing the web”. The fairness of dismissing an employee for posting
messages on social media about their place of work or employer is justifiable according to
media law experts since this is defamatory. The employee could face disciplinary steps and
depending on the severity of the misconduct the employee can be dismissed. Remember
that dismissal for misconduct must be fair and it must be and appropriate sanction. You will
deal with dismissals later in the module. A manager posing as a “friend” is also unethical
conduct because the manager could provoke a reaction.
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1.6 CONCLUSION
HRM is a very broad field and is aimed at maximising the value of people in organisations.
People are seen as the organisation’s most valuable resource as people bring creativity
and innovation to the organisation.
Complete the self-evaluation questions that follow. Also complete the chapter questions at
the end of Chapter 1 in your prescribed book. You can move onto the next topic. Topic 2 will
cover chapters 3, 4 and 5 in your prescribed book.
1.7 SELF-EVALUATION
1 Self-evaluation questions
Answer True or False to the following questions:

(1) The only way to create a sustainable income and growth is to build a working
environment that provides service quality to its people with resulting employee
loyalty and productivity.
(2) Employees are not regarded as internal customers.
(3) The qualified and motivated workforce of an organisation cannot be regarded as a
competitive advantage.
(4) The HR department’s focus is on managing people and has no impact or influence
on the financial results of the business.
(5) The HR department can also be seen as a change agent.
(6) People constitute social capital rather than variable cost.
(7) Current economic conditions have an influence on the high unemployment rate.
(8) Engagement implies the involvement of all employees in areas beyond their job scope.
(9) In a learning organisation, excellence is achieved through the input of various
stakeholders.
(10) Ethics should not be considered a fundamental aspect of organisational culture.
Answers:
(1) True
(2) False
(3) False
(4) False
(5) True
(6) True
(7) True
(8) True
(9) True
(10) False
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8
Topic 2
Employment and onboarding
Topic 2 will deal with the planning, recruitment and selection of candidates to fill vacant
positions. This topic will also cover the concept and importance of onboarding and
orientation of newly appointed employees.
Topic 2 consists of three workbooks and will cover chapters 3, 4 and 5 of your prescribed
book.
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Talent planning and recruitment
CONTENTS
2.1 Introduction
2.2 Talent planning
2.3 Workforce/talent planning
2.4 Key areas of workforce planning
2.5 Steps in the workforce planning process
2.6 Pre-need hiring
2.7 Factors that influence recruitment
2.8 Recruitment sources
2.9 The importance of the recruitment process
2.10 Recruitment policies
2.11 Discrimination in employment
2.12 Current and future trends in recruitment
2.13 Staffing strategies
2.14 Conclusion
2.15 Self-evaluation
Learning outcomes
At the end of this study unit you should be able to:

• Explain how workforce planning forms part of strategic organisational planning
• Examine the internal and external factors that influence workforce planning
• Explain the steps in the workforce planning process
• Describe the role of various staff members in workforce planning
• Compile a recruitment policy for an organization
• Discuss the factors that influence recruitment
• Decide whether internal or external recruitment sources and methods would be
preferable under specific circumstances
• Explain the role of succession planning within the HR context
• Consider and make proposals on the use of current and future trends in recruitment
• Discuss the important of good staffing decisions
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Key concepts
book.
– Compressed work weeks

– Contingent workers
– Employee leasing
– E-recruitment
– Flexi time
– Forecasting techniques
– Job-sharing
– Labour demand
– Labour supply
– Management information system
– Planning process
– Pre-need hiring
– Recruitment sources
– Recruitment methods
– Skills inventory
– Staff turnover
– Staffing decisions
– Succession planning
– Talent planning
– Telecommuting
– Workforce planning
2.1 INTRODUCTION
Workforce planning is one of the most important issues in which any HR professional or
business owner is involved in since it is often difficult to implement. During the recruitment
process, a pool of suitable applicants is sourced and then placed into vacant positions
within the organisation or business. In other words, it is important that workforce or HR
planning is proactive to ensure that the best candidate is appointed to do the job right.
Workforce planning is described as an integrated and holistic resource planning process

that ensures that the right people are in the right roles to meet the current organisational
profit plan (Nel & Werner, 2014:57). The business manager needs to do HR planning to
acquaint himself with the scope and nature of the work that needs to be done and to
determine what jobs need to be filled and the number of staff required. The business
manager needs to be clear on the skills and competencies required to fill these positions
in a way that contributes to the effectiveness of the organisation.
Oosthuizen (in Nieman & Bennet 2007:154) defines human resource planning as the
process of systematically reviewing human resource requirements in order to anticipate
and meet changing needs and thereby ensure that the required number of employees,
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with the required skills, knowledge and ability, are available when they are needed. This
study guide will introduce the concept of workforce planning, the factors that influence
workforce planning, and the steps involved in the workforce planning process. The factors
that influence recruitment will also be examined, along with the recruitment methods,
and some legal considerations that have an impact on planning and recruitment.
2.2 TALENT PLANNING

Talent planning is about attracting more of the right people (Nel & Werner 2014:58) and
allows employees to understand the career aspirations of the people they might need
to hire. Talent management is the driver of processes, skills and awareness.
Figure 3.1 in your prescribed book provides a model that combines strategic human
resource planning with the strategic organisational planning of the organisation.
2.3 WORKFORCE/TALENT PLANNING

Section 3.3 in your prescribed book emphasises the the importance of workforce planning
for any business. In this section, you will learn about the following concepts:
• Talent inventory
• Succession planning
• Workforce planning
• The importance of workforce planning
• The impact of good workforce planning
It is importance to note the external influences on workforce planning. Figure 3.2 in your
prescribed book graphically illustrates these external influences.
• Political
• Social
• Technology
• Legal
• Demographic
• Business
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• Economic
• Cultural
The external forces have an impact on the entire organisation as a whole and will also
influence workforce planning.
Activity
See if you can identify a few examples or practical South African scenarios from each
of the external forces that will impact on the workforce planning of an organisation.
2 Feedback
Pressure from political parties, in terms of transformation and employment equity, have an
influence on workforce planning. Unions also play an important role in how the workforce
is managed. Social factors can include the impact of HIV/AIDS on the workforce. Changes
in technology: the advancement and improvements in technology allows you to work
from anywhere in the world. Legal considerations play an important role. Refer to labour
legislation, employment equity and the Constitution. Completion from other businesses
and economic conditions will have to be considered. Economic growth has been very
dismal and unemployment levels are high. There are also cultural differences to be taken
into account, our workforce is diverse and we need to take care not to discriminate.
Kindly note that there is no section 3.4 in your prescribed book!
2.4 KEY AREAS OF WORKFORCE PLANNING

Workforce planning systems can be categorized into three basic focus areas:
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2.5 STEPS IN THE WORKFORCE PLANNING PROCESS

In this section you will be required to explain the steps in great detail and understand
the process that is involved in workforce planning.
Marx (in Niemann & Bennet 2007:55) has summarised the human resources planning process.
You will notice that when determining the human resource needs of the organisation,
the organisational strategic plans are consulted to ensure that these objectives are met
with having the right people in place to do the right jobs.
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The human resource planning process according to Marx:
Source: Marx (in Niemann & Bennet 2007:55)
2.6 PRE-NEED HIRING

In some instances, employees may resign unexpectedly without notice to the employer.
In practice, a vacant position usually takes some time to be filled. Pre-need hiring is a
concept where people are hired before they are actually needed in the organization.
During this time they are trained and developed so that when the position does become
vacant they will be ready to fill the vacancy when needed.
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2.7 FACTORS THAT INFLUENCE RECRUITMENT
2.8 RECRUITMENT SOURCES

Effective recruitment is the key to organisational success, to ensure optimal productivity
and a motivated workforce. A key decision will be whether to recruit internally or externally.
Internal recruitment means that the recruit will already have an understanding of the
business. Recruiting internally also means that the costs of recruitment are reduced since
no advertisements will have to be placed. External recruitment means the organisation
will bring in “new blood” this will be someone from outside. Recruiting someone from
outside the organisation could bring their experience and contribute fresh ideas from a
different perspective.
The decision whether to recruit from within or to recruit external candidates is not an
easy one. There are various advantages and disadvantages that need to be taken into
account before making such a decision. Table 3.2 in your prescribed book summarises
the advantages and disadvantages of internal vs. external recruitment. It is important
that you learn these.
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2.9 THE IMPORTANCE OF THE RECRUITMENT PROCESS
The recruitment process begins when a need to recruit has been identified. This can be
done by conducting a job analysis. Marx (in Nieman & Bennet 2007:157) summarises the
job analysis as illustrated below:
Source: Marx (in Nieman & Bennet 2007:157)
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The main points in the recruitment process are summarised in your prescribed book in
Figure 3.5.
Amos et al (2004:115) summarises the recruitment process below:
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2.10 RECRUITMENT POLICIES
The recruitment policy explains how employees are recruited. This policy takes into
account the most current labour legislation.
An organisation’s recruitment policy usually includes aspects like:
• Whether internal or external recruitment will take place

• If relatives of existing employees will be considered for employment
• If part-time or flexi-time will be considered
• If people over the retirement age may be employed
2.11 DISCRIMINATION IN EMPLOYMENT

According to the Constitution of South Africa, all persons are equal before the law. This
means that we all have the same right to equality. The Constitution also protects us
from any unfair discrimination and any acts of discrimination against an applicant when
applying for employment is prohibited.
People may not be discriminated against regardless of gender,

race, sexual orientation, religion, education, nationality, culture,
age, marital status, disability or socio-economic background.
Activity
Read the job advertisement below and answer the questions that follow:
Typist needed for manager
We require the services of a young, single woman between the ages of 20-25.
Some typing skills are required and good people skills. The applicant must be
good looking.
If you are interested please send your cv with a full length photo to apply@
company.co.za
Applicants with disabilities will not be considered.
Do you think this advertisement is suitable? Consider what you have learnt thus far and
comment on the advertisement. How would you change this advertisement?
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3 Feedback
The position advertised is for a typist’s position for a single woman between the ages of
20-25.
Think about the type of work that a typist has to perform, and then consider the following:
• Does it really matter if the typist is male or female?
• Does the age really make a difference?
• How will good looks impact on whether the applicant can do the job or not?
• Is it really important to send a photo?
• Why will applications from people with disabilities not be considered?
According to the Constitution of South Africa, discrimination is prohibited. The position

should therefore be open to anyone who can do the job right. Another point you could
keep in mind is that the information in the advertisement is not very clear at all. Include
the responsibilities and the tasks that the applicant will be expected to perform, the
skills required and the minimum requirements that will be necessary to do the job, for
example what type of qualification is needed. Steer clear of any form of discrimination
since the job does not require good looks and people with disabilities might still be in a
position to perform the job. The advertisement does not include any contact details in
case the applicant may have any queries regarding the job before applying for it. Adding
the location will also provide more clarity or for which company the position is advertised.
2.12 CURRENT AND FUTURE TRENDS IN RECRUITMENT

Changes in technology and globalisation have changed the way in which we do business.
Virtual offices allow us to work from anywhere as long as we have the necessary tools
available to do our jobs effectively. The face of employment is constantly changing and
with a diverse workforce it is important to consider the needs of our employees in order
to keep them productive and motivated.
Some organisations incorporate flexi-time. By implementing this system, employees are

required a certain amount of hours per day. For example if you are employed to work for
8 hours per day you may leave at 15h00 if your working day started at 07h00. This works
well for those who wish to avoid peak hour traffic. Some employees prefer to come in
early and leave early, others will come in later and leave after the peak time traffic has
subsided.
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2.13 STAFFING STRATEGIES
This section in your prescribed book will deal with how organisations place the right
people in the right positions. This can be done either internally or externally. You will also
learn how positions are created or become vacant within the organisation.
Study Section 3.14 to 3.16 in your prescribed book
2.14 CONCLUSION
Workforce/HR planning is a vital activity that is performed in any business since the
right person needs to be placed in the right position. In this study unit you learnt about
workforce planning and how recruitment takes place either from recruiting candidates
from inside, or recruiting externally. Both internal and external recruitment offer a range
of advantages and disadvantages. Once the need to recruit has been identified, the
recruitment process is followed to attract suitable applicants to apply for the advertised
vacancies.
The next unit will deal with selection and covers chapter 4 in your prescribed book.
Complete the chapter questions at the end of Chapter 3 in your prescribed book. Complete
the self-evaluation questions that follow before moving on to the next one.
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2.15 SELF-EVALUATION
Answer the following True or False questions.

(1) Employees have to be particularly disciplined when they telecommute.
(2) Planning the workforce must be geared towards the skills and behaviours that support
Total Quality Management (TQM).
(3) The organisation’s recruitment policy must reflect diversity issues and provide
guidelines for the recruiter.
(4) Companies can afford to make mistakes by recruiting the wrong candidates.
(5) Recruitment is not pivotal in the overall selection-placement process.
(6) The workforce is more mobile, globally as well as domestically.
(7) Online applicants immediately enter their details into the database when applying
for a job.
(8) The Labour Relations Act (No. 66 of 1995), and the Employment Equity Act (No. 55 of
1998), in particular, govern the way in which organisations employ new staff.
(9) The labour market conditions do not affect the availability of staff.
(10) Exercising control and carrying out evaluation of workforce planning systems guides
HR activities, identifying deviations from the plan, and their causes.
Answers:
(1) True
(2) True
(3) True
(4) False
(5) False
(6) True
(7) True
(8) True
(9) False
(10) True
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Selection
CONTENTS
3.1 Introduction
3.2 Factors that influence the selection decision
3.3 The selection process
3.4 Offer of employment and appointment
3.5 Selection metrics
3.6 Selection and ethical considerations
3.7 Conclusion
3.8 Self-evaluation
Learning outcomes

• Explain the internal and external factors that influence the selection decision
• Explain the selection process
• Develop application blanks for applicants during selection
• Describe how a semi structured interview is conducted
• Make decisions as to which types of employment tests should be used in specific
selection situations
• Discuss the responsibility for making the final selection decision
• Comment on the role of ethics in the selection process
Key concepts
book.
23 ETP2602/1
– Assessment centre
– Behavioural interview
– Employment test
– Group interview
– Panel interview
– Reference check
– Standard application forms
– Test reliability
– Test validity
– Turnover rate
3.1 INTRODUCTION
After the initial recruitment from a pool of candidates, the nest step is selection. The most
commonly used method of selection is the interview. A business may use other methods
in the selection process, such as psychological or aptitude testing, providing that these
tests are valid and necessary according to the job requirements. The selection process
begins by short-listing the candidates who will be allowed to proceed to the next step
of the selection process.
The aim of selection is important to appoint the right person in a position, someone
who will meet the job requirements and perform at an optimally productive level. These
days, labour unions and workplace forums are actively involved in the selection process,
in order to ensure transparency and employee satisfaction. Although the departmental
manager makes the final decision as to whom to appoint, it is the responsibility of the
human resources department to oversee the selection process and ensure that no
discrimination occurs. Unsuccessful candidates need to be informed as soon as possible
to enable them to find alternative employment.
24
3.2 FACTORS THAT INFLUENCE THE SELECTION DECISION
3.3 THE SELECTION PROCESS

There is no set rule that dictates the precise steps that should be followed in the selection
process, many organisations omit certain steps, organisations choose to conduct the
medical or aptitude tests prior to making the selection decision whilst others perform
these tests early in the selection process.
Compare the selection process from Amos et al (2004:123) to the selection process in
Figure 4.2 in your prescribed book, neither one is incorrect.
Source: Amos et al (2004:123)
25 ETP2602/1
3.4 OFFER OF EMPLOYMENT AND APPOINTMENT
Once the selection process has been completed and the most appropriate candidate had
been selected to fill the position, the HR representative or business owner will contact
the candidate. A verbal job offer is usually made prior to the written job offer. A letter of
appointment is drafted where the candidate is congratulated on the appointment. The
candidate is also advised on when to assume duty, the remuneration package and to
whom the employee should report to on his/her first day. The employee is also required
to sign the letter in acceptance of the offer and confirm this acceptance with the employer.
Activity
You have just completed the selection process and made an offer to the most suitable
candidate. The candidate has accepted the offer and you are required to write a formal
letter welcoming the new employee. What information would you include in this letter?
4 Feedback
A letter of appointment should:

• Welcome the employee into the organization.
• Provide information about the first day of work for example the date and time the
employee should report for duty, where you will meet the person and to whom the
employee should report to on the first day.
• Request the employee to sign the contract of employment and return it to the business
together with a copy of his ID, income tax form and banking details.
3.5 SELECTION METRICS

In any organisation it is important to assess and evaluate how effective the recruitment
and selection process has been for the organisation. Nel & Werner (2014:101) recommends
metrics in order to measure the effectiveness and efficiency of the recruitment and
selection process.
26
3.6 SELECTION AND ETHICAL CONSIDERATIONS
It is not always easy for employers to determine whether the new employee has the right
qualities to be able to perform productively within the organisation. In some instances,
candidates applying for certain positions lie about their qualifications and abilities and
the employer is not always able to verify these. Including false information on a CV can
result in a relationship of mistrust between the employee and employer and can result
in the employee not being able to meet the performance standards. When applying for
a job, the candidate should be honest when completing the application form.
It is crucial that complete records are kept during the entire recruitment and selection
process to ensure that the procedure was fair and free from any form of discrimination
or bias.
Activity
Read the following case study:
NCAWU v HC van Wyk Diamonds (Pty) Ltd

The applicant was dismissed on three counts of dishonesty. He made certain
misrepresentations relating to prior criminal convictions in his application form.
The misconduct in question had only been identified after he had commenced
employment. He had a prior 10-year prison conviction for housebreaking and was
out on parole.
A witness for the respondent testified that when he approached the applicant,
he originally said he was hard up for the job, then that he in fact was convicted
for assault, then he said he was joking and that he needed to consult his union.
The respondent argued that the deception had seriously impaired the employment
relationship (Workplace, 27 June 2007:4).
Do you think the dismissal was fair and what could the employer have done differently
during the recruitment process?
5 Feedback
The dismissal was fair as the applicant had provided false information.
Employers can protect themselves by requiring job applicants to sign a declaration in

the application form that they have not omitted any information, which may be used in
the event of disciplinary action.
27 ETP2602/1
3.7 CONCLUSION
The selection process is also affected by internal and external factors that will have
an impact on the employee that the organisation will hire to fill a vacant position. It is
important to remember that the organisation is required to keep complete records of the
recruitment and selection process to ensure that the process was fair and that applicants
were not discriminated against. There will be times when applicants are dishonest and
will lie about their qualifications. Employers are aware that most applications are unethical
and will have to make conceited efforts to verify applicant’s qualifications and to ensure
that they possess the required skills and abilities in order to do the job right.
Study Unit 04 will cover Chapter 5 in your prescribed book and will deal with the induction
and socialisation of new employees. Complete the chapter questions at the end of
Chapter 4 in your prescribed book.
Before moving on, complete the self-evaluation questions that follow.
3.8 SELF-EVALUATION
(1) Explain why it is important to conduct reference checks for potential candidates
before making a hiring decision in the selection process.
(2) The aim of the initial screening process is to eliminate candidates that do not meet
the requirements of the vacancy. It is at this critical stage of the selection process that
all application forms and CVs are scrutinised and the content thereof questioned.
What are some of the red flags to look out for?
(3) Explain the five testing standards that need to be met in the selection process?
Answers:
(1) Reference checks serve two important purposes: one is to verify the accuracy of fac-
tual information provided by the candidate. And second, to uncover any damaging
background information such as criminal records etc. Checking references of selected
applicants act as a built-in quality checking tool, to eliminate likely chances of fraud,
deception and discrimination in the selection process.
(2) Time gaps in employment, unclear reasons for leaving a previous job, a lack of em-
ployment history, inconsistencies in salary history, and when previous employers are
listed on the cv as out of business.
(3) Reliability – the extent to which a test as a performance measure is devoid of error.
Validity – the degree to which the performance on a test is related to the performance
on the job.
Generalisability – the extent to which a selection methodology for a particular situ-
ation can be extended to other situations.
Utility – the extent to which the information from selection methods increases the
bottom-line effectiveness of the company.
Legality – tests administered to potential applicants must be within the prescribed
legal boundaries.
28
Induction and socialisation
CONTENTS
4.1 Introduction
4.2 The objectives and benefits of induction
4.3 Reasons for poor induction
4.4 Sharing the induction responsibility
4.5 Induction process
4.6 Planning, designing and implementing the induction programme
4.7 Follow-up and evaluation of the induction programme
4.8 Retention strategies
4.9 Talent management
4.10 Induction and ethical considerations
4.11 Conclusion
Learning outcomes

• Distinguish between the concepts of induction, orientation and socialisation
• Explain the objectives and benefits of induction
• Provide reasons for poor induction
• Explain the responsibility for carrying out orientation
• Describe the stages of induction and discuss how the process of acculturation and
assimilation can be fostered
• Explain how an induction programme is planned, designed and evaluated
• Suggest various approaches to internal staffing in specific situations
Key concepts
book.
29 ETP2602/1
– Acculturation
– Anticipatory stage
– Buddy
– Dismissal
– Employee handbook
– Encounter stage
– Induction
– Induction kit
– Onboarding
– Realistic job preview
– Retention
– Settling-in stage
– Socialisation
– Talent management
4.1 INTRODUCTION
Induction is the final step in the staffing process. The new employee is introduced to
the organisation’s goals, and given an overview of the organisation’s culture so that the
employee can familiarise himself or herself with the organisation. Socialisation is a more
long-term process where the aim will be to eventually absorb the employee into the
organisation with the goal of making the employee as productive as soon as possible.
The new employee should feel part of the organisation as soon as possible in order to
start making a meaningful contribution to the business.
This study unit will deal with making the employee feel welcome and introducing the
employee into the organisation so that the employee understands how “things are done
around here”.
4.2 THE OBJECTIVES AND BENEFITS OF INDUCTION

Whether you are starting a new job in a large or small organisation, there is nothing worse
than feeling lost. Do you remember your first day at school or college, or even your first
day at work? Think about how you felt when you first walked through the door? Did you
know where your classroom of office was? A first experience can be quite overwhelming.
The last step in the staffing process is therefore designed to introduce and integrate
the new employee into the business. This is done not only to make the employee as
productive as soon as possible, but also make them feel welcome and to ease the anxiety
of starting a new job.
30
4.3 REASONS FOR POOR INDUCTION
Most organisations feel that induction is a waste of time and money, or that the business
is not large enough to have to implement such a programme since it is assumed that
it can’t be that difficult to “find your way around”. There are various reasons why some
organisations do not adopt the concept of induction, or do not place enough attention
to the induction of new employees.
4.4 SHARING THE INDUCTION RESPONSIBILITY

The question will at some time or another arise as to who will be responsible for induction.
Nel & Werner (2014:113) show some common topics that are often covered in employee
induction programmes. It is suggested that the induction programme is categorised. So
in other words one part of the programme can cover a general company overview, while
another part of the programme will give the employee more specific details about his/
her job.
It is always a good idea to develop an employee guide or handbook with all the information
about the company. This handbook could also incorporate some company rules and a
summary of frequently asked questions. Some organisations make use of what is called
a “buddy” system. The new employee will be assigned a co-worker that will show the
new employee the ropes of the organisation.
4.5 INDUCTION PROCESS

The induction process comprises of three stages. Werner & Nel (2014: 116) places emphasis
on the important steps to be followed in the induction process.
Source: Adapted from Nel & Werner (2014:116)
31 ETP2602/1
You will also be required to know what acculturation entails. Acculturation means that
the new employee will be exposed to the organisational culture of the organisation. The
new employee will encounter four phases of acculturation. This can be found in section
5.2.2 in your prescribed book.
4.6 PLANNING, DESIGNING AND IMPLEMENTING THE

INDUCTION PROGRAMME
You will now be taken through the process of how to design and implement an induction
programme. It is recommended that every organisation have an induction programme in
place since it has proven to that employees perform better when they have undergone
a thorough induction. When designing an induction programme, it is important to keep
your target audience in mind. Include essential information, the must haves and sometimes
the nice to have. Also remember that many employees have a lower level of education
or may even be illiterate, choose your medium of delivery to suit the audience.
4.7 FOLLOW-UP AND EVALUATION OF THE INDUCTION

PROGRAMME
Once your new employees have been through induction, the entire programme should
be evaluated to determine whether it was effective in attaining the goals and objectives
for which it was designed. In many cases organisations were of the impression that once
the employee had attended the induction programme that the manager had no further
responsibilities towards the new employee. Remember this is an ongoing process and
there will be times where the employee will need guidance. It is also a good idea to
determine whether the induction programme is useful to new employees, getting their
opinions will assist in some new ideas in redesigning or improving the programme.
32
4.8 RETENTION STRATEGIES
Although the right person has been recruited and selected to perform the right job, the
biggest challenge is how to retain the employee in the organisation. There has been an
increase in employee turnover over the past few years and this has lead organisations
to adopt retention strategies in order to reduce their levels of employee turnover. There
are many reasons why employees resign from their jobs.
Some reasons for high employee turnover are:
• Financial – employees seek financially rewarding jobs with better benefits or just a
higher salary.
• Stress – the current job or place of work may be too stressful or the environment not
conducive.
• Employees may seek more rewarding or challenging jobs since they have become
bored with what they are doing.
• There may be no opportunities for growth or promotion.
Organisations are thus faced with the challenge of keeping their employees motivated
and retained within the organisation.
4.9 TALENT MANAGEMENT
33 ETP2602/1
Read Section 5.10 in your prescribed book
4.10 INDUCTION AND ETHICAL CONSIDERATIONS

A good induction programme teaches new employees what is expected of them in order
to contribute to the attainment of organisational objectives. This means that employees
should understand the rules, policies and procedures, and how to behave in an ethical
manner not to bring the reputation of the organisation into disrepute.
4.11 CONCLUSION
In this study unit you have learnt about the importance of a good induction programme
and the benefits it holds, not only for the organisation, but also for the employee. In the
next study unit you will learn about remuneration and reward which deals with employee
compensation.
Before you move on, first attempt to answer the chapter questions at the end of
Chapter 5 in your prescribed book. Answer the self-evaluation questions on your own.
Answer the following True or False questions:

(1) The pre-entry phase of employee induction covers employee orientation and
socialisation.
(2) Taking the decision to hire and then taking the decision to place could have serious
repercussions for an organisation.
(3) Organisations do not pay enough attention to induction as they do not regard
employee stress as important .
(4) It is the responsibility of the HR department to conduct a job induction.
(5) An employee handbook is a booklet containing a condensed version of employee
orientation and socialisation procedures.
(6) An efficacious 100 day induction programme plan is more ideally suited to South
Africa’s unique circumstances than executive on boarding programmes.
34
(7) Employee socialisation is the approach adopted by employers to retain key employees
in an organisation to achieve organisation objectives.
(8) In South Africa, literacy levels play an important role in the decision to use visual
media for imparting information.
(9) Lost productivity resulting from the learning curve for new employees is between
1%–2.5% of total revenues.
(10) The evaluation of induction programmes and employer-initiated staff movements
is has little bearing on the measurement of productivity, quality of work-life and
the bottom-line.
Answers:
(1) False
(2) True
(3) True
(4) False
(5) False
(6) False
(7) False
(8) True
(9) True
(10) False
35 ETP2602/1
Remuneration and reward
CONTENTS
5.1 Introduction
5.2 Objectives of a compensation system
5.3 The design of a compensation system
5.4 Job evaluation methods
5.5 Emerging pay systems
5.6 Broadbanding
5.7 Employee benefits
5.8 Benefit planning and flexible benefit plans
5.9 Calculating the costs of employee benefits
5.10 Employee compensation issues in South Africa
5.11 Compensation systems and quality assurance
5.12 Conclusion
Learning outcomes
At the end of this study unity you should be able to:

• Explain remuneration
• Explain reward
• Discuss the objectives of a remuneration system
• Describe the elements of total compensation
• Design a compensation system
• Distinguish between the categories in equity pay for performance and pay satisfaction
• Describe the steps in a job-based compensation plan
• Distinguish between the types of individual-level incentive plans
• Discuss the reasons why broadbanding is useful
• Explain the circumstances in which compulsory and voluntary benefits are used
• Outline the factors that influence the growth of employee benefits
• Explain how the costs of employee benefits are calculated
• Describe the impact of quality assurance on compensation systems
36
Key concepts
book.
– Broadbanding
– Cafeteria benefit plans
– Compensation survey
– Compensation objectives
– Equity
– Executive pay
– Incentive pay systems
– Job evaluation
– Job hierarchy
– Mandatory benefits
– Pay secrecy
– Performance-based pay
– Reward system
– Visible/invisible paycheck
– Total compensation
– Variable pay plans
– Value-added compensation
– Voluntary benefits
5.1 INTRODUCTION
In order for an organisation to achieve its goals and objectives, it needs to remain
financially stable whilst employing the most competent and skilled employees to enable
the organisation to strive. One of the most significant tasks faced by organisations is the
design and implementation of compensation systems. A compensation system should
thus be designed to attract the best qualified candidates for a position while taking into
account what the organisation can afford. Compensation refers to both the intrinsic
rewards, such as achieving personal goals and being given challenging job opportunities,
and the extrinsic rewards, such as a salary and benefits. Compensation therefore refers to
all forms of financial rewards, benefits, and other tangible services an employee receives
as part of the employment relationship.
37 ETP2602/1
5.2 OBJECTIVES OF A COMPENSATION SYSTEM
The main objective of a compensation package should be to influence employee
motivation by rewarding good performance (Nel & Werner 2014:134). It is important for
employers to understand what motivates employees to perform and the satisfaction the
employee displays with regard to compensation. Employees should be compensated for
a job well done. This will not only have an influence on performance levels, but also play
a major role in the retention of employees. There are also various factors will influence
a compensation package.
5.3 THE DESIGN OF A COMPENSATION SYSTEM

Compensation systems need to be designed in such a way to enhance performance, yet
to remain competitive in the markets. They should create value for the organisation and
employees.
38
The total compensation system can be illustrated as follows:
5.4 JOB EVALUATION METHODS

The organisation needs to determine how much to pay someone. But how much?
Employees within the organisation not only differ according to the types of jobs they
perform, but also their experience, skills and qualifications.
Byars and Rue (in Werner & Nel 2014:140) define job evaluation as the systematic
determination of the value of each job in the organisation in relation to other jobs in
the organisation. Figure 6.3 in your prescribed book illustrates a route that is typically
followed by organisations when determining the value of jobs.
39 ETP2602/1
5.5 EMERGING PAY SYSTEMS
The way in which employees are paid today has changed somewhat compared to the
traditional system of earning a base salary for performing the required tasks. Nowadays,
employees are not only expected to develop skills to be proficient in the tasks they
perform, but are also encouraged to further develop themselves in a higher capacity.
Organisations have revisited the way in which employees are remunerated and have
adopted the following alternative methods to pay systems. These include:
5.6 BROADBANDING
Broadbanding is the grouping of jobs with similar duties, responsibilities, and levels of
accountability. This is done in order to reduce the number of job classifications.
5.7 EMPLOYEE BENEFITS

Employees also receive benefits as part of their remuneration packages.
40
5.8 BENEFIT PLANNING AND FLEXIBLE BENEFIT PLANS
Not all benefits that are offered by organisations will be acceptable to all its employees. It
is therefore very important that the organisation has an understanding of what types of
benefits its employees will appreciate and find beneficial. Your prescribed book provides
a framework for comprehensive benefit planning which will guide you in preparing a
benefit plan. It is important to note the advantages and disadvantages when designing
a benefits programme. These can be found in Figure 6.6 in your prescribed book.
5.9 CALCULATING THE COSTS OF EMPLOYEE BENEFITS

Remember that the employees are one of the most important assets of an organisation,
even more so is the objective of making a profit and to remain competitive. It should
therefore be kept in mind to consider the costs of the benefits provided to employees
and how these costs are calculated.
5.10 EMPLOYEE COMPENSATION ISSUES IN SOUTH AFRICA

Labour legislation has been promulgated to protect the rights and promote the interests
of all employees in South Africa. These laws regulate various compensation related
transactions such as leave and working hours for example. In totality, this has an impact
on how compensation is managed in South Africa, and in return, the issues that must be
contended with when dealing with compensation.
41 ETP2602/1
5.11 COMPENSATION SYSTEMS AND QUALITY ASSURANCE
When designing a compensation system, the following factors must be kept in mind:
• Is the remuneration adequate?

• Is it equitable?
• Is there a balance between extrinsic and intrinsic rewards?
• Is the system cost-effective for the organisation?
• The pay system should enhance performance.
• Will the package be acceptable to the employee?
5.12 CONCLUSION
Remuneration is the total reward that an employee receives from the organisation in
return for the tasks and duties performed according to the employment relationship.
The remuneration package is made up of extrinsic and intrinsic rewards. Employees are
entitled to certain benefits by law, whereas some organisations will provide employees
with additional voluntary benefits.
You have now concluded Topic 02. Topic 03 will deal with talent management. Complete
the chapter questions at the end of Chapter 6 in your prescribed book.
Complete the self-evaluation questions below before moving onto the following topic.
Answer the multiple choice questions below.

(1) The objectives of a compensation system are to
(a) Tempt people to apply for a job
(b) Attract, retain, and motivate employees
(c) Enable the company to compete with other employers
(d) Assist management in recognizing individual ability and effort
(e) Support employees in the workplace
(2) The approach that should be followed when implementing a new compensation
system must be
(a) Holistic
(b) Piecemeal
42
(c) Rewarding
(d) Motivating
(e) Innovative
(3) Value-chain compensation is defined as a system that
(a) Takes into account the employees’ priorities
(b) Takes into account the employer’s priorities
(c) Takes into account high unemployment rates
(d) Takes into account employees’ and the employer’s priorities
(e) Takes into account the ranking of rewards
(4) A job-based compensation approach
(a) Rewards people for their job performance
(b) Makes use of a job evaluation committee
(c) Allocates pay so that the most important jobs are paid the most
(d) a+b
(e) b+c
(5) Compensation surveys are used
(a) To collect salary and wage data from within the company
(b) For the purpose of placing jobs into grades
(c) To determine and fix pay rates to specific jobs
(d) To employ people from the labour market
(6) The compensation system that rewards people for the sets of skills, knowledge, abili-
ties, behavioural characteristics, and other attributes that they possess is known as
(a) Pay for knowledge and skills
(b) Pay for abilities
(c) Pay for behaviour
(d) Pay for performance
(e) Pay for competencies
(7) Mandatory benefits are benefits that are offered on a voluntary basis by employers
(a) Decided upon by the employees themselves
(b) Interdependent upon each other
(c) Required by law
(d) Based on the employees’ needs
(8) The pacesetter benefits strategy
(a) Offers only those benefits required by law
(b) Offers only those benefits demanded by employees
(c) Offers the benefits that employee’s want, before employees demand them and
before other organisations do
(d) Offers benefits in line with the pace of inflation
(e) Offers benefits similar to most other organisations
(9) It is predicted that in the future
(a) Increased flexibility will become evident in remuneration packages
(b) Decreased flexibility will become evident in remuneration packages
(c) Increased inflexibility will become evident in remuneration packages
(d) Decreased inflexibility will become evident in remuneration packages
(10) Direct compensation includes:
(a) Cash compensation
(b) Basic salary, deferred cash and cash compensation
43 ETP2602/1
(c) None of the above
(d) All of the above
Answers:
(1) B
(2) A
(3) D
(4) E
(5) C
(6) E
(7) D
(8) C
(9) A
(10) D
44
Topic 3
Talent management
Topic 3 will cover the activities of employee development and the career management of
employees along with managing performance. Issues of managing a diverse workforce
and employee retention will also be dealt with in Topic 3.
45 ETP2602/1
Employee development and career management
CONTENTS
6.1 Introduction
6.2 Education, training and development
6.3 The macro environment and the influence on training and development
6.4 Legislation
6.5 Training and development models
6.6 Training and development delivery approaches
6.7 Challenges of training and development in South Africa
6.8 Benefits of training and development
6.9 Career management
6.10 Conclusion
Learning outcomes

• Discuss the education and training challenges faced by South Africa
• Explain the role of Governments in shaping training policies
• Describe the difference between education, training and development
• Explain the different elements of a training programme and the contribution it can
make towards training and development
• Identify and apply applicable training methods to a particular training session
• Draw up a programme to establish a career path for an employee
Key concepts
book.
46
– Career
– Coaching
– Development
– Education
– Job rotation
– National Qualifications Framework (NQF)
– On-the-job training
– Recognition of Prior Learning (RPL)
– Training
– Vestibule training
6.1 INTRODUCTION
The current legislative framework in South Africa encourages the continuous development
of workplace skills. It is also important that the HR practitioner or business owner has an
understanding of the national agenda in terms of education, training and development
in order to ensure that development policies are not outdated to create a meaningful
learning experience to enable productivity.
South Africa has a very high unemployment rate and has a shortage of skilled employees.
According to Amos et al (2004:324) the largest part of skills development takes place at
the workplace, which highlights the importance of training and development for both
the organisation and the nation. A business needs competent and skilled staff, to give it a
competitive advantage. Training and development is an ongoing process as the business
environment is very dynamic and changes all the time.
This study guide will focus on the concepts of education, training and development
policies and models, and highlight the benefits thereof. Various methods of delivery will
also be covered in the study guide.
“Education is not about the learning of facts, but the training of the mind to think”
Albert Einstein
6.2 EDUCATION, TRAINING AND DEVELOPMENT

In this section you will have to be able to differentiate between the concepts of education,
training and development, and also understand the meaning of career.
47 ETP2602/1
6.3 THE MACRO ENVIRONMENT AND THE INFLUENCE ON

TRAINING AND DEVELOPMENT
Before you start with this section in your prescribed book first read the following two parts:
• Information box 8.1, and,

• Encounter 8.1
The importance of education, training and development is not only a priority in early
childhood since learning should be an ongoing experience aimed at the continuous
development of employees to empower a skilled and productive workforce. It thus
becomes vital to understand the forces in the macro environment that will play a role in
employee development.
These factors in the macro environment include:
• The changing working environment

• National Strategic Framework for Human Resource Development (HRD)
• National Skills Development Strategy (NSDS)
• Skills development for the Small to Medium Micro-Enterprise sector (SMME)
• Vocational education and training
• Certification
• Development and implementation of the NQF
• Compliance and quality assurance
• NQF qualifications
Source: Nel & Werner 2014:194-198
48
6.4 LEGISLATION
The South African government passed legislation pertaining to education and training. This
includes the South African Qualifications Authority Act 58 of 1995, the Skills Development
Act No. 97 of 1998 and the Skills Levy Act No. 9 of 1999. The South African Qualifications
Authority Act is designed to give recognition to learning that takes place after formal
education, to encourage growth of skills.
The South African Qualifications Authority (SAQA) was established to review the plethora
of qualifications offered by various organisations determine how these qualifications
relate to one another and evaluate these qualifications.
The National Qualifications Framework (NQF) ensures that qualifications comply with
national standards, and that qualifications are registered as unit standards. A unit standard
is an analysis of the skills and level of comprehension a person needs in order to achieve
the required performance standards required for their jobs. The aim of the NQF is to
enhance the quality of training and education, to create an integrated national framework
for learning achievements and to contribute to the full personal development of each
learner and the development of the nation as a whole.
In order to register a qualification on the NQF, the qualification must be internationally

comparable (where applicable), it must represent a combination of unit standards/other
learning elements with specific outcomes and it must comply with the NQF’s objectives
such as access, mobility, progression and quality (Grobler et al 2006:336).
49 ETP2602/1
6.5 TRAINING AND DEVELOPMENT MODELS

Training and development can only be considered effective if it forms part of a logical
and systematic process. A generic contemporary training model is provided in Figure 8.2
in your prescribed book.
Phase 1: Needs identification

Phase 2: Design and delivery
Phase 3: Evaluation
6.6 TRAINING AND DEVELOPMENT DELIVERY APPROACHES

There are various approaches to training and development. Training can also be conducted
on-the-job or off-the-job.
Table 8.1 in your prescribed book provides a summary of the training delivery method
and when it would be most applicable to apply the method. This summary is important
so make sure that you study and understand the contents thereof.
6.7 CHALLENGES OF TRAINING AND DEVELOPMENT IN SOUTH

AFRICA
The democratisation of South Africa two decades ago has introduced a few challenges
that have been faced by HR in order to redress the issues of discrimination of the past.
The introduction of labour legislation, the Constitution and the Bill of Rights have all had
an impact on HRM in South Africa. We need to keep in mind that not all adults in the
workforce are literate and the methods of training delivery should be adapted to suit the
training needs and objectives of the employees. Some of the inherent issues present in
50
training and development are adult learning, training a diverse workforce, and Recognition
for Prior Learning (RPL).
6.8 BENEFITS OF TRAINING AND DEVELOPMENT

According to Amos et al (2004:333) the benefits that training and development can hold
for an organisation include the following:
• Increased ability of the employee to do the job

• Improved employee performance
• Reduced staff turnover
• Increased employee motivation
• Reduced need for dismissals due to incapacity
• Less wastage
• Less supervision is required
• Reduced breakage of equipment
• Employees feel competent about themselves and their jobs
• Lower probability of industrial accidents and injuries on duty
• Employees improve their own skills and knowledge
• Increased customer satisfaction
6.9 CAREER MANAGEMENT

What is career management and why is it so important in an organisation? Do you know
where you want to be five years from now? Have you planned your career and set goals
that you would like to achieve? Organisations have realised the value in investing in the
future of their employees. For this reason, they engage actively in career planning and
programmes in order to advance their employees to their full potential.
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6.10 CONCLUSION
Education is the key to building a successful nation and workforce. It is with training and
development that employees are empowered with the skills, knowledge and abilities to
stimulate critical thinking and become more productive. Learning is an ongoing, long-
term process and has no limit. The benefits of training and development are countless,
not only to the organisation, but also to the employee. Various methods can be applied
to address training and development issues. An empowered workforce contributes to a
competitive organisation.
The next study unit will focus on performance management. Before you continue to the
next section, try and answer the self-evaluation questions that follow and complete the
chapter questions at the end of Chapter 8 in your prescribed book.
Answer the following True or False questions.

(1) The 5-year strategic framework of 2009 does not provide a MTSF for South Africa.
(2) The school to vocations process of school leavers in SA is well taken care of by tertiary
sector teaching in SA.
(3) A training and development policy is based on assumptions and principles that
manifests itself in the form of a philosophy.
(4) Training and development models can assist in the process of designing a process
that is logical and systematic to execute training.
(5) Training needs analysis is to identify gaps or discrepancies between past performance
and optimal performance of employees. The process does not need to consider
desired and actual work methods.
(6) Summative evaluation refers to the process of examining all instructional material
after it has been revised after normative evaluation results.
(7) Behaviour modelling (also called “directional learning”) is a process where people
learn from what others have done.
(8) A moblog is a weblog that users video as a primary presentation format and audio-
visual communication via the internet.
(9) RPL is a process that enables people of all ages, backgrounds and attitudes to receive
formal recognition for experience, skills and knowledge they already possess.
(10) Careers are very important to Generation Y, because they are mobile and pursue
career agendas vigorously.
Answers:
(1) False
(2) False
(3) True
(4) True
(5) False
(6) True
(7) False
52
(8) False
(9) True
(10) False
53 ETP2602/1
Performance management
CONTENTS
7.1 Introduction
7.2 Performance and knowledge management
7.3 Purpose of the performance management process
7.4 Conditions for implementing the performance management process
7.5 The performance management process
7.6 Characteristics of high-performance companies
7.7 Performance management and quality assurance
7.8 Managing poor performance
7.9 Counselling employees for performance
7.10 Conclusion
Learning outcomes

• Discuss performance management and its relationship to knowledge management
• Identify and explain all the key elements of the performance management process
• Differentiate between various methods of performance evaluation
• Identify and explain the different types of errors that “raters” tend to commit
• Discuss the nature of the feedback interview
• Discuss the legal considerations that relate to performance management
Key concepts
book.
54
– 360º feedback
– Absolute and relative evaluation methods
– Added value
– Balanced scorecard
– Bahaviourally-anchored rating scales (BARS)
– Bias
– Central tendency
– Critical incidents
– Essay method
– Forced distribution
– Graphic rating scales
– Halo effect
– Leniency and strictness
– Management by objectives (MBO)
– Paired comparisons
– Peer review
– Ranking
– Rational and political perspectives
– Reverse appraisals
– Self-appraisals
– Team appraisals
7.1 INTRODUCTION
Performance management is broader than performance appraisal and is an approach
to managing people. The performance management system needs to be planned and
documented in the form of a performance policy. The aim of performance management
is to plan, direct and improve the performance of employees in line with overall strategic
objectives. Objectives are set and performance is reviewed against these objectives.
Performance feedback needs to be given to employees as a means of motivating

employees to achieve their full potential to experience job satisfaction and to contribute
to organisational success.
Armstrong and Baron (in Bach 2005:291) suggest the main value of performance
management is to:
• communicate a shared vision of the purpose and values of the organisation

• define expectations regarding what must be delivered and how it should be delivered
• ensure that people are aware of what constitutes high performance and how they
need to achieve it
• enhance motivation, engagement and commitment by providing a means of recognizing
endeavours and achievement through feedback
• enable people to monitor their own performance and encourage dialogue about what
needs to be done to improve performance
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7.2 PERFORMANCE AND KNOWLEDGE MANAGEMENT
Nel & Werner (2014:219) define knowledge management as a process that transforms
individual knowledge into organisational knowledge. Performance management is a
described as a process which creates an environment in which employees are enabled
to perform at their best abilities for the attainment of organisational goals (Nel & Werner,
2014:219).
The performance management process is summarised in the diagram below and can
also be found in section 9.2.1 in your prescribed book.
Source: Adapted Nel & Werner (2014:219)
7.3 PURPOSE OF THE PERFORMANCE MANAGEMENT PROCESS

What is the purpose of the performance management process? Bennet & Minty (in Nel &
Werner 2014:220) state that the performance management process serves three purposes,
namely:
• it serves as a process for the implementation of strategy

• it acts as a driver for culture change
• it provides input to other HR systems (development and remuneration)
56
7.4 CONDITIONS FOR IMPLEMENTING THE PERFORMANCE

MANAGEMENT PROCESS
It is important that the conditions arte conducive for the promotion of the performance
management process. Refer to section 9.4 in your prescribed book.
7.5 THE PERFORMANCE MANAGEMENT PROCESS

The performance management process is divided into four key activities. These categories
are discussed in more detail in section 9.5 in your prescribed book. Also consult Figure 9.1
as this provides an important summary of the key activities involved in the performance
management process.
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7.6 CHARACTERISTICS OF HIGH-PERFORMANCE COMPANIES
Companies that have been acclaimed for their outstanding levels of high performance
have attributed their success to the implementation of effective performance management
systems.
7.7 PERFORMANCE MANAGEMENT AND QUALITY ASSURANCE

Studies conducted in the United Kingdom have indicated that there were four major flaws
in the way in which performance management was conducted (Fletcher and Williams in
Nel & Werner 2014:234). You should be able to explain the weaknesses that have been
identified.
7.8 MANAGING POOR PERFORMANCE

In managing poor performance, one should consider the following steps:
• Agree that there is a problem and identify the problem, for example inconsistent
performance in terms of the agreed objectives and standards.
• Explore and identify the reasons for poor performance, for example an ability problem,
lack of motivation or lack of organisational support.
• Agree on corrective action, for example training, transferring the person to a more
suitable position, or the last resort is to dismiss the employee on the grounds of
incapacity. This process must be fair and legal.
• Implement the corrective action.
• Monitor progress and provide feedback to the employee.
7.9 COUNSELLING EMPLOYEES FOR PERFORMANCE

An employee’s performance may be affected by personal problems such as health problems,
financial problems or marital issues. It is in the best interest of both the organisation and
the individual that the employee should be assisted to return to full performance. The
objective of counselling is to help the employee to manage the problem him– or herself.
58
7.10 CONCLUSION
The performance of the workforce is of the utmost importance for organisational success
and performance therefore needs to be managed and facilitated. The human resource
function of the organisation needs to design and implement a performance management
system which should be managed by the line managers. This performance management
system has two principal goals namely, the evaluation of employees’ past performance
for salary and promotion decisions, and the improvement of future performance for
career development.
Generally speaking, employees dislike and fear performance appraisals. Supervisors also
find the process stressful. Employees will only be satisfied with the performance appraisal
process if the interview is constructive, if the appraisal method is job related and if the
outcomes of the appraisal give clear direction for future performance.
There are various methods that can be implemented to manage the performance of
employees, and any method may be used, just as long as the process is fair and legal.
Any performance problems should be identified and poor performance needs to be
managed. Corrective action could include a transferring the individual employee, training
or counseling.
The results of a performance appraisal can be used to determine remuneration/financial

rewards, or to promote an individual or lastly to give feedback to employees feedback
regarding their performance.
The next study unit will emphasise the importance of diversity management and retention.
Before you move on, attempt the self-evaluation questions that follow and complete the
(1) The most important criterion in performance management should be:

(a) the measurement of an employee’s contribution to customer satisfaction
(b) the value of an employee’s productivity in achieving departmental goals
(c) the commitment of an employee to departmental goals
(d) the mission and vision of the organisation
(e) the framework of the system
(2) Performance planning comprises of the following except one:
(a) setting the direction
(b) determining employee goals
(c) determining the evaluator and method
(d) talking to employee about poor performance
(e) developing an action plan
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(3) An employee may be dismissed for poor performance if:
(a) he agreed to it
(b) dismissal is an appropriate sanction
(c) he was made aware of his poor performance
(d) he stole from the company
(e) b and c
(4) External factors that result in ineffective performance (choose the incorrect answer)
(a) industry decline
(b) legal constraints
(c) lack of promotional opportunities
(d) union-management conflict
(5) Reverse appraisals are also known as:
(a) 360 degrees feedback
(b) Self-appraisals
(c) Customer appraisals
(d) Subordinate appraisals
(e) Peer appraisals
(6) Performance appraisal systems should be driven by the following:
(a) Organisational performance
(b) Subordinates
(c) Customers
(d) Personnel department
(e) Line management
(7) The tendency to rate a subordinate based on one single characteristic is:
(a) leniency bias
(b) recency effect
(c) halo effect
(d) stereotype effect
(e) observer bias
(8) Paired comparison is when:
(a) an employee is working with another
(b) you rank employees from weak to strong
(c) you compare two employees’ performance
(d) you give incentives to each pair of employees
(e) none of the above
(9) One of these is not an example of rater error:
(a) unclear standards
(b) halo effect
(c) central tendency
(d) recency
(e) organisational structure
(10) Critical incidents are categorized as:
(a) absolute rating techniques
(b) relative rating techniques
(c) peer bias rating
(d) bar graph rating
(e) none of the above
60
Diversity management and retention
CONTENTS
8.1 Introduction
8.2 The global context for diversity management
8.3 The psychosocial perspectives for diversity management
8.4 Towards an inclusive workforce
8.5 Managing cultural differences
8.6 Strategies for managing diversity
8.7 Identifying the employer of choice
8.8 Employment equity plans
8.9 Conclusion
Learning outcomes
• Explain the nature and scope of diversity management
• Differentiate between workforce diversity and diversity management
• Describe the global context for diversity management
• Discuss the psychosocial perspectives for diversity management
• Describe an inclusive workforce paradigm
• Discuss Hofstede’s model for best-practice strategy towards an inclusive workforce
• Describe the business case for diversity
• Discuss strategies and skills for the effective management of diversity at macro–
and micro-levels
• Describe employer of choice attributes
• Outline the issues relating to employment equity plans
Key concepts
book.
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– Age discrimination
– Age diversity
– Cultural diversity
– Diversity action plan
– Diversity management
– Employees with physical challenges
– Employment equity commission
– Gender diversity
– Inclusion
– Inclusive workforce
– International Labour Organisation (ILO)
– Labour force participation rate
– Previously disadvantaged groups
– Primary dimension of Diversity
– Psychological perspectives
– Racial and ethnic diversity
– Secondary dimension of diversity
– The glass ceiling bias
– Workforce diversity
8.1 INTRODUCTION
South Africa is known as the “rainbow nation” because our nation includes people
from different races, languages and religions. The challenge now lies in managing a
group of people with different values, beliefs, language, customs and religion from your
own. These are all factors that could lead to misunderstandings, misinterpretations and
miscommunication in organisations.
In terms of the Employment Equity Act, organisations are required to make their workforce
more representative of South Africa’s overall population. Organisations are now required
to show preference to members of previously disadvantaged communities. The major
groups that provide diversity in the workforce are:
• ethnic groups (Blacks/Africans, Coloureds, Indians, Asians and Whites)
• women
• South Africans with disabilities
It is important that a business understands the necessity of having a diverse workforce
and how to tap into the potential of that workforce.
62
8.2 THE GLOBAL CONTEXT FOR DIVERSITY MANAGEMENT
Globalisation has transformed the business world into a borderless space where information
flows rapidly through continents in the blink of an eye. This intercontinental flow of
information and goods and services has also resulted in the increased free movement
of people across the globe. The result of this movement is a diverse workforce, one with
a mix of various cultures and customs. One of the main challenges in dealing with these
diverse cultures is to determine which values and standards to adopt which will not
be offensive to another culture. In the same way, organisations must apply values and
standards that will be deemed appropriate in all spheres of society.
Thomas (in Grobler et al 2006:75) defines diversity management as a planned, systematic

and comprehensive managerial process for developing an organisational environment in
which all employees, with their similarities and differences, can contribute to the strategic
and competitive advantage of the organisation, and where no-one is excluded on the
basis of factors unrelated to productivity. The Constitution of South Africa, the Labour
Relations Act and the Employment Equity Act place emphasis on preventing workplace
discrimination and promoting equity.
Activity
Liena, one of your employees, has asked for three days’ leave to attend her mother’s
funeral. You are shocked, because she told you her mother passed away two years ago.
What is your initial reaction and what do you say to Liena?
6 Feedback
This is the challenge. You as a manager need to understand and be sensitive with regard to
all the different dimensions of culture. Your understanding of Liena’s culture will influence
your decision.
Liena is a black African, which means that one could have been her biological mother
and the other person was her mother’s sister. All the brothers of a biological father are
considered to be fathers to his offspring. All the sisters of a mother are regarded as mothers
63 ETP2602/1
to her offspring. If you don’t understand this culture you will immediately think that Liena
is a liar and such an assumption could destroy your working relationship.
Managers therefore need to understand and be sensitive to the cultures and customs of
the diverse workforce.
Activity
Can you think of some situations in your life, whether at work or at school, where there
was an incident where someone did not understand the cultures of another person
and took offence to their behaviour?
7 Feedback
One example that comes to mind is does a man enter through a door first or does a woman?
In most African cultures, the man enters first to check and make sure that it is safe for the
woman to enter. In other cultures, it is considered good manners to allow the woman to
enter through the door first, followed by the man. This simple difference in culture and
customs can often result to a misunderstanding between two people without the parties
even realising it.
8.3 THE PSYCHOSOCIAL PERSPECTIVES FOR DIVERSITY

MANAGEMENT
What makes us different? Differentiation can take various forms. People differ in terms
of race, ethnic groups, age, gender, financial status, education, religion and nationality
to name a few.
Section 10.3 in your prescribed book deals with diversity issues such as:
• Gender diversity and unfair discrimination

• Gender diversity and sexual harassment
• Race and ethnic diversity and unfair discrimination
• Employees living with physical challenges as a component of diversity
• Age diversity and discrimination
• Unfair discrimination based on sexual orientation
• Appearance and obesity as components of diversity
64
The cases in your prescribed book provide you with various scenarios of diversity challenges
that we encounter in our everyday lives. Read through these cases to gain a deeper
understanding of how these differences among people arouse mixed reactions.
8.4 TOWARDS AN INCLUSIVE WORKFORCE

Despite the richness of the diverse workforce, all organisations strive towards an inclusive
workforce paradigm where there is collaboration across all groups of people. Bhahia
(in Nel & Werner 2014:250) has identified several challenges and obstacles that may be
encountered when organisations adopt an inclusive workforce paradigm.
65 ETP2602/1
8.5 MANAGING CULTURAL DIFFERENCES
Study Sections 10.5 to 10.7 in your prescribed book
8.6 STRATEGIES FOR MANAGING DIVERSITY

Diversity is a challenge that needs to be dealt with on national as well as organisational
levels. There are various strategies that have been developed in dealing with inequalities
on these different levels.
66
8.7 IDENTIFYING THE EMPLOYER OF CHOICE
Source: Nel & Werner (2014:258-259)
8.8 EMPLOYMENT EQUITY PLANS

Smit et al (2007:243) state that the reasons why there is a need for diversity management in
South Africa are the imbalances in the South African business world in terms of economic
empowerment and the debate on managerial and economic transformation. How does
employment equity and the Employment Equity Act impact on diversity management?
8.9 CONCLUSION
This study unit explained the nature and scope of diversity and diversity management
and dealt with how the rapid diversification of the South African and global workforce is
forcing managers to change the way in which they administer organisations.
This concludes Topic 3 where you learnt about managing talent. The next topic will deal
with the behavioural aspects of human resource management.
Before continuing to Topic 4, complete the self-evaluation that follows and complete the
67 ETP2602/1

(1) Harassment of an employee is a form of unfair discrimination and is prohibited by
the Employment Equity Act.
(2) Uncertainty avoidance is the degree to which individuals in a society feel threatened
by unstructured, unclear or unpredictable situations.
(3) It is not unfair to discriminate when the employee agrees.
(4) In high masculine culture characteristic organisations, employees prefer a higher
salary to shorter working hours.
(5) Aiming for high economic growth is a micro-level strategy.
(6) An employer of choice introduces fun as part of employee’s working day.
(7) Employee initiative is frowned upon in collectivist organisational cultures.
(8) The height of an employee is considered a diversity issue.
(9) The entire diversity management and inclusion process must be aligned to manage-
ment policies, practices and procedures.
(10) Diversity management only addresses gender inequality issues.
Answers:
(1) True
(2) True
(3) False
(4) True
(5) False
(6) True
(7) True
(8) True
(9) True
(10) False
68
Topic 4
Behavioural aspects of human resource
management
Topic 4 will outline the behavioural aspects of human resource management. Topic 4
consists of four topics.
• Motivation
• Leadership
• Groups and teams
• Change management
69 ETP2602/1
Motivation
CONTENTS
9.1 Introduction
9.2 Understanding motivation
9.3 Motivational theories
9.4 Goal-setting
9.5 Money as a motivator
9.6 Motivating contingent employees and learners
9.7 Engagement
9.8 Conclusion
9.9 Self-evaluation
Learning outcomes

• Explain the concept of motivation
• Discuss the various theories of motivation and their application to the work context
• Explain how goal-setting serves as a motivational tool
• Discuss money as a motivator
• Suggest strategies to motivate contingent employees
• Explain how motivation theory can be applied to motivate learners
• Discuss the assessment of engagement as an indicator of job performance
• Evaluate the importance of ethics on employee motivation
Key concepts
book.
70
– Creativity
– Critical incident technique
– Engagement
– Equity
– Expectancy
– Hygiene factors
– Instrumentality
– Meaningfulness
– Motivators
– Self-actualisation
9.1 INTRODUCTION
The workforce is a vital aspect of any business and the manager must be able to motivate
individuals in such a way that the employee will perform at his or her optimum level. As
you have already learnt from the previous workbook, individuals are different and as
each individual differs, they all have different needs. Organisations are only successful
in retaining competent employees for as long as those needs are satisfied. It is therefore
important that management understands what motivates their workforce.
This workbook will introduce you to the various motivational theories and how
compensation plays a critical role in the motivation of employees.
9.2 UNDERSTANDING MOTIVATION

Motivation is the force that drives behaviour and gives direction. It is therefore important
that managers spend a great deal of time with employees, interacting with them, and
observing their behaviour. Motivation is what drives people to act in a certain way and
to do what is in their best interest. Lin (in Nel & Werner 2014:265) explains motivation as
the driving force that makes people choose a particular job, and work hard in that job.
Motivation is quite a complex aspect of human behaviour which we need to understand
since not individuals are motivated in the same way.
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The diagram below will describe the motivation process as summarised by Smit et al
(2007:338):
Activity
Think about your studies. What are the factors that are motivating you to complete
your qualification? Or, what is the reason that you enrolled for a tertiary qualification?
You may have only one reason, or you may have many. Write these down and as you
progress through this workbook and the chapter about motivation, see if you can
apply the theories of motivation to your answers.
8 Feedback
This activity requires self-reflection and there is no correct or incorrect answer. Various factors
motivate people, whether it is money, success, recognition, status, power or self-fulfillment.
We are all unique. You may share your thoughts on motivation in the discussion forum
created for this workbook. It will be interesting to read what other students have shared.
Read the textbook below:
The best companies to work for in South Africa

According to the 2006 edition of the book, The best companies to work for in South Africa,
South African Breweries (SAB), Standard Bank, and Flight Centre were named the three
best companies to work for. One of the reasons why people want to work for these
companies is because they offer opportunities for personal growth and development.
9.3 MOTIVATIONAL THEORIES

Theories can never predict behaviour with absolute certainty, but they can give management
an indication of ow people might behave in certain situations. Motivational theories assist
management with the questions: what to motivate, and, how to motivate.
72
Motivational theories are divided into two broad categories (Nel & Werner 2014: 266).
9.3.1 Maslow’s hierarchy of needs

According to Maslow, human needs are drivers of behaviour. Maslow has identified five
needs categories:
9.3.2 McClelland’s achievement motivation theory

McClelland identified three needs:
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9.3.3 Herzberg’s two-factor motivation theory
Herzberg distinguishes between factors that lead to satisfaction and dissatisfaction.
Hygiene factors (environmental factors) such as pay, supervision and relations with others
may lead to dissatisfaction. These hygiene factors reflect the context of the job.
Motivators (intrinsic factors) such as growth, advancement and the work itself; are
determinants of job satisfaction. These factors reflect job content. Job satisfaction comes
from within, and no one else can give an employee the feeling of job satisfaction. For
example poor working conditions may lead to dissatisfaction, yet ideal working conditions
may not necessarily lead to job satisfaction or motivation.
Hygiene factors need constant attention in order to prevent dissatisfaction. Hygiene

factors can attract employees, neglecting these factors could lead to dissatisfaction.
However, hygiene factors cannot motivate or actively promote satisfaction. Motivation
and satisfaction can only come from internal factors.
South Africa’s managers face another unique dimension of hygiene factors. Employee
insurance, medical aid and death benefits, as well as the costs associated with staff
replacement and training, are exerting upward pressure on unit labour costs (Smit et al
2007:347).
Grobler et al (2006:219) illustrates Herzberg’s theory as follows:
In applying Herzberg’s theory in the workplace, managers need to ensure that the
leadership style does not suppress the emergence of employee potential. Managers
must recognise when work has been well done, and focus on the content of the job as
well as the working environment.
74
9.3.4 The job characteristics model
In this theory, it is proposed that the task being performed is the key to employee
motivation (Nel & Werner 2014:271) in which five critical job dimensions have been
identified by Hackman and Oldham.
9.3.5 Expectancy theories

According to Amos et al (2004:163) a person’s motivation is dependent on a person’s
perception of the probability that the behaviour will result in a desired outcome, and the
value of the outcome to the person.
Vroom’s expectancy theory states that motivation is a product of the value that the
individuals place on the possible results of their actions and the expectation that their
goals will be achieved (Tyson 2006:17).
Smit el al (2007:350), explain that the expectancy theory argues that people will act
according to:
1. their perceptions and their work efforts will lead to certain performance and
outcomes, and,
2. how much they value the outcomes.
The core components of Vroom’s theory include:
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The challenge for managers is to influence what individuals believe will happen in the
future. The effort exerted by the individual is dependent on motivation. Motivation is a
combination of the value of rewards and the person’s expectation that the rewards are
dependent on certain effort requirements.
Managers should therefore:
• ensure that the work outcomes valued by employees are also valued by the organisation
• appoint the right people into positions to ensure that there is a match between the
individual and the requirements of the job
• design a job in such a way that it offers challenge, variety and autonomy
• ensure that the right resources and support are available to allow the person to do
the job
• clarify objectives and establish how performance will be measured
• reward performance
• align rewards with what an individual values, for example financial rewards or a
weekend away with the family – the reward depends on the needs of the individual
and will differ from person to person
• use rewards to encourage the required behaviour and eliminate behaviour that is not
desired
• allocate rewards fairly
• provide feedback
9.4 GOAL-SETTING
According to this theory, the source of work motivation is the goals of objectives that a
person aims to accomplish. In many organisations, the key performance areas (KPA) of
jobs are identified. This will guide the employee to those areas of the job in which the
employee must perform well in order to be successful (Nel & Werner 2014:277).
Locke and Latham (in Amos et al 2008:186) identify the seven key steps that are involved
in the goal-setting process:
76
9.5 MONEY AS A MOTIVATOR

Managers can also use compensation to motivate staff and to direct their behaviour. With
reference to Herzberg’s theory, management cannot assume that an increase in pay will
lead to an increased level of motivation for all employees. However, too low a salary, or a
salary that is mismatched with an employee’s needs could lead to dissatisfaction. Thus,
adequate pay prevents workers from being dissatisfied, but cannot guarantee satisfaction.
9.6 MOTIVATING CONTINGENT EMPLOYEES AND LEARNERS

Many organisations make use of contingent or part-time workers that want to earn an
extra income. Although these employees are only temporary workers, it is important to
keep motivation levels as high as possible to encourage optimum performance. Managers
nowadays are aware of the importance of motivation in the workplace and must also
consider how to keep part-time or contingent employees motivated.
Another area of motivation that is also a practical concern in society is how to keep
learners motivated. Many educational institutions have raised issues surrounding the
motivation of students in a learning environment and how to make an impact on the
learning experience.
Study Sections 11.6 and 11.7 in your prescribed book
9.7 ENGAGEMENT
Engagement focusses on employee commitment and involvement. Employees invest
themselves fully into the organisation (Rich, Lepine and Crawford in Nel & Werner 2014:281).
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9.8 CONCLUSION
Managers are always seeking ways in which to improve employee performance to make
the organisation more productive and competitive. Motivation is a factor that has a direct
impact on the performance levels of employees. Motivation is the inner desire to satisfy
an unsatisfied need. Therefore motivation relates to needs and desires as manifested in
human behaviour, and various theories of motivation have been developed in an attempt
to explain this human behaviour.
Compensation is also a form of motivation and organisations use both extrinsic and
intrinsic rewards to compensate employees for their time and effort.
Before you move on, complete the self-evaluation questions that follow and complete
the chapter questions at the end of Chapter 11 in your prescribed book.
9.9 SELF-EVALUATION
Refer to the self-assessment exercise at the end of Chapter 11 in your prescribed book.
Be honest in answering the questions. Answer the questions in the self-assessment
application, you can ask a friend or relative to do this exercise with you.
Answer the chapter questions at the end of Chapter 11 in your prescribed book.
Match the items in Column A to those in Column B:
Column A Column B
1 Maslow A Vroom
2 Herzberg B Individual’s belief that that a certain level of effort leads
to a certain level of performance
3 Task significance C All-involved psychological commitment of an employee
4 Expectancy theory D Critical incident technique
5 Valence E The extent to which a person is responsible for a piece
of work
6 Task identity F The attractiveness of a specific outcome to an individual
7 Expectancy G Safety needs
8 Porter and Lawler H Extent to which the job impacts on other people
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9 Engagement I Freedom and discretion to perform the task
10 Autonomy J Link effort with performance and job satisfaction
Answers:
(1) G
(2) D
(3) H
(4) A
(5) F
(6) E
(7) B
(8) J
(9) C
(10) I
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Leadership
CONTENTS
10.1 Introduction
10.2 The role of leadership in organisations
10.3 Leadership vs management
10.4 Culture and evolution of leadership
10.5 Qualities or traits of leadership
10.6 Leadership theories
10.7 Situational leadership
10.8 Team leadership
10.9 Virtual leadership
10.10 Transformational leadership
10.11 Charismatic and servant leadership
10.12 Leadership development
10.13 Women and the importance of ethics in leadership
10.14 Conclusion
Learning outcomes

• Contrast between leadership and management
• Apply various leadership approaches and theories to organisational situations
• Describe the importance of culture in leadership
• Discuss the factors that have an influence on leader effectiveness
• Provide an overview of team leadership, leadership in a virtual workplace and
transformational leadership
• Suggest strategies for the development of organisational leaders
• Discuss the contributions and challenges associated with women in leadership
• Indicate the importance of ethics in leadership
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Key concepts
book.
– Coaching
– Competency modelling
– Emotional intelligence
– Leadership development Framework
– Mentoring
– Self-fufilling prophecy
– Servant leadership
– Situational leadership
– Systematic leadership
– Virtual leadership
10.1 INTRODUCTION
Leadership has become a critically important topic, partly because of the lack of confidence
in business leadership, but also because of the recent corporate scandals. There is a strong
relationship between the performance of a business and its leadership. For example, a
national sports team does well and wins all their matches, the coach usually receives the
credit. If the team does not perform well, the coach gets the blame.
Similarly, the effective performance of a group of people is greatly determined by the skill
of a leader in coordinating the efforts of individual members. In order to stay competitive,
leaders need to inspire their employees to go beyond their job requirments. The leadership
style should also be appropriate to the situation and the person being led. Effective
leaders acknowledge workforce and cultural diversity within groups and teams and use
communication and motivation to influence their employees.
10.2 THE ROLE OF LEADERSHIP IN ORGANISATIONS

There is a very strong relationship between leadership and productivity in an organisation
and one of the key elements in the success of any business is leadership, not management.
The performance of any business is directly related to the quality of its leadership. We
can take the example of Raymond Ackerman, who led Pick ‘n Pay into one of the biggest
retail operations in South Africa.
Another example is Oprah Winfrey, a hugely successful talk show host. As a leader, she
lets her staff know exactly what is expected of them and how she wants them to do their
jobs. She gives clear guidance onhow to accomplish their goals and direction on how to
accomplish their task of being an award-winning entertainment company.
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Leadership is a complex management function and for the sake of good leadership there
should be a delicate balance between the different components of leadership. Too much
authority for example may lead to an autocratic leadership style.
The components of leadership can be summarised below:
10.3 LEADERSHIP VS MANAGEMENT

Leadership is the process of influencing people to strive willingly to achieve organisational
goals. Leadership is not based on holding a formal position of authority in an organisation.
Groups of people can be led in different ways:
• Autocratic
• Democratic
• Laissez-faire
There is a clear distinction between leadership and management.
Refer to Figure 12.1 in your prescribed book, where the authors have outlined the
differences between leadership and management.
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10.4 CULTURE AND EVOLUTION OF LEADERSHIP

Remember that in a diverse workforce means that not leadership roles will be influenced
by cultural differences. A study conducted by the Global Leadership and Organisational
Behaviour Research Project (GLOBE) has identified six leader behaviours that have been
observed across cultures (Nel & Werner 2014:293).
10.5 QUALITIES OR TRAITS OF LEADERSHIP

According to the trait approach theory of leadership, leaders are born and leadership
is not a quality that can be learnt. Successful leaders have certain characteristics which
distinguish them from non-leaders.
These characteristics include:
• Creativity • Effective communication

• Interpersonal skills • Decisiveness
• Assertiveness • Integrity
• Flexibility • Alertness
• Self-confidence • Sensitivity
• Self-awareness
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10.6 LEADERSHIP THEORIES
Just as theories have been developed to explain the factors that drive motivation, various
theories have also been developed regarding the leadership of people. Once again it must
be kept in mind that a theory has been designed in an attempt to understand behaviour.
10.6.1 McGregor’s X and Y theory

McGregor’s X and Y theory is based on the self-fulfilling prophecy that all managers
perceive their employees in a certain way and that they have inherent ideas about the
characteristics of the people they manage (Nel & Werner 2014:296). In other words, an
assumption is made about the attitudes and characteristics of employees.
A typical Theory Y manager has a positive set of assumptions about people, while the
opposite is true for a Theory X type manager. Amos et al (2008:206-207) have summarised
the perceptions of Theory X and Y managers as follows:
• essentially lazy and would rather not • bright, creative, seek self-direction and
work prefer to be in control of their own fate
• have an aversion to both work and • possess a need to do meaningful work
responsibility
• are passive • wish to engage actively in interesting,
challenging activities
• prefer to be dependent and submissive • desire control over their own work
to those in authority
• require direction and protection • desire a say in decision-making
• are inherently self-centred and gullible • experience a need for autonomy and
growth
• seek the easy path • seek responsibility
• are resistant to change by nature • constantly adapting and undertaking
programmes of change
Also refer to Figure 12.2 in your prescribed book that illustrates leaders’ assumptions
about people according to McGregor.
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10.6.2 Blake and Mouton
Blake and Mouton developed a model on which they based the idea that all managers
have only two major concerns, namely production and people. By plotting the styles
of leaders on a two-dimensional grid with two nine-point scale axes (as shown in your
prescribed book in Figure 12.3), a total combination of 81 different styles of leadership is
possible. Some managers believe that there can be a balanced mix of work and caring for
people, three of the five styles show that managers have a very strong belief that people
and work do not mix. Leaders are ranked on the grid according to the rating they have for
the concern for people compared to the concern they have for production. The different
styles that appear in the model are:
10.7 SITUATIONAL LEADERSHIP

In terms of this approach, the leader is expected to be flexible and should adapt the
leadership style according to:
• the situation in which the leader finds himself or herself
• the maturity of the subordinate
• the personality of the leader
This theory has identified four leadership styles:
• directive
• supportive
• achievement-orientated
• participative
According to Hersey and Blanchard, a leader’s leadership style is determined by the level
of the level of subordinate readiness and maturity.
• Telling style (subordinate is unable but willing)
• Selling style (subordinate is unable and unwilling)
• Participating style (subordinate is able but unwilling)
• Delegating style (subordinate is able and willing)
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10.8 TEAM LEADERSHIP

Team leaders play a crucial role in the success or failure of their teams. Team leaders
need to receive special training in leadership and interpersonal relations (Nel & Werner
2014:301). There are various other skills that team leaders should possess in order to
effectively lead their teams.
10.9 VIRTUAL LEADERSHIP

Changes in technology and the way in which we do business, means that we can operate
from anywhere in the world. Our offices have become virtual work spaces where we
don’t really have to be at the office to do our jobs. This could create some challenges for
leaders since the dynamics of the working environment are not the same as the normal
working environment. Nel and Werner (2014:302) indicate that there are five issues that
the leader will have to pay specific attention to in a virtual work environment:
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10.10 TRANSFORMATIONAL LEADERSHIP
Transformational leadership is an extension of transactional leadership. According to
this approach, leaders should act as change agents and motivate employees to perform
beyond expected standards. This leader will focus on both the lower order as well as
higher order needs of employees. The leader allows for participation and the employee
has a say in how goals will be achieved and how tasks will be performed.
Important elements of transformational leadership include the four I’s:
• Idealised influence
• Inspiration
• Intellectual stimulation
• Individualised consideration
Transactional leaders have an ability to bring about innovation and change. This leadership
style is appropriate in a dynamic business environment. Transformational leaders are
needed that will empower employees.
10.11 CHARISMATIC AND SERVANT LEADERSHIP

Can you think of any charismatic leaders that have made a huge impact in the world?
Leaders whose personal characteristics have contributed to their success as natural
leaders? Their strong personalities and selflessness induce people to put their trust in
these leaders because they possess high levels of self-esteem, self-confidence and self-
determination (Nel & Werner 2014:305).
10.12 LEADERSHIP DEVELOPMENT

In this section of work you need to be able to make the distinction between leadership
development and organisational leadership.
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10.13 WOMEN AND THE IMPORTANCE OF ETHICS IN LEADERSHIP

The changing demographics worldwide have called for the role of women to be re-
evaluated, where women are seen to have an equal influence in the workplace. The need
to eradicate gender discrimination is widespread. Traditionally the roles of leaders have
been filled by men since the perception was created that men were stronger leaders. The
perception also exists where women are seen as the more emotionally aware, people-
orientation personality type.
Ethics in leadership also plays an important role since leaders must align their objectives
with those of the organisation and not for their own agenda. Leaders should utilise their
influence to exert good values and standards throughout the organisation.
10.14 CONCLUSION
This study unit addressed the basic concepts of leadership. Effective leadership is the key
to having a motivated workforce. Leaders need to be aware of their own leadership style
and the impact they have on their followers.
Today, the challenge has shifted from managing technology and capital to managing
people. A leader needs to strive towards integration of both the needs of people and
the needs of the organisation. Effective leaders are able to adjust their leadership style
according to the situation, are emotionally intelligent people and exercise a values-based
leadership style.
Before you continue, attempt the self-evaluation that follows. Complete the chapter
questions at the end of Chapter 12 in your prescribed book.
(1) A person with no authority or formal management position may still be considered
a leader inside the organisation.
(2) It is said that a leader “does things right”.
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(3) According to the managerial grid, country club style management is known as the
9/1 style.
(4) Autocratic leaders dictate to their followers.
(5) The opportunistic leader is always shows concern for others.
(6) The telling style of leadership is applied when subordinates are willing and able to
perform the task.
(7) A Theory Y leader assumes that the average person does not have much ambition.
(8) The authority-compliance leader shows maximum concern for people and minimum
concern for production.
(9) Leaders possess the inherent ability to influence behaviour.
(10) Transactional leadership involves exchanges of rewards.
Answers:
(1) True
(2) False
(3) False
(4) True
(5) False
(6) False
(7) False
(8) False
(9) True
(10) True
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Groups and teams
CONTENTS
11.1 Introduction
11.2 Teams and team effectiveness
11.3 Group development
11.4 Enabling a group environment
11.5 Enhancing effectiveness
11.6 Conclusion
Learning outcomes

• Indicate the criteria that are associated with team effectiveness
• Present a model that indicates key factors influencing team effectiveness
• Differentiate between different types of work teams
• Discuss various perspectives on team development
• Explain how team building can contribute to team development
• Discuss the provision of an enabling team environment
• Explain team processes that enhance team success
Key concepts
Read the list of key concepts in the beginning of Chapter 13 of your prescribed book.
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– Blind conformity
– Community of practice
– Conformity
– Constructive controversy
– Distributed leadership
– Group dynamics
– Inertia
– Norms
– Role conflict
– Role-breadth
– Self-efficacy
11.1 INTRODUCTION
An organisation consists of a combination of formal and informal groups. Most individuals
working in organisations will join groups and teams. A core function of management is
to develop, support and lead groups and teams optimally in the organisation. In most
organisations, the performance of a manager is measured by the performance of his or
her team, and not according to individual performance.
This study unit will focus on groups and teams in the organisation. A group’s behaviour has
important consequences for management and has a potential impact on organisational
performance.
11.2 TEAMS AND TEAM EFFECTIVENESS

According to Smit et al (2007:312) a group consists of two or more individuals who are
interdependent and interact to achieve particular goals. Not all groups are teams.
Nel & Werner (2014:319) explain that the sociological criteria of a group comprises of:
• Two or more interacting individuals

• Common goal
• Group identity
• Shared norms
Group dynamics are influenced by factors such as the type of group, reasons for the
group formation, group size and the stage of group development.
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Reasons for group formation:
• to satisfy security needs by joining a group people feel stronger in numbers

• to satisfy social needs for interpersonal relationships
• to satisfy esteem needs, an individual can achieve a certain status by joining a group
• to achieve group goals
• economic reasons
11.3 GROUP DEVELOPMENT

Groups go through various stages of development:
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Activity

THE BT GLOBAL CHALLENGE AROUND THE WORLD YACHT RACE
The BT Global challenge has provided the material for a case study comparing a yacht
race with today’s business environment.
On 10 September 2000, twelve identical yachts started the “world’s toughest yacht
race”, departing from Southampton in the UK. With a professional skipper an crew of
17 men and women from all occupations, each team set out to complete the 30 000-
mile race around the globe.
The crews stopped at six ports: Boston, Beunos Aires, Wellington, Sydney, Cape Town
and La Rochelle. They arrived back in Southampton in June 2001. The race was highly
competitive, the environment hostile, at times dangerous, and conditions were
uncertain. Faced with these pressures, the winners were skippers who led their teams
most effectively to achieve or sustain high performance. The compilers of the case
study interviewed the crew members of the various teams, recording their emptions
experienced during the various stages of development. These were some of the
responses from the teams during each stage of group development:
Forming (identifying emotions)

Crew members were motivated and daunted by the enormity of the challenge ahead.
They were unsure of themselves and their own technical ability, and there was fear
about the structure of the boats and their ability to withstand the pressures of the
southern ocean. There was anxiety about coping in the dangerous conditions. A lot
of self-interest marked this stage of team development on the boats.
Storming (understanding emotions)

At this stage the crewmembers were becoming more competent and were starting to
challenge the skipper on his appointment and role as leader. Dissatisfaction with the
initially established rules and procedures was surfacing. Crewmembers juggled for
position and tolerance was limited. The skippers still made most of the decisions, but
the crewmembers were slowly beginning to understand that there were differences in
style, motivation, need for change and diversity. They discussed feelings and dealt with
personal conflict. Traumatic encounters between crewmembers occurred regularly.
Norming (using emotions)

At this stage, the teams were consolidating and confidence was building. Crewmembers
shared ideas and were willing to change if there was a better way. They followed a
more systematic approach and team members agreed upon procedures. They shared
responsibility and a collaborative approach to decision making developed. Team
members were developing trust and started solving problems together. The skipper of
one of the best performing boats started “giving power away” – the team was running
itself and he did not even need to be there.
Performing (managing emotions)

At this stage, the crew was highly committed to the task and to each other. There
was a feeling of well-being, and they put self-interest aside. Openness, honesty, and
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effective conflict handling characterized this stage. Crewmembers managed their
emotions and focused on performance, making the best of decisions, and continually
strived to improve.
Adjourning
As the race neared completion, the crew members of the various teams needed to pass
through a “mourning” phase. On some yachts, the skippers were pro-active in dealing
with the end of the race and already started discussing the future in Sydney. Many spent
the long leg from Cape Town to La Rochelle helping crewmembers to come to terms
with their feelings. On a few yachts, crew members never openly discussed this subject.
NOTE: some crews never reached the performing stage; some never left the storming
stage.
Source: Smit et al (2007:318)
11.4 ENABLING A GROUP ENVIRONMENT
The size of the group affects the group dynamics and the overall performance of a group.
It becomes difficult to coordinate a group that is too large; therefore the ideal group size
is between five and seven people. However, the size of a group depends on the nature
of the task, the characteristics of potential members, and time constraints. It must be
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noted that in large groups, the leader will find it difficult to get to know subordinates.
Furthermore, communication barriers will exist.
According to Amos et al (2004:182) all members in a group are actors, each playing a role
(that is giving expression to a set of behaviour patterns).
Belbin (in Amos et al 2008:241) identifies 9 roles within a group:
1. plant – the creative person who solves difficult problems

2. resource investigator – an extrovert, enthusiastic and talkative person
3. coordinator – confident and a good chairperson, they clarify goals and promote
decision-making
4. shaper – outgoing individual and challenges obstacles
5. monitor/evaluator – strategic thinker
6. team-worker – easy-going, avoids conflict and listens and develops others (team
builder)
7. implementer – disciplined individual, very reliable and turns ideas into practical action
8. completer – perfectionist, delivers on time and searches out omissions and errors
9. specialist – provides knowledge or scarce technical skills
A norm is generally an agreed upon standard of behaviour which groups expect their
members to follow. As a group develops and as they interact with one another, norms
begin to emerge. Norms represent behaviour that the group members consider to be
the most significant and acceptable. Norms are important to a group and members are
expected to conform to them. It is advisable to avoid negative norms such as: “We are the
best, so we don’t need to attend business meetings, as we know everything anyway”. When
a member rejects norms, that person may feel pressure to conform or leave the group.
Status involves ranking one individual against another, for example the team captain for
a national sports team gets his own hotel room, while other members of the team have
to share rooms. This is an example of group hierarchy, where factors such as knowledge,
aggression, power and seniority determine the status of each individual within the group.
A group as a whole also has a status within the organisation, for example a team in top
management versus the team of middle management. The top management team has the
highest status because of its level in the organisation and on the hierarchy. According to
Smit et al (2007:324) the higher the group’s status in the organisation, the more cohesive
the group seems to be.
11.5 ENHANCING EFFECTIVENESS

For any group to function effectively there must be effective communication within
the group. Members need to be able to confront one another in a constructive manner,
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encourage each other, to draw conclusions and so on. Effective communications depends
on the interpersonal skills of the members such as objectivity, listening skills and recognizing
the interests and achievements of others.
It is important that the group leader identifies certain patterns of communication within
the group such as the following:
• Who communicates most frequently?

• Who communicates least?
• Who communicates with whom?
• Who communicates what?
• Are members sharing information?
Nieman and Bennet (2007:97) identify guidelines for effective communication:
• Plan and clarify ideas before communicating them

• Examine the purpose of communicating the message
• Consider situational factors in which communication will take place
• Involve and consult others when planning communication
• Convey something helpful to the receiver
• Actions must support communication
• Non-verbal messages are powerful – be alert
• Communication is not complete without feedback
• Listening is essential
• Communication must be rich in information
There are a number of ways in which a group can make decisions:
• Decision by authority rule – one person decides

• Decision by lack of response – a decision is made through lack of interest
• Decision by minority rule – a small group sub-dominates
• Decision by majority rule – decisions are made by voting
• Decision by unanimity – everyone goes along with a particular decision
• Decision by consensus – not everyone wants to pursue a particular decision but
everyone agrees to try it
Activity
TEAMWORK AT STARBUCKS
Much has been written about the success of Starbucks. Several factors have been singled
out, for example, effective branding, superior product quality, superior customer service,
96
and product innovation. However, to anyone who ever visited Starbucks, another factor
for its success is apparent – the teamwork of Starbucks “baristas” (the associates who
take orders and who make and serve coffee and food). Baristas are making elaborate
coffee, serve deserts, taking orders at record speed, helping each other out when
needed, answering customer questions, and seemingly, enjoying their work!
Starbucks is legendary for its customer service and teamwork. The effectiveness of
the teamwork affects the effectiveness of the customer service. Starbucks fosters a
teamwork-based culture in many ways. Training is an important element in this culture.
Within their first month, all Baristas receive 24 hours of training e.g. the exact methods
for making Starbucks drinks and customer service practices. In addition, they receive
training on how to interact with each other.
Another factor that leads to effective teamwork is Starbucks’ generous benefit packages.
Baristas receive higher pay, better health benefits and more vacation time than the
industry norm. Starbucks fosters teamwork by providing numerous communication
channels so that every barista can communicate directly with head office. The
communication channels include e-mail, suggestion cards and regular forums with
executives. Perhaps the most telling sign of Starbucks’ desire to create teamwork
culture is that baristas are also called “partner”.
Source: Hitt et al (2006:397).
9 Feedback
Teams are very beneficial to any organisation. Having teamwork inside the organisation
creates synergy and the output of a team is greater than the output of individual workers.
Team members are given more responsibility and they are better empowered to do their jobs.
According to Hitt et al (2006:399) simply having people work together as a team does not
guarantee positive outcomes. Teams must be effectively composed, developed, structured,
managed and supported in order to become high-performance work teams.
When to use teams When not to use teams
There is a clear reason or purpose There is no clear purpose

People work together to get the work done People work independently
The organisation rewards teams and The organisation rewards individual effort
teamwork and team performance and performance
Ample resources are available The resources are not available
Teams have clear authority Management continue to influence and
monitor the work they are doing
The advantages of using teams are:

• better utilisation of the capabilities of employees
• teams facilitate employee involvement
• teams increase employee motivation
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11.6 CONCLUSION
Groups are important in any organisation. There are different groups within the organisation,
namely, formal and informal groups. Formal groups consist of command and task groups.
Informal groups consist of friendship and interest groups. Employees need the necessary
skills to be effective group members and group leaders.
Students were introduced to the differences between a “group” and a “team”. A group
can be defined as two or more interdependent individuals who influence one another.
A team is a group that consists of two or more people, working interdependently within
an organisation with tasks that are relevant to the organisation’s mission.
Conflict will occur in any organisation and may be either functional or dysfunctional
– depending on how it is handled. Parties to a conflict situation can adopt several
responses to the conflict such as competing, avoiding, accommodating, compromising
or collaborating.
The fundamentals of how groups function need to be understood. The aim is to develop
the group into a work team. Organisations can promote effective teamwork by providing
top management support, ensuring technical and informational support, selecting people
for teamwork, training people in teamwork skills and rewarding team performance.
You are now ready to move onto the final study unit in this topic which will deal with
change management. Before you start the next study unit, complete the chapter questions
at the end of Chapter 13 in your prescribed book and answer the self-evaluation questions
that follow.
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Change management
CONTENTS
12.1 Introduction
12.2 What is an organisation?
12.3 Organisational change
12.4 Organisational development
12.5 Environmental factors and change
12.6 Organisational renewal
12.7 Change management
12.8 Typical reactions and interventions
12.9 Strategic planning and change management
12.10 Conclusion
Learning outcomes

• Understand the distinctions made between organisational renewal, organsational
development, and organisational change
• Understand how various conceptual approaches to change management can en-
hance the process of change
• Compare the mechanistic and organic systems of an organisation
• Discuss critical factors for organisational renewal
• Explain key corporate renewal factors
• State why managers require knowledge of organsational renewal
• Distinguish the relationship between environment factors and organisational renewal
• Discuss the roles of technology and values in organisational renewal
• Discuss change and change management
• Outline the impact of disengagement, dis-identification, disenchantment and dis-
orientation in the workforce as reaction to change
• Discuss the advantages and disadvantages of the mechanistic and organic systems
in organisational renewal
• Distinguish between managing change and managing diversity
• Discuss the impact of quality management on organisational renewal and HRM
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Key concepts
Read the list of key concepts in the beginning of Chapter 15 of your prescribed book.
– Globalisation
– Goal-directed activities
– Organic systems
– Organisational change (OC)
– Organisational development (OD)
– Organisational renewal (OR)
– Organisational transformation
– Quality management
– Renewal process
12.1 INTRODUCTION
The business environment is dynamic and organizations have to adapt to change constantly.
A business does not function in isolation and is influenced by the external environment,
the macro environment as well as the market and micro environment. Just consider how
a new competitor in your area would affect your business – you might need to change
your prices, run special promotions, and introduce new products / services and so on.
Organisations continuously need to adapt to survive. Today, businesses are facing

challenges such as skills shortages, new technologies, changing government policies
and legislation.
“It is always easier to talk about change than to make it”

– Alvin Toffler
The aim of this study unit is to introduce you to the concept of change and how to
manage it.
12.2 WHAT IS AN ORGANISATION?

Any business will have to change at some stage in its life cycle if it wants to survive.
Organisations can use their adaptability to change, as a competitive advantage for
example an organization could introduce a night shift into the workplace to meet the
growing customer demand. The basic process of change is to unfreeze (motivate the
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change) the old situation, move to the new situation (involve the workforce) and refreeze
the new situation (reward people who show that they have accepted the change and
behave accordingly).
An organisation will evolve through a series of life stages in its life cycle: start-up, maturity,
renewal or death.
The following is a practical example of how a large organisation, such as Iscor changed
over time:
• The South African government founded Iscor in 1928.

• It was privatised in 1989.
• Massive re-engineering commenced in 1995.
• There was major restructuring in 2000.
• Kumba resources (an independent entity) were created in the course of the
restructuring process.
• Unbundling took place in 2001.
• Iscor is currently owned by Mittal Steel.
Nel and Werner (2014:363) explain the basic life cycle of an organisation. Once the business
reaches the maturity stage, the business life cycle will start to decline, this means that
there are three possible options to pursue: management can opt to maintain the status
quo of the business, to allow the business to decline until the business has to close its
doors, or management can select a renewal strategy to revive the business.
12.3 ORGANISATIONAL CHANGE

The change process consists of the following steps:
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There are various decisions that will be made regarding change:
Activity
You have heard rumours in the office for weeks now. The rumour is about a merger.
Finally, you and your senior management team issue a bulletin confirming that merger
terms have been agreed, in fact, an article about this merger appeared in the newspaper
this morning. You, the general manager, call your team together to announce that the
two operations will be merged in four months’ time.
You are bombarded with questions, such as: Will we keep our jobs? Will we be paid
more or less? What about redundancies? You cannot answer all these questions because
you do not have sufficient information.
What should you have done differently?
10 Feedback
You were correct in not holding an earlier meeting with your team as you did not have all
the information. However, you could be placed in an unfortunate position because the
staff had to read about the proposed merger in the newspaper, instead of hearing about it
straight from you. Lack of consultation is a bad practice and results in dissatisfied staff who
will feel insecure. You should now focus on involving staff, and by making representations
to them. You will also now need to use your leadership skills to persuade and convince
your team to adapt to the change. You need to evoke enthusiasm and get to find out
about all the detail regarding the merge and communicate the reason for the merger to
the staff. Explain to them the consequences if it is decided not to merge and the benefits
if you do go ahead with the merger. You will only then be in a better position to gain their
commitment and trust.
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12.4 ORGANISATIONAL DEVELOPMENT

What is organisational development? Meyer and Kirsten (2014:109) define organisational
development as the “integration of individual roles, as well as the roles of the entire
organisation to ensure that change is managed in a scientific way, so that the goals of
the organisation can be achieved in the most effective and efficient manner”.
The three levels of organisational development are summarised below:
Characteristics of organisational development
Meyer and Kirsten (2014:111) have identified the following reasons for organisational
development:
• low levels of employee morale
• inability of the organisation to retain its best employees
• a lack of communication
• diversity issues
• a lack of teamwork or group cohesion
103 ETP2602/1
• a gap exists between strategy and operational activities
• ineffective systems and processes
• high levels of absenteeism
• customer complaints
• crisis management
• quality problems
• a lack of creativity and innovation
12.5 ENVIRONMENTAL FACTORS AND CHANGE

As you have already learnt in previous study units and have read in the previous chapters
in your book, the organisation constantly faces challenges, not only from within, but
external factors beyond its control. There are various environmental factors that will have
an impact on change an organisation and organisational development.
104
12.6 ORGANISATIONAL RENEWAL
Learning organisation is about adopting an attitude where employees are empowered

to solve problems. A learning organisation displays the following characteristics:
• leadership
• team-based
• employee empowerment
• open flows of information
• participative strategy
• strong adaptive culture
12.7 CHANGE MANAGEMENT

Managing change is one of the most difficult challenges for managers – as managers need
to understand exactly what to change, when to change and how to change. Managers
do not always have adequate guidelines on how to manage the change process and how
to manage resistance to change.
Facilitating change management interventions in organisations is one of the biggest

challenges. Despite prepare and planning for change, management will be faced with
severe resistance to change. In most organisations, employees perceive change as a
threat and change is not always welcome. Stone (in Nel & Werner 2014:379) lists some of
the most common reasons why people resist change:
105 ETP2602/1
• lack of trust
• fear of the unknown
• disrupted habits
• loss of control
• loss of confidence
• poor timing
• lack of purpose
• economic loss
• group pressure
• disturbance of balance of power
To overcome this resistance to change, management needs to educate the workforce about
the change and why it is necessary. Open communication and regular communication play
a key role. Communication could take the form of meetings, presentations or one-on-one
discussions. Employees must be allowed to participate and be involved in the process.
12.8 TYPICAL REACTIONS AND INTERVENTIONS

Change can trigger various reactions and behaviours from employees. Managers need
to be aware of the reactions they will encounter in the organisation and need to be
prepared to deal with these.
Whether the change is revolutionary or evolutionary, management needs to consider

that employee support is vital during this process of change.
Remember that change is met with different reactions and employees will adopt a negative
perception to any change. People have a fear of uncertainty and of the unknown, therefore
management needs to be prepared in order to address any issues arising from this.
Various specialists in the field (in Nel & Werner 2014:381) have summarised the elements
which constitute a new approach to managing organisational change:
106
12.9 STRATEGIC PLANNING AND CHANGE MANAGEMENT

Effective strategic change management can be implemented in 3 steps according to
Parnell (in Nel & Werner 2014:382) as follows:
12.10 CONCLUSION
Change is a complicated process and South African organisations are facing many changes,
such as technological breakthroughs, new legislation, international competition, increasing
cultural diversity and so on. If organisations do not align their vision with the environment,
or adapt their mission and strategy they will fail. Leaders also need to see the need for
107 ETP2602/1
change and move out of their “comfort zones” otherwise they will lead their businesses
to failure.
This concludes Topic 4, the next, and final topic will deal with the legal aspects of managing
human resources.
Complete the chapter questions at the end of Chapter 15 in your prescribed book. Answer
the self-evaluation questions below before moving on to Topic 5.

(1) Disengaged employees are physically present but mentally absent.
(2) Disenchantment is the psychological withdrawal from change.
(3) Resistance to change lowers an organisation’s effectiveness and reduces its chances
of renewal and survival.
(4) Employee involvement should not be encouraged regarding the decision to intro-
duce change.
(5) Organisations are open systems.
(6) The punctuated equilibrium model (PEM) suggests that evolution is incremental or
static, but is punctuated by a radical short term change.
(7) Organisational continuity is a process of transformation that builds on the past by
identifying the things that need to be nurtured, whilst enhancing them as the situ-
ation requires.
(8) The contingency model highlights five dilemmas that require a choice when manag-
ing the change process.
(9) Organisational development can be considered a fix-it strategy.
(10) Disorientation is a common reaction among people who are used to clear goals and
unambiguous directions.
Answers:
(1) True
(2) False
(3) True
(4) False
(5) True
(6) True
(7) True
(8) False
(9) False
(10) True
108
Topic 5
Labour legislation
Topic 5 is the final topic for ETP2602 and will deal with the labour legislation that plays
a vital role in the management of human resources. Topic 5 will guide you through the
laws that impact on human resource management.
109 ETP2602/1
Laws impacting on human resource management
CONTENTS
13.1 Introduction
13.2 The Constitution of the Republic of South Africa
13.3 The contract of employment
13.4 The Basic Conditions of Employment Act
13.5 The Employment Equity Act
13.6 The Labour Relations Act
13.7 The Skills Development Act
13.8 Collective bargaining and employee participation
13.9 The Occupational Health and Safety Act
13.10 The Unemployment Insurance Act
13.11 Conclusion
Learning outcomes

• Explain the constitutional principles that informs labour relations conduct in South
Africa
• Explain the common law duties and responsibilities of employers and employees
• Discuss the main provisions of the Employment Equity Act
• Explain the best practice in dealing with sexual harassment in the workplace
• Discuss the main provisions of the Basic Conditions of Employment Act
• Explain the purpose, scope and application of the Labour Relations Act
• Describe the best practice guidelines for the management of employee performance
• Explain how employees may be dismissed and retrenched under conditions of fairness
Key concepts
book.
110
– Basic Conditions of Employment Act

– Codes of good practice
– Commission for Conciliation, Mediation and Arbitration
– Contract of employment
– The Constitution Act
– Dismissals
– Employment Equity Act
– Employment equity
– Fair discrimination
– Freedom of association
– Sufficiently representative trade union
13.1 INTRODUCTION
The Department of Labour administers labour legislation in South Africa. The purpose of
labour legislation is to protect employees and employers in the employment relationship. As
a business management student you need to understand South African labour legislation
in order to apply it effectively in the workplace.
Think of travelling to an area you where you have never been before. How do you work
out how to reach your destination? Do you ask for directions? Do you use a road map?
Do you rely on the road signs to direct you?
The legal framework regulates employment issues, and acts as a “road sign” or a “road
map” for small business owners. It provides the legal direction on how to manage your
staff component.
13.2 THE CONSTITUTION OF THE REPUBLIC OF SOUTH AFRICA

The Constitution of the Republic of South Africa was signed by President Nelson Mandela
in 1996 marking the dawn of a new democratic era. The Constitution of the Republic
South Africa Act No. 108 of 1996 is the supreme law of South Africa. It provides the legal
foundation for the existence of the republic, sets out the rights and duties of its citizens,
and defines the structure of the government.
The Constitution comprises of various Chapters, of which Chapter 2 of the Constitution

contains the Bill of Rights. Two sections of Chapter 2 are relevant to labour relations and
the management of human resources, namely Section 9 and Section 23.
111 ETP2602/1
13.3 THE CONTRACT OF EMPLOYMENT

The common law contract forms the basis of the employment relationship and is
subordinate to the statute. The contract of employment is an agreement whereby the
employee agrees to make his or her services available to the employer, to perform the
duties defined by the employer in return for an agreed remuneration for a fixed period
of time or until the termination of the contract.
The duties of both the employee and employer are included in the written contract.
Activity
Assume that you have opened your own guesthouse. You have appointed five ladies
as cleaners. What responsibility or duties do you have as an employer?
11 Feedback
Duties of the employer:

• accept the employee into service, after you have reached an agreement on the employ-
ment contract, and the terms and conditions;
• pay remuneration;
• provide a safe working environment;
• adhere to the terms of the contract.
112
Activity
Draw up a contract of employment for the cleaners who will be working in your
guesthouse.
12 Feedback
The contract of employment should contain the following information:
• job description – for example the cleaning of rooms, washing, ironing of linen and so on;
• remuneration – monthly pay, review dates and bonuses;
• hours of work – for example Monday to Friday 07h00 – 16h00, Saturdays 08h00 – 11h00
and Sundays 08h00 – 10h00;
• leave – annual leave, sick leave, maternity leave, family responsibility leave etc.;
• duration of the contract;
• safety rules;
• disciplinary rules and procedures:
• performance standards;
• probationary period;
• termination of employment.
13.4 THE BASIC CONDITIONS OF EMPLOYMENT ACT

The Basic Conditions of Employment Act No. 75 of 1997 (BCEA) prescribes basic conditions
of employment and entrepreneurs and business owners are obliged to regulate the
following:
• Working time – maximum of 45 hours per week

• Overtime – may not exceed 10 hours per week and the rate of pay for overtime is
one and a half times the employee’s normal wage for the ordinary hours of work. An
employee who works on a Sunday must be paid double his or her wage rate for each
hour worked.
• Leave – an employee is entitled to 21 consecutive days’ annual leave. On termination
of employment, the employer must pay the employee for outstanding leave. An
employee is entitled to six weeks’ paid sick leave for every 36 months of continuous
employment. A pregnant employee is entitled to at least four consecutive months’
unpaid maternity leave. Employees are also entitled to family responsibility leave
(3 days per annual leave cycle).
113 ETP2602/1
• Employment and remuneration particulars – on commencement of employment,
the employer must provide the employee with certain information (in writing).
Information such as the place of employment, the name and address of the employer,
job description, working hours, remuneration, leave and the disciplinary code.
• Termination of employment is subject to the following conditions:
– One weeks’ notice where the employee has been employed for six months or less;
– Two weeks’ notice if the employee has been employed for more than six months
but less than a year;
– Four weeks’ notice where the employee has been employed for one year or more,
or a domestic or farm worker who has been employed for more than six months.
• Prohibition of employment of children – no children under the age of 15 may be
employed.
• Inspector’s power of entry to the workplace – a labour inspector may at any time
enter any workplace or any other place where an employer carries out business.
13.5 THE EMPLOYMENT EQUITY ACT

The Employment Equity Act No. 55 of 1998 (EEA)aims to achieve equity in the workplace,
thus promoting equal employment opportunities and fair treatment in employment as
well as implementing affirmative action measures by designated employers.
• The Employment Equity Act addresses issues such as unfair discrimination. Employers
may not discriminate against employees on the basis of age, gender, pregnancy, marital
status, sexual orientation, HIV status, religion, and so on.
• Employers must prepare and implement an employment equity plan.
• Employers must display a summary of the Act in all languages relevant to their workforce.
The Department of Labour has identified the following issues inside an organisation that
can be reviewed in order to achieve equity:
• Employment practices such as recruitment, selection, pre-employment testing and

induction
• Practices related to succession planning
• Job assignments
• Training and development methods and access to training
• Remuneration structures and packages
• Employee benefit arrangements
• Disciplinary practices
• Company culture
• Practices relating to the management of HIV/AIDS in the workplace
• The number and nature of dismissals, voluntary terminations and retrenchments
114
• Working conditions
• Disciplinary practices
13.6 THE LABOUR RELATIONS ACT

The objectives of the Labour Relations Act No. 66 of 1995 include:
• To regulate the fundamental rights of South Africans – for example employees may join
trade unions, participate in elections, employers may form employers’ organisations.
• To promote collective bargaining – for example agency shop agreements, closed shop
agreements, and the establishment of bargaining councils. In the past, the relationship
between industry level and bargaining at branch level was not regulated. Bargaining
councils have replaced the old industrial councils. Bargaining councils are responsible
for settling most disputes in their industry (including disputes that arise in small– and
medium sized enterprises). Bargaining councils negotiate wages and working conditions
such as working hours, leave and overtime rates. These councils promote and establish
training schemes and establish and administer benefit schemes.
• Promote worker participation – establishment of workplace forums. Prior to the passing
of this Act, there was no statutory support for worker participation in decision-making.
• Promote effective dispute resolution – the LRA makes provision for the three following
dispute resolution procedures:
– Conciliation
– Arbitration
– Adjudication
Prior to the Act, the needs of small business were not addressed and the right to organize
and bargain collectively did not meet international standards.
115 ETP2602/1
13 Feedback
The Commission for Conciliation, Mediation and Arbitration handles all labour relations
cases that are not handled by bargaining or statutory councils.
Functions of the CCMA:
• attempt to resolve disputes referred to it in terms of the LRA through conciliation
• arbitrate if a dispute remains unresolved
• assist in establishing workplace forums
• publish information, research and statistics about its activities
The CCMA may also offer advice and oversee any election or ballot of a registered trade
union or employers’ organisation.
13.7 THE SKILLS DEVELOPMENT ACT

The aim of this Act is to encourage employers to use the workplace as an active learning
environment, to provide opportunities for employees to gain experience and to improve
the prospects of previously disadvantaged persons (Van Dyk et al in Amos et al 2004:98).
The application of this Act has led to the establishment of numerous bodies to coordinate
training, education and development in South Africa through various Sector Education
and Training Authorities (SETAs). These SETAs represent different sectors of industry such
as mining, food, banking and so forth.
SETAs develop sector skills plans, implement these plans, promote learnerships, liaise
with the Department of Labour and collect and disburse skills development levies in
their sectors. Grobler et al (2006:339) explain that learnerships are intended to address
the gap between current education and training provision and labour market needs.
Learnerships must have a structured learning component and include practical work
experience of a specific nature and duration that leads to a qualification registered by
SAQA and related to an occupation.
Some businesses have to register with a SETA and pay a skills levy. This money will then
be used for national skills development. The Minister of Labour has the discretion to alter
the levy, but currently it is 1% of the organisation’s total wages and salaries bill. There are
certain organisations that are exempted from paying this levy such as any public service
116
employer, and religious or charitable organisations. Small businesses with a total wages
and salaries bill of less than R250 000 per annum are also exempted.
In order to reclaim training levy money (unless the organisation is exempt from the skills
levy) a business must meet the following requirements:
• A skills development facilitator must be nominated.

• Employers must submit an annual workplace skills plan.
• Grants may be claimed back if the employer has addressed specific skills shortages.
• There must be compliance with SAQA.
• Sufficient staff and financial resources must be made available for assessment.
• An effective quality assurance and control system must be maintained.
• Training material should be recognized and accredited by the Education and Training
Quality body (ETQA).
• Organisations should research the possibility of using learnerships.
• Training must be delivered by competent education, training and development
practitioners.
• Learning and development plans for employees must be established.
13.8 COLLECTIVE BARGAINING AND EMPLOYEE PARTICIPATION

There are various role players in labour relations, namely:
A trade union is any number of workers in a particular organisation, industry, trade

or profession who are united for the purpose of organisaing relationships between
themselves and their employers (Grobler et al 2006:417). The primary goal of a trade union
is to represent the interests of its members through collective bargaining and lobbying.
117 ETP2602/1
There are several types of trade unions:
Industrial Public sector

Craft unions General unions
unions unions
Also called trade Organise workers Organize all Example: The

unions. Organise from a specific workers, unskilled South African
workers on the industry. and semi-skilled Democratic
basis of skills or Example: The from different Teacher’s Union
trade. mining industry. levels and
Example: industries.
Amalgamated Example: National
Engineering Education
Union.
Unions may be registered or unregistered. However, the Labour Relations Act 66 of 1995
stipulates that only registered unions can claim all rights of a union. These rights include
the right to hold meetings and communicate with members on the employer’s premises
and the rights to access.
The Department of Labour has created the following security legislation for union
members (Grobler et al 2006:419):
• Closed agreement – a representative trade union and the employer may conclude an
agreement to the effect that all employees covered by the agreement should become
members of the trade union. Two thirds of the employees must agree to this agreement.
• The agency agreement – a representative trade union and the employer conclude
a collective agreement where the employer will deduct a standard agency fee from
employees’ wages – this includes all members, unionised or non-unionised.
Why do employees join trade unions?

• To protect a trade or skill.
• For representation – employees often feel that they are not involved in matters
that affect their work. Unions bring employees’ wants, needs and concerns before
management.
• Job security and regulation – employees want to believe that management will not
make any unfair decisions about their employment. They wish to be protected against
lay-offs and know that their jobs will be protected against automation.
• Economic reasons – regarding wages and benefits, employees want to be paid fairly
and want to receive wages on par with those in similar positions in other organisations
or industries. Employees believe that unions will be able to negotiate higher levels of
wages and benefits with their collective power.
• Political reasons.
• Social needs.
• Self-fulfilment.
Employers join trade unions to assist them in the management of the workforce.
118
The trade union structure:
Shop stewards assist members during grievance inquiries, disciplinary inquiries and
hearings. A shop steward is elected by members to act as a link between management
and union members and the union branch. For every 10 members of a representative
trade union, one shop steward may be elected. A shop steward has to enrol new members,
see that the agreements between the trade union and the company are adhered to
adhered to, discuss complaints with management and look after the general well-being
of members (Grobler et al 2006:423).
• Local branches: The local branch provides secretarial services and coordinates the
activities of unions such as ballots and dispute handling.
• Regional committee: This committee consists of representatives of the various branches
and acts as the coordinator of branch activities.
• National committee or national executives: consists of the chairman or president,
general secretary and treasurer and can be seen as the supreme authority of the union.
This committee is responsible for the implementation of union policies.
13.9 THE OCCUPATIONAL HEALTH AND SAFETY ACT

The aim of the Occupational Health and Safety Act No. 85 of 1993 is to cover the health and
safety of employees and members of the general public who may be affected. Remember
it is the duty of the employer to ensure a safe working environment for employees and
to provide the necessary training to ensure health and safety of employees at work. The
employer must also enforce measures in the interests of health and safety and inform
employees of their duties.
The duties of the employee include:
• Take reasonable care of the health and safety of themselves and others
• Cooperate with the employer to fulfil any duty imposed by the OHSA
• Obey health and safety rules
• Report any situation which is unsafe or a health hazard
• Report all incidents that could affect anybody’s health or cause injuries
An employer that employs 20 or more employees must appoint a Health and Safety
representative.
119 ETP2602/1
13.10 THE UNEMPLOYMENT INSURANCE ACT
The Unemployment Insurance Act No. 63 of 2001 provides for the payment of unemployment
benefits to contributors who have become temporarily unemployed due to termination
of their employment contract, or due to illness, maternity leave or adoption. Employers
are obliged to register their employees with the Unemployment Insurance Fund (UIF)
and make the required contributions monthly.
The following employees are excluded from the Act:
• Persons who do not fall within the definition of “employee” (eg. Independent contractors,
the self-employed)
• Employees who are not contributors as defined by the Act
• Employees who receive remuneration under a learnership agreement
• Government employees
• Migrant workers who must be repatriated at the conclusion of their contracts of service
• Employees employed for less than 24 hours per month
Activity
Link each one of the following scenarios to a specific Act which will guide the business
owner on how to handle the situation.
(1) Baby U R employs females only. The branch manager admits that men would also
be able to work in a baby store but he prefers the female sales team in his busi-
ness, as they all have children and can relate easily to the baby products and thus
sell more items.
(2) The sales ladies have been working the entire day without taking a lunch break.
(3) Only two sales ladies know how to operate the cash register. This is becoming a
problem on busy days when the ladies are supposed to be on the floor assisting
customers.
(4) One of the team members realized that there are no fire extinguishers on the
premises.
14 Feedback
(1) Employment Equity Act No. 55 of 1998

(2) Basic Conditions of Employment Act No. 75 of 1997
(3) Skills Development Act No. 97 of 1998
(4) Occupational Health and Safety Act No. 85 of 1993
120
13.11 CONCLUSION
The government of South Africa has introduced legislation which has had a profound
effect on labour relations in South Africa. Employers must ensure that their recruitment
and selection practices are non-discriminatory and that each applicant is given an equal
opportunity. Employers and business owners need to understand the field of labour
relations and the tripartite relationship between the state, employers and employees.
Read Sections 2.12 and 2.13 in your prescribed book
This chapter concludes the module ETP2602. Answer the Chapter questions at the end of
Chapter 2 in your prescribed book and then attempt the self-evaluation questions below.
(1) Assume that one of your employees has been using abusive language and has
assaulted another staff member at work. You would like to dismiss the worker. On
what grounds could you dismiss the employee and what are the guidelines that you
would follow?
(2) Explain whether an employer is allowed to assess the employee’s competence before
confirming his or her appointment.
(3) An employer is considering retrenchments at his workplace due to economic reasons.
Explain what procedures the employer has to follow for the retrenchments to be
substantially and procedurally fair.
Answers:
(1) Dismissal for misconduct. The guidelines that should be followed are:
 You must first determine whether the employee did contravene a rule regulating
conduct in the business.
 Gather information to determine if there are grounds for dismissal.
 The onus is on you to prove on a balance of probabilities that the employee is
indeed guilty of misconduct, namely the employee was aware of the business
rule and the rule has consistently been applied by the business owner.
 The code of good practice lists examples of serious misconduct which include
willfully endangering the safety of others, physical assault on the employer,
employees, a client or customer.
 The dismissal must be substantially and procedurally fair.
 The employee must be allowed the opportunity to state his or her case in response
to the allegation – a hearing must thus be held.
(2) Yes, an employer is allowed to assess an employee’s competence before confirming
the appointment. This is known as the probationary period (for a reasonable period
of time). During this period, the employer must give the employee appropriate evalu-
121 ETP2602/1
ation, training, guidance and counselling to the extent necessary for the employee
to perform satisfactorily.
(3) Guidelines for retrenchments:
 Employers must consult with employees before commencing the retrenchment
process.
 Consulting parties should attempt to reach consensus on matters such as ap-
propriate measures to avoid the dismissals or to minimize the number of dis-
missals, change the time of the dismissals and to mitigate the adverse effects
of the dismissals.
 An attempt should be made to reach consensus on the severance pay for the
dismissed employees (at least one week’s remuneration for each completed year
of continuous year of service with that employer).
122

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Human Resource Management only Study Guide for

for Entrepreneurs ETP2602

Department of Entrepreneurship, Supply Chain,

University of South Africa, Pretoria

All rights reserved

Printed and published by the

Topic 2: Employment and onboarding 9

Topic 3: Talent management 45

Topic 4: Behavioural aspects of human resource management 69

Topic 5: Labour legislation 109

Which parts of the prescribed book must I study?

Topic Study unit Chapter

Topic 1 Study unit 1

3 MODULE-SPECIFIC STUDY PLAN

Reading of relevant chapters in the prescribed book 40

Completing the activities in the prescribed book 10

Completion and submission of assignments 10

Studying the relevant chapters in the prescribed book 50

Total time spent on the module 120

Learning outcomes. The learning outcomes indicate what aspects

Study. This icon indicates the relevant sections of the prescribed

Key concepts. The key concepts indicate which terms or keywords

Activity. This icon refers to activities that you must do to develop

YouTube video link. This icon indicates a link to a YouTube video

Did you know.

WORK THROUGH CHAPTER 1 OF YOUR PRESCRIBED BOOK.

At the end of this workbook you should be able to:

Study Section 1.1 in your prescribed book

1.2 HRM AT A GLANCE

The people employed by an organisation are a potential source of competitive advantage,

Study Section 1.2 and 1.3 in your prescribed book

1.3 CHALLENGES FACING HRM IN SOUTH AFRICA

Study Section 1.4 in your prescribed book

1.4 CURRENT FOCUS AREAS IN HRM

Study Section 1.5 in your prescribed book

1.5 THE ROLE OF HR IN CREATING AN ETHICAL

Study Section 1.6 in your prescribed book

Answer True or False to the following questions:

WORK THROUGH CHAPTER 3 OF YOUR PRESCRIBED BOOK.

At the end of this study unit you should be able to:

Key words and concepts

– Compressed work weeks

Workforce planning is described as an integrated and holistic resource planning process

Study Section 3.1 in your prescribed book

2.2 TALENT PLANNING

2.3 WORKFORCE/TALENT PLANNING

Study Section 3.2 in your prescribed book

Study Section 3.3 in your prescribed book

Kindly note that there is no section 3.4 in your prescribed book!

2.4 KEY AREAS OF WORKFORCE PLANNING

2.5 STEPS IN THE WORKFORCE PLANNING PROCESS

Study Section 3.6 in your prescribed book

Source: Marx (in Niemann & Bennet 2007:55)

2.6 PRE-NEED HIRING

Study Section 3.7 in your prescribed book

Study Section 3.8 in your prescribed book

2.8 RECRUITMENT SOURCES

Study Section 3.9 in your prescribed book

Source: Marx (in Nieman & Bennet 2007:157)