The Truth About Employment Equity

by | Mar 11, 2011 | Public Service | 0 comments

To measure progress and the returns on the national investment in employment equity over the past twelve years by the ‘one size fits all’ measurement of demographic representation is a gross oversimplification and a reckless disregard for the complex nature of organisational development.

No matter what is said in general debate about workplace and employment practices, be it job creation, decent work, equal pay for equal work, the wage gap or equity, the human resource management reality is that all these issues have to be interpreted and measured in every organisation based on their unique operational circumstances. This is also true at sector level, where, for example the employment practices in the public and private sectors are vastly different.

In the public sector the government is the only employer and public money is used to fund its employment costs. Consequently, the only risk faced by Government is that taxpayers may vote them out if the public servants don’t deliver what their employer promised. Even this is not too much of a concern because according to current statistics only 1 in 5 voters pay income tax.

In the private sector employment costs are operating expenses, funded from income generated through the products or services delivered to the market.

Consequently, customers are the ultimate ‘paymasters’ of private sector employees.

When customers are not satisfied with any aspect of the service that a supplier delivers, they simply move their spending to another supplier – putting the errant supplier’s income stream and employee’s jobs at risk.

In the private sector, the rule is that ultimate worth of any job is the employer’s ability to pay for it.

Proof of this rule is that over the last four years the private sector has reduced jobs by 2.6% whilst the Government has increased its jobs by 15%. This begs the question of whether the nett shift from wealth creating to wealth absorbing jobs is sustainable in the longer term.

What does this information tell us about the inwardness of the notion of employment equity?

Employment equity and constitutionally compliant affirmative action are important focus areas to build the national pool of competent citizens.

Race, gender and the other prohibited grounds of unfair discrimination are important considerations when developing competency building initiatives, but on their own they hardly impact on the determination of competency requirements.

Competence has everything to do with what an individual needs to know, do and how to behave to perform the requirements of a job, satisfy the customers’ needs, create wealth and ensure the sustainability of their jobs into the future.

The Employment Equity Act of 1998 (EEA) deals with this important understanding of the purpose of this legislation in section 6(2) where it is provided that it is “not unfair discrimination to (a) take affirmative action measures consistent with the purpose of this Act; or (b) distinguish, exclude or prefer any person on the basis of an inherent requirement of a job”.

These two defences have far wider organisational implications than the race based noise and threats that have been thrown around since the promulgation of this legislation.

The tragedy of the narrow unconstitutional focus on race is that not only has South Africa lost many years of competency building time, but also many mentors who were adequately positioned to assist with training and the transfer of much needed job skills.

Section 6 (2) of the EEA is the thumbnail description of the established organisational development process which is intentional, continuous and systematic.

Organisational development is the on-going process of planning and adjusting the relationship of jobs to one another in a decision making system, to create a living social organism that is able to react to operational circumstances as and when they occur.

Section 15 of the EEA covers a range of affirmative action measures that would add focus and value to any well structured organizational development initiative, but unfortunately this value has been totally drowned out by exchanges that have created the perception that employment equity is a race based attempt to change the workplace via social engineering not seen since the days of grand apartheid.

In what must have been an attempt by the Minister of Labour to broaden the reach of employment equity, the Department published a Code of Good Practice on the Integration of Employment Equity into Human Resource Policies and Practices, as a General Notice in Government Gazette No 27866 on 4 August 2005.

This integration of employment equity and human resource planning would not have been the only benefit of this Code. Human resource planning and budgeting is the process used to determine the operational requirements to support overall business plans and budgets. Consequently this Code should have resulted in employment equity becoming a normal routine business consideration, rather than simply another statutory requirement administered by the Employment Equity Department.

Unfortunately, despite this Code offering valuable insights to the benefits of properly structured organisational development plans and initiatives, its value has, once again, been lost in the noise of promoting race based indicators to measure the levels of compliance.

Employment equity is dogged by unintended consequences to such an extent that the progress of its value as an organisational development initiative in the private sector can only be described as painfully slow, if not counter-productive.

With the much spoken of changes to labour law it was expected that the barriers to the progress of employment equity as a business tool would have been addressed and amendments structured accordingly.

As we now know this is not the case. The critical amendments only seek to increase the opportunity for the Minister of Labour and the various Commissions to interfere in the operational circumstances and the running of businesses. Where they are not able to interfere sufficiently, they will punish offenders to the extent that they may not be able to survive.

As far as the amendments to the EEA are concerned, there are clear indicators that the politicians don’t understand the importance of allowing management to do what they do best – create wealth, and rather than punish employers they should find ways to support them as allies in the interests of tax revenue generation and job creation.

With regard to the amendments as submitted at present, management will simply ensure that they comply as far as their operational requirements permit, but employment equity will remain an additional statutory requirement that is much easier to control using a specialist who will operate outside of their normal business routines.

The Government needs to know that the public sector is not the place to set employment equity benchmarks. Because of the rushed competition within the different tiers of government to achieve employment equity targets, an audit of its current structures using the rules of section 6 (2) of the EEA could provide valuable insights to its concerns regarding service delivery problems.

With our history of racial division and social engineering – using race as the core driver of workplace organizational change, is a high risk strategy and one that has yet to prove it can deliver sustainable benefits.

If a proper, and constitutionally complaint distinction is drawn between the public sector (governed by the values and principles of section 195 of the Constitution) and the private sector which is ruled by market forces, progress is possible. The Government needs to take the whole Act back to square one and engage on the real or perceived barriers to employment equity being the base organizational development framework to create the much needed jobs that can ensure future peace and prosperity.
It’s time!.

Daan Groeneveldt
March 2011
Institute for Accountability in Southern Africa

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