Mar 2011 • Vol 29 No. 3
People
Dynamics
How toxic is your organisational culture?
Journal of the South African Institute of People Management www.ipm.co.za
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CONTENTS
human resource practices
EDITOR’S LETTER INTERVIEW – SHIRLEY ZINN
Corporate Services
2 4
South Africa’s banks in fine shape post crisis
INSURANCE
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You can’t afford to be under-insured By Mandy Barrett
ORGANISATIONAL CULTURE
6
How toxic is your organisational culture and how much does it cost you? By Phil Clothier and Nene Molefi
ROLE OF HR
8
Why tension is a sign of a high-performing HR team By Guy Ellis and Chris O’Brien
TRAINING
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Dire need for financial literacy training By Kim van Schoor
MENTOR MATTERS
11
Leave it alone By Gary Taylor
TRAINING
12
Do less, but do it well By Suzanne Hattingh
ADVERTORIAL
13
Calculating return on investment on training By Jae Freitas
LABOUR LAW
14
Spying on Staff By Jeremy Forsyth
INDUCTION
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The P–E Human Resource Practitioners Handbook Part of the P-E Suite of remuneration surveys, this is the most exhaustively researched summary of personnel practices available within the South African market. Information is practical and up to date ensuring its relevance for policy formulation and review. It includes: • Application of the most commonly applied job evaluation systems in South Africa and how these systems may be cross-referenced, integrating concepts such as broad banding, multi-skilling and skill based pay. Tables showing basic salary and total cost of employment data by grade, both nationally and by region, function and industry sector, are also included. •
A description of salary administration practices and pay policies incorporating issues such as: — wage differentials and attraction premiums — performance management policies — bonus and incentive pay arrangements — sales force commission structures, and — expatriate pay and relocation allowances
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A comprehensive survey of all commonly found staff benefits in South African organisations – from car policies to retirement planning, housing, security and medical arrangements
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Research on conditions of employment – from leave policies to training and development practices. This section also includes commentary on labour legislation, work force composition and in particular, a detailed analysis on how organisations are implementing employment equity.
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Staff turnover, retrenchment and productivity cost statistics.
Employee induction is crucial to talent retention By Veronica Matlaila
INTERVIEW
17
Flawless Consulting: Transforming the way that people work together
ROLE OF HR
18
Lead with LUV! By Ken Blanchard
OPINION
19
The future of HR
GROUP INSURANCE SCHEMES
20
Lift club risk By Mandy Barrett
NEWS AND REVIEWS
20
HR in brief
INSTITUTE NEWS 2011 IPM ANNUAL COVENTION KZN HR Executive Scoops Global HR Leadership Award
GABRIEL’S HORN Happiness is
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By Gabriel Mofekeng FORTHCOMING ISSUES FEATURES MARCH 2011– Training, Skills Development & Competencies, Performance Management and Appraisals, Training Institutions APRIL 2011 – HR Outsourcing & Technology, Change Mangement, Performance Improvement, HR Software, and the Budget speech,
This survey is published annually in September. In order to participate in the survey and receive a copy of the results please contact Adele Slotar, Deidre van Greunen or Sandra Greville on (011) 442 4334 or our agents in: The Western Cape, Eastern Cape, KwaZulu-Natal and Namibia
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Leading advisors to leading companies
EDITOR’S LETTER
A
In today’s world constant training and skills development has become a necessity for survival. When I was young I did not have the demands of technology to think about and instead could spend the afternoons playing in the fresh air and sunshine. Today, if you do not start your children with computer classes at age three there is a possibility they may be left behind. This has caused great turmoil for me, as a mother. Should I encourage my daughter to play outdoors and hope she will catch up when needs be or do I ensure she too can use an iPad to order items off the internet like some of her friends? I think kids are wired differently now, watching them they have no problem picking up a cellphone and knowing how it works, immediately. My three year old mastered the Nintendo Wii remote within a day. So, while I think it is necessary to develop skills and competencies on an ongoing basis, much of what we learn and do can be taken in through our interaction with our immediate surroundings. There is so much information available in many different forms that one does not have to look far to develop a new skill or learn a new competency. Hopefully, in order to avoid information overload, there is still enough time for us all to play in the fresh air and sunshine.
Editorial Alex Bouche E-mail: alexandra@eaglepub.co.za Advertising Bookings Helen Bennetts Tel: 011 326 0303 Fax: 011 501 2878 E-mail: helen@eaglepub.co.za Publisher The Eagle Publishing Company Tel: 011 326 0303 Fax: 011 501 2878 E-mail: rob@eaglepub.co.za www.eaglepub.co.za Rob Furney Tel: 011 326 0303 Fax: 011 501 2878 E-mail: rob@eaglepub.co.za Tony Proudlock Tel: 011 326 0303 Fax: 011 501 2878 E-mail: tony@eaglepub.co.za Design Margie Carter Tel: 011 326 0303 E-mail: studio@eaglepub.co.za IPM Central Office 287 Kent & Harley Street, Randburg PO Box 3436, Randburg 2125 Switchboard: 011 329 3760 Keith Pietersen Tel: 011 329 3760 Fax: 011 329 3765 e-mail:keith@ipm.co.za www.ipm.co.za
People Dynamics is the monthly journal of the South Africa Institute of People Management (IPM). The IPM is dedicated to the effective development of human potential. In terms of fast emerging global challenges, it is critical to champion the strategic role of human resources and to acknowledge that both development and management are catalysts for growth. In the spirit of progress and support, the IPM provides members with effective leadership and access to appropriate knowledge, information and the opportunity to network with key local and international players. People Dynamics provide a forum for debate and discussion on all issues affecting people managers in South Africa, the African continent and beyond. People Dynamics is distributed to all members of the South African Institute of People Management (IPM), and to other key decision-makers in the industry. To receive People Dynamics regularly and enjoy additional benefits, including discounts on HR-related services, professional networking events and HR vacancy postings on the IPM web-site, contact the membership manager of the IPM.
INTERNATIONAL FEDERATION OF TRAINING AND DEVELOPMENT ORGANISATIONS
WORLD FEDERATION OF PERSONNEL MANAGEMENT ASSOCIATIONS
No part of this publication may be reproduced without prior written approval from the IPM.
ISSN 0261-2399 The views expressed in this publication do not necessarily reflect the values of the IPM.
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INTERVIEW – SHIRLEY ZINN
HR doyenne faces new challenges D
oyenne of the HR industry, Professor Shirley Zinn, has overcome many challenges in her life and will doubtless meet the newest with the combination of skill, determination and aplomb that has characterised her career. Late last year she was appointed Deputy Global HR Director of the Standard Bank Group with a portfolio that includes the whole of Africa and 16 other countries from China to Argentina. She talked to Tony Proudlock. Zinn is well aware that in the aftermath of the global meltdown banks, particularly in the western world, suffered “incredible damage” to their reputations. While she is quick to point out that South African banks were far less impacted than their global counterparts, the most immediate target was to restore the trust factor. “Because they effect the very fabric of most people’s lives – from home loans, investments, financial services to simply keeping our hard-earned money – banks tend to be an emotive subject,” says Zinn “One of the most damaging factors was that certain banks were seen as prime movers in the meltdown because they had failed to adhere to fundamentals and had not maintained the moral high ground. The challenge is to somehow rebuild on the ashes that have been left behind.” By contrast, Zinn believes that our own banks survived the meltdown exceedingly well and are today in good shape. “A recent international survey by the World Economic Forum revealed that the soundness of South African banking was ranked as sixth in the world out of 139 countries – which is spectacular,” she says. Zinn’s arrival at the Standard Bank Group coincided with the announcement of retrenchments within the organisation which she describes as “difficult and complicated.” A business decision had been made and it was incumbent on her to navigate and drive the process with the involvement of all the stakeholders. She admits to being highly impressed with Standard’s management team and the “inspirational” leadership of CEO Jacko Maree whom she calls “the man with the banking Midas touch.” She is clearly relishing her new position which will involve her in the Group’s aim to become a leading financial services provider in the emerging markets – especially Africa. She brings with her an unsurpassed record of achievement in HR. She qualified with a master’s degree from the University of the Western Cape and later received a doctorate in education at Harvard in the USA. Her first job in HR was in 1997 when she was appointed to head training and development for Southern Life Association in Cape Town. She then joined SARS as general manager, human resources and was part and parcel of the process that saw the perception of SARS move from pariah to standard bearer of the new South Africa. People actually took pride in compliance. She reflects fondly on her five years at Nedbank: “It was a fascinating and dynamic journey for me. I joined the company soon after Tom Boardman was put at the helm charged with turning round the bank – which was a huge task. “Tom put in a new executive team and invited me to move from SARS and join him – primarily to uplift the spirit of the organisation. In three years the bank had been turned around financially but
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People Dynamics March 2011
perhaps more importantly a new and exciting corporate culture had been created. I feel privileged to have been part of such an inspiring process,” she says. Zinn has played a major role in the development of the IPM, becoming its President in 2005. “The IPM will shortly celebrate 65 years of existence and during that period has forged a remarkable record in making the HR profession what it is today,” she stresses. “It has a rich history in establishing a platform for the HR profession. It has transformed the profession’s perception from the ‘personnel clerk’ image of yesteryear to a group of highly qualified and motivated people who have taken their rightful place as part of the decision making team in 21st century organisations. “One has to praise the tenacity and fortitude of our founders as well as all those who, over the years, have given freely of their time to uplift the profession. “There is little doubt that the IPM has made the voice of HR heard. Like many professional institutes, the IPM is financed largely by its membership. Despite peaks and troughs, the IPM has always had a solid core of people who have been determined that the organisation will endure no matter what,” Zinn concludes.
INSURANCE
You can’t afford to be under-insured By Mandy Barrett
U
nder-insurance and policy lapses are on the increase in the short term sector as economic conditions continue to hammer consumers. Industry estimates show that only about 35% of the seven million vehicles of all types on South African roads are insured in spite of the fact that, where vehicles are financed, it’s obligatory to have comprehensive insurance cover in place and that some 40% of short term insurance policyholders are under insured by up to 45%. The reasons for the situation are not hard to quantify: high household debt, reduced disposable income, retrenchments, struggling companies, liquidations, etc. A turning point in consumer fortunes may have been reached. Conditions for Mr Average have become “mildly better” and insolvencies have slowed. However the temptation to cut insurance costs remains. Cutting insurance cover is extremely unwise. Underinsurance is the danger. Risk management is the solution. South Africans are said to be more exposed than most to loss from the likes of crime, burglary and vehicle claims with underwriters recently reporting a big jump in car hijacking and theft. Frequently, it’s not just a matter of home theatres, Raybans, clothes and the like being under-insured. As serious as that may be, often major items such as cars, household possessions and even property may not be properly covered. What this means is that, in the event of a claim, you may be paid out only partially for the loss. That’s because of what the insurance industry describes as the ‘average’ formula. If, for example, you insure household contents for R250 000, but their replacement value is perhaps double that amount, you are effectively 50% under-insured. Should you suffer a loss of R40 000, the insurance company will pay only 50% of the claim, i.e. R20 000 and you are out of pocket for the balance. Imagine what this would mean if your home was under-insured, something that can easily occur with property construction costs having increased as much as threefold in the last ten years. Take the hypothetical example of a
home bought ten years ago for R500 000. Replacing it today could cost R1 500 000. If the sum insured is not increased to reflect that kind of increase, the under-insured component could be as much as R1m, even though its market value may have declined. Then consider that expensive luxury 4x4. With our unenviable accident rate, poor standard of driving and increases in car hijackings and theft, one in four vehicles is the subject of a claim. Here it’s not merely a case of possible under-insurance as replacement costs increase, but also of choosing the right cover. Don’t forget the cost of replacing investment items such as art and jewellery - art sales in South Africa are realising record prices in spite of the recession, so that Maggie Laubser on your wall, that you picked up ten years ago, may now be worth a great deal more and while a work of art can’t be replaced, its market value has to be built into the calculation of your cover for household contents. Having said all that, it’s still possible to economise on insurance and to risk manage your portfolio in much the same way as a business does. For example: • accepting a bigger excess on your cover (the first amount you would pay on a claim) excluding certain items • combining your household and motor insurance to get a better rate • insuring your home (the bricks and mortar) with a conventional insurer, not a bank which generally charges higher rates. • covering the contents of your entire house, not just what you think may be stolen in a burglary • valuing your insurable goods every 12 months at least and adjust your cover accordingly • making certain you are insured at replacement value. Mandy Barrett, National Manager Marketing and Sales for Personal Product Solutions, Glenrand MIB, www.glenrandmib.co.za
March 2011 People Dynamics
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ORGANISATIONAL CULTURE
How toxic is your organisational culture and how much does it cost you? By Phil Clothier and Nene Molefi
A
ll organisations operate with a set of values. Some are explicit and expressed on the wall yet others are not expressed, not written anywhere, but are very much part of the culture of the organisation. Some of the values will be positive, such as open communication, trust, honesty, integrity and customer satisfaction. If these values are fully accepted and practiced daily, over time they will become an integral part of the culture of the organisation and a positive asset. Often, the limiting values are unconscious but with time they become part and parcel of the organisation. Examples of these values include bureaucracy, manipulation, empire building and information hoarding. Another way to describe potentially limiting values is to use the term fear-based values. Fear-based values are so called because the associated behaviours are either based in fear or create fear, usually both. Most organisations, depending on the health of the culture, will operate from a mix of positive and potentially limiting values. Like any situation, a ‘rotten apple’ contaminates others and sooner or later, the culture becomes more toxic. Can you have a poor culture, unhappy people and still claim that it doesn’t cost you money? The energy associated with managing employees who operate in a toxic environment is that which is then not available for useful work. Research has shown that fear-based values can dramatically reduce the profitability of an organisation, and worst case scenario,
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People Dynamics March 2011
force the business into bankruptcy. For example, internal competition, a fear-based value, is rooted in fears concerning self esteem often coming across as attempts to “please the boss”. In this circumstance, people compete rather than collaborate because they are more focused on self interest than the common good. Some leaders perpetuate that culture (albeit unconsciously) by rewarding such behaviour. People who practice internal competition see life as a zero-sum game with winners and losers. They must win at all costs. Empire building and information hoarding are motivated by similar self interest needs. Hierarchy is rooted in fears concerning status and trust. Bureaucracy is rooted in fears concerning order and control. The Law of the Lid by John Maxwell suggests that employees cannot grow beyond their leader. So if a leader thrives on bureaucracy, it will show in his team and contribute to a toxic culture. In hierarchical structures, the underlying fear is “people cannot be trusted” and therefore they must be supervised very closely. The more loyal and trusted one is within the organisation, the more status one gets in the hierarchy. Another example of fearbased behaviour is those who seek self esteem through status and want to look good in the eyes of their superiors. They will be concerned about their image. They will blame others when things go wrong, and they will manipulate the system to finish on top. In bureaucracy, the underlying fear is “things will fall apart
ORGANISATIONAL CULTURE
if order is not maintained” and “people will cheat the system if there are no controls.” Therefore, actions must be checked and double checked. Bureaucracy and hierarchy feed off each other by giving people power over others. Power seeking leads to empire building – another fear-driven approach to achieving self esteem consciousness. All these activities that stem from fear create cultural entropy. The energy involved in internal competition, bureaucracy, hierarchy, empire building, image, blame and information hoarding is not available for useful work. The effort and time spent supporting these potentially limiting values results in a loss in productivity, decreased efficiency and missed opportunities. This is the basis for the ‘cost of fear’ calculation.After completing a values assessment and determining which potentially limiting values are part of the culture, groups of employees, of varying levels, estimate the percentage impact of each of the potentially limiting values on lost productivity and lost opportunity. Employees must give real examples to back up their estimates. The results are aggregated by staff level and then an average percentage impacts determined for each potentially limiting value on lost productivity by the total employee costs (salary plus benefits). Then multiply the average percentage of lost opportunity by total sales. Add the results of these two calculations together to find out the financial impact of the cultural entropy on the organisation. The following example shows the personal, current and desired culture of 154 staff at a real company (name withheld). The assessment of the management team produced a similar set of values.
POTENTIALLY LIMITING VALUE Bureaucracy Confusion Empire Building Information Hoarding Hierarchical Long Hours Short Term Focus Other elements Total
ANNUAL COST $2,519,465 $4,450,090 $2,470,554 $2,287,663 $874,058 $263,072 $4,873,145 $1,246,140 $18,984,190
This organisation had an annual income of $48 million and a staff salary bill of $9 million. They reported a loss of $0.7m in the year in question. According to this calculation, the cost of their seven potentially limiting or fear-based values was in the region of $18 million. The “cost of fear” calculation gave this organisation some hard financial numbers on which to justify the need for a cultural change. Even if the estimates were only 20% correct, the savings from eliminating the cost of fear would have been $3.6m, sufficient in this case to turn a company loss into a significant company profit. The results are not scientific. They do, however, provide an estimate of the monetary impact of the potentially limiting values on human performance. Reducing the level of cultural entropy by 10 points, i.e. from 30% to 20% can have a significant positive effect on the bottom line results. Phil Clothier, Barrett Values Centre and Nene Molefi, Mandate Molefi
ROLE OF HR
Why tension is a sign of a high-performing HR team By Guy Ellis and Chris O’Brien ork for a lot of people seems to be getting more and more stressful: increased workloads, less time to do it in, competing priorities, difficult people to work with, etc…. The theory goes that the implications of increased stress levels leads to greater tension within and between employees, resulting in lower productivity, less innovation and reduced employee engagement. However, is stress and tension necessarily always a bad thing? Can tension be a sign of a healthy organisation? More importantly, is tension something to be actively encouraged within the HR Function?
W
The demands on HR are manageable
HR is going through a transition phase from the predictability of personnel to the dynamism of HR partnership.This means that on the one hand HR is being asked to ‘add value’ to their organisation while on the other hand it is expected to retain its traditional focus of delivering efficiently. On the face of it this breadth of offering can seem contradictory and unmanageable. In fact it simply reflects a tension that has been recognised in all organisations for decades. Academics recognise that all organisations face a number of inherent contradictions e.g. to centralise or decentralise; to create new products or grow existing ones. These contradictions have no right ‘answer’ and organisations must therefore find a ‘balance’ that best meets its goals at any moment in time. For example, most people will have been faced with the challenge of trying to save costs while striving to increase revenues. The risk for organisations that don’t get the balance right will potentially result in them offering either cheap but outdated goods or innovative yet unsalable/unstable products. What can HR do? Tension arises as organisations need to risk spending money in order to create new revenues. The ‘right’ level of investment for any individual organisation will be based on a range of factors including their strategy, heritage, competitors and market environment. CourageousHR call this tension the standardisation / customisation dynamic and it is in response to this that the HR partnership structure emerged in the early 1990s. Attempts to create, in a diagrammatic form, the HR partnership structure, which can sufficiently capture the complexities and fluidity of this relationship based model has tended to fall short as they have concentrated on formal reporting relationships and deliverables. The existence of these ‘three-legged’ and ‘four-legged’ models are, at best, simplistic views as they do not reflect the reality of multiple and nonstatic reporting lines in organisations (especially multinationals). More importantly, these models give rise to a belief that there is one best model or structure for HR and that the role of the HR business partners is as the exclusive ‘power brokers’ for HR. However, this traditional thinking needs to be turned on its head by focusing instead on the underlying reasons for the emergence of the HR
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partnership structure as well as by recognising the dynamic nature of this structure. What this mean for HR The HR partnership structure simply mirrors the organisation’s need to balance efficiency and revenue generation. Therefore, HR needs to: l Continue to support the organisation in reducing costs and being as efficient as possible. This can be delivered in direct savings or managing risks e.g. helping managers to make balanced decisions. l Support individual businesses to increase their revenues. This can be delivered through a variety of different approaches such as greater productivity, e.g. increasing employee engagement; new products and services, e.g. increased innovation; increased customer spend, e.g. improved customer service; or entering new markets, e.g. appropriate talent. The HR partnership structure therefore has an inherent tension as HR professionals have to balance these two competing organisational needs. HR roles The Standardisation/Customisation Dynamic Model also helps define the role of each part of the HR community (function). HR partners HR partners are responsible for ensuring that the needs of their business are represented to the HR community. Whereas they have a continuing responsibility to ensure that the organisation’s need for efficiency (standardisation) is met. They are ideally placed to translate their business revenue need (customisation) into ‘people’ deliverables. Importantly, the model also demonstrates that if an activity, e.g. salary review, is standard across the organisation, there is no requirement for the HR partner to be responsible for its delivery (they add no extra value as it is the same activity for all businesses). Where there is a potential to increase revenues, HR partners have a role in helping their business build an investment case and representing that investment to HR. However, they also have a responsibility to ensure that their business does not spend money unnecessarily where the returns cannot be justified or the resources are unavailable. HR operations, centres of expertise and shared service centres HR operations,centres of expertise and shared service centres are responsible for ensuring the needs of the organisation are suitably represented to each business.Whereas there is a clear responsibility to support agreed business customised activities, they are ideally placed to use their technical expertise to minimise costs and risks to the business. Importantly, the model shows that operations, COEs and SSCs should have responsibility for delivering standardised HR activities directly to the business. Where there is a potential to increase revenues, operations, COEs and SSCs have a role in examining whether an organisational investment is justified based on available resources and whether it should be standardised across the organisation. However, if an investment is agreed, they have a responsibility to support the HR partner and deliver their part of the HR activities. HR deliverables The Standardisation/Customisation Dynamic model also helps quantify HR deliverables.
Where a deliverable is standardised – it is specific to the organisation, e.g. the recruitment process. Standardised deliverables are typically the responsibility of HR operations, COE or SSC. Where a deliverable is customised – it is specific to a business, e.g. a sales incentive programme to a sales team. Customised deliverables are typically the responsibility of the HR partner, although they may not actually undertake the activity, i.e. deliver them. The benefits of defining HR deliverables in this way is that it allows HR communities to make conscious decisions and establish protocols for who is accountable for ensuring the deliverable happens and who actually undertakes the activity. Characteristics of a high-performing HR community A high-performing HR community is able to recognise and openly manage the inherent tensions between standardisation and customisation. They know that the business world is in a constant state of change, that there is no ‘one size fits all’ HR partnership operating model, and that HR needs to continuously be able to respond and adapt its model and how it works. l high-performing HR communities also recognise that the existence of tension is a sign of health.Where there is no tension, the HR community is; l probably not delivering one of its core responsibilities (typically the revenue or value adding one) l unclear about the roles within HR and who is accountable for its various deliverables l seeking to hide conflict. The sign of a ‘powerful partnership’ between HR and the organisation is when all parties are able to articulate the standardisation/customised tension and proactively use it to achieve the organisation’s strategic goals. Benefits to you and HR By expressing your responsibilities, roles and deliverables in terms of the Standardisation/Customisation Dynamic, you and the HR community will experience a number of benefits; l recognise that tension is normal, not the product of individuals being unable to ‘get on’ with each other l create a language that both HR and businesses can understand
l allows you to communicate HR deliverables in terms of organisation and business needs l allows you to rationally communicate both the basics and ‘value added’ that HR can offer and who is best placed to deliver them (line, centralised, outsourced) l help clarify your role l creates clear protocols and procedures to agree accountability and delivery where there is overlap in responsibilities i.e. a modified deliverable is involved l supports the concept of the HR community – all parts of HR are reliant on each other to deliver HR offerings l demonstrates that there is no best HR structure model – the focus should be on HR deliverables and the quality of HR individuals and their role l reinforces the concept that every business is different and therefore the role of every HR partner is different – if every business was the same then the HR partner role would be standardised. Tension is normal – find a way to make it work for HR The world of work is unpredictable and therefore HR – and other internal service functions – needs to realise that if it is to meet the competing demands of its internal customers it has to focus less on formal and restrictive structures and rely more on quality relationships and purposeful action. The CourageousHR Standardisation/Customisation Dynamic model is a radical new view on the responsibilities, roles and deliverables of HR. It redefines how HR needs to work together as a community, so that it can positively and openly deal with apparently competing demands for their time and expertise. Based on an established academic perspective of inherent tensions within organisations, this model is a practical tool that gives HR a language and perspective that allows the community to proactively work with the wider organisation to achieve its strategic goals. Guy Ellis and Chris O’Brien, CourageousHR, enquiries@courageoushr.co.za.To find out more about how HR can deliver real value to the business go to www. courageousHR.co.za/resources where you will be able to download free practical tools as well as a number of relevant ‘Thought Leadership’ articles. March 2011 People Dynamics
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TRAINING
Dire need for financial literacy training By Kim van Schoor
D
espite a 6% drop in interest rates over the past 2 years, the average employee in South Africa is still experiencing serious financial difficulties. This was recently confirmed when 72% of the more than 12 500 employees who have attended Free To Grow’s Money Sense course over the last 9 years, rated the state of their financial health as being either poor or very poor. The employees, all from different job levels and a wide selection of industries completed the assessment anonymously. The results were as follows:
Almost all the participating companies either approached the programme as a ‘preventative’ intervention and encouraged employees to attend, or presented it to volunteers as part of their employee wellness offerings.
South Africa currently has about 8.5 million consumers battling with debt repayments. The average debt-to-income ratio of these consumers is 78.5% despite the fact that interest rates have dropped by over 6% since 2008. Most of these consumers are employees and while the impact of this debt on their personal lives is devastating, it also impacts negatively on the organisation that employs them. Impact on individuals and organisations In the Financial Mail of May 2001, Andrew Sykes estimated that a company loses two out of twenty days in production for every employee who suffers from financial problems. This is due to either physical or mental absenteeism. When people worry about how they will be paying their accounts at the end of the month their focus is not on their work and the risk of errors and accidents increases due to a lack of concentration. The cost to organisations goes beyond the loss in productivity because of mental and physical absenteeism. It can also take the form of an increased demand for salary increases and loans; additional resources required to administer garnishee orders and loans; increased risk of theft and fraud; and loss of experienced staff and the cost of recruiting, appointing and ‘up skilling’ new staff as people with serious financial problems face the temptation to resign so that they can access their pension to pay their debt. What is needed? The answer is not in increasing salaries as financial problems are not limited to people on the lower salary scales. The reality is often that as our income increases, so the pressure to buy more, bigger and smarter increases incrementally. Most people know that they should use their money responsibly. Just as most people know that they should eat nutritiously and exercise regularly. However, most people do neither of these. The answer does not lie in merely providing people with information on different aspects of managing one’s personal finances but rather providing an effective financial life skills programme. An effective programme should: l Challenge people to explore their attitudes, beliefs and perceptions about money. Develop budgeting skills, teach people about the cost of credit and how to use it effectively, how to manage debt, why, how much and how to save. l Be accessible. Highlight and explain financial jargon. Key principles and skills should be made clear and easy to remember and apply. Actively engage people in the learning experience through a variety of creative learning methods. l Focus on application. Draw up realistic action plans that can be implemented after training. Organisations can approach financial life skills training in two ways; either as a luxury or low priority investment or a valuable investment to better the lives of employees and impact their emotional wellbeing and quality of life. Kim van Schoor, Free To Grow, Tel: +2721 852 4445, kim@free-to-grow.co.za, www.free-to-grow.co.za
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People Dynamics March 2011
MENTOR MATTERS
Leave it alone By Gary Taylor
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here are surprisingly disparate views in the HR community about the value of granting vacation leave, and how much of it is desirable in the employer’s benefit package. If you weren’t constrained by the Basic Conditions of Employment Act or your company’s historical practices, would you offer less or more annual vacation entitlement than you do now, and why? In the USA, they start off with just 2 weeks vacation, moving up to 3 weeks with long service or seniority, so the message they send is that you are there to work, it’s a competitive world and we need you on board in every sense. The work ethic is go-go and there are others who will take your job if you don’t like it. By contrast, in some mining environments, we still see 4 – 6 weeks paid vacation, a throwback to days when the work was all physical, and people needed time to travel long distances to their homes. In the Middle East, expatriates get 6 – 8 weeks leave, including public holidays, in order to get home and see families, often taken during the hot summer months, and this becomes the norm. So, what’s the “right” amount of leave for today’s workforce? Some employers are revisiting the old assumptions about a standard 3 to 4 weeks, and are considering flexible self funded extended leave for a range of reasons: There is a growing desire for work-life balance, particularly among Generation X knowledge workers, but now even baby boomers, who are re-evaluating their priorities in life after decades in the rat race. Many working mothers are looking for additional vacation to coincide with school holidays. Rather than lose key staff, additional vacation provides an attractive lifestyle value proposition for the competitive employer. Risk managers and auditors have long been saying that a vacation is the best time to uncover fraud or even inefficient processes, when the incumbent is out of the office for a protracted period. Staff with the travel bug need not resign in order to feed the gorillas in Rwanda or trek across Europe before the family comes. This opens up sabbatical options as a means of retaining talent. Arguably productivity increases with enhanced wellness and reduced stress caused by extended leave. Succession planning can be enhanced when people with potential get put in acting roles during the vacation of others.This tests their abilities in a relatively low risk environment. Despite the theoretical possibility of additional costs, hordes of temps are not necessarily required during vacations. The work can quite often be split up, reporting lines shifted, and ambitious underlings step into the gaps. This is not a cost matter actually. Many employers are already introducing some innovative flexibility with maternity leave, so why not consider other circumstances for extended leave? The skeptics don’t buy this, of course, especially those who boast about forfeiting their leave as an act of corporate macho. They encourage staff to commute excess leave to cash, which reinforces the belief that staff add value to the bottom line, and therefore should not be rewarded with time off. They see their corner office and nice car as the result of being a workaholic; others see the divorce and dysfunctional kids. Ultimately, it should be about choice. Whatever the guidance we give in HR, it sends a signal – just make sure that you send the signal deliberately, rather than by default. As with most things,‘tis the balance we strive for!
TRAINING
Do less, but do it well By Suzanne Hattingh
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n the current tough economic times the money we spend on training must deliver the desired results. Unfortunately, despite all the efforts spent on the systems and processes for improving the quality of training, too much of the training is done badly. This not only wastes valuable resources, it undermines the credibility of skills development, especially among managers who do not see the positive impact of training in the workplace. Too often, training is seen as a quick-fix solution, such as, “my administration assistant is not performing as per my expectations, send her for training”. Generally, too little time is spent on planning training interventions. However, the more time spent on planning, the greater the chances of success of any endeavour – whether it is planting tomatoes or implementing a complex change management strategy. Training can deliver the desired results only if it addresses clearly-formulated competency requirements for a job, if the skills needs of the incumbent of the job have been identified through a valid analysis process, and if the programme is designed to address the identified skills. Therefore, the starting point is to formulate clear job requirements for all the occupational categories in your organisation: What must the persons in this job know, understand and be able to do, and what additional attributes must they have to perform the tasks to the required standards? This should be followed by a skills audit to determine the skills needed in the organisation to achieve its immediate as well as its medium- and long-term goals and objectives. The audit should then compare the skills employees currently have with the skills needed to determine the gap. An organisation-wide skills audit should be conducted about every three years, or when there have been major changes in the organisation that affect skills needs. The results of the skills audit should form the basis for conducting an annual training needs analysis. Frequently, training is used to address problems that it cannot fix. Training is effective only in addressing performance problems that are caused by a lack of skills. Therefore it is essential to analyse information on performance gaps – for example, the results from performance appraisals – to determine the underlying causes. Only then can the most appropriate solution to the performance gap be selected. Poor performance as a result of ineffective management, low motivation, lack of appropriate tools or incorrect placement, is best solved through people management or operational processes – not through training. Where there is a need for training to address skills gaps, it is essential to select the type of programme that is most appropriate to addressing the identified need. This would generally include programmes that are aligned to the National Qualifications Framework (NQF), such as learnerships and skills programmes, as well as programmes that fall outside the NQF, such as short courses, informal in-house development activities or mentoring by senior colleagues. While NQF-aligned programmes are important for people
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who wish to gain credits or qualifications, it is not true that other programmes have no value. For example, Minister Trevor Manual and his management team could attend a three-day programme on effective national and interdepartmental planning processes offered by local and international academics and experts. They would gain valuable information and insight through this programme that would have a significant impact on our country – but do they really want to be formally assessed to gain five credits on the NQF? The workplace skills plan (WSP) was designed to provide information required by the SETAs; it was not designed primarily as a planning tool for addressing the skills needs of organisations. Unfortunately, this is why most employers do not see the relevance of the WSP and generally submit it simply to qualify for the SETA mandatory grants, where after it gathers dust in the WSP file. I always encourage employers to develop a more comprehensive training and development plan for internal use, from which they extract the information required in the WSP. This internal document should include all the planned formal training and informal development programmes, the names of staff to be trained, the preferred training providers, cost, delivery schedule, etc. so that it serves as the implementation plan to address the organisation’s skills needs. Many learnerships are implemented without the necessary planning and fail to achieve the desired results for the employer, the learners or the broader nation in improving productivity, providing opportunities to the unemployed for income generation and unemployment and poverty. Millions are spent on training a thousand learners who end up with no qualification and without any prospect of employment. This is not unique; I encounter similar horror stories in my work with learnerships across the country. There are many success stories, but they are overshadowed by many poorly implemented learnerships, mostly stemming from poor planning. Decisions on learnerships should primarily be driven by an internal organisational need – not by external drivers, such as SETA funding or BBBEE. I had a number of participants in a recent workshop on implementing learnerships who planned to use learnerships to get the six points on the BBBEE scorecard. However, there was no internal need for learnerships, nor was there the buy-in from line managers, nor the required internal processes for successful learnership implementation. We must get the basics right if we want the millions we spend on training to have the desired impact.The current trend to increase the number of people we push through training programmes to achieve SETA or BBBEE targets are counterproductive. We should be doing less training, but do what we do well. This will ensure that the money spent on skills developed builds the skills base essential for our country to improve service delivery and increase productivity in a highly competitive global economy. Suzanne Hattingh, managing director of Learning for Performance Improvement
ADVERTORIAL
Calculating return on investment on training By Jae Freitas
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eople are your greatest asset and training your human capital is an investment, not an expense. In this article, we will show you how to use return on investment (ROI) as a tool for forecasting and evaluating the benefits of training. ROI is a performance measure that is used to evaluate the efficiency of an investment or compare the efficiency of a number of different investments. It is probably the most important calculation one needs to make regularly to ensure the long-term viability of the business. ROI is expressed as a percentage and is based on returns over a period of time, it is calculated as follows: ROI = [(Payback – Investment)/Investment]*100 Where payback is the total amount of money earned from your investment and the investment is the total resources (in monetary value) needed to generate the payback. Because ROI is a percentage, it can clear up confusion caused by looking at rand value outputs. For example, if company A made R100 000 from an investment and company B made R5m; most people would assume that Company B’s investment is the better one. Now let’s take into consideration the costs of these investments. Company A invested R50 000 while Company B invested R400m.This would mean that Company A’s ROI is 200% and Company B’s is only 1.25%. The rand value on a return is thus meaningless without considering the cost of the investment. Businesses often misunderstand the investment amount and as a result, ROI calculations can be skewed. Most small business owners often undervalue their own time. Remember, ‘investment’ is defined above as the total monetary value of the resources. This includes human resources or time. How do we use ROI calculations to accurately evaluate the benefits of investing in training programs for our human capital? Firstly, we need to shift the perception of training from an expense to an investment that is aimed at improving organisational performance and will add to organisational effectiveness and, ultimately, profitability. In order to measure organisational effectiveness, one needs to determine the monetary value of the individuals in their current status. Once the training intervention has taken place, the learner performance must be measured again. Training is a continuous process in achieving organisational effectiveness. Employees need to receive training on an ongoing basis to enable application to their daily activities. The information acquired to reinforce learning will be converted to knowledge application once the specific task is performed more efficiently and effectively. Only then can the ROI be calculated through a cost-benefit analysis by determining the cost (investment in training) versus the benefit of the learning that has taken place, i.e. the benefit of learning as a result of training. Training managers know that ROI must be measured, yet few are actually performing this task.The King Report on Corporate Governance states that accountability must be reported in the area of human capital management, of which training is an essential component. ROI’s should be measured monthly and annually. It is important to follow appropriate guidelines for the effective application of the ROI measurement process by: l creating awareness for ROI in the organisation
l building capacity for ROI by training staff to understand ROI l quantifying information before the training in order to obtain a baseline and then converting this data into a monetary value l allocating resources for ROI l developing a culture for measurement and accountability among staff l starting with only one course as a pilot programme to practise ROI skills l communicating results to training staff and the whole organisation l designing improvement plans for training programmes in order to increase ROI l utilising the data to market future learning programmes. Measuring ROI is not a one person show. It is a powerful tool that enables training managers to prove the value of training, gaining credibility for the value added and a contribution to achieving organisational effectiveness. It enables them to report to management in quantifiable terms. Measuring ROI is about accountability and taking responsibility for measuring the impact training has had on the organisation. Measurement is about becoming a strategic business partner that adds value and provides integrated business solutions. Educos Vision Services (Pty) Limited provide fully integrated HR and payroll solutions which provide you with the invaluable tools you require to store, track and evaluate employee training and development records, critical to assist you with the management tools to measure your ROI in training. Do you have the tools you need to measure your ROI in training? We have the expertise you need; we are ready to help.
INYATHELO PHILANTHROPY AWARDS
NO M I NA TI O NS RE Q U I RED Do you know someone in your in your community who deserves national recognition for all the good work they do? If so, nominate them for the 2011 Inyathelo Philanthropy Awards. These Awards publicly recognise people whose personal financial contribution has made an outstanding and lasting contribution in South Africa. Inyathelo highlights this kind of giving to inspire others to make a difference. To nominate someone simply go to www.inyathelo.co.za or call Inyathelo on 021 465 69 81 for more information. Entries open 1 February 2011 and close 30 June 2011. March 2011 People Dynamics
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LABOUR LAW
Spying on staff By Jeremy Forsyth
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have a problem with Kim. She used to be a hard worker, but lately she’s been sending personal emails all day, chatting with her friends on Skype and wasting company time on Facebook. I know she’s doing it, I’ve seen her hurriedly minimize the windows when I walk past her desk. Speaking to her hasn’t helped, she denies everything. Something needs to be done. You can’t run a successful business today without computers. Virtually every office worker has a computer, that they rely on to do their jobs, connected to the internet so they can retrieve necessary information and send email. They can also forward pictures of kittens with funny captions to their friends and waste time that should be spent working hard and meeting targets. As an employer, you have a problem. On the one hand you want a happy and motivated workforce, and restricting access to these internet distractions can lead to people seeing you as authoritarian and mean spirited. On the other hand you need your workforce to accomplish their goals, which is always going to be hindered by these distractions. Sometimes you need to step in and take disciplinary action because an employee is wasting a lot of time on the internet. The problem is: can you spy on them to prove it? You should always be hesitant to look at an employee’s computer, because you’re never guaranteed of what you’ll see. By checking their email, you are potentially invading their privacy because you can read personal emails which they have not authorised you to view. Imagine you decide to snoop on their email and read something like “I think
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my boss might be interested in me personally. Little does he know I’m gay!” Now you’ve inadvertently violated the employee’s privacy in a big way and made your work relationship more uncomfortable. But now let’s imagine for a second that Kim isn’t just planting crops in Farmville, but actually divulging confidential information to your competitors. A lot of money suddenly depends on whether you can determine if she is leaking your secrets or not. If that isn’t a reason to justify spying on an employee, what is? Legal Issues The good news is that whether you’re checking up on time wasting or a confidentiality breach, legally speaking you are within your rights to read an employee’s email or check their browsing history at any time. The only caveat is that you need to have probable cause to do so. You may be called to defend your decision to spy on your employee at the CCMA and will be required to present evidence that you had a valid reason to do so. This ability to intercept employee communications is made possible by a recently publicised act called RICA. RICA is not just an inconvenience for you and your cell phone. The act is designed to govern intercepting communications, which includes monitoring employee email, instant messaging and even phone calls. But then we also have the South African Constitution, which makes specific mention of protecting your right to privacy and preventing restriction of your rights, which can conflict with regulations set up in RICA.
LABOUR LAW With potentially conflicting laws, rulings on whether spying on your employees is lawful or not will come down to the motivation behind it. If you monitor their communications because you have a reasonable cause to suspect they are up to no good, you have a better case than if you decided to spy on all the employees of a specific race or gender for no obvious reason. Conflicts will usually end up at the CCMA, which will decide who was right based on who presents the most reasonable case. There are other ways Just because you have the right to spy doesn’t mean you should. If you suspect an employee is wasting time on the internet, you won’t need to spy on them to take action. Regularly wasting time on the internet will usually result in a decline in performance, and a performance issue can be addressed without any spying. And if performance doesn’t suffer, does it really matter if your employees spend some time on Facebook each day? More companies are stepping back from the paradigm of monitoring and controlling everything and letting employees have a bit more freedom to do what they want, so long as they accomplish their goals, meet performance targets and don’t create any unnecessary costs in additional time and bandwidth. Workers in their twenties are more socially interactive online, and putting too many restrictions on them is a quick way to demoralise them. Another way to deal with wasted resources without spying is to look at installing a decent IT solution to monitor the overall picture instead of the details. For example, if you own a small office with a capped broadband solution, if you regularly get capped unexpectedly then you can assume that your office is downloading more than is appropriate. By getting clever with your IT and installing a proper firewall, you can block access to major sites that eat your bandwidth and also monitor which computers are eating it. This can help you identify the culprit without invading the employee’s privacy. You can see that Kim’s computer is using ten times the bandwidth of everyone else, which means she is likely abusing company resources. She could be on YouTube all day, or any number of bandwidth guzzlers, but you can successfully prevent it, or confront her about it without needing to know where she went and what she did. Prevention When looking at the issue of spying on employees, prevention is better than cure. You can assume that at some point in the future you’ll need to deal with the issue, and more preparation beforehand means you have more methods at your disposal for dealing with prospective problems: Include the necessary wording in the employee contract. While preparing the employee contract, you can include a clause that grants you access to the employee’s computer and any information on it.
Ideally you should have a ‘letter of consent’, an agreement between employer and employee which states that the information on company computers is not considered private, and the employee should take care not to use it for any personal business that they would not want their employers to see. Another document you should include is an ‘Acceptable Use Policy’, which outlines the way your company facilities can be used, stipulating restrictions like “No Facebook during business hours”. This helps in any disagreements between you and your staff. Having it in writing can help you avoid legal issues down the road. Having the right to view employee data doesn’t mean you need to use it liberally, but you’ll retain the right to do so if circumstances get out of control. The consent of the employee will keep you covered in the event that you end up defending your actions at the CCMA. Filter your internet to block unwanted websites. With a competent IT solution in your office, you will be able to block access to websites like Facebook and any others inappropriate for work. You can configure the settings to remove the restrictions during a lunch hour or after hours, or to only apply restrictions to certain departments or employees. Restricting access to the websites that enable time wasting can prevent you from ever having to spy on employees to find out where their time is disappearing to. Manage your employees. Don’t become too focused on treating the symptoms of the problem. The employee is wasting time on the internet and you can restrict access and monitor them to combat the symptom directly, or look past the symptom for the actual problem – the employee is avoiding their work. By putting in more effort into encouraging employees, rewarding their successes and helping to correct their failings, you can help to curb the problem of an employee believing they can squander their work hours and get away with it. Even being around the office more can serve as a soft deterrent to wasting time online. If an employee knows that you’re paying attention, they will be less likely to waste time than if you only visit their office on Tuesday mornings between meetings. Honesty and trust is imperative, so if the employee knows that you aren’t going to break out threats and written warnings at the mere mention of Facebook, they’ll be more willing to discuss the matter with you openly and come to a compromise that keeps everyone happy. Don’t be evil Now that the technology to spy on your employees is cheap and easily available, it is easy to lose perspective and abuse the privileges that this technology makes available. Make sure your contracts cover you in the event of any problem. If a problem arises and you need to act, make sure your motives are honest. The dark side is an easier path, but the cost is often higher than you realise. Dial a Nerd Tel: 087-72-63737/087-72-NERDS www.dialanerd.co.za
March 2011 People Dynamics
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INDUCTION
Employee induction is crucial to talent retention By Veronica Matlaila
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etaining top talent has become a global challenge. Employee induction, also known as orientation or on-boarding, plays a significant part in talent retention. When you take on a new employee, it is important that the induction benefits them and your business. A well informed employee is a productive employee. What is Employee Induction? It is the practice used in many businesses to welcome new employees to the company and prepare them for their new role. The term ‘induction’ is generally used in a workplace context to describe the process whereby employees adjust to their jobs and working environment. Some people use the term ‘on-boarding’ to describe the progression from an individual’s first contact with the organisation to understanding the business’ ways of working and getting up to speed in their job. Employees who have a well thought out induction are more likely to stay with the organisation. The first step in developing a successful induction programme is identifying the specific information, skills and support new employees require. Induction can also be important for existing employees if it was not done previously or following changes in the organisation. Companies that do not have employee induction programmes will often find that many new employees experience extended periods of unproductiveness. Professionally organised and delivered induction training is your new employees’ first impression of you and your organisation, so it’s also an excellent opportunity to reinforce their decision to come and work for you. As a manager it is your responsibility to ensure that induction training is properly planned. An induction training plan is useful and should be issued to new employees and
those departments providing induction training. This will assist new employees in coping with their new role better, faster and independently. The induction process begins at the recruitment stage and continues into employment. New recruits need to know the organisation, the culture and the people, as well as their role. Ideally, all new employees should receive an individual induction programme that reflects their specific needs. For a large company, this programme would be a combination of one-on-one discussions and more formal group presentations. Purpose The purpose of induction is to ensure the effective integration of staff into or across the organisation. Research has shown that tailor made induction programmes increase staff retention. A good induction programme contains the following elements: l orientation (physical) - describing where the facilities are l orientation (organisational) - showing how the employee fits into the team and how their role fits within the organisation’s strategy and goals l an awareness of other functions within the organisation l meeting with key senior employees (either face to face or through the use of technology) l health and safety information l explanation of terms and conditions l details of the organisation’s history, its products and services, its culture and values l a clear outline of the job/role requirements. Consequences of an ineffective induction programme? New employees get off to a bad start and never really understand the organisation itself or their role in it. This may lead to: l poor integration into the team l low morale l loss of productivity l failure to work to their highest potential In extreme cases, the new employee leaves, either through resignation or dismissal. Early leaving results in: l additional cost for recruiting a replacement l wasted time for the inductor l lowering of morale for the remaining staff l detriment to the leaver’s employment record l having to repeat the unproductive learning curve of the leaver l damage to the company’s reputation. Summary A good induction can determine how quickly your employee settles into the business and the speed at which they develop to their full potential. Giving the employee all they need to know in relation to their time at your business will further determine its effectiveness. Make the employee feel welcome and comfortable in all areas that will involve their presence. Veronica Matlaila, Managing Member, Ubuzwe Talent Solutions, veronica@ubuzwe.co.za, www.ubuzwe.co.za, 011 728 9536 or 074 168 8744
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Flawless Consulting: transforming the way that people work together I
n this time of free agency, outsourcing, and cross-functional work teams, consulting has become a part of everyone’s job. No matter how technical or commercial the consulting work might become, every consulting project is essentially a human encounter – after the discussion of a new change model, or business processes, or strategy, we finally end up in a conversation with a client or a colleague, and it is what we bring to this conversation that ultimately proves decisive. The ideas and practices that form the basis of the Flawless Consulting workshop were conceived over thirty years ago by Peter Block (author of the book ‘Flawless Consulting, A guide to getting your expertise used’ ) when the vice-president of information services at an Exxon affiliate realised that 60 percent of the recommendations that his group made to the line organisation were never implemented. He knew that his group’s recommendations were well conceived and relevant, but despite this they were very rarely used. He invited Peter to design a consulting skills workshop for his systems group that would improve the implementation ratio of their recommendations. And out of this project came a successful consulting skills workshop that is broadly regarded as the leading model worldwide (to date over 100 000 people have attended the workshops internationally) for both internal and external consultants; which is very real proof, in a marketplace that demands and thrives on novelty, of the depth and durability of the process. The core skill in consulting is how to contract with your clients (or colleagues), which is why this practice lies at the heart of the Flawless Consulting Process. Contracting (Flawless Consulting 1) is all about building and negotiating relationships; exchanging needs and wants with our clients; clarifying expectations; working with resistance; treating the relationship as central, in the hope that if we can contract well with our clients, this will, by example, help them to contract well with others, thereby transforming the way that the people in their organisations work together.
But once the contract is clear, the work of really understanding the problem and the current reality begins. The intent in Flawless Consulting 2 (Discover) is to identify and give attention to the particular skills of this phase that enable us (as consultants) to guide our clients through a process of discovery, engagement and dialogue, which then enables them to find answers to their questions and to apply strategies that are enduring and productive. To date more than 300 people have attended the Flawless Consulting workshops in South Africa, to mostly rave reviews. The general consensus from those who have attended is that it is the interactive and experiential nature of these workshops, together with the proven practices that the delegates get to work with, that enables people to make such dramatic shifts in terms of how they show up everyday, and to successfully develop the quality of their business relationships following the workshop. Here’s what two of the workshop delegates had to say: “What struck me was the simplicity, sincerity and authenticity of the content, and also the way that the training was facilitated. After attending Flawless Consulting 1, I was able to immediately and effectively apply the thinking and skills. To me this means that the learning was useful and will stick. As a consultant I am always concerned about the value I bring to my client and whether the client would want what I offer. Flawless Consulting helps to build agreement on that. Thanks for a great experience!” - Francois Venter, Mandevco Consulting. “I recommend Flawless Consulting to external and internal consultant at all levels. The insights and tools equip consultants with the courage and confidence to conduct authentically and effectively with clients, in a way that builds a trusting and productive contracting relationship, right from the start” - Cally Mundy, Independent Consultant. For more information on how you and your organisation can benefit from the Flawless Consulting process, contact Les Wenzler on 082 866 9484 or les@symphonia.net To register for one of the workshops please consult our advertisement alongside this editorial.
INTERVIEW
Contracting is the first and most critical step of the consulting process. This workshop, developed by ground-breaking author Peter Block, focuses on skills needed to build productive working relationships with clients.
CAPE TOWN Mon, 18 & Tues, 19 April 2011
JOHANNESBURG Tues, 15 & Wed, 16 March 2011 Wed, 13 & Thurs, 14 April 2011 Registration: 08:00 Workshop: 08:30 - 17:00
The Consultant’s Bible
Peter Block’s bestselling book is often called ‘The Consultant’s Bible’. It is the ultimate guide to getting your expertise used, whether you are an internal or external consultant!
The Discovery Phase includes going beyond the client’s presenting problem and finding out how the problem is being managed. You will learn how to help identify the client’s contribution to the problem and develop a simple, clear and independent picture of the situation.
CAPE TOWN Tues, 2 & Wed, 3 August 2011
JOHANNESBURG Tues, 23 & Wed, 24 August 2011 Registration: 08:00 Workshop: 08:30 - 17:00 Only delegates who have attended Flawless Consulting 1 are able to attend Flawless Consulting 2.
To book please contact Johleen on 021 913 3507 or email johleen@symphonia.net www.symphonia.net
Alchemy of Engagement
ROLE OF HR
Lead with LUV! By Ken Blanchard
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hat has love got to do with leadership? Everything according to Ken Blanchard, who says leading with love can help us achieve unprecedented organisational success. I’ve been a huge fan of the former President of Southwest Airlines, Colleen Barrett, for many years. She is an amazing woman who worked closely with founder Herb Kelleher for more than three decades as his executive secretary, before he had the wisdom to promote her to the top job on his retirement in 2001. Colleen does all the things I write about, the stuff I’ve learned and taught over the years and have been talking about in these columns. My philosophy comes alive in this one real person. For a while I’ve wanted to work with her on a book that captures the real-life leadership examples that have made Southwest Airlines a model of good management, and now we’ve done it: our jointly written Lead with LUV: A Different Way to Create Real Success is now in print! Why have we titled it ‘Lead with LUV?’ Because LUV, amazingly, is the New York Stock Exchange symbol for Southwest Airlines! And because Colleen has the heart of a servant leader; love runs through everything she does for her people. This is why Herb Kellher promoted Colleen. He knew intuitively that he didn’t want some outside egomaniac coming in and changing the vision, direction, or values of the company. What he wanted was somebody who was already philosophically turning the pyramid upside-down. Colleen and I have written our book in the form of a conversation between the two of us, focussing on how Leading with LUV works, why it’s the most powerful way to lead, and how it can help achieve unprecedented business success. It’s an idea that can be challenging for senior executives at first, but it makes perfect sense. It’s simply about loving your mission, loving your people, loving your customers, and loving yourself enough to get out of the way so that other people can be magnificent. Too often, managers think their job is to sort people into a normal distribution curve using a rank-ordered performance review system, but leadership should in fact be more like sitting down and having a cup of coffee with your mom. She doesn’t think you’re part of a normal distribution curve. She thinks you’re special. She cares about you. She wants you to win. She wants to know how she can help. Leadership should be about having conversations with people and showing them you are listening to them. It’s not about you. Hierarchical ‘command-and-control’ leadership gets in the way of success. What works is having the humility as a leader to set the direction and vision for an organisation and then turn the pyramid
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upside-down when it comes to implementation. And remember – humility is not about humiliation! As Norman Vincent Peale said, “humble people don’t think less of themselves, they just think about themselves less.” Leading with love means you care about both results and people. In the foreword to our book, Herb Kelleher says people need ‘psychic satisfaction’ in their work. He asks,“Why shouldn’t a business simply be an enlargement of our circle of family and friends?” As Southwest has proven over the last 40 years, you get great results and a great level of satisfaction when everybody contributes and pulls together. Leading with LUV at Southwest means that when it comes to that difficult balancing act of keeping customers, employees, and shareholders happy, employees come first, customers second, and shareholders third. The reasoning behind this is based on the Golden Rule: “do unto others as you would have done unto you.” If you treat your people right, good things will happen. Managers at Southwest are expected to spend approximately 80 percent of their time treating their 35 000 employees with Golden Rule behaviour, and trying to make sure they have an enjoyable work environment and feel good about what they do, about themselves, and about their position within the company. They demonstrate ‘love in action’ by remembering anniversaries and kids’ graduations and everything else. In Colleen’s case that meant more than 100 000 letters to the 35 000 employees of the company coming out of her office every year—including 2 500 that she wrote herself. But this isn’t a soft option, because it also sets an expectation that employees will demonstrate the same kind of loving behaviour with customers. So Southwest’s passengers can expect to experience the same kind of kind of warmth, caring, and fun spirit. This creates a loyal customer base, which comes back often and recommends Southwest to other travellers, which pleases the third customer—shareholders. It’s a winning formula that has resulted in superior customer satisfaction ratings and financial performance in a notoriously competitive industry. How does your top management prioritise these three groups of people? Could your company benefit by creating a high support, high expectations “Golden Rule” environment for employees? Could it benefit from an injection of LUV? For more information about Lead with LUV contact southafrica@kenblanchard. com, or phone 0800 980 814.To access a recording of a free webinar on Lead with LUV featuring Ken Blanchard and Colleen Barrett visit www.kenblanchard. com © The Ken Blanchard Companies, 2011
OPINION
Key learnings from the World HRD Congress 2011
The future of HR Gordon Day and Steve Kgatuke hat is happening in the world of HR? This question resulted in the directors of i-Cap arriving in Mumbai, India to attend the 19th World HRD Congress with 750 delegates from 89 countries. To try and sum up all of the contributions to this congress over three days with four parallel tracks, would be an impossible task, however we will share some of our key learnings from the congress. So what is the future of HR? The first observation is that the future is, as always unpredictable and seems to arrive at our doorstep ever faster and more unexpected. By the time we have made a forecast, we already know we were wrong in every way since the world has changed in the meantime. Massive and unexpected changes in markets, politics, technology and social trends all contribute to make the future of HR challenging and exciting at the same time. Our current linear planning methodologies are no longer relevant in this environment and we need to shift towards predictive methodologies such as sustainable business modeling, scenario planning and risk management. In this rapidly changing business environment, the concept of a practice becoming a traditional ‘best practice’ no longer applies. The definition of a best practice is changing to become a practice that is relevant and effective only at a particular point in time. HR can only remain relevant by understanding how value is created in the organisation and by making sense of the impact of events in the macro world. This approach implies a different type of thinking and requires HR professionals to be skilled in lateral thinking and constant innovation. What HR professionals learned at university becomes outdated and obsolete very quickly, so we need to find a sustainable capability model to remain competent. Innovation should be an important driver of HR skills to ensure that the function remains relevant and adds value. Events, such as those unfolding in Egypt and Tunisia, are challenging our paradigms about leadership. Leadership in the future is better defined as an energy created by people coming together as opposed to the qualities or competencies of one individual. Managing the generational diversity in organisations is a new challenge for HR as many organisations are now employing more people from the younger generations. The expectations and values of these age groups are so different that HR cannot get away with ‘one size fits all’ solutions any more. Employees expect to have choices and to be empowered to define their own working conditions on a more
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personalised basis. Some of the emerging HR concepts resulting from the attempts to offer a more personalised employment experience include talent segmentation and building a talent pipeline that is aligned to different work environments, conditions of service and work patterns. Individuality and choices for employees will become a core competitive advantage to attract the best available talent. Social media rules! The underlying principles and concepts of social media impact on all HR processes. Transparent, open communication practices and technology are now seen as fundamental requirements to retain talent in the organisation. Some of the examples include: 360° surveys with transparent results, open to all participants; recruitment and selection influenced by information from social media; employer branding and reputation New technology has a profound impact on the HR function in organisations. Many HR professionals are still trying to solve today’s problems with yesterday’s tools. New generations of employees and the latest technology is changing the work environment and therefore HR’s role in it. The extent to which HR takes advantage of these technological changes in the work environment will determine the function’s perceived value to the organisation in future. The advances in technology also create new possibilities for innovation and different HR service delivery models. Constraints like geographic locations and language differences become more and more irrelevant to how we deliver HR to the organisation. In conclusion, to be relevant in the future: HR must be able to make sense of the macro world and craft appropriate and timeous responses to changes in this world (technological, generational, political, economic, etc.) HR must understand the business model(s) of the organisation - how does my organisation create appropriate value? With this understanding, HR interventions will always have a strong business case and be aligned to business objectives. HR must be able to design and build sustainable organisational capabilities that can stand the test of time. HR has to find ways to make the employment experience more individualised and create meaningful choices for employees to select from and create their own personalised work environment. HR needs to be very aware of social media and make use of communication technology to stay ‘tuned in’ to employee needs and to manage the employer brand.
InterMedia i-Cap’s creative HR Solutions refreshing your ideas
GROUP INSURANCE SCHEMES
Lift club risk By Mandy Barrett
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ift clubs, sparked off by rising motoring costs, are a potential insurance nightmare. Among the reasons for a likely increase in lift club numbers, are two recent petrol price adjustments and the expectation that, with oil prices on the rise, possibly accompanied by a weakening of the rand exchange rate, there could be further increases. Also, other motoring costs are on the increase, including insurance rates as insurance policy renewal season arrives. Also, with more than 40 toll gates planned across Gauteng’s freeways from April, motoring costs in the province in particular are under pressure and the temptation to join a lift club to commute to work and schools is seductive. However therein lies major insurance risk. Looking at the Gauteng scenario in particular, the implications of the toll roads for motoring costs are significant with The Road Freight Association claiming that the toll fees proposed by the SA National Roads Agency Limited (Sanral) will be equivalent to doubling the fuel price. The Gautrain rapid rail service between Johannesburg and Tshwane, when it opens, will no doubt help matters, although at a cost, but there’s speculation that lift clubs will nonetheless mushroom as commuters look for cheaper transport alternatives. The key risk aspect in this scenario is whether the driver of a vehicle in such a club is driving for reward, i.e. charging passengers and we urge people to exercise caution, as in this case passenger liability cover may be excluded under their personal motor insurance policies.
The driver in this scenario needs to register under Chapter 6 of the Road Traffic Act as a taxi operator, subject to all the rules and regulations of that legislation, including holding a professional driving permit and with commercial passenger liability cover in place. As the driver in a lift scenario without such cover in place, you could be open to crippling claims if your passengers were to be injured due to your negligence. It’s all to do with the purpose of providing the transportation and if that purpose is for profit, even indirectly. Take a worst case scenario where, say, half a dozen people are injured in an accident while you were transporting them. You could be faced with multiple claims running into millions for everything from pain and suffering to loss of future earnings, and the claimants could sue you It would also be advisable not to breach other legislation. For example, have a professional driving permit in addition to a taxi licence where this is required. On the other hand, just as drivers should be clear on where they stand in terms of insurance cover for transporting passengers, passengers in lift clubs should establish whether the driver to whom they entrust themselves, is indeed properly covered to avoid a potentially nightmarish scenario where they are injured or worse and there is no insurance cover in place, possibly resulting in long drawn-out legal battles with no certainty about the outcome. Mandy Barrett, Glenrand M.I.B’s Manager Marketing and Sales Personal Product Solutions, 011 329 1020
NEWS AND REVIEWS
HR in brief
Finding the balance between push and pull By James Mc Kerrell, There has seldom been a new year in the past decade which has not been approached with some apprehension. Just as we thought we were seeing all the right signs of recovery, the European Union finds itself in crisis. South African economic data, has by in large, been pointing towards signs of growth and the IT industry in general is certainly starting to pick up. Looking deeper into 2011 we can expect companies to tentatively move towards expansion.We say tentatively, because while there is certainly money available to be spent, companies will be looking for compelling evidence of return on investment. Companies wishing to see effective growth in 2011 will need to have a convincing strategy which focuses on two things – skills and efficiencies. Indeed, organisations looking to expand will struggle to accomplish this without solid performance and incentive systems that align employee delivery and behaviour with business objectives. However, organisations will also struggle to attract, hire and retain appropriate skills without excellent human capital systems and strategies. Turning to technology may well prove to be a significant part of the solution. Using technology to improve human capital management (HCM) is nothing new and we have seen some improvement across the board in the past year. Through 2011, the forward thinking manager will continue to automate and reduce HR administration costs. Using a combination of system consolidation, process standardisation, as well as shared and selfservice options, organisations stand to benefit from lower overheads and increased quality. A key opportunity will lie in empowering employees to take control of their own progress and HR management through self-service applications. Historically, most HR systems have operated on a “pull” basis, with HR managers requesting or demanding information from employees and
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management. We believe there is a growing acceptance that companies should empower their employees to manage their own HR matters. Not only will staff have a deeper appreciation of company policies and how they work, but the organisation as a whole will benefit from more accurate data and, ultimately, a far more cost effective HR ecosystem. Using HR applications that require employee “push” will also result in employees taking ownership of their growth paths and they will be more likely to volunteer their interests, information and skills. James Mc Kerrell, CRS Technologies, 021 555 2660 All goals are attainable with As One In As One Deloitte, the world’s largest consulting and financial services firm, shares their secrets to leading teams that achieve the goals they set for themselves. The world is as much about co-operation as it is about conflict; as much about collaboration as competition.And yet we have very little knowledge regarding collective behaviour.The command-and-control mode of management previously favoured by leaders fails to engage people. Therefore Deloitte has invested in the global, As One project, in order to study effective collaborations. In As One the authors Mehrdad Baghai and James Quigley refer to several modes of “As One behaviour” that are applicable to various contexts. It defines eight archetypes of leaders and followers, their characteristics and how one can apply them to your organisation. Unlock the power of As One on a global scale with As One. Mehrdad Baghai is the Managing Director of Alchemy Growth Partners and has been a strategic adviser to leaders of large organisations for more than 20 years. He is the author of The Alchemy of Growth and its sequel The Granularity of Growth. James Quigley is the CEO of Deloitte Touche Tohmatsu Limited and has been with the company for more than 30 years. www.asone.org
2011 IPM ANNUAL CONVENTION
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o acknowledge the support of our members and delegates for making an effort to register early for the 2011 IPM Annual Convention, IPM would like to make a substantial concession by allowing them to register on the 2011 early bird registration rates on condition that they register and pay on or before the 30th April 2011. The convention committee has already started planning for the hosting of yet another intellectually stimulating convention. Some of the issues that the convention committee has started deliberating on because of their impact on business and the economy in general are the following: • The impact of the global economic environment on business operations locally. • People management issues emanating from both the presidential address and the budget speech. • Complexities of the South African labour market, including the shortage of critical skills and talent. In the same manner that global leaders both from public and private sectors converge under the umbrella of the World Economic Forum to find solutions to major global economic, political, and social problems, so is the tradition of HR professionals and business executives in South Africa and neighbouring countries to converge annually under the umbrella of IPM Annual Convention to find growth oriented solutions confronting organisations locally. In a study conducted by the Boston Consulting Group (BCG) in 2008, IPM Convention has been identified as the conference that attracts most delegates compared to similar conferences globally.This is due to the fact that the IPM Convention Committee takes the job of organising and hosting the convention seriously and high quality speakers both locally and globally are always keen to participate in this premier HR and business leadership event. Take advantage of the ‘early bird’ registration discount and act now. Rre. Elijah Litheko Chief Executive Officer elitheko@ipm.co.za
KZN HR executive scoops global HR leadership award Mr Raj Seeparsad, IPM’s Vice President: Stakeholder Relations, has been awarded the Global HR Leadership Award, which was presented to him at the World Human Resource Development Congress held in Mumbai, India last weekend. Mr Seeparsad was invited by the world body to chair a session (themed “The Future”) at the Congress. Mr Seeparsad is the Human Resources Manager of GUD Holdings (Pty) Ltd in Pietermaritzburg and is also an Executive Director of the Pietermaritzburg Chamber of Business. His involvement with the Institute of People Management spans 26 years, an organisation he has served with passion and enthusiasm. The IPM Durban Coastal branch is delighted that Raj has received this well-deserved accolade and is proud that he represented the DURBAN COASTAL BRANCH, IPM’S NATIONAL “BRANCH OF organisation and South Africa at this important international event. THE YEAR” AWARD WINNER 2004 TO 2010 March 2011 People Dynamics
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IPM 55 ANNUAL CONVENTION & EXHIBITION - SUN CITY, TH ND NORTH WEST PROVINCE, SOUTH AFRICA, 30 OCTOBER TO 2 NOVEMBER 2011 TERMS AND CONDITIONS:
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2011 IPM AWARDS
Please submit 2 weeks before the event as IPM cannot be held responsible for dietary requirements that have been submitted late. (eg. Vegetarian, Kosher, Halaal)
METHOD OF PAYMENT: Delegate registration fee:
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The signatory warrants his/her authority to sign this agreement on behalf of the company. Please fax the completed form with proof of payment to Lavern Meyers at +27(0)11 329 3765 or +27(0)86 679 6651 to secure your booking. An administration fee of 20% will be levied on cancellation received prior to 1st August 2010, thereafter the exhibitor will be liable for the full cost. In case of cancellation, no substitution is permitted.
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For any queries please contact IPM Central: +27(0)011 329 3760 or Lavern@ipm.co.za
Visit IPM online at: www.ipm.co.za March 2011 People Dynamics
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GABRIEL’S HORN
Happiness is... I
sometimes think we are a strange lot in this country. Now I know that I am just as strange as the rest of us. It’s no secret that all of us who live in the greater Johannesburg area have been plagued by the on-going billing crisis which has seen 1 000’s of honest citizens having their lights and water cut-off through no fault of their own. Most of us have spent countless hours trying to rectify obvious overcharging or, indeed, attempting to get billed at all. I have been through months of not being billed for electricity or water. I continued paying on an estimate basis but there was always the stress of knowing that you could be cut off at any moment. To my great joy, I last month received official water and electricity accounts. My wife was incredulous at my whoops of delight. “All this happiness because you received two bills,” she remarked. On reflection it was a little strange but I suppose a strange society breeds an innate strangeness. Great service It is sad but true that when we receive outstanding service these days we are very surprised. Recently a colleague had the pleasant experience of being on the end of outstanding service. He had booked a 10 seater vehicle to take a trip to the Eastern Cape. On arriving at Europcar at the Sandton Sun hotel he was dismayed to discover that the travel agent had booked an
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8 seater, which was not very helpful as there were10 people waiting to board. A number of phone calls were made to not very sympathetic travel agents involved in the supply chain of booking the vehicle. Surprisingly they were not interested in assisting. Perhaps they don’t believe in repeat business. In the end, the very helpful Gary Nixon and his manager, Michelle Chiappini, of Europcar at Sandton Sun agreed to make a 10 seater available to my colleague at no extra cost. Full marks to Europcar for proving that great service still exists in South Africa. While in East London, my colleague was very impressed to watch the unloading of new motor vehicles from a cargo ship at the mouth of the Buffalo River. New cars were leaving the mammoth vehicle at the rate of one every 10 seconds. There must have been over 2 000 cars standing on the quay when the exercise was finished. Later on the locally made cars were seen being loaded onto the ship at the same rate. It augers well for the economy that so many new vehicles are being imported into the country, and, more importantly, that so many locally made vehicles are being exported. Gabriel Gabriel@eaglepub.co.za
65th Anniversary feature June 2011
Dynamics
People Dynamics is the official journal of the South African Institute of People Management (IPM)
65 YEARS OF THE IPM - A STORY OF FAITH, FORTITUDE AND FULFILLMENT The IPM recently celebrated its 65th anniversary. This milestone will be commemorated in the June 2011 issue of “People Dynamics”. IPM members are recognised as a highly qualified group of people who have taken their rightful place as part of the decision making team in 21st century organisations. There is little doubt that the IPM has played a vast role in empowering HR professionals. The June issue of “People Dynamics” will be a celebration of the success story that is the IPM. From the tough early years of the “founders” to today’s position of pre-eminence, the growth of the Institute has been a fascinating odyssey. The 65th Anniversary issue of “People Dynamics” will be a fitting tribute to all those who have been part of the exciting history of the IPM. We trust that all those involved with the profession will support this very special issue. It’s the perfect time to market your products and services.
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Anniverary Advertising Rates (excluding VAT) Special Anniversary Issue Rates Front Cover
R19 250
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