CHAPTER 1: LEGISLATION

1. The Skills Development Act (SDA) (NO. 97 OF 1998)

1.1 The purpose of the Skills Development Act (SDA)
 Develops the skills of South Africans, improving productivity in the
workplace
 Invests in education and training of the South African workforce.
 Encourages workers to participate in learning programmes.
 Redresses imbalances of the past through education and training

1.2 The impact of the SDA on businesses

Advantages
 Trains employees to improve productivity in the workplace.
 Promotes self-employment and black entrepreneurship.
 Increases the return on investment in education and training.
 A business can become more globally competitive.

Disadvantages
 Increases cost as the process requires lengthy paperwork.
 Implementation of the SDA can be difficult to monitor and control.
 Many service providers that offer training services are not SAQA
accredited.
 The time and money spent on improving employee skills is wasted if
they leave the business.

1.3 Discriminatory actions according to the SDA

 Unfair promotion of skills and training to certain employees.
 Furnishing false information in any prescribed document.
 Promoting skills development unfairly, where only certain employees
benefit.
 Falsifying information in any documentation such as tax
documentation submitted to SARS.
1.4 Penalties for non-compliance
 Businesses that do not pay the Skills Development Levy may not offer
learnerships.
 A labour inspector can order the business to stop operating should
the business be found guilty of illegal practices.
 Businesses that do not comply with the SDA may receive a
compliance order from the Labour Court.
 The business’s operating licence may be revoked, which may prevent
any form of operations.

1.5 Ways in which businesses can comply with the SDA

 Display a summary of the SDA in the business that is visible to all
employees.
 Provide all employees with the opportunity to improve their skills.
 One per cent of an employer's payroll must be paid over to the SETA.
 Encourage employees to participate in learnerships and other training
programmes.

1.6 The functions of SETAs is to:

 Report to the director general.
 Promote and establishes learnerships.
 Collect levies and pays out grants as required.
 Register learning programmes.

1.7 Funding of SETAs

 Skills Development levies paid by employers to SARS as a collecting
agency.
 Donations.
 Surplus funds received from government institutions
 Funds received from rendering their services.
1.8 The meaning of learnerships
 Practical training opportunities that can lead to a recognised
occupational qualification.
 Agreement between the trainee, employer, and training provider.
 Can include employment for a specified period after learnership is
completed.
 Includes a training course with learning material as well as practical
work experience.

1.9 Explanation of the National Skills Development Strategy (NSDS)

 Increase access to programmes that train people.
 Build training centres.
 Guides the work of SETAs.
 Improves social development through economic improvement.

1.10 Explanation of the Human Resource Development Strategy

(HRDS)
· Promotes social justice which helps alleviate poverty.
· Develops short-term and long-term workforce skills.
· Improves the supply of skills.
· Increases employee participation in lifelong learning.

2. The Labour Relations Act (LRA) (No.66 of 1995)

2.1 The purpose of the Labour Relations Act (LRA)
 Promotes collective bargaining at the workplace.
 Promotes fair labour practices between employers and employees.
 Promotes workplace forums to accommodate employees in decision-
making.
 Establishes the Commission for Conciliation, Mediation and
Arbitration (CCMA) Labour Courts and Labour Appeal Courts for
dispute resolutions.
2.2 The impact of the LRA on businesses
Advantages
 Provides mechanisms such as the CCMA.
 Promotes a healthy relationship between the employer and
employees
 Protects the rights of businesses and employers in labour related
issues.
 Promotes quick and affordable labour dispute resolutions.

Disadvantages
 The LRA may reduce global competitiveness due to lower workplace
productivity.
 Costs of labour increase because of legal strikes.
 Many employees and employers do not respect the Labour Relations
Act.
 Decreased profits due to decline in productivity and sales.

2.3 Actions regarded as non-compliance/ discriminatory by the LRA

 Dismissing employees unfairly.
 Preventing employees from forming and joining trade unions.
 Preventing employees from participating in legal strikes.
 Refusing the establishment of workplace forums.

2.4 Penalties for non-compliance with the LRA

 The employer could enter a dispute resolution process. if they do not
participate.
 Businesses that fail to comply incur financial costs such as CCMA
fees.
 Businesses that do not comply may receive a compliance order from
the Labour Court that forces the business to comply.
 The business’s licence may be revoked, which may prevent the
business from continuing any form of operations.

2.5 Ways in which businesses can comply with the LRA

 Fairness should be promoted, and employees should not be unfairly
dismissed.
 Allow the establishment of workplace forums.
 Any agreements made during collective bargaining should not be
ignored by employers.
 Display a summary of the LRA in the workplace where it is visible to
all employees.

2.6 Rights of employers and employees in terms of the LRA

Rights of employers in terms of the LRA
Employers have the right to:
 Form employer organisations to represent them in labour related
matters.
 Form a bargaining council for collective bargaining purposes.
 Recourse a lockout during periods when employees engage in
wildcat strikes.
 Dismiss employees who are engaged in an unprotected strike such
as violence during strike action.

Rights of employees in terms of the LRA

Employees have the right to:
 Join a trade union of their choice.
 Embark on legal strikes as a remedy for grievances.
 Refer unresolved workplace disputes to the CCMA.
 Refer unresolved CCMA disputes to the Labour Court on appeal.
3. The Employment Equity Act (EEA) (No 55 of 1998)
3.1 The purpose of the EEA
 The EEA allows employees who do the same work to be paid equally.
 Advocates that employees who do work of the same or equal value
must be paid equally.
 Eliminate discrimination on grounds of gender or race in the
workplace.
 Promotes equal opportunity and fair treatment in the workplace.

3.2 The impact of the EEA on businesses

Positives
 Encourages consultation between employer and employees.
 Promotes equal opportunity and fair treatment in the workplace.
 Impacts positively on BEE ratings for businesses.
 Motivates employees because the workforce is more inclusive.

Negatives
 Penalties for non-compliant businesses may be expensive for the
business.
 Diversity in the workplace may lead to conflict.
 Job hopping of skilled/trained EE appointees may increase staff
turnover.
 Other groups may not respect the knowledge of an EEA appointment,
and it may lead to conflict.

3.3 Actions regarded as non-compliance /discriminatory by the EEA

 Refusing to employ young women because they would choose to
have children in the future.
 Doing HIV testing unless justified by the Labour Court.
 Denying people access to the workplace, based on any form of
discrimination such as gender and treating them unfairly in the
workplace.
 Treating workers unfairly and incorrectly promoting affirmative action
in the workplace.

3.4 Penalties/consequences for non-compliance with the EEA

 Businesses may face heavy fines for non-compliance.
 They can be ordered to pay compensation and damages to the
employee.
 Labour inspectors may ask questions about complaints
 A compliance order may be issued to businesses that do not comply
with the EEA.

3.5 Ways in which businesses can comply with the EEA

 Promote equal opportunities and fair treatment
 Implement an employment equity plan.
 Implement affirmative action measures to promote diversity in the
workplace.
 Ensure that diversity in the workplace is achieved.

4. The Basic Conditions of Employment Act (BCEA) (No. 75 of 1997)

4.1 The purpose of the BCEA
 Outlines clear terms and conditions of employment for employers and
employees.
 Sets the standard for the creation of employment contracts.
 Advances economic development and social justice for employees.
 Regulates the variations of basic conditions of employment.

4.2 The provisions of the BCEA

Work hours
 Employees may work 9 hours a day if they work five days or less per
week.
 Ordinary work hours may be reduced to a maximum of 8 hours per
day.

Overtime
 Employees must agree to work overtime and cannot be forced.
 Employees cannot work more than 3 hours overtime per day or 10
hours per week.
Overtime must be compensated as follows:
o 1½ times the normal rate of overtime pay worked on weekdays and
Saturdays.
o Twice the normal rate of overtime pay worked on Sundays and public
holidays.
Meal breaks and rest periods
 Employees must have a meal break of 60 minutes after five
continuous hours of work.
 The meal breaks can be reduced to 30 minutes by a mutual written
agreement when employees work less than 6 hours per day.
Termination of employment
 An employment contract may only be terminated following 1 weeks’
notice if the employee has been employed for six months or less.
 A minimum of 4 weeks' notice must be given if the worker has been
employed for a year or longer.

Public holidays
 Employees must be paid for any public holiday that falls on a working
day.
 Employees may work on public holidays when there is a mutual
agreement, and they are paid twice their normal rate.

Child and forced labour

 It is illegal to employ a child younger than 15 years of age.
 It is illegal to force someone to work.

Leave
Annual leave
 Employees are entitled to:
 21 consecutive days of annual leave per year.
 Annual leave must be granted within six months after the leave cycle
ends.
Sick leave
Employees are entitled to:
 30 days paid sick leave in a 3-year cycle.
 1 day paid sick leave for 26 days worked during the 6 months of
employment.

Maternity/Adoptive leave
 Pregnant employees are entitled to 4 consecutive months of
maternity leave.
 The starting date is usually any time from four weeks before the
expected date of birth.

Parental leave
 An employee irrespective of gender, who is a parent, is entitled to 10
consecutive days of parental leave after the birth of their child.
 The employer must be notified at least one month before the
expected due date of birth.
Family responsibility leave
 An employee may receive 3 to 5 days paid leave per year on request,
in the event of the death of the employee’s family.
 An employer may require reasonable proof – before approving this
type of leave such as a death certificate of the family member whose
funeral will be attended.
4.3 The impact of the BCEA on businesses
Positives
 Specifies work hours to prevent exploitation of employees.
 Encourages consultation between employers and employees.
 Promotes the fair treatment of employees.
 Outlines the basic requirements for employment contracts.

Negatives
 Employers cannot force employees to work more than 45 hours per
week, which can reduce productivity.
 BCEA forces businesses to comply with any legal requirements,
which may increase labour costs.
 Businesses can be charged with high penalties for non-compliance,
which negatively impacts cash flow.
 Employers cannot hire cheap labour and therefore cannot exploit
employees.

4.4 Actions regarded as non-compliance/discriminatory by the

BCEA
 Preventing workers from accessing employment contracts.
 Refusing to accept a valid medical certificate of a sick employee.
 Forbidding workers from discussing salaries with co-workers.
 Preventing pregnant employees from legally taking maternity leave.

4.5 Penalties/consequences for non-compliance with the BCEA

 Businesses can receive a compliance order from the Labour Court,
which forces the business to comply with the BCEA.
 Businesses may be taken to the labour court for a ruling.
 They can be ordered to pay compensation and damages to the
employee.
 The Director General may agree or cancel the compliance order.
4.6 Ways in which businesses can comply with the BCEA
 Workers should only work 9 hours per day in a 5-day work week.
 Ensure that employees do not exceed the stipulated working hours of
45 hours per week.
 Workers must receive double if they work during public holidays.
 They must have a break of 60 minutes after five hours of work.

5. The Compensation for Occupational Injuries and Diseases Act

(COIDA) (No. 61 of 1997)
5.1 The purpose of COIDA
 To protect employees who are injured while doing their duties.
 COIDA applies to all workers who become injured due to a workplace
accident.
 Excludes workers who are guilty of wilful misconduct.
 The severity of the injury will dictate the medical expenses and other
compensation that will be paid to employees.

5.2 The impact of the COIDA on businesses

Positives
 Promotes health and safety in the workplace.
 Employees do not contribute towards this fund.
 Claiming processes are simple.
 Any compensation to an employee is exempt from income tax.

Negative
 Claiming process may be lengthy.
 Employers may be forced to pay heavy penalties if found guilty of
negligence.
 Implementation processes required by the Act may be expensive.
 South Africans who are temporarily employed in foreign countries are
not covered by COIDA.
5.3 Actions regarded as non-compliance /discriminatory by COIDA
 Bribing employees not to report the injury based on the grounds of
race/gender.
 Employers who do not allow claims for injuries discriminate against
injured employees.
 Employers that delay the claiming process.
 Refusing to lodge the claims of domestic workers.

5.4 Penalties/consequences for non-compliance with COIDA

 Businesses may receive a compliance order from the Labour Court,
which forces the business to comply with COIDA.
 Businesses may pay large fines for refusing to lodge claims and can
face imprisonment, which depends on the severity of the non-
compliance.
 Employees may take businesses to court for not registering them with
the Commissioner of the Compensation Fund.
 Businesses will have to pay large penalties if found guilty of
misconduct.

5.5 Ways in which businesses can comply with the COIDA

 Display a summary of COIDA in the workplace which is visible to all
employees.
 Promote health and a safety in the workplace.
 Ensure all machinery is in good working condition.
 Report all incidents causing injuries to employees.
6. The Broad-Based Black Economic Employment Act (BBBEE)
(No. 53 OF 2003, as amended in 2013)
6.1 The purpose of BBBEE
 Wealth is spread more broadly across all population groups.
 Aims at targeting inequality in the South African economy.
 Allows development for the Codes of Good Practice.
  Increases the number of black people who manage South African
businesses.

6.2 Differences between BEE and BBBEE

Black Economic Empowerment Broad-Based Black Economic
(BEE) Empowerment Act (BBBEE)
· A government policy that may not · An Act that is enforced on businesses.
always be enforced.

· Benefitted only a few previously · Encourages black women, people who

disadvantaged people in the economy. are physically challenged, youth, and
people in rural areas – to participate in the
economy.
· This resulted in a few previously · Aims to distribute the country’s wealth
disadvantaged individuals sharing in across a broader spectrum of society.
the wealth of the economy.

· Focused only on three pillars that did · Focuses on five pillars – which include all
not include all previously sectors of the society – especially the
disadvantaged people. previously disadvantaged people and
communities.

6.3 The BBBEE PILLARS

1. Management control
2. Skills development
3. Ownership
4. Enterprise and supplier development (ESD)
5. Socio-Economic Development/Social responsibility
Implications of the FIVE BBBEE pillars on businesses
Management control
Business must/should:
 Ensure that transformation is implemented at all levels.
 Appoint black people in management.
 Involve black people in the strategic decision-making processes.
 Ensure that black females are represented in management.
Limitation/Barriers:
 Due to a shortage of skilled black managers, some businesses find it
difficult to make appointments this limits the growth opportunities of
the business.
 Businesses are directly penalised for not implementing this pillar.

Ownership
Business must/should:
 Include black people in shareholding.
 Encourage small black investors to invest in big companies and share
ownership.
 Create more opportunities for black people to become owners and
entrepreneurs.
 People are promoted to level 3 of the BBBEE scorecard.
Limitations/Barriers
· Businesses find it difficult to find suitable black business shareholders
who can afford shares.
· Many black people cannot afford shares in companies.

Enterprise and supplier development (ESD)

Business must/should:
 Create jobs as ESD promotes local manufacturing.
 Identify black-owned suppliers that can supply goods and services.
 Support black-owned SMMEs with donations.
 Develop and implement supply chains.
Limitation/barrier:
 Small businesses may not be able to afford enterprise development
support.
 Smaller businesses that are not BBBEE compliant lose business.
Skills Development
Businesses must/should:
 Involve black employees in various skills development training
programmes and initiatives.
 Benefit from the increased pool of trained employees, which
increases productivity.
 Provide learnerships to black employees.
 Train staff where learnerships are not offered.
Limitation/barrier:
 Businesses often compromise productivity, when coaches use work
hours to participate in training.

Socio-economic development/Social responsibility

Businesses must/should:
 Contribute towards social investment projects and community
development.
 Focus on critical areas of CSI such as development in education.
 Distribute scarce CSI resources to selected beneficiaries in the
community.
 Promote sustainable use of natural resources and support
businesses that use sustainable production techniques.
Limitation/barrier:
 Businesses are not experts in societal issues and social responsibility
and may result in the wastage of financial resources if not
investigated correctly.

6.4 The impact of the BBBEE on businesses

Positives
 Businesses address the demands for equity in the workplace.
 Provides a variety of business codes to improve employment equity.
 Share prices of BBBEE compliant businesses are likely to increase as
they attract more business.
 Businesses that support Small, Micro, and Medium Enterprises
(SMMEs), may increase their own BBBEE ratings.

Negatives
 Large penalties for businesses that do not comply with BBBEE.
 If BBBEE processes are not monitored properly it may lead to
corruption.
 Ownership issues can cause unhappiness amongst existing owners.
 Many businesses have been disadvantaged due to BBBEE ratings as
they may not be able to meet all the scores.

6.5 Actions regarded as non-compliance/discriminatory by BBBEE

 Incorrectly implementing the means to achieve the requirements of
the five BBBEE pillars.
 Failing to implement affirmative action to meet BBBEE
responsibilities.
 Promoting unsuitable people into a management position at the
expense of qualified previously disadvantaged people.
 Refusing to award government tenders to BBBEE-compliant vendors.

6.6 Penalties/consequences for non-compliance with BBBEE

 Businesses may receive a compliance order from the Labour Court,
which forces the business to comply with BBBEE.
 Businesses may be fined a fine of up to 10% of the company's annual
turnover.
 A business can be banned from participating in government contracts
for 10 years.
 Business licenses may not be renewed, and authorisations may not
be issued.

6.7 Ways in which businesses can comply with BBBEE

 Conduct regular skills development training with black employees.
 Businesses must appoint black people in managerial positions.
 Develop small business through ESD.
 Improve the standard of living of the communities in which they
operate.

7. The National Credit Act (NCA) (No. 34 of 2005)

7.1 The purpose of the NCA
 Promotes the responsible granting of credit, by credit providers.
 Promote a fair but competitive credit market.
 Makes provision for the establishment of the National Credit
Regulator/NCR
 Prevents discrimination and ensure credit is available to all
consumers.

7.3 The impact of the NCA on businesses

Positives/advantages
 NCA protects businesses against non-paying consumers.
 Lower bad debts resulting in better cash flow.
 Authorised credit providers may attract more customers.
 Prevents reckless lending and prevents businesses from bankruptcy.

Negative/Disadvantages
 Businesses that grant credit recklessly cannot recover the debt.
 Businesses struggle to get credit such as bank loans/overdrafts.
 Businesses that do not comply with the NCA may face legal action.
 Increases the administration burden on credit providers.

7.4 Action regarded as non -compliance /discriminatory by the NCA

 Charging different interest rates to customers based on gender/race.
 Blacklisting customers without making efforts to recover the debt.
 Granting credit recklessly to consumers and failing to explain the
credit contract to consumers.
 Failing to conduct affordability assessments to determine whether the
customer can afford the credit being offered.

7.5 Penalties/consequences for non-compliance with the NCA

 The National Credit Regulator may impose a penalty on the business
for non-compliance.
 Business/credit providers may not charge any fee/interest/other
charges under that specific credit agreement.
 The business may not demand payment, sue, or attach the
clients'/consumers' salaries/assets to repay debt.
 The business licence may be revoked for reckless granting of credit
and gross violations contravening the NCA.

7.6 Ways in which businesses can comply with the NCA

 Register the business with the National Credit Regulator (NCR)
 Conduct an affordability assessment to ensure the consumer can
meet their obligation.
 Comply with the necessary procedures regarding the provisions of
the Financial Intelligence Centre Act (FICA).
 Disclose all costs of the loan.

7.7 The rights of consumers in terms of the NCA

Consumers have a right to:
 Apply for credit and to be free from discrimination.
 Obtain reasons for credit being refused by credit providers.
 Receive protection of their personal information.
 Refuse a credit limit increase.

8. The Consumer Protection Act (CPA) (No. 68 of 2008)

8.1 The purpose of the CPA
 Promotes fair and sustainable places for people to sell their products.
 Promotes responsible consumer behaviour amongst consumers.
 Establishes national standards to protect consumers.
 Establishes a National Consumer Commission (NCC)

8.2 The Impact of the CPA on businesses

Positives/Advantages
 Safeguards businesses from dishonest competitors.
 Protected businesses if they are regarded as consumers.
 Prevents larger businesses from undermining smaller ones.
 Businesses may build a good image if they ensure that they do not
violate consumer rights.

Negatives/disadvantages
 Confidential business information may become available to
competitors.
 Penalties for non-compliance may be very high.
 Businesses may feel unnecessarily burdened by legal processes.
 Staff need to be trained which can increase costs.

8.3 Actions regarded as non-compliance/discriminatory by the CPA

 Denying customers proper information about the product/services.
 Treating customers differently based on gender/age/race.
 Charging different and unfair prices to consumers for the same goods
and services.
 Refusing customers proper information about the goods and services.

8.4 Penalties/consequences for non-compliance with the CPA

 Businesses that do not comply may receive a compliance order that
forces the business to comply with the CPA.
 Non-compliant businesses may receive large fines and imprisonment,
depending on the severity of the non-compliance.
 Licences of businesses may be revoked for unfair consumer
practices.
 Businesses may be compelled to pay damages that are due to the
consumer.

8.5 Ways in which businesses can comply with the CPA

 Allow consumers a five-day cooling-off period in the sales agreement.
 Disclose prices of all products on sale.
 Provide training to staff on the CPA.
 Implement measures that will facilitate complaints, e.g. suggestion
boxes.

8.6 The rights of consumer rights in terms of the CPA

Consumers have the right to choose:
 Choose suppliers.
 Shop around for the best prices.
 Return goods that are defective for a full refund.
 Renew fixed-term agreements.

Right to fair and honest dealings:

 Suppliers may not use physical force or harass customers.
 Suppliers may not give misleading/false information.
 Contracts and agreements should be in plain language and easy to
understand.
 Businesses should label products and trade descriptions correctly.

Right to fair/responsible marketing/promotion:

 Businesses should not mislead consumers on pricing, benefits/uses
of goods.
 Consumers may cancel purchases made through direct marketing
within five working days/cooling period.
 All information related to the country of origin/expiry dates/ingredients
of the products should be disclosed/clearly labelled.

Right to accountability from suppliers:

 Businesses should honour credit vouchers and prepaid services.
 Suppliers in possession of any credit vouchers must not treat such
property as theirs and must exercise care and assume liability for any
losses suffered by consumers in this regard.
 Consumers have the right to be protected in lay-bye agreements.
 Suppliers must supply equivalent or superior products or offer a full
refund with interest if goods in the lay bye are not provided by
businesses.

Right to privacy
 Consumers have the right to stop/restrict unwanted direct marketing.
 They can object to unwanted promotional e-mails/telesales.
 They have the right to stop/lodge complaints about the sharing of
their details.

Right to fair/just/reasonable terms and conditions

Consumers have the right to:
 Protection against unfair or unjust contract terms.
 Approach the Court to ensure fair and just conduct terms and
conditions.
 Businesses should provide consumers with written notices of clauses
that may limit consumer rights.
 Businesses may not sell goods at unfair prices to consumers.

Right to equality in the consumer market

 Businesses may not charge different prices for the same
goods/services.
 Businesses should not discriminate against any group of consumers
when marketing their products and services in different areas/places.
 Businesses should not limit access to goods and services in the
consumer market.
 Businesses may not under any circumstance, vary the quality of their
goods to different consumers as this is discriminatory.

Right to fair/honest dealings

 Suppliers may not use physical force/harass customers.
 Businesses cannot promote pyramid/chain-letter schemes.
 They may not give misleading/false information about the
product/service/ transaction.
 Businesses may not overbook/oversell goods/services and then not
honour the agreement.

Right to fair value/good quality/safety

 Consumers may demand quality services/goods.
 Cancel /renew fixed-term agreements.
 To be informed about hazardous/dangerous products
 Businesses may not sell goods at unfair prices.

CHAPTER 2: HUMAN RESOURCES FUNCTION

HUMAN RESOURCES ACTIVITIES
1.1 Recruitment
1.2 Meaning of recruitment
 Process used by businesses to identify vacancies in the business and
attract suitable candidates for them.
 Recruitment aims at finding candidates who have the experience to
fill the vacancy.
  Businesses can use an internal or external method of recruitment
depending on the vacancy.
 Recruitment is an ongoing process as employees get other jobs or
retire.

1.3 Recruitment procedure

 The human resource manager should prepare a job analysis, that
includes the job description.
 HRM should indicate the job description to attract suitable candidates.
 Choose the method of recruitment, e.g. internal/external, to reach
suitable candidates.
 External recruitment should be considered if internal recruitment is
unsuccessful.

1.3.1 The meaning of job analysis

 A tool used by the human resources function to obtain and analyse
information about the business’s workforce so that they can place the
right person in the right job.
 A job analysis consists of the job description and job specification.
 The employer must be clear about the nature of the work to be
performed so that an appropriate job description and job specification
can be prepared.

1.4 The differences between job description and job-specification

JOB DESCRIPTION JOB SPECIFICATION
 Describes duties of a specific job.  Describe the minimum acceptable
qualifications needed for the job.
 A written description of the job and its  A written description of specific
requirements. qualifications needed for the job.

 Describes key performance areas for  Describes key requirements from the
a specific job, e.g. working conditions. candidate, for example, formal
qualifications.
1.5 METHODS OF RECRUITMENT
Internal recruitment and External recruitment
1.5.1 Internal recruitment
 The process of sourcing potential candidates for certain available
posts from within the business.

1.5.2 Internal recruitment

Sources of Internal recruitment:
 Internal e-mails
 Word of mouth
 Management referrals
 Head hunting in the business

1.5.3 The impact of internal recruitment

Positives/advantages
 The recruitment process is faster if the candidates are known to the
business.
 Placement is easy, as management knows the employees' strengths.
 Opportunities for promotion reward good work and motivate current
employees.
 Staff morale and productivity increase if suitable staff members are
promoted regularly.

Negative/disadvantages
 Limited ideas generation from current employees.
 Promoting a current employee may cause resentment among existing
employees.
 Employees who do not have the required skills for the new job may
be promoted.
 The business must spend more money on training/developing
existing employees in the new position.
1.5.4 External recruitment
 Refers to the use of external sources to advertise vacancies outside
the business.

1.5.5 Sources of external recruitment

 Social media
 Walk-ins
 Headhunting
 Networking

The impact of external recruitment

Positives/advantages
 New candidates bring new ideas into the business.
 There is a larger pool of candidates from which to choose.
 Allows business to achieve affirmative action
 Minimises conflict amongst current employees who applied for the
post.

Negatives/disadvantages
 Information on CVs may not be reliable.
 Many unsuitable applications can slow down the selection process.
 New candidates generally take longer to adjust to a new work
environment.
 The recruitment process takes longer as background checks must be
conducted.

1.6 Selection
Selection procedure
Option 1
 Determine fair assessment criteria on which selection will be based.
Use criteria to assess all CVs received.
 Sort the received CVs according to the selection criteria.
 Compile a shortlist of approximately five candidates.
 Once candidates have been selected, a written offer is made to them.

Option 2
 Receive application forms and sort it according to the criteria of the
job.
 Evaluate CVs and create a shortlist.
 Conduct interviews with shortlisted candidates.
 A written employment offer is made to the selected candidate(s).

1.7 Screening as part of the selection procedure

 Check application documents against job requirements.
 Candidates who meet the minimum requirements are separated from
others.
 Conduct background checks of applicants who qualify for the job.
 Prepare a shortlist of suitable candidates after screening.

1.8 Purpose of an interview

 Allows for the exchange of information between the business and
applicant.
 Determine a candidate's suitability for the job.
 Obtains information about the strengths and weaknesses of each
candidate.
 Evaluates the skills and qualities of the applicant.

1.8.1 Role of the interviewer when preparing the interview

 The interviewer should develop a core set of questions based on the
skills required.
 Book and prepare the venue for the interview.
  Set the interview date.
 Allocate the same amount of time to interview each candidate in the
program.

1.8.2 Role of the interviewer and interviewee DURING the interview

Role of the INTERVIEWER Role of the INTERVIEWEE
 Allocate the same amount of time to  Listen carefully to the questions before
each candidate. responding.

 Make the interviewee feel at ease.  Make eye contact and have good posture.

 Do not mislead the interviewee.  Show confidence and have a positive

attitude.
 Provide an opportunity for the
interviewee to ask questions.  Be inquisitive and show interest in the
business.

1.9 Meaning of an employment contract

 An agreement between the employer and the employee which is
legally binding.
 Establishes the rights and responsibilities of the employer and
employee.
 Specifies the duties that would be carried out by the employee for
remuneration from the employer.

1.9.1 Aspects that should be included in an employment contract

 Personal details of the employee.
 Job title.
 Job description e.g. duties.
 Job specification e.g. formal qualifications.

1.9.2 Legal requirements of the employment contract

 The employer and new employee must both sign the contract.
 Employer and employee must agree to any changes to the contract.
 The remuneration package must be clearly indicated.
 Aspects of the employment contract can be renegotiated during
employment.

1.9.3 Reasons for terminating an employment contract

 The employer is restructuring.
 Incapacity to work due to illness.
 By mutual agreement between the employer and employee.
 The duration of the employment contract expires.

1.10 Induction
10.1 Meaning of induction
 Process of introducing new employees to a business.
 New employees become familiar with their new work environment.
 Information regarding the business processes is communicated to
new employees.
 The job expectations are explained to new employees.

10.2 The purpose of induction

 Make new employees feel welcome by introducing them to their
physical workspace.
 Improve skills through in-service training
 Familiarise new employees with their supervisors
 Allow new employees the opportunity to ask questions that will put
them at ease.
NOTE: Businesses use the purpose of induction to draw up the induction
programme.
10.3 Aspects to be included in an induction programme
 Safety regulations and rules.
 Overview of the business.
 Tour of the premises.
 Discussion of employee benefits

10.4 Benefits of induction for businesses

 Increases productivity.
 Allows new employees to settle in quickly and work effectively.
 Makes new employees feel at ease, which reduces anxiety.
 Reduces staff turnover as new employees have been inducted
properly

11. Placement
11.1 Meaning of placement
 Selected candidates are placed where they are suitable and will add
value to the business.
 A specific job is assigned to the selected candidate.
 The skills of the selected candidate are matched with the job
requirements.

11.2 Placement procedure

 The business should outline specific responsibilities of the employee's
new position.
 Determine the employee’s skills by subjecting them to various
psychometric tests.
 Determine the similarities between the expectations of the position
and the competencies of the new employee.

11.3 The importance of skills development in human resources.

 The trained employee is equipped to perform in their job.
 A company’s investment in training shows employees are valued.
 Effective training programs allows employees to strengthen their
skills.
 Ongoing training and upskilling of the workforce encourage creativity.
11.4 Salary determination methods
Differences between piecemeal and time-related salary
determination methods
PIECE-MEAL TIME-RELATED
 Workers are paid according  Workers are paid for the
to the number of units time they spend at work.
produced
 Workers are not  Workers with the same
remunerated for the number experience are paid on
of hours worked. salary scales regardless of
the amount of work done.
 Used in factories, e.g. textile  Used by the public and
industries. private sector.

11.5 The link between salary determination and the BCEA

 The BCEA outlines legalities, such as the employment contract, which
may affect salary determination.
 The BCEA sets out conditions that ensure fair labour and human
resources practices.
 According to the BCEA, businesses may use different remuneration
methods to pay their employees.
 Businesses are supposed to deduct income tax (PAYE) from the
employees' taxable salaries.

12 Fringe benefits
12.1 Examples of fringe benefits in the workplace
 Medical Aid Fund.
 Pension Fund.
 Provident Fund.
 Car/Travel Allowance.
12.2 The impact of fringe benefits on businesses
Positives
 Improves productivity.
 Attractive fringe benefit packages reduce employee turnover.
 Businesses save money as benefits are tax deductible.
 Fringe benefits can be used as leverage for salary negotiations.

Negatives
 Can create conflict if unfairly allocated.
 Fringe benefits are additional costs that may result in cash flow
problems.
 Errors in benefit plans may lead to costly lawsuits.
 Decreases business profits, as incentive costs are higher.

“Benefits” required by the law

Unemployment Insurance Fund (UIF)
 By law, employees are required to contribute 1% of their basic salary
towards UIF.
 Employers are also required to contribute 1% of an employee’s basic
salary towards UIF.
 The fund also assists the dependants of a contributing worker who
has died.
 Contributions are paid to the Unemployment Insurance Fund (UIF) or
the South African Revenue Services (SARS).

Implications of Acts on the Human Resources Function

Implications of the Labour Relations Act (LRA) (No. 66 of 1995) on
the Human Resources Function
 Promotes resolution of labour disputes.
 Protects the rights of employees/employers as outlined in the
Constitution.
 Advances economic development.
 Provides for unresolved disputes to be referred to Labour Courts.

The Implications of the Employment Equity Act) (EEA) (No. 55 of

1998) on the Human Resources Function
 Equal pay for work of equal value.
 Ensure that affirmative action promotes diversity in the workplace.
 Train designated groups through skills development programmes.
 Display a summary of the Act where employees can clearly see it.

The implication of the Skills Development Act (SDA) (No. 97 of

1998) on the human resource function
 Identify the training needs of the employees and provide them with
training opportunities.
 Contribute 1% of their salary bill to the Skills Development Levy/SDL.
 Ensure training in the workplace is structured.
 Appoint a full/part-time consultant as a Skills Development Facilitator.

The implications of the Basic Conditions of Employment Act

(BCEA) (No. 75 of 1997) on the Human Resources function
 Ensures that employees only work 9 hours per day in a 5-day work
week.
 Overtime should not exceed 10 hours per week.
 Ensures that employees have a 60-minute break after five hours of
work.
 Ensures that employees receive double their rate if they work on
public holidays/Sundays.

CHAPTER 3: ETHICS AND PROFESSIONALISM

1. Meaning of ethical behaviour
 Acting in ways consistent with what society thinks are good values.
 Ethical behaviour is expected from all employees.
 Meaning of ethics
 Set of values that are morally acceptable when conducting business.
 Business practices that are acceptable to society.
 Forms part of the employees' code of conduct.
 Focus is on developing a moral compass to use in decision making.

2. Examples of ethical and unethical business practice

Ethical business practices Unethical business practices
 Using fair advertising  Unfair advertising
 Treating all employees equally  Tax evasion
 Paying fair wages  Paying employees unfair wages
 Operating within the law  Disobeying the law

3. Meaning of professional behaviour

 Refers to what is acceptable in a business.
 Focuses on developing a moral compass for decision making.

4 Examples of professional and unprofessional business practice

Professional business practice Unprofessional business practice
 Good use of work time  Using impolite language
 Treating everyone the same.  Abuse of work time.
 Using polite language to colleagues.  Giving people special favours.
 Keeping clients details confidential.  Discussing clients’ information.

5. Differences between ethical behaviour and professional

behaviour
Ethical behaviour Professional behaviour
 Refers to the accepted principles in  Refers to what is acceptable in a
society. business.
 Set of values that are morally  Set of standards of expected
acceptable. behaviour.
 Part of a code of conduct to guide  Applying a code of conduct of a
 employees to act ethically. profession or business.
 Focuses on developing a moral  Focuses on upholding the business
compass for decision making. reputation.

6. Ways in which businesses can apply King Code principles for

good corporate governance

Transparency
 Actions must be clear to all stakeholders.
 Staffing and other processes should be open and transparent.
 Employees should be aware of the employment policies of the
business.
 Audits and reports must be available to shareholders.
 Regular audits should be done to determine the effectiveness of the
business.

Accountability
 There must be regular communication between management and
stakeholders.
 Businesses should be responsible for their actions.
 Company should appoint internal and external auditors to audit
financial statements.
 The board should ensure that the company's ethics are effectively
implemented.

Responsibility
 The business should implement programmes aimed at protecting the
communities in which they operate.
 The business should develop remedial programmes to protect the
environment for example, reduce air and water pollution.

7. Ways in which professional, responsible, ethical and effective

business practice should be conducted
 Mission statement should include values of respect.
 Treat workers with respect by recognising work well done.
 All workers should have access to equal opportunities.
 Hire honest and trustworthy accountants.
 Regular tax payment.
 8 Types of unethical business practices and examples
Type of unethical/business Examples
practices
Unfair advertising  False labelling.
 False promises.
 Selling second hand goods as new goods.
 Criticising competitor's goods.

Pricing of goods in rural areas  Inflating prices

 Charging higher for goods of inferior quality in
rural areas.
 Businesses may experience a decline in sales
due to high costs added to the price of the final
product.
Tax evasion  Businesses that do not declare all their income to
SARS.
 Falsifying the business financial statements.

9. Challenges posed by the above-mentioned types of unethical

business practices
Unfair advertising
Challenges posed by unfair advertising as an unethical business
practice
 Unfair advertisements could be harmful to consumers.
 Misleading statements in advertising leads to misrepresentation of the
product, which may negatively affect consumers.
 Businesses can make unwise advertising choices to increase profits.
 Discriminatory advertisements target some sections of the population.

Strategies to deal with unfair advertising in the workplace

 Consumers must report unfair advertisements to the Advertising
Standards Authority (ASA)
 Business should be encouraged to keep their advertising fair and in
line with the constitution.
 Advertisement should be honest and not abuse consumers’ trust.
 Advertisement should not contain anything discriminatory.

Pricing in rural areas

 Challenges posed by pricing in rural areas as an unethical
business practice
 Some businesses exploit their customers by charging high prices.
 Some consumers in rural areas are vulnerable to exploitation.
 It may be common practice to pay higher prices for goods of inferior
quality in rural areas.
 Business may form monopolies in rural areas and increase their prices
unilaterally.

Strategies to deal with pricing in rural areas in the workplace

 Work with suppliers to share delivery costs to rural areas.
 Charge fair prices for goods and services.
 Avoid unethical business practices to attract customer loyalty.
 Businesses can buy in bulk and get a discount to avoid charging high
prices.

Tax evasion
Challenges posed by tax evasion as an unethical business practice
 Businesses may pay heavy fines for evading tax.
 Tax evasion may negatively impact on the business image.
 Businesses may lose key stakeholders if the act of tax evasion is
reported.
 Some businesses submit incorrect returns to SARS resulting to
penalties

Strategies to deal with tax evasion in the workplace

 VAT needs to be charged on VAT-able items.
 Submit the correct tax returns to SARS on time.
 Disclose all sources of income for tax payment purposes.
 Keep abreast with the latest SARS regulations and tax laws.

10. Type of unprofessional business practices and examples

Type of unprofessional business Examples
practices
Sexual harassment  Managers who promise employees
promotions if they agree to have a
relationship with them.
Unauthorised use of workplace  Employees who download music and
funds and resources movies using the business’s resources
 An employee who uses business
 resources for personal gain.
Abuse of work time  Taking extended lunch breaks.
 Doing personal business during work
hours.

11. Challenges posed by the above mentioned types of

unprofessional business practice

Sexual harassment
Challenges posed by sexual harassment as an unprofessional
business practice
 The affected party may stay away from work regularly.
 Businesses could lose and retain less female employees.
 Sexual harassment causes humiliation and negatively affects work
relations in the workplace
 A victim may be severely traumatised, and this may affect other
employees' emotionally.

Strategies to deal with sexual harassment in the workplace

 Provide a framework for corrective action.
 Educate employees on sexual harassment matters.
 Formulate a policy regarding sexual harassment.
 Ensure compliance with the law.

Unauthorised use of workplace funds and resources

Challenges posed by unauthorised use of workplace funds and
resources as an unprofessional business practice
 Fraud increases the cost of doing business and undermines the
businesses competitiveness.
 Discourages investors as fraud and corruption increases the risk of
investment.
 The business can experience substantial loss if it goes unchecked.

Strategies to deal with unauthorised use of workplace funds and

resources
 Conduct regular audits.
 Identify risk areas.
 Educate employees about the impact of fraud.
 Implement fraud prevention strategies.

Abuse of work time

 Challenges posed by abuse of work time in the workplace
 It may result in employees' often abusing work time.
 Abuse of work time could result in losing customers or not meeting
deadlines.
 Wasting time costs the business money and affects productivity.
 Effective customer services may not be rendered resulting in a
negative business image.

Strategies to deal with abuse of work time

 Speak directly to those employees who abuse work time.
 Monitor employees to ensure that tasks are completed on time.
 Code of conduct should contain clear rules about abuse of work time.
 Conduct training on the contents of the code of conduct.

CHAPTER 4: CREATIVE THINKING AND PROBLEM-

SOLVING
1 PROBLEM SOLVING
1.1 Meaning of problem solving
 Analysing a situation to identify strategies to change the situation.
Problem solving requires creative thinking.
 Problem solving is a mental process that involves problem finding,
the ability to identify the problem.

1.2 Meaning of decision making

 Decision making is a choice made by using one's judgement.
 It is also aimed at finding a solution to a problem by choosing a best
solution.

1.3. Differences between problem solving and decision making

DECISION-MAKING PROBLEM-SOLVING
-Done by a person or member of senior -Problems can be solved by a team or an
management who makes it authoritarian. individual team member.
-The person/senior management will -The team will identify various solutions
consider various alternatives before and then critically evaluate each one.
deciding on the best one
-This process is part of the problem- -This process of analysing a situation will
solving cycle because decisions need to help the team identify strategies to bring
be taken in each step of the cycle. about change.

1.4 Problem solving steps

 Identify the problem.
 Define the problem.
 Identify possible solutions to the problem.
 Select the most appropriate alternative.
 Develop an action plan.
 Implement the action plan.
 Monitor the implementation of the action plan.
 Evaluate the implemented solution.

1.5 Application of problem-solving steps

Identify the problem
 Acknowledge that there is a problem before it can be solved.
 Break down the problem into smaller parts that are easier solve
separately.

Define the problem

 Name the problem by stating exactly what the problem is.
 Define the possible causes of the problem

Identify alternative solutions

 Identify possible solutions by using a problem-solving technique such
as brainstorming or the Nominal Group Technique.
 Decide what seems to be the best solution(s) to the problem.

Evaluate alternative solutions

 Use critical evaluation and analytical skills to evaluate each solution.
 Consider the advantages and disadvantages of each alternative
solution.

Choose the best solution

 Set criteria for the best solution, in terms of aspects such as risk
involved.
 Identify which solution will be used

Formulate/Develop an action plan/strategy

 Arrange the necessary resources and delegate tasks.
 Establish a timeline for implementation and set deadlines.

Implement the action plan

 Carry out the planned solution.
 Communicate deadlines to employees.

Evaluate the solution/action plan

 Assess whether the problem has been solved partially or entirely.
 Test the action plan continuously.
1.6 Problem solving techniques
 Delphi technique
 Force field analysis
 Brainstorming
 Nominal group technique

1.7. Application of the problem-solving techniques

1.7.1 Ways in which business can apply the Delphi Technique

 Business invites a panel of experts to research the complaints from
customers.
 Design a questionnaire consisting of questions on how to improve
the quality of their products and distribute it to the panel members.
 The business summarises the responses from the experts in a
feedback report.
 This feedback report is sent back to the experts and, if necessary, a
second set of questions based on the feedback report to the panel
members will be developed.
 If necessary, send a third questionnaire based on feedback from the
second round.
 After reaching a consensus, the business should then choose the
best solution/proposal based on the report.
1.7.2 The impact of problem-solving techniques
The impact of the Delphi technique
Positives/Advantages
 Businesses may use a group of experts without bringing them
together.
 The experts will give the business clear ideas on how to improve on
profitability.
 Information received from experts can be used to solve complex
business problems.
 Experts may give honest opinions as they do not have a personal
interest in the business.

Negatives/Disadvantages
 It is an expensive technique to use due to high administrative costs.
 Could be time consuming to analyse data received from experts.
 Not all experts are willing to give feedback.
 Some experts might not have an in-depth knowledge of certain
topics.

1.8 Application of Force-Field Analysis

 Describe the current situation and the desired situation and write it in
the middle for everyone to see.
 List all driving and restraining forces that will support and resist
change.
 Allocate a score to each force using a numerical scale, where 1 is
weak and 5 is strong.
 Weigh up the positives and negatives then decide if the project is
viable.
 Choose the force with the highest score as the solution.
 Identify priorities and develop an action plan.

1.8.1 The impact of the Force-Field Analysis

Positives/Advantages
 Employees understand where the business is going.
 Employees grow with the business because they are included in the
process.
 Provides a visual summary of all the various factors supporting and
opposing a particular idea.
 It enables businesses to strengthen the driving forces and weaken
the restraining forces.

Negatives/Disadvantages
 Requires the participation of all business units.
 It is time consuming since the business must stabilise before further
changes can be made.
 The analysis developed is entirely dependent upon the skill level and
knowledge of the group working on the analysis.

1.9 Ways in which the business can apply the brainstorming

technique
 The business must define the problem clearly so that all participants
understand it.
 The group must set a time limit for each brainstorming session.
 Members state possible causes of the business problems.
 People in the group must suggest ideas at random, and all ideas
must be written on a flip chart.
 After the discussions, the group must rate ideas and chooses the
best solutions according to their usefulness as well as the difficulty
and cost to implement them.
 Group members then need to discuss a plan of action on how to
implement the best ideas.

1.9.1 The impact of brainstorming

Positives/Advantages
 People get ideas from others and build on them.
 Stimulates creative thinking in the workplace.
 Productivity increases if the business generates ideas that use time
and money more effectively.
 Managers will be better leaders because they will be able to manage
change creatively.
 AND/OR
Negatives/Disadvantages
 Some team members may dominate discussion and influence other
group members.
 Discussion may result in conflict due to differences in opinion.
 Some employees fear of criticism may prevent full participation in
brainstorming sessions.
 It may lead to 'group think'.

1.10. Ways in which the business can apply the Nominal Group
Technique
 Encourage the group to clearly define the problem to improve the
quality of their product from complaints so all the small groups can
work on the same problem.
 Request each employee to silently brainstorm and write down their
ideas.
 Each employee in the small group can give one of their ideas with a
short explanation.
 All ideas are written on a large sheet of paper.
 Each employee must read through all the suggestions and
anonymously rate them giving the highest points for the best solution.
 All ratings are collected and the total points for each suggestion are
calculated. Once all tallies are in, the group can then choose the best
solution.

1.10.1. The impact of the Nominal group technique

Positives/Advantages
 It provides time to think about the question in silence before
responding.
 Voting on the ideas is anonymous and may be more reliable.
 Strong technique for preventing conformity to group pressure.
 Strong technique for preventing conformity to group pressure.

Negatives/Disadvantages
 Small groups limit participation and are pre-selected.
 It is time consuming, as each member must make a presentation.
 Minimises discussion and thus prevents the full development of ideas.
 It is hard to implement it effectively with large groups unless carefully
planned.

2. CREATIVE THINKING
2.1 Meaning of creative thinking
 Ability to look at the same scenario and come up with original, new
innovative solutions.
 Focuses on exploring ideas and looking for answers.

2.3 Ways in which a business can create an environment that

stimulates creative thinking in the workplace
 Encourage alternative ways of working.
 Respond enthusiastically to all ideas and never let anyone feel less
important.
 Reward creativity with reward schemes for teams/individuals that
come up with creative ideas.
 Provide a conducive working environment free from distractions.

2.2 Benefits/Advantages of creative thinking in the workplace

 Unique solutions are generated.
 Complex business problems may be solved.
 Improves motivation amongst staff members.
 Management/employees may keep up with fast changing technology.

STUDY HARD.
THINK ABOUT IT.
#BLUE FLAME.