BEE Partner, South Africa Economy Watch

Split compliance targets

The employment equity scorecard splits the compliance targets between 0 to 5 years and 6 to 10 years. The Codes acknowledge that transformation is not going to be an overnight phenomenon and that businesses will take a while to establish Black people in relevant employment positions. They have provided moderate targets for the first five years in consideration of this. Overnight transformation strategies are unlikely to result in sustainable development.

The management indicator

The majority of points, 15, are allocated to this indicator. The management indicator is subject to the gender adjustor and full points will only be scored where 50% of the management targets for Black people are held by Black women. The targets are split. The target for 0 to 5 years is 40% of total management and the target for 6 to 10 years is 60% of total management positions that should be held by Black people.

In the QSE Codes the management indicator refers to all management. This implies the inclusion of top management too. A Black person holding a position in top management will also receive points under the management section. Although some argue that this is double counting as the entity receives points under both the management and the employment equity elements, others argue that it further encourages Black participation in top management.

The interpretation above is not consistent with the generic scorecard, which expressly prohibits double counting of this nature. However, the inclusion of the word “all” in the indicator does imply that double counting is allowed in the QSE employment equity scorecard.

The employee indicator

Most entities will score highly in this indicator. In the generic codes there are no points for having Black employees. In the QSE environment it is necessary to include all employees when measuring employment equity because it is possible that the entity has no management apart from the owner. Ten points are allocated to this indicator. The employee indicator is subject to adjusted recognition for gender. Half the targeted employees must be Black women for the entity to score full points here.

The targets are split. The target for 0 to 5 years is 60% of total employees and the target for 6 to 10 years is 70% of total employees that should be Black people.

The employee indicator also allows opportunity for double counting because it does not specify that managerial employees must be excluded from this measurement. Black people recognised in management will also be recognised in the employee indicator. Again the logic behind this is to encourage the appointment of Black people to managerial Positions because they score under both the management indicator and the employee indicator.

Measurement

Separate calculations must be done for the management indicator and the employee indicator. Both indicators require the same formula shown below adapted for their criteria, management or employee.

Step 1 Calculate the adjusted recognition for gender A = + C

A = the adjusted recognition for gender

B = the percentage of employees identified by the indicator who are Black people (Black people includes Black men and Black women)

C = the percentage of employees identified by the indicator who are Black women

Step 2 Calculate the contribution towards the employment equity objectives

A= B/2 +D

A = the measured entity’s score in the indicator

B = the adjusted recognition for gender (the result of Step 1)

C = the target set for the indicator

D = the weighting points allocated to the indicator

Where an entity does not achieve the target, the calculations are designed to allocate points on a pro-rata basis. If the entity scores higher than the points allocated to each indicator, the score carried forward is limited to the points allocated to the indicator. A maximum of 25 points may be carried forward for these two indicators.

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