BEE Partner, South Africa Economy Watch

Bonus points

Two bonus points are available in employment equity. The bonus points are based on what the Codes term EAR EAP stands for “economically active population“. The Codes do not provide a clear explanation on how the bonus points are to be calculated. What follows is my interpretation on how to calculate bonus points. The two points are allocated to each indicator based on the indicator’s percentage of total points available. If the management indicator meets its EAP target, the bonus points would be 2s x 2 points. If the employee indicator reaches its EAP target, then the bonus points would be ¹₂-⁽₅². x 2 points. Read the rest of this entry »

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. Read the rest of this entry »

The QSE skills development scorecard only contains one indicator. It is significantly simpler than skills development of non-QSE businesses and easier to obtain a higher score. Unfortunately, because the target is based on terms and calculations used in the Skills Development Levies Act, the SDLA, this is a technical section.

Indicator terminology

Leviable amount

The leviable amount is derived from the SDLA. It the amount that the levy that must be paid to the SETA is calculated on. BEE uses the same calculation and therefore terminology, but sets a target over and above that payable to the SETA. The scorecard sets the target for the indicator as 2% of the leviable amount for QSEs. Essentially, the leviable amount is the annual total net salaries and wages payable by the entity. Read the rest of this entry »

Calculations of BEE Skills Development

The calculations of skills development spend includes expenditure on learning programmes and in-service training programmes. The following calculation assumes the indicator is subject to adjusted recognition for gender.

Measurement of the skills development spend indicator

The calculation of the adjusted recognition for gender is as follows:

A = B/C + C

A = the adjusted recognition for gender

B = the skills development spend on Black employees divided by the leviable amount

C = the skills development spend on Black women employees divided by the leviable amount Read the rest of this entry »

Qualifying socio-economic development contributions

Socio-economic development contributions consist of monetary or non-monetary contributions actually initiated and implemented in favour of beneficiaries by a measured entity with the specific objective of facilitating sustainable access to the economy for those beneficiaries.

The contributions may be monetary based or non-monetary, such as providing training or sacrificing their employees‘ time in favour of beneficiary groups, as opposed to incurring a direct expense. The contribution must be “actually initiated and implemented“, meaning it must be exercised and paid for. Future initiatives do not count. Read the rest of this entry »

Targets

As mentioned above, the target is calculated on the same basis as that of enterprise development. The calculation is not clearly articulated in the Codes and is a technical computation. To avoid repetition, the following constitutes a brief summary of what was communicated under enterprise development.

The target for socio-economic development is 1% of net profit after tax (NPAT). NPAT is easily manipulated through accounting entries, so the Codes use an anti-circumvention approach, outlined below. Read the rest of this entry »

A crucial error in socio-economic development is not asking the communities what they need. One-sided decisions on contributions to beneficiaries are often counterproductive because the people may, for example, want a bridge over the stream to get to town more easily, whereas the company instead builds a school that the community cannot service with teachers. Read the rest of this entry »

Investment No. 3: Spend resources to secure your leadership pipeline

Any South African firm today is really an emerging globaliser. Therefore, it has to ensure that it can develop great leaders and, indeed, a succession of them. There is always the temptation for a senior executive or an executive team to focus on building a legacy based on their own policies and achievements, rather than _establishing a pipeline of leaders. Establishing a leadership pipeline is a strategic activity built over the long term and is the result of a _cumulative process. Read the rest of this entry »

8. Share wealth

According to holistic health guru Deepak Chopra, one of the fundamental universal principles is that of giving.” This principle works through a form of universal reciprocity, whereby the act of giving, in whatever form it may take, is returned to the giver. This reciprocity may not come from the recipient, but may find its way to the original giver via another source. In a business context, sharing wealth, particularly with one’s employees, in whatever form that may take, is a form of giving. The new breed of South African manager will find it particularly beneficial to enhance the talents, willpower and motivation of his or her employees by sharing the company’s wealth with them. South African companies have to have as many of their people as possible feel part of the company’s strategic initiative if it is going to be successful in tackling the opposition. Sharing the wealth of the company with employees rewards them for their endeavours and spurs them on to achieve even greater feats. Read the rest of this entry »

5. Leverage diversity

One of the most powerful tools of innovative thinking in the South African workplace is that of diversity. In South Africa, with its apartheid past, the temptation is to focus on cultural diversity in order to try to forge a clearer understanding between the various cultures of South Africa. The Rainbow Nation is well represented in business organisations, thereby presenting our companies with a great opportunity for the generation of ideas. However, the prudent manager will appreciate that workplace diversity also covers age, ethnicity, ancestry, gender, physical abilities and qualities, race, sexual orientation, educational background, geographical location, income, marital status, military experience, religious beliefs, parental status and work experience, amongst others. Read the rest of this entry »

2. Create a high-engagement workplace

Because modern business competition is more about a battle between rival workforces than it is about technology, innovation and strategies,companies coming from emerging market economies need all the intellectual input they can get in order to have a chance of becoming a serious player in the global marketplace. For that reason, the new breed of South African manager will have to find ways of harnessing the energy and intellectual capability of all the company’s employees and focus these on innovatively growing the organisation. Read the rest of this entry »

In addition to all of this, the development and application of strategic thinking is dependent not only on the manner in which the manager views his or her company, industry and competition, but also on how he or she actually views business per se, and the world in general. All organisations function within the greater universe. How a manager views our universe will have an impact on how a strategy is developed. For example, if business is seen purely as a means of making money, then one’s overall thinking will reflect that view. If, on the other hand, a broader context is applied, such as a business as a means of providing employment and/or making a contribution to the development of one’s community or country, then broader-based thinking will result. Read the rest of this entry »