Employment equity in Canada and South Africa - Taylor & Francis Online

Int. J. of Human Resource Management 15:1 February 2004 36 –55

Employment equity in Canada and South Africa: progress and propositions

Ade`le Thomas and Harish C. Jain Abstract In 1998 the South African government attempted to redress historical workplace discrimination through the introduction of the Employment Equity Act, largely modelled on the Canadian legislation. This paper provides a background to the rationale for employment equity and related practices in both Canada and South Africa. Policies and practices are compared and progress achieved thus far in both countries is discussed. Suggestions for future consideration by South African policy makers and business leaders are proposed that include issues that are more difficult to legislate, yet which will determine the optimal progress of employment equity in South Africa. The issues highlighted in this regard pertain to top management commitment, the development of holistic human resources policies and practices, the appreciation and management of employee diversity and the creation of inclusive organizational cultures that address historical systemic discrimination. Keywords Employment equity; Canada; South Africa; diversity; human resources practices; organizational culture.

Introduction Issues of globalization and competition have intensified the migration of skilled and professional workers from less developed countries to industrialized countries such as the United States, Britain and Australia. The International Monetary Fund (cited in Finance and Development, 1999) has noted that the biggest migratory flows from Africa to the United States were from Egypt, Ghana and South Africa. Of these, more than 60 per cent were university and college graduates. According to Statistics, South Africa (2001), the number of people in professional and technical occupations who left the country in 2000 had increased by 33 per cent since 1998, a figure that represented almost 25 per cent of the total number that had emigrated. Such mobility, it is suggested, has focused attention on the strategic management of human resources in a diverse and global context as well as on the full utilization of increasingly scarce human resources in the South African context. It has also presented the challenge of addressing fairness in employment practices, in both developed and less developed economies, in order to create work environments in which employees can experience job satisfaction and also optimally achieve company objectives (Becker, 1971), issues that are of critical importance in South Africa as it competes in a global economy. Equality Ade`le Thomas, Graduate School of Business Administration, University of the Witwatersrand, Johannesburg, South Africa, PO Box 98, Wits 2050, South Africa (tel: þ 27 11 717 3622; fax þ 27 11 787 5344; e-mail: [email protected]; [email protected]). Harish C. Jain. McMaster University, Hamilton, Canada. The International Journal of Human Resource Management ISSN 0958-5192 print/ISSN 1466-4399 online q 2004 Taylor & Francis Ltd http://www.tandf.co.uk/journals DOI: 10.1080/0958519032000157348

Thomas and Jain: Employment equity in Canada and South Africa

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of opportunity, employment equity and related affirmative action policies that increasingly create diverse workforces in various nations have also become critical challenges for both public- and private-sector policy makers and managers (Days, 1993; De A. Samarasinghe, 1993; Puthucheary, 1993). Learning to manage such employee diversity has become one of the greatest challenges in managing human resources in the global economy (Cox and Blake, 1991; Morrison, 1992; Horwitz et al. 1996; Ratnam and Chandra, 1996; Thomas and Ely, 1996; Bowen et al. 1999; D’Netto and Amrik, 1999). In South Africa, in order to address historical workplace discrimination, the Employment Equity Act No. 55 of 1998 (Republic of South Africa, 1998a) was introduced, largely modelled on the Canadian Federal Employment Equity Act of 1986 (Jain et al., in press). Canada and South Africa are both members of the Commonwealth, have parliamentary, democratic governments and have adopted policies that involve government intervention in the prevention and elimination of unfair discrimination in employment against racial groups, women and people with disabilities. Each country has developed a shared approach to employment equity between government and employers. This paper provides a background to the employment equity legislation in both countries, compares policies, assesses progress thus far and concludes by posing propositions for consideration by South African policy makers and managers as they strive to progress employment equity as a new initiative in the country. With regard to employment equity in Canada, the focus of the paper is primarily on women and visible/racial minorities. Rationale for employment equity in South Africa Internationally, unfair discrimination according to race and historical disadvantage appears to be a feature of the workplace (Haberfield, 1992; Carrington et al., 1996; Haslett and Lipman, 1997; Mount et al., 1997; Holzer, 1998; Elvira and Town, 2001). Brzuzy notes that the enactment of policies to address prejudice can ‘set a national tone and put in place parameters of acceptable behavior and . . . also opens rights and privileges to previously excluded groups and can increase opportunities and resources’ (1998: 328). In support of this sentiment, Ng et al. (1998) note positive benefits of anti-discrimination legislation and Bennington and Wein (2000) report on the greater transparency of human resources practices as a result of such legislation. Reporting on the Canadian experience, Leck and Saunders (1996) suggest that the presence of legislation has led to the appointment of members of some disadvantaged groups in both management and non-management positions. In support of this view, Stewart and Drakich (1995) found that vigorous university employment equity programmes in Canada, governed by legislation, resulted in the greater recruitment of women into faculty positions. Similarly Jain (1999), discussing progress in employment equity in the United States, notes that, without governing legislation, progress by employers in this regard is usually much slower. When considering workplace inequalities as they relate to South Africa, the important difference with regard to the target of discrimination, when compared to many other parts of the world, is that it has historically been directed at the majority of the population. The South African population of approximately 46 million people comprises 76.6 per cent African, 11.3 per cent white, 8.3 per cent Coloured (mixed race) and 2.4 per cent Indian/Asian. (The unspecified component of the population comprises 0.9 per cent (Bureau of Market Research, 2002)). It is estimated that 52 per cent of the total population is female (Statistics, South Africa, 2002). In 1999, 17 million people

38 The International Journal of Human Resource Management were estimated to comprise the South African labour force, with 34 per cent of the economically active population being unemployed (World Bank, 2001). Historically, the South African labour market was a distorted one, with access to education, skills, managerial and professional work based on race and ethnicity (Bowmaker-Falconer et al., 1998). While statutorily based racial discrimination has systematically been abolished since 1980 and significant labour law reforms have occurred in the last five years, the apartheid labour market has left the majority of the economically active population of South Africa inadequately trained and economically disempowered, with the attendant effects of historical discrimination still evident today. Van der Westhuizen (1998) indicates the extent of under-representation of black people (the generic collective term for Africans, Coloureds and Indians) and women in management positions (i.e. from director level upwards) in the public sector prior to 1996. Only 6 per cent of this echelon was black and only 5 per cent was female. In the private sector, the Breakwater Monitor Project (2000), in which more than 160 South African organizations are reviewed, indicates that management levels are still largely occupied by whites (80 per cent) and by men (79 per cent). The South African Department of Labour (1999) notes that whites enjoy a 104 per cent wage premium over Africans and that men earn approximately 43 per cent higher wages than similarly qualified women in similar industrial sectors and occupations. Accordingly, the South African government has, since 1994, prioritized the redressing of years of workplace discrimination. In addition to introducing legislation aimed at protecting the rights of employees (Republic of South Africa, 1995), the government has enacted laws aimed at eliminating unfair discrimination and promoting equity in the workplace (Republic of South Africa, 1998a) and providing for a statutory levybased system for skills development for working and unemployed people (Republic of South Africa, 1998b). Employment equity in Canada Since the early 1960s, Canada has had human rights statutes to prevent and eliminate unfair discrimination. Human rights in employment are covered by human rights statutes, the Canadian Constitution and employment equity legislation at the federal level. All jurisdictions (all ten provinces) have human rights statutes that prohibit and attempt to eliminate employment discrimination on numerous prohibited grounds such as race, national/ethnic origin, colour, religion, age, sex, marital status, disability, sexual orientation, etc. The provisions of these statutes allow employers to undertake voluntary employment equity programmes for members of disadvantaged groups that, according to Agocs (2002), include: . . . .

women of any race or ethnicity; visible or racial minorities (self-identified as black, Asian or South Asian); aboriginal peoples (Indians or members of First Nations, Metis and Inuit); and persons with disabilities.

In 1996, visible minorities comprised 11.2 per cent of the Canadian population and are a growing proportion of the population in Canada’s principal cities (Jain et al., 2000). Women constitute more than 46 per cent of the labour force in Canada and are projected to be one-half of the workforce in the coming years (Jain et al., 2000). In addition, Canada’s population and workforce are becoming increasingly pluralistic. From 1991 to 1996, 78 per cent of new entrants into Canada were from Asia, Central/South America,


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the Caribbean and Africa, providing a multicultural mosaic. In the period 1971 to 1980, immigrants from these regions comprised 57 per cent of all new entrants into Canada (Statistics, Canada, 2000). Catano et al. (2001) note that currently women and people other than white constitute 70 to 80 per cent of new entrants into the Canadian labour force. In the early 1980s, governments in Canada began to investigate the need for policy initiatives in the area of improving the economic status of minorities who faced discrimination in the labour market. The best known of these investigations, commissioned by the federal government and known as the Abella Commission Report (Abella, 1984), found that significant obstacles confronted women and racial minorities. The Commission recommended early action to head off potential social conflict that may result from inaction. The Edmonds Task Force (Edmonds, 1990) examined barriers to the advancement of women in the federal public service and arrived at the same conclusion. Employment equity is permitted by the Canadian Charter of Rights and Freedoms, a part of the Constitution Act of 1982 (Jain, 1993) as well as by the Federal Employment Equity Act enacted first in 1986 and revised extensively in 1995 (Jain, 2001). The Canadian Charter’s provisions apply to all federal, provincial and municipal government agencies across Canada. In addition, the federal government has, since 1986, had the Contractors Programme, which applies to large and medium-sized provincially regulated employers who supply goods and services to federal government departments and agencies. Both the Employment Equity Act and the Contractors Programme cover the four disadvantaged groups (Jain, 2001). The Federal Contractors Programme applies to many more employers than does the Employment Equity Act since it covers large provincially regulated employers that undertake business with the federal government. All employers with 100 or more employees or who wish to undertake a contract worth $250 000 or more are required to comply with the Federal Contractors Programme. There are in excess of 1250 employers across the country, employing more than a million workers who are thus affected (Jain, 2001). One of the serious limitations of human rights legislation across Canada is that it is complaint based, placing the onus of initial proof on an employee or a job applicant. In numerous cases, applicants and employees are reluctant to file complaints for fear of retaliation and/or job loss. Hence the complaints filed before human rights commissions represent a tip of the iceberg (Jain and Al-Waqfi, 2001). Legislation, compliance monitoring and good intentions are all assisted by the development of effectiveness criteria such as those set out in the Employment Equity Index developed by Jain and Hackett (1989). Employment equity legislation in most countries, including in Canada and South Africa, embodies these criteria that, in essence, allow employers to develop ‘best practices’ to implement, nurture and evaluate the effectiveness of employment equity programmes. These criteria are briefly discussed below. Accountability Research indicates that employment equity programmes are more likely to succeed when line managers are an integral component of the planning and implementation of the programme and are held accountable for the outcomes (Jain and Hackett, 1989; Thomas, 2002a, 2002b). In this way, line managers’ performance assessment and subsequent linkage of success to bonuses, salary increase or promotion facilitates the acceptance and adoption of employment equity throughout the organization.

40 The International Journal of Human Resource Management Numerical goals and timetables Numerical goals and timetables are instrumental in facilitating the effectiveness of employment equity programmes. Employment equity programmes should specify all the designated groups (not just one) and specify goals and timetables ranging from one to five years. Jain (1999) notes the progress that results from the setting of definite targets with regard to employment equity. Monitoring and control mechanisms Effective monitoring is necessary to the implementation of an employment equity programme. Regular evaluations can indicate progress being made towards set objectives and the need for suitable corrective action or adjustment. This should include: periodic reports of progress toward meeting goals, flow information on staffing and adequate systems for human resource information management. Monitoring requires a systematic evaluation of the current environment and practices and the development of employment equity indicators combined in a scorecard to evaluate progress. Ongoing publicity A major step in the development and implementation of an effective employment equity programme is to communicate company policy clearly to employees. Thomas (2002b) found this to be an essential component of employee satisfaction with the process in South Africa. Such communication may include video and/or memoranda sent by senior management, dedicated sections in annual reports, workplace posters, communication in several languages in company newsletters and other in-house organs. Employment practice review One of the critical prerequisites to an effective employment equity programme is the identification and elimination of unfair discriminatory barriers to employment opportunities. Agocs and Burr note that such discrimination is insidious, having become ‘patterns of behaviour that are part of the social and administrative structures and culture of the workplace, and that create or perpetuate a position of relative disadvantage for some groups (and advantage for others), or for individuals, on the basis of their group identity’ (1996: 31). Agocs further notes how such discrimination comprises ‘complex and interrelated patterns of policies, institutionalized practices, norms and values’ (2002: 258) that maintain exclusionary structures, opportunities and power relationships. McDonald and Potton (1997) note the negative effects for the company in terms of not recruiting and selecting productive applicants as a result of systemic discrimination and Baldi and McBrier (1997) and Powell and Butterfield (1997) note the negative effect on individual employee groups as a result of this practice. The addressing of such barriers can be assisted by: reviewing and updating job description/specifications; monitoring staffing practices such as training and development, performance appraisals, promotions and terminations; reviewing job assignments and terms and conditions of employment; ensuring that job requirements are job related; providing interviewer training; validating tests and other staffing procedures. Special designated group recruitment and training efforts Such practices include proactive efforts to recruit and train designated group members, ensuring that recruiting teams are represented by members of designated groups,


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providing recruiting material in several languages, introducing mentoring programmes and special measures in the form of flex-time, internal and external communications, work sharing, childcare and educational assistance. These practices have been noted by the US Equal Employment Opportunity Commission (EEOC) (1997) to be benchmarks of ‘best practice’. Employment equity in South Africa In the 1990s, South Africa enacted some of the most progressive legislative measures, including the Labour Relations Act (Republic of South Africa, 1995), the Employment Equity Act (Republic of South Africa, 1998a), the Skills Development Act (Republic of South Africa, 1998b) and the Promotion of Equality and Prevention of Unfair Discrimination Act (Republic of South Africa, 2000). South Africa has patterned its Employment Equity Act and a part of the Constitution Act of 1996 (Republic of South Africa, 1996) such as section 9(2) of the Bill of Rights, on the Canadian Employment Equity Act and the Charter of Rights and Freedoms. The South African Employment Equity Act aims to redress historical workplace discrimination against blacks (Africans, Coloureds and Indians), as well as women and people with disabilities (all collectively referred to as the designated groups). The objective of the Act is to achieve equality in the workplace by the elimination of unfair discrimination and the promotion of equal opportunity through the implementation of positive and proactive measures (termed affirmative action measures) to advance members of the designated groups. The Act requires employers with fifty or more employees or those who have certain specified financial turnovers to undertake affirmative action measures. Such measures are aimed at ensuring that the designated groups have equitable representation in all occupational categories and levels in an employer’s workforce, consistent with their availability in the external labour market and their demographic representation within the economically active population. The Employment Equity Act requires that employers give due consideration to a ‘suitably qualified person’ in the recruitment of members of designated groups. Such a person may have a combination of formal qualifications, prior learning, relevant experience or capacity to acquire, within a reasonable time, the ability to do the job. Capacity to acquire the ability to do the job may require training and support and the Employment Equity Act, along with the Skills Development Act, requires employers to provide training to members of designated groups. Common features of the Canadian and South African employment equity statutes In both Canada and South Africa employers are required to: identify and eliminate job barriers by undertaking a thorough review of staffing polices and practices; develop employment equity plans that include positive measures and reasonable accommodation measures to remedy the effects of past discrimination; undertake internal and external workforce analyses; and adopt measures to recruit, train, develop, promote and retain qualified members of designated groups throughout the organization. They are also required to set numerical goals and timetables according to external availability figures and, accordingly, to devise strategies to address under-representation of members of designated groups in all occupational categories and levels. Related employment equity plans are required to be devised for the short and the long term. In Canada, the Employment Equity Act requires that employers have short-term (one to three years) and long-term (three to five years) plans, while in South Africa the requirement is one to five

42 The International Journal of Human Resource Management years. In the devising of plans, employers are required to consult with employee representatives, or bargaining agents in the case of unionized employees, and to provide all employees with information relating to the employment equity plan. Records of staff job movement are required to be maintained by employers. In Canada, employers are not required to take measures that might cause undue hardship; neither are they required to hire or promote unqualified members of designated groups. In addition, employers are not required to create new positions in the workforce. In South Africa, employers are prohibited from taking any decision that will establish an absolute barrier to the prospective or continued employment of members of nondesignated groups (i.e. white males). In both countries, compliance and monitoring is mandated in the respective statutes. In Canada, it is the Canadian Human Rights Commission that can and does undertake employer audits while in South Africa it is the labour inspectors of the Department of Labour who monitor employer compliance. Employment equity laws apply to government agencies and private-sector employers. In Canada the coverage is restricted to employers with 100 or more employees in the private sector, federal Crown Corporations and federal government departments and agencies, while in South Africa the Act applies to companies employing fifty or more employees or those with a specified financial turnover as well government departments and agencies with the exception of the National Defence Force, the South African Secret Service and the National Intelligence Agency. Both countries also have contract compliance provisions. In Canada the Federal Contractors Programme is administered by Human Resources Development Canada and is supported by executive policy, applying mostly to large provincially regulated employers. In South Africa contract compliance is a required by the Employment Equity Act. Evaluation of progress in Canada and South Africa Progress in Canada Overall, in private-sector firms covered by the Employment Equity Act since 1986, the representation of members of visible minority groups has more than doubled in the thirteen years (1987 to 1999), from 4.9 per cent to almost 10 per cent. However, this representation in the workforce has remained below the 10.3 per cent availability rate established by the 1996 Census (Census Canada, 1999). Visible minorities have remained concentrated in certain occupational categories and are under-represented in others, including at senior management levels (Census Canada, 1999). The representation of visible minorities has varied considerably by industrial sector, as noted in Table 1, in which the largest companies within three industries are compared. In the banking sector, the representation of visible minorities rose to almost 15 per cent in 1999 relative to 9.5 per cent in 1987. In the communications sector, this number rose to 9 per cent, more than doubling their 1987 representation rate of 4.1 per cent. This rate was, however, below the availability of this group within the economically active population. Progress was slowest in the transportation sector where the visible minority representation rate rose to 8.6 per cent in 1999 relative to 2.6 per cent in 1987. In the case of visible minorities, except for the National Bank of Canada where their share has shrunk in 1999 to 4.5 per cent relative to 9.2 per cent in 1996, visible minorities have exceeded their Census representation in the selected banks both in 1996 and 1999 relative to 1987. However, they are below the Census representation in most of the selected companies in the transportation sector. While the proportionate representation of women in the banking industry far exceeds the availability of economically active women in the population, the transportation industry has lagged behind. Women are generally

1999 (%)

16.9 7.7 33.5 6.4 37.1 16.7 19.0 13.2 39.6 36.2 50.4 35.2 22.6 46.2 32.6

Transport Canadian National Railway Company Air Canada CP Rail Division of Canadian Pacific Ltd Canadian Airlines International Ltd Greyhound Via Voyageur

Communications Canada Post Corporation Bell Canada Canadian Broadcasting Corporation Purolator Courier Ltd CTV CHUM Ltd

41.5 37.5 47.2 40.3 24.5 59.6 33.8

20.8 7.2 34.8 7.6 40.0 20.9 19.0 21.0

75.9 77.2 76.5 75.1 77.3 74.3 81.5

Sources: Census, Canada (1999) and Human Resources Development Canada (1999)

76.1 77.2 78.2 74.6 76.9 77.4 77.2

42.2 38.1 57.3 41.3 23.1 45.6 35.9

21.8 8.4 36.5 6.9 40.9 24.2 20.6 26.6

74.8 76.3 75.0 73.2 76.1 72.6 N/A

41.7 39.5 54.7 39.4 24.4 43.7 40.7

24.6 8.6 37.1 8.4 42.9 22.5 24.3 N/A

72.8 74.5 72.8 70.6 73.0 69.1 77.4

4.1 4.0 4.1 2.1 1.2 5.7 1.3

2.6 2.8 2.9 1.8 2.9 1.6 4.8 1.5

9.5 7.5 12.2 9.6 10.6 10.9 1.3

7.2 6.3 5.5 5.1 4.6 14.0 3.8

4.2 7.0 4.1 2.5 6.0 2.1 8.0 3.1

13.7 10.8 14.3 14.1 16.6 17.6 3.1

1994 (%)

1987 (%)

1996 (%)

1987 (%)

1994 (%)

Visible minorities

Women

Banking Royal Bank of Canada Canadian Imperial Bank of Commerce Bank of Montreal Bank of Nova Scotia Toronto-Dominion Bank National Bank of Canada

Sector and company

Table 1 Breakdown of women and visible minorities by sector and company

8.8 8.6 8.4 5.0 12.6 8.3 4.7

4.8 4.7 5.8 2.5 6.6 1.6 8.5 4.7

14.1 10.5 13.9 15.8 17.0 18.4 9.2

1996 (%)

9.0 9.2 8.0 4.8 13.0 12.1 5.6

8.6 4.7 7.6 7.6 15.9 9.1 7.4 N/A

14.9 13.7 14.6 17.7 16.2 18.8 4.5

1999 (%)

Thomas and Jain: Employment equity in Canada and South Africa 43

44 The International Journal of Human Resource Management under-represented in all of the seven prominent transportation companies relative to the Census. Overall, the communications sector appears to have approximated the external representation of women. In the six companies in this sector, one (Bell Canada) also evidences a higher representation of women relative to the Census. Human Resources Development Canada (1999) reports that, since the beginning of mandatory employment equity policies in Canada, available data indicate that no progress has been made in terms of the representation of aboriginal people and people with disabilities in senior management positions in the country. The Canadian Human Rights Commission, in its 1999 Annual Report, found that only four employers (of the 136 employers audited in the two years) were actually in compliance at the time of the initial audit. The Commission reported that, while there had been progress for some designated groups, ‘movement towards an equitable federal workplace continues at a snail’s pace’ and that visible minorities in the public sector ‘are simply not making acceptable gains’ (Canadian Human Rights Commission, 1999: 86). Progress in South Africa According to the Department of Labour (2001), as of 31 August 2000, 3083 employers had filed their annual employment equity reports. Of this number 2170 (70.3 per cent) had reported correctly while the balance of employers were either required to re-submit their reports including more comprehensive information (14.5 per cent) or required to submit wholly modified reports (15.1 per cent). Between them, these employers employed almost 2.2 million people or 28 per cent of the economically active working population. The Department of Labour (2001) estimates the overall compliance for private companies to be 60 per cent of the total number of companies required by the Act to report on their employment equity plans. In report submissions it was found that employers provided poor quality of information in that no link was made between barriers to employment equity and affirmative action measures that would need to be effected and that affirmative action measures were not meaningfully reported. The most frequently identified barriers were noted to be: training and development; recruitment and selection processes; issues relating to corporate culture; performance and evaluation systems; succession and experience planning; and job classification and grading. The Department of Labour concluded that there were no significant improvements in the representation of designated groups since the baseline profiles of 1998 (Jain and Bowmaker-Falconer, 1998) and that the quality of reporting may indicate poor-quality employment equity processes and plans effected by employers. The Commission for Employment Equity (CEE, 2001) recently released its first annual report covering the period 1999–2001. The Commission’s report for 2001 is based on 8250 employers employing 3,336,784 people and indicates mixed results. From Table 2, it is indicated that black (African, Coloured and Indian) workers improved their labour market position from the 1998 baseline survey (Jain and Bowmaker-Falconer, 1998) to 2001. Improvement was seen in the movement within the occupational categories ‘professional’ and ‘technicians and associate professionals’. The ‘professionals’ category also compares favourably to the Statistics South Africa Household Survey data for 1999. Blacks lost ground from 1998 to 2001 as legislators, senior officials and managers, where their representation in this combined occupational category dropped from 28 per cent to 26 per cent. Given that since 1994 the majority of


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Table 2 Black representation according to occupational category Occupational category

EE Report 2001 (%)

Household Survey, 1999 (%)

Baseline Survey, 1998 (%)

Legislators, senior officials and managers Professionals Technicians and associate professionals Clerks Service and sales workers Skilled agricultural and fishery workers Craft and related trades workers Plant and machine operators and assemblers Elementary occupations Non-permanent workers TOTAL

26.1

45.1

27.9

55.1 47.5

48.6 66.9

24.7 37.8

59.4 72.0 85.6

64.2 83.3 90.6

57.7 62.1 90.8

61.7 93.7

84.9 94.6

65.9 92.2

97.5 84.1 75.2

97.7 N/A 90.8

98.3 N/A 66.1

Source: Commission for Employment Equity (2001: 10).

legislators in South Africa have been black, this decrease can possibly be explained by the numbers in the subcategories ‘managers’ and ‘senior officials’ in organizations exceeding that of ‘legislators’ and the increase of white managers and officials in this latter category. The importance of this phenomenon is even more pronounced when compared to their 45 per cent representation in the Household Survey of 1999. Black employees are primarily concentrated among elementary occupations (98 per cent in 2001), plant and machine operators (94 per cent in 2001), skilled agricultural and fishery workers (86 per cent in 2001) and service and sales workers (72 per cent in 2001). Women represent 38 per cent of the total number of people employed and are underrepresented in all management occupational levels (CEE, 2001). Women comprise 22 per cent of the category ‘legislators, senior officials and managers’, of which white women hold 15 per cent of such positions (CEE, 2001). Together black and white women currently occupy only 13 per cent of top management and 21 per cent of all senior management positions in South Africa, with African women occupying only 1.2 per cent of all top management positions (CEE, 2001). According to the Commission on Gender Equality (CGE, 1999), across all sectors, women mainly occupy jobs associated with stereotyped domestic roles. Booysen (1999) has noted that women comprise only 1.3 per cent of directors of companies listed on the Johannesburg Stock Exchange and that less than 1 per cent of all board members are women. As can be seen from Table 3, blacks, women and people with disabilities are still poorly represented in top and senior echelons in South African organizations. With regard to women in the South African workforce, the Commission for Gender Equality (1999) highlights that employers cite several problems in integrating women into their workforces, viz. resistance by male employees across the organizational spectrum, stereotyped perceptions of the roles of women in business and inadequate skills among female employees, issues also noted in other parts of the world (Bennington and Tharenou, 1996; Bennington and Wein, 2000). Similarly Thomas and Hlahla (2002) note the prejudice that exists in business in South Africa towards people with disabilities.

46 The International Journal of Human Resource Management Table 3 Representation by designated group in occupational levels Occupational level

Blacks (%)

Females (%)

People with disabilities (%)

Top management Senior management Professionally qualified, experienced professionals Skilled, technical, academically qualified and junior management Semi-skilled and discretionary decision makers Unskilled and defined decision makers

12.6 18.4 44.0

12.5 21.0 43.1

1.2 1.1 0.9

56.4

40.0

0.8

82.2

38.6

1.0

98.0

28.6

1.0

Source: Commission for Employment Equity (2001).

Propositions for future consideration When considering government intervention to regulate labour markets, Walker (1993) notes that business leaders are generally unaccepting of such intervention. Such opposition to the employment equity legislation in South Africa has been manifested in the arguments advanced by business. Antagonists have cited the over-regulation of the labour market and the ‘watchdog’ role of government as factors that will result in a decrease in overseas investments and in entrepreneurial initiatives, especially in the medium and small business sectors. Such sectors together contribute nearly 33 per cent of GDP and nearly 45 per cent of private-sector employment (Dickman, 1998). Other arguments include the following: strategies to achieve employment equity, by definition, are meant to advantage those who have been most discriminated against historically. Inevitably such beneficiaries have suffered disadvantage, not only in the workplace but also in obtaining access to other societal resources, paramount among which is education. The resultant shortage of skills in some sectors will make (primarily black) skills more expensive and unaffordable for smaller companies, further providing disincentives for investment and expansion. Added to this, it has been argued (Dickman, 1998; Jafta, 1998) that, rather than new jobs being created for new entrants to the labour market, employees will simply be shifted from some employers to others who can afford the higher wages. It is further argued (Dickman, 1998; Jafta, 1998) that heavy administrative costs in the private sector relating to compliance with the legislation will impact on company growth and, accordingly, upon optimal growth in the private sector. In addition, costs to government, and hence the taxpayer, will be increased by the administrative burden of monitoring and enforcing the legislation. Legal structures will also be overburdened and unable to cope with the cases where legal rulings will be required. Jafta (1998) further argues that employment equity in South Africa will incur indirect and opportunity costs through poor hiring decisions to reach employee targets and through the declining morale and loyalty of the previously advantaged group of white male employees who, historically, have acquired skills relevant to achieving market competitiveness. She also notes that race classification will be heightened, promoting a social cost by reinforcing ‘negative stereotypes, racial tension and a stigmatisation that thwarts the efforts of members of the preferred groups to pursue their goals on merit and hard work rather than preferential treatment’ (Jafta, 1998: 5). In addition, it can be expected that those from designated groups who still require


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training and development will have unrealistic short-term expectations that will further increase racial and social conflict within companies and that, expecting secured positions, they may adopt a culture of entitlement ‘that undermines initiative, selfconfidence and self-reliance’ (Jafta, 1998: 5). However, as previously noted, Jain (1999) argues that, without government intervention in the form of employment equity legislation, little progress is made by employers to redress historical workplace inequalities. In support of this view, Thomas and Robertshaw (1999) note of the South African situation that, while business leaders recognized the implications of socio-political reform in the country as early as the 1980s, little change was evident over the ensuing years in terms of addressing workplace discrimination. Advantages of employment equity initiatives in South Africa In a country characterized by historical discrimination, employment equity legislation offers the possibility of assisting the redressing of such unfair discrimination in the following ways: 1 2

3

4

Ensuring that employers focus on members of all designated groups, including Africans, Coloureds, Indians, women and people with disabilities (Jain, 1993). Encouraging a greater number of employers to devise new and innovative measures proactively to recruit, promote and train people from designated groups. Such creativity would, hopefully, go beyond the ‘poaching’ of black employees by one employer from another (in order to achieve numerical targets only) to the systematic and holistic planning of staffing. Motivating employers to develop comprehensive human resources information systems that could replace crude, unscientific and ad hoc practices so that charges of unfair discrimination can be addressed on a rational and scientific basis (Jain, 1993). Sensitizing employers to labour market demographics pertaining to members of designated groups while developing their employment equity plans (Jain, 1993).

Thomas and Ely (1996) and Ely and Thomas (2001) posit three constructs on diversity which have application to the discussion in this paper. The first construct is that of ‘discrimination-and-fairness’ that is premised on the belief that a culturally diverse workforce is a moral imperative ‘to ensure justice and the fair treatment of all members of society. It focuses diversification on providing equal opportunities in hiring and promotion, suppressing prejudicial attitudes, and eliminating discrimination’ (Ely and Thomas, 2001: 246). Ely and Thomas (2001) note that adherence to this paradigm generally results in requiring assimilation of employees to a white cultural standard. The second construct, ‘access-and-fairness’, is premised on the diverse markets and constituencies to which companies need to gain access and legitimacy. The business case for diversity formulated within this paradigm is narrow and primarily centres upon matching employee diversity to external markets and other stakeholder groups. The third construct, ‘integration-and-learning’, advances the belief that the competitive advantage of a multicultural workforce ‘lies in the capacity of its members to learn from each other and develop within each other a range of cultural competencies that they can all then bring to bear on their work’ (Ely and Thomas, 2001: 242). Ely and Thomas (2001) note that merely increasing the numbers of groups who have traditionally been under-represented in organizations (access-and-fairness) without effecting any change in the power relations between

48 The International Journal of Human Resource Management those groups is unlikely, in the long run, to substantially improve the position of those groups. Drawing upon their empirical research, they further note that adherence to a paradigm of ‘integration-and-learning’ is associated with sustainable performance gains as a result of diversity. In support of this proposition, international research highlights that, in spite of legislation, the addressing of unfair discrimination and the redressing of historical inequalities in the workplace is not always optimally achieved (Bendick et al., 1996; Arrow, 1998; Heyward et al., 1999; Elvira and Town, 2001). Below are noted some of the practical problems that pertain to the implementation of the Employment Equity Act in South Africa as well as some that are of a more elusive nature as a result, it is proposed, of adherence to primarily a ‘discrimination-and-fairness’ paradigm. Problems encountered in South Africa 1

2

3

4

5

6

The Employment Equity Act treats women as a homogeneous category. White and black women have had extremely different levels of education, training and job opportunities. Even among black women, as a generic category, there are significant differences. Legislation, at present, does not require companies to disaggregate their information on race and disability by gender. This presents the possibility that targets for women will be met by advancing the already privileged thereby denying black women access to training and traditionally male jobs (Samson, 1999). Companies below the threshold limit of fifty employees are not covered by the Act. Since the vast majority of African women work in the informal sector or as domestic workers, most of them will remain uncovered by Act in their workplaces (Samson, 1999). The fines for non-compliance may not be a sufficient deterrent. First-time offenders could be fined up to R500,000 (approximately USD45,000) but they could also be charged something much less. In some cases business has recruited black employees who have had the benefit of education abroad during the apartheid era. In other cases, the employment of foreign blacks has been used to address numerical target achievement. While, in the case of the former, some argument can be made if such employees are South African citizens, in the latter case, such practice has served to heighten xenophobia in the country. While Africans constitute the majority of the population of South Africa, the focus upon targeting members of this designated group has caused a growing schism between them and members of other designated racial groups, most notably Coloureds and Indians. Valentine (1995) notes that this phenomenon contributes to ‘hierarchies of oppression’ where different disadvantaged groups compete with each other for resources. In an endeavour to encourage top management commitment to numerical target achievement, it is not uncommon in South Africa, that a percentage of managerial bonus is allocated to such target achievement. While rewarding managers for working towards employment equity is a positive move forward, this practice has had the inadvertent effect of encouraging recruitment from outside companies as opposed to, in many cases, a concerted focus upon the training development of internal candidates from designated groups.

Employment equity in South Africa presents the challenge of redressing inequalities in the workplace while simultaneously not compromising standards of output and overall productivity. It is suggested that, in line with international ‘best practices’


49

(Thomas, 2002a), employment equity legislation in South Africa, as in Canada, is not unnecessarily complex, encompasses numerical target setting and the monitoring of progress by government, and was embarked upon with due consultation between government, business and labour. In spite of this, as has been indicated, employment equity is not progressing optimally in either country. Added to this, it is proposed that compliance with issues not able to be legislated, will ultimately determine the outcomes of this process in South Africa. Such issues are: top management commitment to the process, the development of holistic human resources practices, the recognition of the importance of employee diversity and the creation of inclusive organizational cultures, all of which, it can be argued, are essential to the development of an ‘integration-and-learning’ perspective (Ely and Thomas, 2001). In this regard it is proposed that South African business leaders, in addition to complying with statutory requirements, need to take cognizance of what are commonly regarded as the ‘softer’ issues of people and organizational development. In South Africa, employment equity as a whole, and affirmative action measures specifically, have not been regarded as strategic business issues and, accordingly, there has been a lack of management commitment to this process at all levels in companies (Thomas, 2002b). Rather, the task of achieving employment equity has been delegated to members of the human resources department of large corporations that seldom have the authority or necessary mechanisms to ensure progress. In addition, few managers have identified any holistic business rationale for employment equity in respect of the possible competitive advantage that a diverse workforce can afford. Rather, strategies to achieve employment equity have been implemented as a response to moral or legal compliance issues and, accordingly, are regarded as a ‘necessary evil’ with which business has to contend. Compliance with legislation is one matter; actual top management commitment to the effective utilization of those recruited through affirmative action strategies is quite another. In this regard, research has highlighted the propensity of people to select and include those who evidence attributes similar to themselves (Michel and Hambrick, 1992; Stangor et al., 1992; Tajfel and Turner, 1986; Tsui et al., 1992; Wiersema and Bantel, 1992). Ultimately, a challenge exists in South African organizations to break the power relationships associated with the club culture of the ‘old boy’s network’, as noted by Clarke (1998) and Coulson-Thomas (1994), that has ensured that the dominant group, in the South African case white males, succeed in business. This area warrants attention, particularly as it has a bearing upon how those new to companies due to affirmative action strategies are perceived within those companies. Internationally, it has been demonstrated that employment equity must necessarily be embarked upon as a holistic process (Thomas, 2002a). While numerical target setting is important, equally important are the practices of training and development, mentoring and coaching, and competence transfer for those recruited into companies. Simply legislating against unfair discrimination in selection, recruitment and promotion practices, it is suggested, is insufficient on its own, as has been highlighted by Ely and Thomas (2001). It has been noted in South Africa (Thomas, 1996) that performance management, as a means of training and developing people from designated groups into fully productive employees, has been poor, especially in the areas of managerial commitment to performance management, the recognition of potential and nontraditional skills, mentoring and coaching, and career planning. This area warrants greater attention if true employment equity, beyond numerical target achievement, is to be attained. The broad challenge exists for managers to create receptive organizational cultures that allow all employees who are now part of the new employee mix to work together

50 The International Journal of Human Resource Management productively. The business imperative for developing inclusive organizational cultures can be drawn from studies abroad that appear to suggest the benefits to business of effectively managing employee diversity (Cox, 1993; Lattimer, 1994; Morrison, 1992; Thomas, 1991). Such benefits may include: tapping into skills not previously available in a company characterized by a homogeneous workforce; enhancing company creativity and problem solving; responding quickly and effectively to diverse markets and managing productive relationships with diverse customers, suppliers and distributors; promoting a culture of inclusivity, critical to a commitment to total quality; enhancing team performance; and attracting and retaining the best talent especially among those representing new consumer markets. Thomas and Ely (1996) also note that diversity encourages different and creative insights and styles in approaching the design of business processes and tasks, in the achievement of goals, in the creation of effective teams and in the communication of ideas, among other things. Cox et al. (1991) note the tendency towards more co-operative choices among ethnically diverse groups than among all-Anglo groups and McLeod and Lobel (1992) report that ethnically heterogeneous groups produce higher quality ideas in brainstorming activities than do homogeneous groups, a finding supported by Watson et al. (1993). Positive results relating top management team diversity to corporate performance and strategic decision making have also been reported by Bantel and Jackson (1989), Glick et al. (1993) and Wiersema and Bantel (1992). Effectively managing this mix of employees in the workplace, Jenner argues, will assist employers in becoming employers of choice, thereby being able ‘to pick from the ever-shrinking pool of highly skilled employees’ (1994:12). In this regard Yu (2002) notes that a determined strategic effort on the part of managers is required. It can be argued, therefore, that one of the foremost challenges that South Africa faces is that of ensuring that the new workforce, demographically changed through the implementation of employment equity legislation, contributes towards the achievement of the global competitiveness of the country. An integral component of the above, and of prime importance to the success of any employment equity initiative, is the recognition that possible systemic discrimination within corporate culture needs to be addressed. The development of holistic human resources policies and practices is only one part of the equation. The commitment by top and line management to create inclusive organizational cultures where systemic discrimination is identified and addressed is essential. Agocs notes how research in Canada and the United States suggests that persistent inequalities according to race and gender ‘may be strongly linked to patterns of exclusion, marginalization and harassment that are embedded in the informal social relations of an organization’ (2002: 266). Thomas (2000) notes in a South African study that black managers may leave companies (‘job hop’) for higher salaries and related perks due to not fitting into historically established corporate cultures. Agocs (2002) raises to awareness the significant weakness in employment equity policies, viz. the lack of specific provisions for the addressing of systemic discrimination within the culture of the workplace. She notes that the monitoring of workplace culture should comprise an integral part of the compliance monitoring process. Conclusion Although progress has been made in enhancing racial and gender representation in the South African workplace, this is an incremental process that has to be supported by coherent human resources development priorities through the implementation of skills


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development legislation and changes in the organizational culture. On a macro-level, employment equity needs to be supported by prioritizing human resources development and education in skills and competencies needed in a society in transition. This reality has been recognized by the government and the Black Economic Empowerment Commission that has made recommendations to the government with regard to enhancing economic growth through state-driven measures to ensure black participation in the mainstream economy. Proposed measures include a national integrated human resources development strategy, legislated de-racialization of business ownership in the private sector and national targets that include land ownership and equity participation in economic sectors. Linking into employment equity, the Commission further recommends targets for senior and executive management in private-sector companies rather than supporting the setting of targets by company management themselves. The Commission’s proposals that have been accepted by the government, in principle, offer a significant policy basis for improving access to capital, skills and economic empowerment for the majority of South Africans. These overall measures, along with the progress in implementing employment equity and attendant workplace practices, it is suggested, will greatly improve the chances of majority blacks to have their just share in the South African economy. In this regard, employment equity must be viewed from both macro- and microperspectives. Changes have to occur at macro-policy levels. Equally, business leaders are required to comply, at a company level, with the provisions of legislation. However, the real challenge exists to go beyond compliance in the ensuring of top management commitment to the sentiments that underlie the legislation and the holistic development of people and organizational cultures that are free of historical discrimination. Acknowledgements A part of this paper dealing with employment equity in Canada has been adapted from a forthcoming book by Harish C. Jain, Peter J. Sloane and Frank Horwitz entitled Employment Equity and Affirmative Action: An International Comparison, to be published by M.E. Sharpe. Professor Jain would also like to acknowledge the partial support of the Social Sciences and Humanities Research Council (SSHRC) of Canada.

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