Innovation is the #1 requirement for business success today

Natalie Turner shares her thoughts on organisational innovation with Alan Hosking.

Why is innovation the #1 requirement for business success today?

As markets change and technologies continue to disrupt all we take for granted, what we see as breakthrough innovation today will pale into insignificance tomorrow. The most important human survival skill will be our ability to innovate or to consistently create value out of new ideas. To be an innovator is to be a pioneer of bringing the new into the world, but it is not just about being creative, and not just for research and development or new product creation. It requires a complex and diverse raft of skills and ways of thinking, applied across all touch points of how an organisation thinks and operates. Whether ready or not, this puts innovation squarely in the domain of the people and organisational professions, HR and Organisational Development.

What makes innovation so difficult?

Many organisations talk about the need to innovate, but don’t know where to start, or whether they even have the skills or capabilities to generate ideas and make them work. The big challenge is how to make innovation part of the organisational DNA and culture. This requires the development of innovative mindsets, behaviours and culture as part of everyday working life, both for what I call everyday innovation, as well as bigger strategic moves that will change the direction of how a company operates. Innovation has largely been seen in the domain of new product design, brand management, research and development, and more lately process and business model innovation, but actually, a new domain is emerging, what I call ‘Organisational Innovation’ or innovation in management – the way we hire, on board, manage and develop people and create conducive environments that stimulate innovative ways of working. This is tough to do, as it requires challenging the way we currently think about how we lead and manage people and structure our organisations.

What inspired you to write a book on innovation?

Prior to setting up my business in London in 2006, I was an Innovation Director in a Market Research firm, responsible for helping big brands create concepts for new products and services. Clients were never short of good ideas yet many ideas would get lost and not see the light of day, or the novelty of what made them innovative was diluted as it journeyed through the maze of organisational decision making. In questioning why this was happening, little did I know that I had stepped into the territory of organisational development. It seemed so obvious to me that these two worlds – what we create (the product, service, process, outcome) and how we create (the skills, mindsets, working environments) were natural allies, but not so in many organisations. The organisational design is just not set up to think this way. If I ask you who owns innovation in your organisation, who would you say? It’s like saying, “Who owns marketing and finance?” and not knowing the answer. In my unsatisfactory search for a Model to help my clients unpack the complexity around innovating, I invented, in partnership with industry and leading thinkers in the areas of behaviour and organisational development, The 6 ‘I’s® of Innovation which we have been using around the world in organisations such as Singapore Airlines, LEO Pharma Asia, Cisco Systems and the National University of Singapore. The purpose of the Six ‘I’s® is to give individuals and organisations a consistent framework for developing and measuring innovation skills and capabilities, and an actionable process for creating an innovative and productive working culture. The book is a direct outcome of this work.

How much of the book is theory verses practical tips?

I wanted to write a practical book, grounded in theory, and standing on the shoulders of research that has gone before me, but full of tips, tools and methods to help people practically innovate – building skills and mindsets along the way. I have structured the book around the 6 ‘I’s®, which are:

1. IDENTIFY with the mindset of CURIOSITY to spot opportunities by understanding trends and customer needs;

2. IGNITE ideas with the mindset of CREATIVITY by creating novel solutions;

3. INVESTIGATE with the mindset of CRITICAL thinking, by developing propositions, prototyping and testing;

4. INVEST with the mindset of COURAGE by creating business models and plans for investment;

5. IMPLEMENT with the mindset of COMMITMENT by bringing an idea to life and creating value; and

6. IMPROVE with the mindset of being CLEVER by optimizing an idea into another area of opportunity.

Central to the Model is also PURPOSE. Why are we trying to innovate in the first place, and what is it that we want to accomplish?

I overview six core skills for each ‘I’ and give ideas for each of the mindsets to help people think through how they can develop different ways of thinking. The book also includes a free skills self-assessment profile for the reader to find out what they consider their innovation strengths. The key message is that everyone can innovate, everyone must innovate and everyone has a part to play, not just those that we deem creative at the IGNITE phase. It is about harnessing diversity and building a culture, and supporting processes that will stimulate each of the 6 ‘I’s® to work together towards a common PURPOSE.

* Discover your innovation strengths with the free 6 ‘I’s® profile that comes with the book. Visit: www.yesyoucaninnovate.com, www.6-i-innovation.com.

Profile

Natalie Turner is the inventor of the 6 ‘I’s® of Innovation, which offers an end-to-end people-centred approach to innovation, blending the principles of design thinking with organisational development, and a unique innovation strengths assessment for individuals and teams. She is also the Founder and CEO of The Entheo Network, a global innovation company based out of Singapore. She is a frequent Keynote speaker on topics such as “How to build an innovative culture” and “Can HR be the new enablers of innovation?” Natalie is the author of WH Smith’s business book of the month Yes, You Can Innovate. Discover your Innovation Strengths and Develop your Creative Potential.

This article appeared in the May 2018 issue of HR Future magazine.

WISE up when setting goals

This alternative to the traditional SMART method of goal setting will help you.

Specific, measurable, achievable, time-bound goals (SMART goals) are an effective way to align and improve performance. However, we have probably all noticed situations where SMART goals didn’t seem to fit the reality. When the reality is ambiguous, uncertain or rapidly changing, then something as well-defined as a SMART goal can be out of place. More broadly, when we only have vague or extremely general ideas about what to achieve, then it’s hard (or even harmful) to be overly specific. Perhaps in those cases we need WISE goals, Wide-spanning, Insightful goals that are Sensitive to the ever changing Environment.

We can frame this as a left brain view versus a right brain one. The left brain has an engineering mindset that wants to carefully put everything into well-defined boxes. The right brain likes to sit back and observe the world in a holistic way, ever alert for interesting events or patterns. SMART goals are left brain, WISE goals are right brain. It’s important to know that while the right brain values the capabilities of the left, the reverse is not true. When we are in left brain mode, or work with someone who is, the vagueness of WISE goals will be infuriating. If our left brain co-worker is in a good mood they will eagerly try to show you how you can turn your vague WISE goals into a specific SMART goals; which, if you fall for it, will destroy their special power.

One WISE goal you might set for employees, in addition to their core set of SMART goals, is: “Do something that will enhance the effectiveness of this department.” The SMART goals deal with the known, the WISE goal opens up the door to the unknown. It should be said right away that some individuals won’t be comfortable with WISE goals. That’s fine, they’re not for everyone.

How do you assess the outcome of a WISE goal? In some cases it will be apparent in measurable terms, someone may come up with an “out-of-theblue” idea that saves time or increases revenue. Other times it may not be measurable, such as increasing the capability to innovate or noticing an opportunity that has yet to be pursued. As we tackle this question, we need to ask ourselves why we need a formal assessment of the outcome at all. More often than not, coming up with something new is reward in itself, so if you are worried without assessing its value and assigning a bonus; well you don’t need to go there. I think the starting point for rewarding the achievement of WISE goals should be showing appreciation.

One could potentially build WISE goals into the formal goal setting process. Personally, I’m more inclined simply to let managers know that this is an option. We don’t have to be specific, measurable or time-bound in how we use WISE goals; let’s simply encourage managers to have the wisdom to use them when they are needed.

David Creelman is CEO of Creelman Research, creelmanresearch.com. He is best known for his workshops on Agile Analytics, Evidence-based Management and the Future of Work.

This article appeared in the May 2018 issue of HR Future magazine.

Brand impacts on employee engagement and revenue

Use these tips to ensure your employees buy into the company’s brand.

“Companies with high employee engagement levels have 3.9 times the earnings per share when compared to those in the same industry with lower engagement levels.” Gallup Study Internal Branding + Engaged Employees = Increased Revenues. It seems simple enough when put into an equation like this. The truth may not be that simple, though. If employees are not really buying into the brand at a heart and soul level, it would not take a physicist to work out why the ‘increased revenues’ part of the equation has gone off track. Not only that, disengaged employees are HR’s worst nightmare that cause high attrition rates. And team leaders are in constant bang-myhead- against-the-wall mode as their teams are not performing up to par.

Engaged employees play a critical role in championing the internal brand and it is important to look at ways to create engagement.

Start by asking your employees

It begins with research. What are your employees really thinking? Do they even know anything about the internal branding?

If they do, how do they rate the company’s internal brand? Are they aligned with the brand’s values? Getting some ‘real’ answers sets the stage for the next steps to unfold. Pressing deadlines and thoughts like, “Who-has-time-for-all-this-when-my-boss-is-onmy-case-for-the-next-deadline?” are not conducive to getting the real answers. Using a top-down approach with complete senior team buy-in that facilitates focus groups or one-on-one meetings is the only way to approach this.

Management might be in for a surprise here. It may be greatly desirable to have engaged employees that live and breathe the company’s brand, but the necessary measures to achieve this may not be in place. Research will bring clarity to what the management wants and any gaps that exist.

Discovering perceptions – some practical tips

Use word power. To figure out current perception, employees can be asked to jot down some words and phrases, and create a list of all the attributes they think the brand is known for. These can be narrowed to the top five attributes. The exercise can be repeated in teams as well to see what comes up in a team setting.

This simple exercise will reveal a lot of insights. Not only will it reflect what the general perception is, but the team and department perception will also begin to emerge. Gaps will be highlighted and a clear picture regarding which teams and departments are aligned with the company’s values will be revealed, along with where there are gaps. This will enable time, money and energy required to address any gaps to be focused where they are most required.

Designing initiatives and communication

Getting the real answers helps to design initiatives and communication that align with what the internal brand wants to represent. It also helps to come up with innovative ways to communicate this – sending a long email may get lost in the multitude of emails in an already bursting-at-its-seams inbox. One company used a cartoon strip and a tongue-in-cheek approach to get their message across, which was a hit. Depending on the company culture, food, games, competitions, away-days, campaigns, there are a variety of ways that can be used to deliver the internal brand message effectively.

Hence, leaving it up to the internal marketing team to come up with a campaign may not be the solution. Total company buy-in means involving everyone – in a targeted way – to figure out the best messaging and ways to communicate it. It may even involve an external advertising agency to help. A concerted effort will surely pave the way for the best, innovative and effective ways to communicate the message.

Elements of the company’s brand will be reflected in all initiatives and policies. If fun is a value that the company believes in, it should show up in the communication. If it is great customer care, then that will be reflected, for example, in turn-around times when dealing with customer complaints.

Further, the employees will be very clear on what is expected and, from a Human Resource perspective, the company will, over time, attract and retain only those employees who align with its values. Happy employees who look forward to waking up and getting to work – not those who are constantly unhappy perhaps because their personal values do not align with the company’s brand values.

Ongoing initiatives

Action plans need to be acted upon to ensure employees will trust the process and become and remain engaged. For impact, a senior team member can be called upon to discuss the findings of the focus groups or surveys and what the company plans to do with the findings. Quite a few ideas have gone down the drain as employees never trusted management to follow-up. It was another not-oneof- those-again instances where a lot of hype was created and nothing came out of it.

Front-line staff

Front-line staff deserve a special mention; they are direct representatives of the brand’s values and can make or break a brand’s perception in the customer’s mind. As front-line staff deal with the customers directly, they have a huge impact, and spending time with them and understanding how well they understand the brand is of critical value. Internal branding needs to be reinforced in different ways so that employees are constantly reminded about them. A great way is to reward employees, teams and departments who live up to the values. This in itself creates a healthy competition and the values are reinforced in a subtle way, which can sometimes create more impact than in-your-face campaigns.

Engaged employees are people who feel heard and respected. They understand the values that the brand represents and are conscious of living those values. Engaged employees believe in the brand they work for. It plays out in the way they show up for work, their relationships with their coworkers, with clients, and with all other external stakeholders.

Best of all, their productivity shines through in their work and that has enormous positive effects on the revenue bottom line. Happy employees can easily be the catalyst for great revenues!

Kim Speed is based in Toronto, Canada, purplemooncreative.com, and is the author of Branding on a Shoestring: How to Re-Create Your Small Business Identity and Increase Sales Results in 83 Days or Less. After a successful career as a Creative Director at a top advertising agency, she now helps small business owners build and grow their companies with simple, effective marketing.

This article appeared in the May 2018 issue of HR Future magazine.

HR trends that are emerging in the Future of Work

The field of human resources is constantly changing. These are some of the most important human resources trends in 2018.

Workplaces are undergoing profound transformations to accommodate the varying expectations of a multigenerational workforce and the increasing influx of AI-enabled entities.

1. Artificial Intelligence will play a stronger role In Human Resources.

Artificial intelligence already is important in the human resources sector. Estimates indicate that 20% of human resources workers will specialise in activities that are related to Artificial Intelligence by 2020. Even if your job is not exclusively dedicated to the use of Artificial Intelligence, you’re likely to spend a significant amount of time working with AI. In fact, two-thirds of recruiters anticipate spending more time working with artificial intelligence in 2018. There are many types of artificial intelligence that will be used in human resources departments. Some forms of human resource software will make use of machine learning. One of the most beneficial forms of software for human resources departments in 2018 will be shift scheduling software.

2. There will be strong competition between Human Resources companies.

There always have been multiple major players in the human resources industry, and there always has been competition between these companies. However, new companies have entered the arena. While Microsoft was always a large corporation, they weren’t considered a major player in human resources until relatively recently. In addition, Google and Facebook now have job search features.

Google has two features that will be important for the HR industry. One of its features is Google Hire. Google Hire is an applicant tracking system. In addition, it makes use of search engine API. This allows job boards to get their listings ranked higher in search results. Facebook now has a jobs function. The jobs function of Facebook is likely to allow as many as two billion people to access job postings. These services will directly compete with the services that are offered by other human resources companies.

3. Corporate training is likely to improve.

The improvements in technology in human resources will require more extensive training for employees. The increased amount of training that is required for human resources positions will require more employees to conduct the training. For instance, companies will need to hire data scientists and machine learning engineers in order to conduct the training that is required for human resources employees.

In addition, the nature of corporate training is likely to change. Due to the fact that there will be more material that needs to be covered, corporate training will increasingly make use of videos. In some cases, virtual reality technology will even be used.

4. Independent whistleblower technology will help human resources departments to more effectively combat sexual harassment.

In many cases, human resources did not respond to sexual harassment complaints. Some human resources departments even were found to have sided with the harasser. However, new technologies will help to prevent this from occurring in 2018. However, it isn’t known how effective this technology will be at reducing sexual harassment in the workplace.

5. There’s a good chance that a new human resources company will have an initial public offering.

It’s likely that the largest human resources companies will do best in 2018, and this will be an incentive for entrepreneurs who are starting a human resources company this year to invest a large amount of money in the company that they are starting. As a result, new companies in human resources might offer potentially profitable stocks. Furthermore, there’s also a chance that mergers will occur. This also could result in an initial public offering. A new human resources company was founded on 8 January, and the initial public offering has already occurred. The name of this company is Text Recruit.

Jenn Livingston is a US-based freelance writer who works primarily with small businesses. She loves to help other people solve problems in the workplace, and enjoys reading and exercising in her spare time.

This article appeared in the May 2018 issue of HR Future magazine.

Does the quest for high status encourage misconduct?

Volkswagen and similar falls from grace were motivated by the desire to be number one.

Martin Winterkorn, the former CEO of Volkswagen, was leading his company on a course to surpass Toyota as the largest car maker in the world. And he succeeded. In July 2015, he achieved this pinnacle amongst auto manufacturers. Unfortunately, by September of that same year, his ability to enjoy this privileged position was over. By now, the storied tale of Volkswagen’s Icaruslike fall from grace is now all too well known in business circles and beyond. Specifically, it is now understood that Volkswagen rigged its 2009-2015 diesel-model cars with special software that would detect when the car was going through an emissions test, allowing it to perform at lower emissions levels than was actually the case. The question that my coauthors, Tim Vriend, Onne Janssen, and I asked was if the desire to be Number 1 influences the unethical behaviour of those occupying top positions in various ranking contexts.

Rankings, that is, positions by which persons or groups are ordered according to their performance, are pervasive throughout society, including both business and sports. On many levels, rankings are quite effective and valuable. First, rankings give meaning and value to those who occupy the rank. For example, the top rank signifies that someone is the best and the bottom rank signifies that someone is the worst. Second, rankings foster competition (and therefore perhaps, higher performance) amongst people or teams to attain high ranks or avoid low ranks. Third, rankings allow people and organisations to clearly discriminate between good and bad performers and to assign rewards or punishments where relevant.

But is there a destructive side to rankings? In a recent paper published in the journal, Organizational Behavior and Human Decision Processes, we found that those competing to attain top ranks in and of themselves were more likely than those competing to attain middle ranks or avoid bottom ranks to act unethically. However, we found that when we accompanied top ranks with rewards and bottom ranks with punishments (which is often how they work in the real world!), people aiming to avoid being in the lowest ranks actually acted most unethically – by doing things like lying and cheating.

The question then is why do top and bottomranked people act in these ways? Interestingly, we found that while the outcomes are the same, the reasons are different for those at the top and those at the bottom. Specifically, those in top ranks act unethically because the power that accompanies such top ranks leads to a feeling of invulnerability and behavioural release, fuelling the unethical behaviour.

Whereas, those at the bottom act unethically because their “nothing to lose” mindset allows them to feel morally-justified in bending the rules and situation to their benefit. In other words, people at the top and the bottom of the ranking spectrum both act unethically – but for entirely different reasons.

So, what does all of this mean for leaders and organisations? Should corporations, organisations, and committees do away with rankings altogether? We definitely do not argue for a full-scale elimination of ranking systems. But we do assert that these systems have to be accompanied by extra checks and balances. Perhaps the most troubling part of these findings is that the entire assumption on which the effectiveness of rankings is based – that is, that people will increase their legitimate performance in order to attain high ranks or avoid bottom ranks – is turned on its head when we discover that people act unethically (e.g., violating rules, cheating, lying) in order to achieve their desired rank or avoid their undesired rank. This destructive behaviour will lead to such ranking systems being perceived as unfair by employees, actually leading to a general cynicism and demotivation by employees. While we hate to argue for more and stricter monitoring systems, for such systems communicate distrust to employees and are often quite costly to effectively implement, it seems like in order to maintain “fair play” in the midst of rankings, such monitoring systems might be necessary. In addition, these monitoring systems should be accompanied by undesirable (and enforceable) punishments for any violations of a fair system of play – that is, punishments that surpass in value the rewards that accompany achieving such ranks.

Second, we found that top-ranked people’s greater feelings of power (and the “behavioural release” that accompanies such feelings) are responsible for the unethical behaviour of those at the top.

Thus, the question is how to decouple the joys of attaining top rank with the feelings of power that go along with it? One way may be to foster an attitude of humility throughout the organisation – that is, an attitude that even those who have achieved the heights of status also need to be mindful of the duties and responsibilities that come with such a coveted position. And while our research does not speak to this point, it also seems obvious that environments that are more values-based, that is, environments where what leaders preach and practise are imbued with and supported by strong values like honesty, integrity and fairness, are less likely to show the insidious effects of ranking systems and rather largely promote the desirable effects.

In no way do we think that ranking systems will go away any time soon – nor do we advocate for their demise! That said, the results of our research point to the fact that ranking systems can have of which leaders and organisations need to be mindful.

Prof. Jennifer Jordan is Professor of Leadership and Organizational Behavior at IMD. She teaches on the Orchestrating Winning Performance and Building on Talent programmes. Tim Vriend is Assistant Professor and Onne Janssen is Professor in Organisational Behaviour in Business and Economics at the Faculty of Economics and Business at University of Groningen in the Netherlands.

This article appeared in the May 2018 issue of HR Future magazine.

Learn about the local culture when on an expat assignment

Challenges of managing across cultures can be overcome with the necessary training.

With globalisation, there are an increasing number of expatriates working in overseas operations. Therefore, the cultural dimensions of space and time have become more important for expatriates to work successfully in assignments or projects abroad. Indeed, there are many dimensions to culture. In order to understand this, the culture of a country has to be deconstructed in terms of language, social habits, political system, history and the dimensions of space and time.

One may view culture as the accumulation of the best possible solutions to the common challenges faced by the members of a particular society. Therefore, mostly US-based solutions do not work as efficiently in foreign business environments as they do in the United States. In fact, many times there is a cultural hostility in the host country against an expatriate merely because of his or her origins. This hostility can be minimised and misperceptions can be clarified if an expatriate is offered meaningful training in social and cultural nuances of the host country. The following case incident reveals the challenges faced by a physician from New York City working in Saudi Arabia.

Case Incident #1

Dr Tom McDivern, a physician from New York City, was offered a two-year assignment to practise medicine in a growing urban centre in Saudi Arabia. Many of the residents in the area he was assigned to were recent immigrants from the much smaller outlying rural areas. Because Western medicine was relatively unknown to many of the people, one of Dr McDivern’s main responsibilities was to introduce himself and his services to those in the community. A meeting at a local school was organised for that specific purpose. Many people turned out.

Tom’s presentation went well. Some local residents also presented their experiences with Western medicine so others could hear the value of using his services. Some of Tom’s office staffers were also present to make appointments for those interested in seeing him when his doors opened one week later. The meeting was an obvious success. His opening day was booked solid. When that day finally arrived, Tom was anxious to greet his first patient. Thirty minutes passed, however, and neither of his first two patients arrived. He was beginning to worry about the future of his practice while wondering where his patients were. What was the major cause of Tom’s worries? (Source: “Marketing Across Cultures,” Second Edition, Jean-Claude Usunier, Prentice Hall, 1996).

The above case reveals many dimensions of Saudi Arabian culture obstructing the smooth functioning of Dr Tom McDivern. First of all, Dr McDivern was not able to perceive that the concept of time in Saudi Arabia is different from that of United States. The doctor’s patients did not appreciate the Western method of keeping appointments on time. Moreover, the patients did not appreciate that fixing an appointment with a doctor is a type of commitment. Furthermore, the patients were apprehensive about the efficacy of Western medicine because they may have had a greater faith in hakims whose practices are semi-religious and age-old. Indeed, it is also possible that the patients may have changed their minds during the week. In fact, the village elders may have persuaded them to change their minds. Even so, Dr Tom McDivern would not have been frustrated had he taken short-term training in cultural immersion prior to his arrival in Saudi Arabia. Consequently, the late arrival of patients would not have disturbed him had he known that his patients considered themselves arriving on time even if they were late by an hour or more.

The following case illustrates the perceived cultural differences in family attachments between a French engineer, who works for a Japanese company in France, and his Japanese boss.

Case Incident #2

Mr M Legrand is a French engineer who works for a Japanese company in France. One day the general manager, Mr Tanaka, calls him into his office to discuss a new project in the Middle East. He tells Mr Legrand that the company is very pleased with his dedicated work and would like him to act as chief engineer for the project. It would mean two to three years away from home, but his family would be able to accompany him and there would be considerable personal financial benefit to this position. And, of course, Mr Legrand would be performing a valuable service to the company. Mr Legrand thanks Mr Tanaka for the confidence he has in him, but says he will have to discuss it with his wife before deciding. Two days later, Mr Legrand returns and tells Mr Tanaka that both he and his wife do not like the thought of leaving France and so he does not want to accept the position. Mr Tanaka says nothing but is somewhat dumbfounded by Mr Legrand’s decision. Why is Mr Tanaka so bewildered by Mr Legrand’s decision? (Source: “Marketing Across Cultures,” Second Edition, Jean-Claude Usunier, Prentice Hall, 1996).

In the above case, Mr Tanaka believes that loyalty to the company is paramount. In contrast, the family is of secondary importance for the Japanese but not for the French. Moreover, in Japanese culture, the wife’s opinion in the matter of re-location of her husband’s job is of minimal importance. However, in France, the family has a more egalitarian ethos and the wife’s opinion carries a greater weight than in Japan. Moreover, the Japanese tend to be work-centred whereas the French tend to be oriented toward leisurely activities. In this case, Mr Tanaka believes that it is foolish for Mr Legrand to refuse financial benefits that are related to his new job. To resolve this problem, Mr Tanaka should have a heart-to-heart talk with Mr Legrand and his wife. Mr Tanaka can offer a free vacation to the couple in the Middle East, where the new job is located. This will help the French family to acclimatise to the Middle Eastern ethos.

At the same time, Mr Tanaka needs to understand that the expatriate’s spouse plays a crucial role in the potential effectiveness and retention of the manager in host locations. Companies should ensure the spouse’s interest in the assignment, including her in the pre-departure training, and provide career and family support during the assignment and upon return.

Dr Archan Mehta has a PhD in Management and is based in India. He has over 10 years of work experience in sectors like Media, Food Services, Hospitality, Education, and Security. He is currently a Consultant.

This article appeared in the May 2018 issue of HR Future magazine.

Should you outsource your HR?

Make your HR outsourcing decisions for the right reasons.

The job of human resources is personal. It’s the job of figuring out what makes people tick, what motivates them and what will push them to do better. With so much of human resources focused on a deep understanding of other people, is it really something you can outsource?

Yes, it is. However, the fear that it isn’t is understandable. Outsourcing is sometimes seen as a cost-saving measure associated with lazy management and faceless third-parties. The reality is much more nuanced, but the perception isn’t completely inaccurate. Sometimes, outsourcing really is a race to the bottom.

In some employers’ minds, outsourcing is popular because the less you can pay someone to do something, the better. To others, though, outsourcing is seen how it should be seen: an opportunity. It’s a chance to improve your company by increasing your talent pool.

All of this might be well and good for some jobs, but HR is about people. Surely, outsourcing the job of employee wellbeing to a third party suggests that you don’t care about employee wellbeing? The answer is that it depends on what sort of company you outsource your HR to.

Costs of outsourcing HR

The most obvious cost of outsourcing HR is the financial cost. As with any other kind of outsourcing, this needs to be weighed up against the cost of doing the same job internally. For some businesses, outsourcing can wind up costing more than doing a job in-house – especially if you’re looking for quality. The second cost of outsourcing HR is the cost to employee morale. If the news is delivered in the wrong way, it sends the message that HR is being demoted. Even if you hire the best HR agency in the world, none of that will matter if your employees don’t believe in how good they are. Outsourcing HR needs to be sold to your employees as beneficial for everyone. If not, it can look like a mistake.

By far the biggest potential cost is getting your outsourcing wrong. More so than materials or rent, human capital can often be the most expensive cost of a business. Paying employees costs a lot of money, but hiring employees costs a lot of money as well – with the average cost-per-hire in the US at $4,000. The cost of hire might be very different in Jersey (where I’m based) or in South Africa, yet it’s still a cost which needs considering.

With so much money on the line, handing HR over to a third-party can mean handing over the success or failure of your business to a third-party. As such, it’s no wonder that many business owners want to be the person who hires and trains new staff. If you discover that the company you’ve outsourced your HR to is terrible, it might well be too late.

Benefits of outsourcing HR

Financial cost is also the most obvious potential benefit of outsourcing HR. Moreover, if you choose to spend more, you can get a lot more. HR agencies dedicate all of their time and energy to the work of human resources.

You can also break HR down into different things – some of which you might outsource and some of which you might not. The legal side of HR is something best left to lawyers and legal experts. This could be outsourced while other aspects of HR – onboarding, negotiating contracts, or managing employee morale – could be done in-house.

Then there’s HR software. Somewhere between outsourcing your HR work and doing it in-house, you can pay for appraisal software specifically developed to help you with the work of HR. This is just one example of the diverse possibilities for outsourcing HR.

The biggest benefit of outsourcing HR is that it allows you to focus on the business of doing business. Yes, HR is important, but unless you’re in the HR industry, it’s unlikely that it’s the reason you started your business. For those business owners, outsourcing HR gives you more time to focus on the parts of your business that you love the most.

In short, the negatives of HR outsourcing only apply to bad agencies and the positives only apply to good ones. While this should be obvious, many businesses ignore the potential benefits of HR outsourcing just because they’ve seen it not work for other businesses. If you’ve successfully outsourced another part of your business, there’s no reason that outsourcing couldn’t work for HR.

Chris Austin is the Head of Employment Law at Parslows Jersey. He and his team specialise in employment law and HR support.

Thriving in an age of Disruption

Putting African people at the heart of change.

Today, African businesses are being shaped by the disruptive forces that are impacting collective global markets. Just one example is speed of the current advancements in technology – such as AI, robotics, autonomous transport, IoT, 3D printing and big data analytics among others.

Against this backdrop of disruption, organisations need to distinguish themselves from others in order to stand out. This is also shaping the next decade of work and if your organisation is not developing people strategies that account for these forces, prepare to be blindsided. Despite this clear recognition, the 2017 WEF Human Capital Report highlighted the failure by business to adequately develop people’s talents. The report found that only 62% of the world’s human capital is fully developed. In Africa, Kenya with a ranking of 78, outperformed South Africa and Nigeria with rankings of 87 and 114 respectively.

Thriving organisations seek to enrich the lives of their employees — meeting their health, wealth and career growth needs. They ensure that managers provide the personal support required to help individuals reach their potential and, as much as possible, are able to contribute to the innovation agenda. As a result, people feel connected, challenged and empowered.

Our research clearly points to the need for employees to connect with the true purpose of the organisation, beyond profit. If organisations are able to ensure that senior leaders and employees understand the deeper purpose of why the organisation exists and then align their intent and efforts to that, more people will be able to bring their real and authentic selves to work. Furthermore, to place people at the centre of what and how you deliver work is key, not because HR says so, but because it makes business sense, more organisations will find that they not only thrive from a people perspective, but also achieve higher results.

Failure to thrive

Thriving organisations, that is those that transform their work environment into a compelling experience, will be most successful in building the workforce of the future. According to Mercer’s latest research, “Thriving in an Age of Disruption,” which surveyed over 800 participants in 57 countries across 26 industries, only 52% of respondents said their organisations were committed to creating an environment where employees are able to THRIVE. Why do so many organisations find it difficult to achieve the transformational work environment that will support their continued success? From our work with companies around the world, Mercer has observed three contributing factors.

First, organisations fail to adapt effectively to changes in their external environment. Rather than developing creative ways to tackle new problems, they often find themselves maintaining the status quo. As a result, they gradually drift into a state of survival – fighting just to get by.

Second, organisations fail to develop an internal environment that stimulates the growth and innovation they need to stay ahead. They view their relationship with employees as a transactional quid pro quo and therefore struggle to find people who feel truly invested in their work and the organisation’s future.

And third, some organisations have uninformed decision-making processes. Thriving organisations are curious about their people and laser focused on taking data-driven action, not just importing best practices from others. This approach enables them to pinpoint the unique menu of actions that will help their people thrive.

The impact of these failures is tangible. With the lifespan of the average S&P 500 company now under 20 years, it is clear that failure to thrive has a real impact on people, businesses, and the economy.

What does it mean to thrive?

To find out what it feels like to thrive at work, we asked over 800 HR and business leaders from around the world a series of open-ended questions about their organisational culture and people practices. We then identified a number of key themes in those companies that are committed to developing a thriving workforce.

Growth and learning came out most prominently, matching previous research, which suggested that thriving is a combination of vitality and learning. In addition, our data showed that organisations have been focused on strengthening the sense of equity and efficiency in talent processes to help people thrive.

By overlaying these findings with Mercer’s Global Talent Trends Study results, we found that two dimensions were predictive of job satisfaction and commitment: how energised employees feel day-to-day and whether they can bring their authentic selves to work. When both factors occurred, employees were nearly three times more likely to report job satisfaction and a desire to stay with the organisation.

These results suggest a clear call to action.

A new mandate

Thriving organisations do not happen by chance – they are deliberately designed and intentionally built. In the same way that leading organisations obsess about their customers, thriving organisations obsess about their people – finding ways to help them have transformational experiences at work.

Our research has pinpointed the strategic focus of thriving organisations, the characteristics of thriving workforces, and how thriving individuals experience their workplace.

Four critical priorities

Thriving is about focusing on the needs and desires of individuals and understanding what drives their personal investment. To get there, organisations need a purposeful strategy and committed leaders. You can ensure that your organisation is on the Thrive journey by focusing on four critical priorities:

1. Craft a future-focused people strategy: Organisations need to approach their people strategy with as much dedication as they approach their innovation and digital strategies. Thriving organisations treat their workforce as an asset in which to invest – not simply a business cost.

2. Curate a compelling employee value proposition: People want jobs that work for them. They want tools to manage work and life in a way that is personalised, flexible and unique to their own interests and aspirations.

3. Create a thriving work environment: Individuals thrive when work is challenging and purposeful, when they feel empowered to make decisions and when they are connected to colleagues and experts.

4. Cultivate a lab mindset: To stay ahead in changing times, cultivate a mindset that encourages experimentation, design thinking, innovation, balanced risk taking and a climate of continuous learning.

Most people spend at least half of their waking hours at work. For many, organisations are where the majority of life is lived. When employees thrive, organisations grow. When organisations thrive, they benefit stakeholders, shareholders and the community at large.

Deon de Swardt is a Principal Consultant at Mercer, www.mercer.com.

What’s next for AI around the world?

See what’s around the corner for Artificial Intelligence.

2017 was a breakout year for Artificial Intelligence (AI). Despite repeated attempts to sensationalise AI over the past year, we have witnessed unprecedented gains in mainstream understanding of AI-driven technologies. People have begun to grasp the impact of AI-powered applications on their everyday digital lives. Building upon this progress, AI is poised to continue to journey into the mainstream throughout 2018. But there’s still a lot of work to be done. For many, the mechanics and decisionmaking processes behind these groundbreaking technologies remain a mystery. Here’s how I predict AI will evolve and excel over the next year:

#1. Human-like AI will slowly fade away

Thankfully, in 2018, the AI industry will begin to move away from developing technologies that reside in human-like physical structures. I believe this is one of the most promising trends for the future of AI. As we’ve seen from Sophia the Robot, making AI appear more human while trying to make it behave human-like actually ends up detracting from real progress. Consequently, AI engineers and developers will pivot toward building algorithm-driven AI that responds, makes decisions and interacts with people in a human way. We will see a pronounced industry shift as AI becomes increasingly integrated into platforms and technologies people use to locate public records, rate customer experiences, manage their finances, and learn.

#2. The AI industry will start to prioritise solving the world’s biggest problems

In 2018, the industry will shift toward deploying AI to solve the right problems. We’re not currently using AI to solve the biggest problems facing the world today. Instead, the majority of AI’s current enterprise and consumer applications focus on small-scale, niche problems. Sure, a search algorithm can direct you to the best dentist in Paris. A smart assistant may be able to help you to book a meeting room. A voice assistant might help you to discover a music genre you never knew existed. But is this really the most effective use of AI? Today’s AI technologies already possess the potential to address much more complex problems, such as managing an entire workforce and solving climate change. Throughout 2018, I predict companies across industries will begin to deploy AI technologies to solve the world’s most complex and significant problems.

#3. AI and humans will realise that working together produces the best results

Too often reports covering AI and its impact on the job market provoke needless panic. Many fear how advancements in AI will impact future job opportunities, talent and workplaces. Although some jobs will inevitably be replaced by AI technologies, the reality is that most will evolve to incorporate – and coexist with – AI in order to maximise benefits to companies. As a result, throughout 2018, we will see companies begin to establish retraining programmes to educate their non-technical employees on how to effectively work with AI.

#4. There will be greater emphasis on consumer adoption of AI

In 2018, the AI industry will strive to establish trust with the everyday consumer. The industry will work to ensure consumers feel comfortable with AI-driven products and services, and communicate more clearly on the privacy and security of AI products. All of this communication will occur in simple language that regular people can understand. If we can make
consumers more comfortable with AI, we can help to address widespread ethical and technical concerns, as well as maximize AI adoption.

#5. Cybersecurity will turn to AI to tackle sophisticated threats

While Hollywood would love for us to believe that hackable technology can result in robots seizing our planet, engineers will actually begin to address these issues at the data and algorithm levels with AI. Todate, hackers’ skills have exceeded the cybersecurity industry’s ability to safeguard vulnerable technologies. To resolve this discrepancy, tech giants like Facebook, Google and Amazon will pursue partnerships with startups and academic researchers at leading institutions to create AI-driven security.

Ultimately, these collaborations will help to produce AI systems capable of monitoring, identifying and preventing hacks.

#6. The regulatory landscape of AI will move forward

We will see an increase in both regulating AI as an industry and as data, which will result in heightened accountability throughout the industry. As governments around the world seek to learn more about the AI industry, major industry players will start to unveil how they self-regulate AI-driven enterprise applications. This increased self-regulation in the industry will help to address additional business and public safety concerns about data privacy and protection. Throughout 2018, we will see continued pressure on the industry to increase accountability and transparency. The AI industry will now be expected to clearly explain how companies use data – particularly consumer information – to build and inform AI applications.

#7. AI development training and tools will become available to a wider talent pool

Just a few years ago, developing AI technologies required advanced degrees in data science and engineering. Today, the industry is much more accessible. Developer tools, training programmes, and more attainable career opportunities now enable non-technical people to break into this once impenetrable industry. In 2018, the industry will grow even more accessible through the introduction of additional tools, resources and educational opportunities. Moving forward, people without advanced technical skills will emerge as the future leaders of AI, building solutions to address problems in industries ranging from finance to healthcare to transportation. We will see technical experts collaborate with creative professionals to harness the power of AI to solve the world’s most pressing problems.

Conversations around AI will turn to action

This year, I believe the AI industry will continue to evolve and make significant strides toward reaching the mainstream. More people will become familiar with the nuances and intricacies of AI technologies. AI-powered applications will continue to both increase in number across the enterprise and expand to new industries. Meanwhile, the AI industry will be pushed to assume responsibility for increasing transparency and accountability around these applications. We will see more robust partnerships forming within the AI industry, as well as between the private, public and academic sectors.

The AI industry launched a global conversation around the importance of developing ethical, unbiased and responsible AI last year. 2018 is the time for us to convert these discussions into tangible action. Industry leaders will now prioritise deploying AI technologies to tackle the most pressing business and societal problems, democratising AI development tools, spearheading self-regulation strategies and effectively communicating AI’s unparalleled potential to the everyday consumer. This year is sure to be an outstanding year for AI.

Kriti Sharma is the Vice President of AI at Sage Group, www.sage.co.za. She is also the creator of Pegg, the world’s first AI smart assistant that manages everything from money to people, with users in 135 countries.

This article appeared in the May 2018 issue of HR Future magazine.

Wanted: ethical leaders

Sound ethics in the workplace requires ethical leadership.

Ethics is a key issue for both the private and public sector, instilling confidence in its stakeholders including, staff, customers, investors as well as the public. However, there are many instances of questionable ethics that have recently been highlighted, giving rise to the question of: how can companies protect their reputation and ensure that the organisation is steeped in unwavering integrity?

We are experiencing a wave of scrutiny where ‘watchdogs’ are uncovering acts of corruption and fraud. Although listed companies are heavily regulated and are also answerable to their shareholders, most often it is considered that, as long as an organisation is generating a satisfactory profit, the ways and means it uses to do so are left relatively ungoverned. It is often tempting for executives to leverage the likes of nepotism, connections and bribery for personal gain. Greed is one of the largest motivating factors behind unethical decision making.

However, the short-term gains to be had from such dealings lack long term sustainability, and negatively impacts the business on the whole. Not only is an organisation’s reputation on the line, for exposure would severely damage their credibility as a trustworthy institution, but their future sustainable growth is damaged, too, as hardworking employees bear the brunt of poor decisions.

Ethical behaviour in business benefits more than the shareholders and general populace – it’s critical to ensure that employees of a business continue to work in the interests of that business. Managers need to lead by example, and need to be seen as trustworthy in their leadership roles, for employees to flourish. Happy employees are productive employees, and few things can bring company morale lower than when employees perceive top management to be increasing their wealth through unethical means.

What constitutes ethical management?

Managers are typically chosen by the board to run the business in a sustainable, profitable – and ethical – manner. However, there is often a lack of clarity about what business ethics are that can lead to confusion over management’s responsibilities and where the limits of those responsibilities are.

Simply put, using business assets or the business itself for personal gain is unethical. Managers have an obligation to manage the business in the business’s and owners’ best interests, putting these interests above the managers’ own, and to disregard that obligation is to cheat the business and owners, which is unethical.

In any instance where the company, the owners and some or all of the employees do not directly reap the benefits of a manager’s decisions or deals, and the manager is the sole beneficiary of those decisions or deals, it is unethical.

Ethical leadership promotes innovation, creativity and passion as employees are not consumed by fear, tyranny and a skewed rewards system. An organisation where managers lead by example to encourage talent and skills, using them to benefit the business, its employees and the community as a whole, builds on a reputation of trust and ethics.

How can businesses ensure that management remains ethical?

The board has a judicial responsibility to take accountability for any identified unethical behaviour, and to take action accordingly. Managers found to be acting in their own interests should be held responsible and face the relevant disciplinary action. However, it is not always possible for the board to be aware of unethical behaviour, particularly when a business seems to be profitable and there are no immediately obvious red flags to highlight unethical activity.

Many companies have clearly defined values displayed on walls or written in their overviews, however, they are often not put into real practice. Often, managers are scored on their targets and not on their values – something that needs to change. Boards should rate their managers with ethics and values lived as an embodiment of the organisation’s culture, too.

Private enterprises should have strict policies in place regarding what constitutes unethical behaviour, as well as clearly defined consequences – and managers need to uphold these in practice. Business leaders are the embodiment of the organisation’s value system, and what they do sets the cultural practices for the entire organisation.

Their actions pave the way for the rest of the work force to follow suit, and should be without blemish or fault, to the best of their ability.

Maintaining ethical business policies can also be driven from the bottom up. Employees should be comfortable enough to be able to question possible unethical business decisions, and to bring these to the attention of the right people. However, it is often the case that employees simply stick to their own work and don’t speak out against managers.

Whether due to fear or simply being employees who are not interested in the greater good of the company, instances where employees ignore questionable dealings should be investigated. Usually, their silence can be traced back to a work culture that does not encourage an “open door policy”, which can stunt business growth altogether.

Ethics is a business culture

Ultimately, ethics, values and basic integrity in a business exist because of a consciously developed ethical mindset, irrespective of individual culture or background. They are practices which are entrenched within a business environment from the top down. Unethical behaviour can only exist in a business where it is accepted and/or promoted. In a country where the economic climate is still in flux, businesses and their boards need to ensure that ethics form the backbone of their business’s culture. In brief the golden rule applies in ethics “Do unto the others as you would like them to do unto you”.

Thapelo Petje is the Executive Director: Group Strategic Sales at Jasco Group, www.jasco.co.za.

This article appeared in the May 2018 issue of HR Future magazine.

Managing the temptations of power

Too much power with no checks and balances is not a good thing for any leader.

Why do people with apparent leadership capabilities sometimes fail to “make the grade”? Some of the reasons for the leadership failure may lie in the personal “hardwiring” of the leaders, as human nature is far more complex than what is visible on the surface.

Most people learn about leadership by following and observing other leaders. If they are also competent, loyal, and hard-working, they may grow into leadership positions of their own. Yet, every day, new studies are published on how disillusioned people are with their leaders. These studies highlight perceptions of leaders having low or no integrity, self-serving attitudes and poor listening skills, being resistant to feedback, and abusing power.

Power reveals

It is generally accepted that power does not only corrupt, but that it actually exposes. A position of power can serve as an excellent platform for those leaders who wish to do well and make a constructive difference to their business and society. However, a position of power can also allow negative characteristics such as a need for absolute control, personal image, greed, selfishness, laziness, manipulation, and jealousy to flourish uninhibited. The irony is that a person in a position of power, if not checked by strict governance, consequences and, hopefully, a good amount of personal insight and moral values, may allow their natural leadership characteristics (such as confidence, ambition, analytical thinking, strategic orientation and taking initiative) to “morph” into unacceptable versions of these characteristics. In this regard, confidence could become arrogance, and analytical reasoning could change to being hyper critical of others, both which can lead to becoming abusive and dismissive of people.

Absolute power, when there are not enough checks and balances, corrupts absolutely. Leaders in such powerful positions believe that they are untouchable and can get away with anything. They can become addicted to the freedom, excitement and money such power provides.

Being able to gamble with resources, taking chances, playing “hide and seek” with information and unduly influencing colleagues can blur all the boundaries of what is generally regarded as “right or wrong”. Like most addictions, it requires a conscious effort to manage the use of power, if not by the individual in power, then by those around them.

What do do?

John C. Maxwell has said that a leader who thinks he/she leads, but has no followers, is only taking a walk. Powerful positions can tempt one with the illusion that people do not matter. Nothing could be further from the truth, as poor relationships will boomerang and become the essence of the leader’s failure.

The way you work with people, listen to their feedback, respect their opinions, negotiate solutions, and illustrate emotional control are some of the key characteristics associated with successful leadership. These so-called “soft skills” are actually “core skills”. When asking a group of executives to list the characteristics of a good leader, these are the
characteristics they most often pick first.

These core skills can also play an important part in mitigating the temptations of power. This is particularly true if they are based on a very strong set of values that the leader lives by.

Those who are elected to powerful positions have generally earned the opportunity, given their skills, experience and leadership capabilities. Powerful positions, however, provide fertile ground for a leader to show characteristics that may not have been visible before.

Organisations do well when they not only screen their leadership candidates for their qualifications, experience and leadership traits, but specifically give attention to the risks associated with placing the person in a position of power and design ways to keep them accountable for their actions.

Jopie de Beer is the CEO of JvR Africa Group, www.jvrafrificagroup.co.za.

This article appeared in the May 2018 issue of HR Future magazine.

Agility the main business objective

How to pull off a quick switch to agility and leave your competitors lagging behind.

With the modernisation of the world, not only has the technological scope changed, but so has that of business processes in general. Evolutionary theory hypothesised that we humans may have been related to monkeys – its proof resting on the fact that as our needs transformed, so did our bodies. For instance, monkeys need tails to climb trees. As we evolved, our need to climb trees dwindled, leaving us to rely more on our heel bone to stand. Our tails thus diminished to a stub, leaving just a prodding out coccyx. This theory carries over to the workplace as continual technological improvement has shifted our world at such haste that competition has evolved to a global level, forcing us to change every means by which we function.

Evolution has thus brought us to the age of agility where “fast and flexible” is the key to survival. The strongest survivors are those that have implemented agility in all areas of business function – from performance management to remuneration. To build an agile organisation that will leave competitors lagging, follow these steps:

Step 1: Implement agility in management

The latest trend is to transition strict management styles into a more communicative and reciprocal style. For instance, where performance evaluation was once a stressful and dreaded task for employees, managers are encouraged to adopt a mentor role with a more positive air. Rather than criticising employees’ performance, managers are required to be actively involved, supporting them along the way and providing mentorship. This creates a freer environment which opens the doors to a learning environment. Organisational culture becomes of a reciprocal nature, where learning is encouraged and shared, initiating innovation among employees. Furthermore, it leads to greater productivity from the support and positive environment they experience.

A suggestion is to coach managers to become mentors. Training may include educating managers in the realm of establishing goals and priorities; merging personal goals with business goals, and learning and development goals, as well as quality feedback provision.

Step 2: Implement agility using teams

Business has taken the route of agility by means of teams. Teams have become more commonplace whereby they are formed to complete a project and disperse thereafter. This
means the way traditional feedback worked has been replaced by a more dispersed system. 360 degree feedback has become more prominent, replacing the upward hierarchical feedback structure. Peers in teams are required to provide feedback to one another for the sake of uplifting the whole team, as a member that lags, prohibits development for every member of the team. This allows for hastier feedback and the allowance of quick adaptation as soon as the information is received.

The use of technology further improves the process as an application may capture the information provided in team meetings for a simple summary of excessive amounts of information and determination of yard sticks to ensure that they have not strayed too far from the goal posts. If so, a quick correction can be made to get back on track as opposed to losing an abundance of time and pointless effort. Management can also be alerted of the teams’ progress by a simple notification, speeding up the supervision process and the apps may even allow for the recording of individual progress. Managers can simply download the data of each individual when it comes to performance review time. The quick access and ability to contribute to the data on the app also means that employees, supervisors and clients can provide feedback at anytime from anywhere – a frontrunner in agility.

Step 3: Recruit by the means of agility

The modern day has led to the increase of a work-life balance desire and therefore flexitime jobs. The younger working generations also have a different value system to those of the older working generation who sought to find a job at a company, work their way up the ladder and retire from that same company. Younger generations value diverse education and experience and will therefore work at several different companies in their lifetime as well as undergoing several career changes. This means that short-term job roles are sought after. Recruitment should thus be directed toward these individuals and their expectations.

Step 4: Remunerate according to agility

Remuneration is another crucial step in turning your company agile. This is because it plays such a major role in the motivation and productivity of workers. Different pay techniques need to be aligned with different business objectives. The main business objective now is to become agile. Thus, one must remunerate to support agility – to encourage innovation, speed and motivation. There is a simple method to this means. The general rule of thumb is that feedback is most effective when it is fresh. Thus, reward is most effective when it is fresh. Behaviour has the tendency to be reinforced when recognised immediately. This is why a bonus at the end of the year is less effective than an immediate reward received after the appropriate goal or behaviour has been achieved. Year-end bonuses are ineffective due to too much time passing by. Salary survey data, such as that on Paterson Points, can be accessed to determine compliance with marketrates for a guide on how much to actually reward.

Step 5: Use agile learning and developmental techniques

To be able to keep on one’s toes and respond at record speed, the necessary learning and development are prerequisite. Learning and development initiatives need to be directed at the project in question and the specific skills that need to be brought into the organisation. Artificial Intelligence has even advanced to the stage where animated simulations can be depicted, acting out the appropriate behaviour in support of this.

Conclusion

It is important to note that not only should agility be utilised in the core business function areas, but in every area of the company in general. The above mentioned steps can be used as a template for implementing agility but it won’t hurt to come up with your own ideas to further implement agility in your company. Just remember, each step towards agility is a step to success.

So what, then, are the implications for HR? Well, the switch to an agile organisation requires that HR continues to provide the very same services it always has … recruitment and selection, training, remuneration, performance management and so forth, but these have to all be adapted to the changes in the rest of the organisational system in order for the organisation to be able to transition to agility effectively and to succeed.

Agility may very well be your boost to becoming the leader of the pack.

Dr Mark Bussin is the Executive Chairperson at 21st Century Pay Solutions Group, www.21century.co.za, a Professor at University of Johannesburg, Professor Extraordinaire at North West University, Chairperson and member of various boards and remuneration committees, immediate past President and EXCO member of SARA, and a former Commissioner in the Office of the Presidency. Daniela Christos is a Candidate Human Resources Practitioner at 21st Century Pay Solutions Group.

This article appeared in the May 2018 issue of HR Future magazine.

Why your employee engagement initiatives won’t work in the new world of work

Leaders agree that employee engagement and retention are at the top of the priority list.

“Employee engagement is falling! With the rise of populism and rapid increase of disruptive technologies, organisations are being challenged in unprecedented ways. To survive the volatility of 2017 and beyond, organisations will need to make tough decisions on how to engage their employees and save their business.” Aon Hewitt

This is true except, Employee Engagement is not falling. We just need an understanding of what it is becoming in the new world of work.

Right now …

The job market is now filled with Millennials who fundamentally think about their roles as a stepping stone and a growth opportunity. But they also want to feel deeply connected and committed to their role and contribute to organisations that will invest in their development. This isn’t necessarily deviant from what other generations value. However, a greater emphasis is placed on opportunities to learn, grow and advance.

The traditional HR approach values tenure over impact. Therefore, the focus is on retention and engagement initiatives. We’ve put emphasis on understanding how to attract and keep a new generation of employees, but what if they don’t need to be kept? What if this new generation requires us to simply partner and enable them to make meaningful contributions to the organisation’s success, while pursuing their own development?

Change perspective

Speaking from personal experience, I can say that Millennials, unlike any other generation, are not too shy to make known their plans, which might not include their current employer/organisation. I was once employed, highly committed and engaged (aligned and connected to my company’s overall success), but life happened, my priorities changed and I was no longer aligned to the company’s values and moved on. Some of my colleagues, on the other hand, had already checked out (disengaged) years ago, but were struggling to find other jobs, so they stayed and continued to receive their long service awards. There was simply no intervention/assessment or incentives that would change or cause me to deviate from my “bigger plans”. However, in light of the signs of disengagement, my manager attributed it to himself and the organisation’s inability to create job satisfaction and naïvely invested in development plans and cool engagement initiatives that were never going to work for most employees in the long term. This is much like a teenager in love, who tries to show their crush that they have the same long term goals as they do.

In the future role of HR, Employee Engagement will undergo a metamorphosis that requires us to relook at our current thinking. Here are three things we need to re-think about Employee Engagement in the new world of work:

1. De-emphasising the weight placed on tenure and attrition rates.

When creating a job role, HR professionals need to become more intentional about how long they would like the candidate to occupy the role, as well as how they will motivate and develop them in that period of time. The shift from trying to achieve infinite employee engagement and longer tenure is moving towards the question: How do we enable meaningful work contributions, impact and personal development in the shortest period of time? There are some companies especially in the management consulting industry that encourage people to move on after a period of time. They therefore value innovation and development, without placing much weight on attrition rates and they don’t celebrate tenure in certain job roles. In this case, an intentionally high attrition rate becomes the new norm and we start to appreciate those that do move on at the right time.

2. Realise that the need to find alignment in personal and organisational values is fruitless.

In the past we have learned that the alignment of personal and organisational values leads to higher retention rates and employee engagement. However, with the exponential changes in technologies and business, we might need different people with different skills quicker than we can find value alignment (engagement) or develop them. The focus will then be on enabling an environment where employees can contribute more meaningful and impactful work in a shorter period of time.

3. Stop driving behavioural change without really addressing the factors that drive employee performance.

As behavioural specialists we are eager to drive behavioural change but often send people back to the very environments that produced the behaviours we don’t want.

It might be very easy to put our focus on developing what we think are life changing programmes and initiatives that are devoid of context and a deeper understanding of the root causes of performance deficiencies. We need to consider questions more typically related to engagement, such as inquiries about managerial attention, pay, ergonomics, wellness, communication, culture, transparency, meaning, one’s future with the company, recognition, teamwork, empowerment and accomplishment. I have experienced a manager that was more interested in developing my will to innovate, but put internet quotas and restricted all social media platforms, which were a critical part of idea sharing and information. He was driving a certain behaviour but his trust issues disabled the environment for then defaulted to how things are always done.

All I am saying …

There are many drivers of engagement, and understanding them in the context of the future will assist organisations to look at how they recruit, lead, develop and measure the success of their employees in the long term. In the new world of work, more value is placed on innovative and meaningful work overtime rather than tenure and infinite employee engagement. This forms a contemporary challenge for HR to become the driver of the new employee and employer relationship that is emerging.

Refiloe Manyaka is the Chief Executive Officer of Twice Blue, a strategic partner, assisting organisations to build capacity and reach objectives through their human capital.

This article appeared in the May 2018 issue of HR Future magazine.

HR is in the Cloud

Cloud-based HR solutions have now become a viable option to deliver high end HR services.

The rapid advancement and availability of Cloud-based HR solutions coupled with an ever increasing adoption of Cloud technology, has caused disruption for many HR teams, especially those teams that have not yet embarked on the journey of full digitisation of the HR function.

The current expectations of what the HR team should be delivering is for them to be able to align themselves with overall strategy of the organisation, help in the creation of a digital workforce and workplace, while making a positive contribution to the bottom line.

This certainly entails the HR team having to acquire new skills to help them deliver innovative solutions to meet the real-time needs of managers as well as servicing the needs of a multi-generational workforce, where the bulk of these employees have high expectations of experiencing digital HR.

However, many organisations still find themselves stuck with cumbersome and expensive legacy systems which are not only becoming increasingly expensive to maintain, but were designed when the HR team still operated in distinct siloes. As many vendors have moved their focus to development of their Cloud-based HR offerings, their legacy systems are now also starting to lag in new development around embedded HR practices, which over time have become antiquated, non-compliant, and ineffective in change management.

This, in turn, has resulted in many HR departments becoming more and more discouraged in having a strategic focus in what they do best – people management – as their primary tools are unable to deliver against their requirements.

This unhealthy situation is now forcing more and more Chief Human Resources Officers to rethink their HR systems strategy, with a specific focus on revisiting all the benefits a Cloud-based HR solution can offer in managing the workforce.

In general, HR teams are looking to Cloud-based HCM solutions to provide a comprehensive and unified approach to re-establish HR as the connective force between the business and their employees. When looking at the benefits that Cloud computing promises, it is easy to see that benefits run across numerous business and functional areas, but with HR being somewhat late starters, the positive impact Cloud technology can bring has not been fully investigated as in other areas of the business. The good news is that this scenario is rapidly changing, with a huge upswing of organisations now looking at implementing a Cloud-based HR solution.

In both South Africa and internationally, software providers are already offering HR and Payroll as Cloud-based solutions – utilising the Software as a Service (SaaS) deployment model, with this trend fast becoming the norm.

Adopting Cloud-based technology will enable the HR team to be in a position to start taking advantage of the benefits this technology brings, two of these being:

1. Reduced Capital Expenditure

Cloud technology utilises a “pay-as-you-go” model, thus eliminating the need for purchasing additional hardware and third party software, as these costs are normally included in the monthly subscription fees.

2. Agility

Modern day HR requires an agile solution to meet with the ever-changing demands made on the HR team. With change constantly happening, the HR team needs to be able to respond rapidly in an easy and adaptable manner when dealing with issues such as talent scarcity, digital engagement, multigenerational and real-time workforces. A Cloud-based solution is able to offer prompt access in a personalised, self-service, connected, and secure environment, reducing time spent dealing with multiple systems.

By its definition, Cloud-based solutions promote access through mobile media, thus allowing access to the system from anywhere, only limited through the availability of an Internet connection. This really assists organisations when promoting functions such as Self Service, collaboration and communication. An employee’s experience in the workplace should be no less engaging than the experience offered to external customers. Cloud-based HR solutions have been designed to enrich the lives of employees with rich consumer-grade experiences through integrated online applications, self-service portals, and collaboration tools such as blogs, chats, and workplace social networks, which enable real-time connections between managers and employees, while giving HR the tools to creatively encourage and motivate the workforce.

In conclusion, Cloud-based solutions are by no means a “Pie in the Sky” dream, but rather, readily available to empower HR with the means to focus on providing professional services to meet the needs of an ever changing workforce, without the traditional barriers of long lead times, inconsistent data, disconnected technology, or insufficient resources.

Rob Bothma is an HCM Business Solution Architect at Oracle Corporation SA, www.oracle.com, a Fellow of the Institute of People Management and past non-executive director and Vice President of the IPM, co-author of the 4th Edition of Contemporary Issues in HRM.

This article appeared in the May 2018 issue of HR Future magazine.

Dismissal on the grounds of derivative misconduct

Can you dismiss employees who fail to identify who committed misconduct?

Derivative misconduct has been established where an employer does not prove that the employees knew the identity of the perpetrators but an inference is to be drawn that such employees were present during the direct misconduct and, through their silence, have committed derivative misconduct on the basis of the breach of trust between them and their employer.

The Labour Court, in Dunlop Mixing and Technical Services (Pty) Ltd and Others v NUMSA and Others (2016) 27 SALLR 27 (LC), considered the following important issues:

(a) With reference to the Labour Appeal Court judgment in Chauke and Others v Lee Service Centre t/a Leeson Motors (1998) 19 ILJ 1441 (LAC), is it a requirement that the employee has actual knowledge of the direct misconduct or, alternatively, is it sufficient that the employee ‘may reasonably be supposed to have such knowledge’?
(b) With reference to the Chauke judgment supra, what is the content of derivative misconduct?
(c) What is the viewpoint of the Labour Court in casu as to whether or not derivative misconduct has been established in the scenario where an employer does not prove that the employees knew the identity of the perpetrators, but that the inference is to be drawn that such employees were present during the direct misconduct and, through their silence, have committed derivative misconduct, on the basis of the breach of trust between employer and employee?
(d) With reference to the Labour Appeal Court judgment in FAWU v ABI (1994) 15 ILJ 1057 (LAC), what is the effect of the failure of employees to give evidence, either in the workplace hearings or external fora, regarding their being present during the commission of direct misconduct and their failure to explain why they did not disclose the relevant information to their employer?
(e) What is the viewpoint of the Labour Appeal Court, formulated in Western Platinum Refinery Ltd v Hlebela and Others (2015) 36 ILJ 2280 (LAC), as to whether or not a breach of the duty of good faith is established in the circumstances where an employee remains silent where the employer’s business interests are being improperly undermined?
(f) With reference to AA Onderlinge Assuransie Assosiasie Bpk v De Beer 1982 (2) SA 603 (A), what approach is to be adopted to determine whether or not an inference is the correct one?

OVERVIEW

This is an application by the applicants to review and set aside portion of the award handed down by the third respondent pursuant to an arbitration conducted into a dispute declared by the first respondent on behalf of certain of its members (‘the respondent employees’) arising from their dismissal by the applicants.

The applicants are all wholly-owned subsidiaries of Dunlop Industrial Products (Pty) Ltd and all carry on business at the factory situated at Induna Mills Road, Howick.

PERTINENT FACTS OF THE CASE

During August 2012, the applicants’ employees (‘the striking employees’), all of whom were members of the first respondent, embarked on protected industrial action ‘in furtherance of a wage dispute’.

During the course of the industrial action, the striking employees became involved in serious acts of misconduct all of which are described in detail in the third respondent’s (‘Commissioner of the CCMA’) award and the applicants’ evidence. The strike took place at the respondents’ premises in Induna Mills Road and commenced on 22 August 2012.

In his award, the third respondent described evidence relating to the striking employees’ conduct as ‘painting a picture of a dangerously volatile situation’ involving attacks on vehicles and ‘tantamount to placing the company’s premises under siege.’

The conduct of the striking employees was the subject of an interdict granted by the Labour Court on 22 August 2012, inter alia, restricting the striking employees from being within 50m of the access road to the applicants’ premises and interdicting the unlawful conduct.

It is apparent from the record of the arbitration that, despite the interdict, the misconduct continued unabated until the dismissals.

On 26 September 2012, the applicants terminated the striking employees’ employment for derivative misconduct.

The third respondent found the derivative misconduct arose from the failure of the striking employees to provide particulars to the applicants of the identities of the perpetrators of the ‘acts of violence intimidation and harassment committed from 22 August 2012 to 26 September 2012’.

At the conclusion of the arbitration, the third respondent found that those employees listed in paragraphs (a), (b) and (c) (the respondent employees) of the award had been unfairly dismissed and ordered the first, second and third applicants to respectively reinstate the respondent employees listed under each paragraph from the date of the award.
The CCMA Commissioner identified three categories of employees, namely:

• those whom the applicants had established had been involved in direct acts of misconduct and who had been fairly dismissed;
• those whom the applicants had identified as being present during the direct misconduct, but who failed to provide the applicants with the identities of the perpetrators, and were guilty of derivative misconduct serious enough to justify their dismissal; and
• those who had not been identified as being present during the direct misconduct, who were not guilty of derivative misconduct and should not have been dismissed.
The applicants only sought to review that portion of the arbitration award relating to the third category of employees.

The applicants applied to review and set aside paragraphs (a), (b) and (c) of the third respondent’s award and for the award to be corrected by determining that the dismissal of those employees was fair (‘the 65 respondent employees’).

FINDINGS OF THE LABOUR COURT

Detail of the arbitrator’s finding:

1. Whether employees were present during the direct misconduct and therefore obliged to disclose

The review was confined to the third respondent’s finding that the distinguishing factor between those employees fairly dismissed for derivative misconduct and those found to have been unfairly dismissed for derivative misconduct was simply whether or not the applicants’ had discharged the onus of establishing that those employees listed in paragraphs (a), (b) and (c) of the award were present during the commission of the ‘acts of violence, intimidation and harassment’ (the ‘direct or principle misconduct’) and therefore obliged to provide the applicants with the ‘particulars of the identities of the perpetrators’.

2. Employees dismissed for failure to provide the identities of the perpetrators

The third respondent, in addition, held that the derivative misconduct for which the employees were dismissed:

‘was misconduct relating to an alleged failure on their part to provide the [applicants] with particulars of the identities of the perpetrators of acts of violence, intimidation and harassment committed from 22 August 2012 to 26 September 2012’

The essence of the applicants’ ground of review was directed at the third respondent’s conclusion that the applicants had not discharged the onus of establishing that respondent employees, who were not specifically identified as having been present during the ‘direct misconduct’, were accordingly not guilty of derivative misconduct.

In their evidence, the applicants’ witnesses amplified and explained the basis of their averment that the respondent employees, despite not being identified, were guilty of derivative misconduct and, therefore, fairly dismissed as it could be inferred that they were present during the acts of misconduct.

The applicants’ evidence went further than simply relying on the respondent employees’ failure to provide ‘particulars of the identities of the perpetrators’.

In their pleadings, and during the evidence, the applicants averred that the respondent employees were guilty of derivative misconduct in that they committed a breach of the trust relationship by failing to come forward and either:

• exonerating themselves by explaining they were not present during the ‘picketing’ and ‘direct or principle misconduct’ or could not identify the perpetrators; or
• identifying the perpetrators.

The applicants averred that it was

‘illogical and unreasonable [for the third respondent] to hold that such respondents were entitled to decide not to testify because there was no evidence against them’.
The applicants averred that, accordingly, the decision of the third respondent was not one which could be reasonably reached on the evidence and other material placed before him.
Nature and extent of derivative misconduct

Crucial to the enquiry is, firstly, a careful consideration of the nature and extent of the derivative misconduct.

I. Approach of the CCMA

It is not unreasonable to infer, not only from the applicants’ evidence but from the evidence of the respondents at the arbitration, that all the striking employees were engaged in and participated in the strike and, accordingly, in the absence of any explanation, were present.

CCMA: CEPPWAWU judgment (LAC): employer is required to prove commission of misconduct

The third respondent, in considering whether the applicants had established that the employees were guilty of derivative misconduct, started by referring to the matter of CEPPWAWU v NBCCI and Others [2011] 2 BLLR 137 (LAC), where the court held that:

‘…In cases of collective misconduct an employer can only act against those employees it can prove to have committed the misconduct complained of.’

CCMA: nature of derivative misconduct the employees were dismissed for – failure to provide identities of employees directly involved

It is important to repeat the third respondent’s finding regarding the nature of the derivative misconduct for which the employees were dismissed.

‘I accordingly find that [the employees] were dismissed for derivative misconduct relating to an alleged failure on their part to provide the [applicants] with particulars of the identities of the perpetrators of acts of violence, intimidation and harassment committed from 22 August 2012 to 26 September 2012.’
CCMA: onus – knowledge of the perpetrators and failure to disclose

The third respondent concluded that the applicant bore the onus of

‘proving on a balance of probabilities that the [employees] knew who the perpetrators of the principal misconduct were and that they failed to disclose such information to the [applicants]’.

LC’s response: derivative misconduct in casu – in addition: a breach of trust arising from failure to come forward to identify the perpetrators or exonerate themselves
This conclusion ignored the fact that the derivative misconduct the applicants relied upon related, in addition, to failing to identify the perpetrators and to a breach of trust arising from the failure to come forward, either to identify the perpetrators or exonerate themselves.

CCMA: relied on Chauke judgment (LAC)

When dealing with derivative misconduct, the third respondent relied on the matter of Chauke and Others v Lee Service Centre t/a Leeson Motors (1998) 19 ILJ 1441 (LAC) and, in particular, the following:

‘[31] …Two lines of justification for a fair dismissal may be postulated. The first is that the worker in the group which includes a perpetrator may be under a duty to assist management in bringing the guilty to book. Where a worker has or may reasonably be supposed to have information concerning the guilty, his failure to come forward with information may itself amount to misconduct. The relationship between employer and employee is in its essentials one of trust and confidence, and, even at common law, conduct clearly inconsistent with that essential warranted termination of service. Failure to assist an employer in bringing the guilty to book violates this duty and may itself justify dismissal…
[33] This approach involves a derived justification, stemming from an employee’s failure to offer reasonable assistance in the detection of those actually responsible for misconduct. Though the dismissal is designed to target the perpetrators of the original misconduct, the justification is wide enough to encompass those innocent of it, but who through their silence make themselves guilty of a derivative violation of trust and confidence.’

LC’s response: CCMA’s approach ignores the inference that the employees were present and guilty of derivative misconduct by remaining silent

The third respondent’s conclusion that the derivative misconduct was simply confined to proving ‘… that the [employees] knew who the perpetrators of the principal misconduct were and that they failed to disclose such information to the [applicants]’ ignores not only the applicants’ evidence regarding the breach of trust but the inference that the respondent employees were present and accordingly guilty of derivative misconduct by remaining silent.

In the award, the third respondent then proceeded to consider the onus on the applicant in proving the derivative misconduct.

CCMA: onus – RSA Geological Services (LC)

In this regard, the third respondent relied on the decision in RSA Geological Services v Grogan NO and Others (2008) 29 ILJ 406 (LC) and, in particular:
‘The employer must prove on a balance of probabilities that the employees knew or must have known about the principle misconduct and elected without justification not to disclose what they knew.’

LC’s response

In analysing the evidence, it is apparent that the third respondent, in determining whether the applicants had discharged the onus, lost sight in the final analysis of that aspect of the derivative misconduct for which the employees were found guilty and dismissed.

The third respondent failed to consider, firstly, whether a reasonable inference could be drawn that the respondent employees were present and, secondly, if such an inference could be drawn whether the failure of the employees to come forward and provide either an explanation exonerating themselves or providing the names of the perpetrators constituted derivative misconduct.

II. LC’s approach dealing with derivative misconduct: on a balance of probabilities employees knew who the perpetrators were and failed to disclose identities or exonerate themselves

The third respondent, having determined that the derivative misconduct was only a ‘failure on their part to provide the [applicants] with particulars of the identities of the perpetrators of acts of violence, intimidation and harassment committed from 22 August 2012 to 26 September 2012’, appears to have proceeded on the premise that the only misconduct the applicants were required to prove on a balance of probabilities was that the employees knew who the perpetrators of the principal misconduct were and that they failed to disclose such information to the applicants.
This raised two issues:

1. Distinction between proving that the employees knew who the perpetrators were and under duty to come forward
• Firstly, there is a clear distinction between proving on a balance of probabilities that the employees knew who the perpetrators were and failed to come forward and disclose this information as was found by the third respondent to be the onus resting on the applicants and considering whether, as was postulated in the Leeson Motors matter, the respondent employees were under a duty, consistent with the ‘essential … trust and confidence’ of an employment relationship to come forward with an explanation; and
2. Was there a duty on the employees to do more than remain silent?
• Secondly, the third respondent did not consider whether the evidence of the applicants’ witnesses was sufficient to require the respondent employees to do more than simply remain silent.

FAWU v ABI (LAC)

In Leeson Motors, the court, referring to the decision in FAWU v ABI (1994) 15 ILJ 1057 (LAC), said the following:

‘In FAWU v ABI, the court held that, on an application of the evidentiary principles of failure by any of the workers concerned give evidence either in the workplace hearings or in the Industrial Court justified the inference that all those present at the workplace on that day either participated in the assault and the support to it. There were other inferences compatible with the evidence. But the inference of involvement was most likely since ‘this is pre-eminently a case in which, at one or more of the appellants had innocent explanation, they would have tended it, and in my view that failure to do so must be weighed in the balance against them.’

In analysing the evidence and considering the various incidents, the third respondent appeared to concentrate only on the simple issue of whether the applicants were able to identify who was present or not.

CCMA failed to consider whether an inference could be drawn

This approach was inexorably linked to the third respondent’s failure to consider whether it could be inferred that the respondent employees were present and ‘through their silence make themselves guilty of a derivative violation of trust and confidence’.

The third respondent, despite referring to the inference to be drawn from the evidence, only relied on a consideration of whether the employees were identified by the witnesses and did not appear to consider whether the evidence adduced by the applicants was sufficient to create an inference that the respondent employees were all on strike and present.

The third respondent found that the parties were subject to a picketing rules agreement, that it was proved by the evidence of the first respondent’s Mr Sibisi that it had been conveyed to the respondent employees that the applicants required information regarding the perpetrators of the misconduct and that they should provide such information.

The third respondent also found that the defence raised and relied upon by the respondents at the time of the misconduct and the arbitration was to deny the misconduct. The witnesses who gave evidence on behalf of the respondents simply denied any misconduct, breach of the strike and picketing rules or the interdict.

It is trite that the arbitration was a hearing de novo. The respondent employees had been afforded an opportunity to come forward before they were dismissed. This opportunity was again available to them at the arbitration.

In the face of the extensive evidence relating to the presence of the striking employees and of the serious misconduct, the first respondent and the employees elected deliberately not to give evidence or an explanation (besides Duma and Grantham, whose evidence was simply to the effect that no misconduct had taken place, which evidence was rejected by the third respondent).

The right to remain silent is sacrosanct in criminal matters where accused persons are presumed innocent until found guilty. This was not a criminal investigation and the presumption of innocence does not apply.

The issue in question in this matter was whether the respondent employees were entitled, despite the nature of the employment relationship, to passively remain silent in the face of an opportunity to assist in the investigation. The courts have repeatedly stressed the nature and essence of the employment relationship which is based on trust and good faith.
The response by the respondent employees in this matter, particularly taking into account the evidence adduced by the applicants, to simply remain silent was a breach of that trust.

The question that arises is whether the evidence adduced by the applicants was sufficient to create the inference that the employees were present during the misconduct and that, in turn, placed a burden upon the employees to exonerate themselves or identify the perpetrators of the misconduct. It was never suggested by the employees that they were not present during the direct misconduct that took place during the strike.

In FAWU v ABI (1994) 15 ILJ 1057, the Labour Appeal Court held the following:

‘In argument before us it was accepted by the appellants’ counsel that if it was found that each of the appellants had associated themselves with the assault in one or other of the forms alleged by the respondent, the dismissal was justified.

It was submitted by the appellant’s counsel that the onus of establishing this was upon the respondent, and that the onus was to be discharged as a matter of probability. I have assumed for purposes of this appeal that that submission is correct.

There was no direct evidence linking any of the appellants to any particular act in relation to the assault, and the respondent’s case was based on inference alone. None of the appellants gave evidence, either in the court a quo or in the course of the disciplinary hearing. The attitude adopted by the appellants throughout was that it was for the respondent to establish their complicity, and that no case had been made out against any of them which called for a reply.

The extent to which a party’s failure to give evidence may properly give rise to an inference against him has received considerable attention from the courts. What emerges from the decided cases is that his failure to do so cannot by itself constitute proof of what is alleged against him. Nevertheless the evidence against him, though not conclusive, may be such that an explanation would be expected if one was available. In such cases his failure to provide an explanation may be placed in the balance against him.

In the field of industrial relations, it may be that policy considerations require more of an employee than that he merely remain passive in circumstances like the present, and that his failure to assist in an investigation of this sort may in itself justify disciplinary action.’

More recently the issue of derivative misconduct was considered by the Labour Appeal Court in the matter of Western Platinum Refinery Ltd v Hlebela and Others (2015) 36 ILJ 2280 (LAC), where Sutherland JA, after considering the judgment in Chauke and Others v Lee Service Centre t/a Leeson Motors, stated the following:

‘The effect of these dicta is to elucidate the principle that an employee bound implicitly by a duty of good faith towards the employer breaches that duty by remaining silent about knowledge possessed by the employee regarding the business interests of the employer being improperly undermined. And controversially, and on general principle, a breach of the duty of good faith can justify dismissal. Nondisclosure of knowledge relevant to misconduct committed by fellow employees is an instance of a breach of the duty of good faith. Importantly the critical point made by both FAWU and Leeson Motors is that a dismissal of an employee is derivatively justified in relation to the primary misconduct committed by unknown others, where an employee, innocent of actual perpetration of misconduct, consciously chooses not to disclose information known to that employee pertinent to the wrongdoing.’

The issue is whether, on the evidence, the inference could be drawn that the employees in this matter were present when the direct misconduct was committed and the Labour Court found this to be the case.

In the ABI judgment (supra), the court, when considering the inference to be drawn, said the following:

‘The inference which the respondent seeks to draw from the evidence is that all the appellants were present at the time the assault took place, and either actively participated in the assault or at least supported and encouraged the actual perpetrators. It is a cardinal rule of logic when reasoning by inference that the inference sought to be drawn must be consistent with all the proved facts. If it is not, the inference cannot be drawn (R v Blom 1939 AD 188 at 202-3). In my view all the evidence in the present case is consistent with that inference…

The fact that the evidence is consistent with the inference sought to be drawn does not of course mean that it is necessarily the correct inference. A court must select that inference which is the more plausible or natural one from those that present themselves (AA Onderlinge Assuransie Assosiasie Bpk v De Beer 1982 (2) SA 603 (A)). In the present case however no alternative inferences have been advanced which have a foundation in the evidence. It was suggested in argument that one or more of the appellants may have been absent, or may have been unwittingly caught up in the events. This, however, is no more than speculation, as there is no evidence to suggest that this is what occurred. In my view this is pre-eminently a case in which, had one or more of the appellants had an innocent explanation, they would have tendered it, and in my view their failure to do so must be weighed in the balance against them.’

Labour Court’s conclusion

The Labour Court was satisfied that the only reasonable and plausible inference that could be drawn from the evidence was that the respondent employees were present during the strike and, accordingly, during the misconduct. If they weren’t present or had no information regarding the perpetrators they would have said so. They, despite the opportunities afforded them, had not.

Order of the Labour Court

In the circumstances and for the reasons set out above, the Labour Court made the following order:

• paragraphs (a), (b) and (c) of the third respondents award were reviewed and corrected by the deletion of paragraphs (a), (b) and (c) and substituted with an order that the dismissals of those persons whose names appeared in paragraphs (a), (b) and (c) were substantively and procedurally fair;
• there was no order as to costs.

Dr Brian van Zyl is a Director of labour law firm Van Zyl Rudd and Associates, www.vanzylrudd.co.za.

This article appeared in the May 2018 issue of HR Future magazine.

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