Blaming the Boss.

Labour unrest is as much about relationships as it is about pay and working conditions.

When someone behaves badly one of the first questions asked is whether he or she comes from a dysfunctional family, or was abused or beaten as a child. It sparks the seemingly endless debate about nature or nurture and psychologists and criminal apologists are quick to portion a large part of the blame on parenting.

It’s an exasperating debate for living ancestors like me. You have this constant and vague threat that you are somehow accountable if your child or grandchild does something unspeakable or becomes a serial killer.

There is a link, albeit a rather obscure one, between this and the blame game around the worker conflict we have been experiencing. Blaming bosses is of course, the obvious one, and it’s a mood that will continue for a long time after the Lonmin miner’s return to work. The bosses, on the other hand will claim innocence under the veil of “market conditions”, “affordability”, “union rivalry” and many more.

What is ignored and totally understated is that employee discontent is as much about a relationship between boss and worker, as it is about pay disputes and working conditions. That relationship is one of power and while this may sound patronising and paternalistic, there is a valid link to parenting in understanding that relationship and the norms that validate it. Parenting is, after all, the first experience of power we go through.

One submits voluntarily to power on a simple condition: that one believes the person wielding it has one’s interest at heart. There are very few instances other than the workplace where one experiences power more frequently and to a greater extent. Like the parent to the offspring, the elements that legitimise that relationship are the care and development of the subordinate. Legitimacy depends on much more than an employment contract.

To unpack these criteria you simply have to ask yourself what you expect of a boss as opposed to what you expect of “the company”. Your expectations will most likely cover “having a sympathetic ear”; “understanding my circumstances”, “demonstrating care”; and “honesty”, “fairness”, “opportunities to develop”, etc. They fall into two broad categories of “care and growth”. Power is not a “soft” quality. It is never earned by being a “pal” or sanctioning mediocrity.

Another important finding is that rarely will “pay me more” feature in that relationship. It is as if it is vaguely accepted that pay is not within its ambit, and is subject to outside forces. It is only when those forces and their legitimacy are not fully transparent and understood that it becomes a trust and worker contentment issue.

These perspectives are not only my own. They were developed from an extensive research project by my brother Etsko Schuitema in the mining industry in the tumultuous 1980’s and further developed by our own consultancy. They have been known for a very long time and one of the most important perspectives discovered at the time was that trust and the legitimacy of power in the workplace were mostly forged by the relationship between the subordinate and the immediate boss.

Yet, it is this relationship that is often neglected, disrupted, interfered with and neutered. It has been a costly neglect and an important missing element in containing employee frustrations and labour unrest. Regaining legitimate power in the workplace is a huge task. Despite all the useful aids of modern organisational theory, adversarial lines are still firmly entrenched in out-dated ideological paradigms, overwhelming pay/profit obsession and vested interest power structures.

A promising opportunity lies in information sharing and employee reporting – a task that should be the remit of first line leadership. We are witnessing how volatile false expectations can be. But it is also fragile as a power base as the National Union of Mineworkers has discovered. The only legitimate information source is the company itself, but then it has to be transparent, credible, regular, understandable and developmental.

Part of the problem is a lack of leadership qualities in supervisors themselves – qualities that very seldom constitute an important criterion for appointments. The absence of empowering leadership and then holding them specifically accountable for the care and growth of subordinates is also an important oversight. Empowerment and accountability can to some extent compensate for a lack of inherent leadership talent.

More important factors that frustrate sound leadership in the workplace are external.

A power vacuum such as that experienced at Lonmin’s Marikana mine has been created by the false assumption that the care of workers is the job of the Union and the shop steward, and the supervisor’s job is to extract production and effort. You simply cannot divide power in this way. There is also no need to.

Equally dangerous is to hand the care and growth of employees over to another surrogate in the form of a “human resource department”. This again divides power in the same way as assigning them over to a shop-steward does. Contract labour likewise introduces a surrogate in the form of the contract principal and divides the power earning care and growth functions from the control or command functions. Contract labour itself tends to inhibit the longer term development of employees.

Many of my routine detractors will fume at the idea that the care and development of employees are remotely the responsibilities of business. They assume that company responsibility towards employees ends with meeting labour law prescriptions, creating acceptable working conditions and a pay cheque. This is a commodity expression of labour and one feature of the way business has been dehumanised. The understanding and structure of companies on the principle that capital is some kind of Pied Piper whose flute attracts labour and customers as it merrily prances along the path of self-enrichment simply has no place for such human frills.

Yet modern pragmatic business understands that it makes sense because conflict threatens profits, increases risk and increases the cost of capital. It’s an expedient view lacking authenticity and, as all counterfeit things are, will be exposed in the end: especially when the raw self-interest tune of the Piper rings hollow with his followers.

It is of course, a tune far better played by a Piper that is the customer. That’s a melody that creates harmony in a common purpose.

The power of poverty thinking.

Entrenched poverty is as much a state of mind as it is of wallet.

“It was the best of times; it was the worst of times...”

That has always been my most favoured line in the English language.

It came to mind again in the stark contrast between the return of the inspirational South African para-olympic team and talk about a poverty driven revolution on our doorstep. At what point, one must ask, does deprivation become a self-imposed helpless state? Even some economists familiar with empirical and scientific definitions concede that poverty is relative. This means it is largely self-defined – as much a state of mind as of circumstance.

Revolutions are mostly caused by social ferment based on a gap between individual expectations and real experiences. When the gap between expectations and reality grows too wide you have the perfect setting for violent discord and revolution.

Most analysts tend to focus on reality because it seems to be more tangible and subject to the rigours of empirical and scientific research. Expectations on the other hand are self-defined, intangible, soft, incalculable, hypothetical and arguable. Yet they have to be managed and treated with great caution, not only in the extent to which we encourage them in others, but more importantly the extent to which we harbour them ourselves at a risk to our own serenity and contentment.

Poverty as World Bank Definitions show, defies a one-size-fits all metric. Many of the other measurements that are used to define aspects of poverty, a state of deprivation or income disparities range from being non-definitive to ludicrous. The Lonmin rock-drillers have demanded a “living wage” of R12 500 basic per month. Economist Mike Schussler statistically places their current basic pay of R4 500 in the top 25% of formal wage earners. The Gini co-efficient is suspect as a reliable indicator of income disparities. The C.P.I inflation measurement is equal nonsense at an individual household level. And so there are many others that may look fine as an overall tapestry but completely lose meaning as an individual thread.

The only definition, albeit not a formula, of poverty that makes sense is that it is a state where there is an absence of adequate food, water and shelter. Even this definition can be very subjective and circumstantial. Squatter does not need to equal squalor.

Expectations are the more important and real force. And here one cannot ignore the toxic additives of promises, entitlement, comparisons, resentment, jealousy and envy.

So it was not without some frustration and pique that I listened to the dire warnings of a pending revolution by amongst many others, the very people who have helped create the expectations in the first place, and mixing in the toxic additives through their own ostentatious lifestyles. And then, to boot, by the very people who have been responsible for the biggest let down in expectations – that of central and local government service delivery.

We simply don’t appreciate enough, the nuances that make up expectations and the frustrations and self-destructive behaviour they can cause. The real problem is that they are not always rational and defendable, but are real for the person harbouring them. As Bertrand Russell would have it: There is no reality but our perception of it. Or Hamlet’s assessment that “there is nothing either good or bad, but thinking makes it so.”

With age comes a long list of broken promises and unfulfilled expectations that tempers a belief that life owes you; that you come into this world with a list of debtors. The reality is that life owes you nothing but life itself. And even this is a lease of unspecified duration rather than permanent freehold title. It is up to you and you alone to make a living in whatever circumstance.

Of course sound social values require healthy parenting and for all of us to look out for each other. Indeed many countries have a high level of social justice without detracting from individual and national aspirations and effort. But able adult self-accountability is blunted when this becomes entrenched as an inalienable right and valid expectation.

In response to the Woolworths bit of social theatre, the esteemed newspaper editor, Ferial Haffajee again draws attention to a seemingly infinite debt – that of affirmative action, B.E.E., and B.B.B.E.E. While we have to achieve racial equity and eliminate racial bias in the workplace, her concept of “trans-generational privilege” applicable to a whole group is a new concept to me in my understanding of how life works. But more precarious is the implied existence of “trans-generational unprivileged, underprivileged, disadvantaged or victims”, who now have special rights because of race and can legitimately have expectations for special treatment above others. By default, the solution to workplace inequity will be swapping incumbents rather than creating new jobs.

Reading her litany of personal deprivation it struck me that post war teens and young adults, including most of all colours in South Africa, experienced much worse. Yet that generation of “baby boomers” was able to convert an age of extreme deprivation into an age of innovation, abundance and unprecedented prosperity. Within less than one generation the vanquished of the 2^nd World War, Germany and Japan, surpassed the victors in economic health and strength. In less than 20 years, Korea and many other Asian countries changed from largely pastoral societies to highly industrialised. Something similar is happening in China today.

What distinguished them was putting education on steroids and having a very low level of expectations. They expected little but aspired to much. Juxtapose that against the decline of some European countries today and you will find the opposite – a decline in aspirations and a rise in expectations that have lost touch with reality

Reflecting on those times the thing that strikes me most is that we never considered ourselves “poor”. Perhaps that was because there were many that were poorer than we were. It could also be that we had rather limited exposure to real wealth because at the time it was seldom flaunted, seldom ostentatious, and seldom elitist. It simply was not all that important to us. Our earlier role models of teachers, doctors, police, priests, company managers, sports-heroes, government officials and even politicians all appeared to be of modest means. That, at least, was my experience of it.

Like my children, grandchildren and I suspect some readers, Ms Haffajee will no doubt roll her eyes to the ceiling at my “when-I-was-young” nostalgic dip into a prudent and modest past. This is not a competition for most deprived and it certainly is not to deny my liability, culpability and status as a “social debtor”. It is an expression of concern about cementing for generations to come indebtedness on the one hand and an expectation on the other – one group that is always made to feel that it owes, and another that believes that it is owed in perpetuity.

It is one symptom, and a very important one, of the tragic swing of the debate in South Africa away from responsibilities to rights, and to a near exclusive focus on distribution and re-distribution away from wealth creation itself: sharing the pie differently before it is baked. It is the same self-destructive affliction in many companies where there is a near exclusive focus on profit or pay: the curse of morphed capitalism. In turn this behaviour has exacerbated the entitlement mood.

Clearly a country will struggle to grow and create prosperity if one group sees its main opportunity as simply being able to redeem a debt from another. A lingering sense of indebtedness is divisive and will extend on-going resentment on both sides while adding to racial tension.

South Africa has an explosive gap between expectations and reality. It is a national psyche or state of mind that locks many into dependence, poverty thinking and helpless inertia. It is a climate where regular empty promises and revolutionary rhetoric could become a suicidal self-fulfilling prophecy.

We certainly need inspirational leadership. But perhaps we need a Cesar Millan type “country-whisperer” or national psychotherapist more.

A leap of faith for industrial peace.

Getting past traditional paradigms and belligerent confrontation in labour relations has become critical.

Unions don’t play nicely. The history of the labour movement over the last century or more is tainted with blood, violence, intimidation and coercion. Our own experience in the 80’s when new unions were being formed was no different and we did not need a Marikana tragedy to remind us of how ugly the conflict between labour and capital can become when it is framed in highly charged traditional, emotive and largely ideological paradigms.

Whatever the past justifications were for this violent and highly disruptive confrontation, and there were plenty, we simply have to get past it now. Our third lowest World Competitiveness report ranking in industrial relations is a lot more than just another shameful statistic. It is the real elephant in the room to which the critical problems of unemployment, poverty and inequality can be validly and more directly linked, perhaps even sourced. An economic “CODESA” has much merit, but it will find a massive stumbling block in the way our labour relations have developed over the last few decades. Dismantling this cumbersome and antagonistic system will require a huge leap of faith equal to CODESA. It needs to go back to the basics and question all the holy cows such as labour rights, collective bargaining, profit maximisation and shareholder supremacy.

Many of the issues involved are beyond the scope of this article, so I’ll touch on only a few and with some recognition of their quixotic nature. One that has been mooted is to encourage the growth of competitive Unions – of having a number of labour benefit tuck-shops in the workplace as it were. In the present climate it will simply see a repeat of the 1980’s, encourage mob rule and intensify the underlying tensions that led to Marikana. In theory it does have merit such as exposing flaws in collective bargaining, fragmenting centralised union power and allowing greater flexibility in differentiated pay for various employee tiers. This has already happened to some degree. But if unions and marginalised groups start vying for the same broad based support it will simply fuel already explosive expectations and exacerbate an ideologically charged environment.

Free market utopian theory has always been tempered by social values and needs. But it is useful occasionally to challenge the extent to which these may have become murky, counter-productive, and to expose some flaws in current assumptions. One is that the true value of labour is determined by the supply and demand for skills and qualifications itself, or worse still, by the bargaining power of a collective. This is not strictly true. The value of any product, service or effort is determined by the end user or buyer in free and fair legitimate transaction. In a company’s case, the true value of the combined efforts of both labour and capital can only be established when that product or service has been sold to an outside customer.

What this says is that irrespective of how much can be extorted from bosses or remuneration committees, or what certificates of competence may be presented to support a certain pay level, the real sustainable value is determined by a completely neutral outside force that finds those efforts useful and meaningful.

The firmer the link between real and established value-added or wealth creation, and rewards in the form of remuneration and profit, the more valid and sustainable they become. In a healthy competitive environment there are clear limits to which one can reverse this process – in other words predetermine and insist on certain rewards and then extort these demands from an outside customer. We have clearly passed those limits in South Africa and the price we are now paying is growing unemployment, a decline in competitiveness both in exports and against imports and ultimately higher inflation.

There really is only one way to restore this link – and it implies the outrageous suggestion of breaking away from rigid centralised, collective and horizontal wage bargaining across sectors, industries, and occupations, to site and company specific bargaining. This may mean that people in a small clothing factory in Natal could be paid less than those say in a large manufacturer in Gauteng. Or that a seamstress at company X could be paid less than a seamstress in company Y.

There have been some mild and very tentative steps along these lines, but its full expression will always be severely hampered until another equally, if not more outrageous concept is introduced – flexible pay in the form of fortune sharing. A transparent, understood and well communicated flexible pay system – initially only a small proportion of pay need be put at risk – will enhance perceptions of fairness while promoting understanding and company involvement. It will encourage greater responsiveness to customer needs and enhance workplace meaning in a spirit of “people serving people”, which is the essence of all transactions after all.

Where collective bargaining/consulting will be useful is in creating with market guidance benchmarks for optimum wealth distribution between labour, capital and state – the three contributors to the creation of wealth. The labour share will still be subject to the disciplines of differentiated pay according to competencies and experience, but these can be determined not in absolute amounts but rather in acceptable Gini type multiples between lowest skilled and highest.

Of course it could be argued with some merit that smaller and less profitable companies may find it difficult to attract top skills. But that is also true for the current model. In addition nothing should stop a company from transparently and through negotiation, adjusting the differentials as needed, while many skilled people could be attracted to smaller companies that give them greater involvement and a chance to improve their rewards through greater efforts, which is implied in fortune sharing.

Shareholder concessions are also implicit in greater flexibility. There has to be a move away from unbridled maximisation of profit to meeting defined legitimate profit expectations based on and regularly adjusted to the specific capital structure of that company. There are ways these can be benchmarked, one being through EVA. Once the shareholder’s cut of value added or wealth creation has been agreed upon, then shareholder fortunes also become linked to wealth creation – a move which most likely will see greater benefits and certainly greater sustainability.

What we have lost in labour relations is the understanding that trade Unions cannot provide for the care and growth of employees. Only management can. They too are ultimately constrained by customer tolerance, or enabled by customer approval.

Meaning and means.

Distinguishing between the two benefits personal growth and trust in companies.

Ag shame, poor Charlie.

In an anonymous comment to one of my recent articles, he writes: “When one works for an organisation one wants to be paid and to hell with this service to others. The incentive is if one lives out whatever value the organisation wants to be known for you get paid (in cash),”. I emphasise its anonymity because it gives me some licence to be somewhat impolite and flippant in my response.

But the underlying issue is a serious one and has plagued economic man and organisational theorists for centuries. It’s a condition called “being a wage slave”, and while that term referred exclusively in the past to exploited migrant workers and the destitute, it can apply just as validly to anyone who is tied to the workplace only for pay. When applied to top executives the terms “golden handcuffs” or “retention bonuses” aptly describe the same condition. The latter may have a few more choices on parole than the former but the essence is the same. Only the chains and prison bars differ – one being hunger and desperation, the other mortgages and lifestyles.

Then, on the other end of the scale, I saw this Facebook posting by Western Cape community leader Nolan Adams: “I don't believe that our society really wants hand-outs, grants, easy-come-easy-go stuff, etc.! No, our society wants and needs opportunities. They want to take charge of their own lives and earn their own salaries and to be proud of whatever they manage to bring home - how big or small the stipend/salary may be!”

The beauty of the free market system is that it can accommodate both Charlie and Nolan – one focused on money and the other on meaning. In today’s world and the way most business organisations have been structured, I suspect that Charlie is by far the majority and Nolan the minority – although the latter includes quite a number of business icons who expressed the same intent and still made their fortunes as a result. We cannot prove Charlie nor Nolan right. I clearly favour Nolan and you may favour Charlie – it all depends on which wolf you want to feed. The real question is what makes the best driver of the human spirit and our economic collectiveness.

At the extreme end, one can find absolute, unconditional and exclusive dedication to a task that at a particular point in time disregards all other considerations, rewards or self-interest. I went through such an experience and described it in an article titled “A Decent Job”. Then there are those many recorded acts of heroism that involved extreme self-sacrifice including the ultimate sacrifice.

Somewhere between Charlie, Nolan and true heroes, there is an elusive truth that speaks to the very essence of being human. We try to package it neatly in a subject called “motivational theory” which in itself has achieved little in defining a one-size-fits-all driver for human endeavour. As organisational guru Peter Drucker once quipped: “We know nothing about motivation. All we can do is write books about it.”

Perhaps this is simply because in practice there is no such thing as a single definable motivational tool. People are motivated differently by different things, which means you would need some 7 billion different motivational criteria for all the people on earth. In each, these norms can change regularly depending on circumstances and changing priorities. On top of that we often confuse things like job satisfaction, self-worth, motivation, incentives and involvement. There may be links between them, but they certainly are not synonymous.

Of course, Charlie was being a tad mischievous. No-one works for pay only and the stipend at the end of the month is seldom, if ever the only thing that occupies us when we go to work or spend eight hours of the best part of the day in the workplace. Indeed many, if not most people get somewhat piqued when they see their pay slips, believing they deserve more; that the boss gets too much; that Pravin is being a bit greedy or that the government is squandering the tax contribution.

There are many other things, including the daily task routine, camaraderie at work, and the value of employment in creating a sense of self-worth. Obviously these cannot replace pay – that would simply be grossly transactionally incorrect and ignore universal principles that balance supply and demand, give and receive, generosity and gratitude and contribution and reward.

Charlie may have seen this light if he was the fall guy at one of my workshops where I ask those that profess to work exclusively for pay how they would respond if I offered them a job at fivefold more pay but where the job description was to do absolutely nothing all day, eight hours a day and five days a week. Most refused the hypothetical offer and only a handful said they would do it but for a brief period only.

The crucial point that people like Charlie miss and have blunted their consciousness of it, is the very significant distinction between meaning and means. Salaries and wages can never be anything else but means. If the work itself has no meaning, then nearly one third of one’s existence loses real meaning, indeed becomes demeaning.

We all have multiple self-identities, and one of the most important is our job or profession. It is a lot more than “earning a living”. One of the most frequent questions we ask of each other shortly after making an acquaintance is: “what do you do?” I have yet to hear the response: “I earn a living.” Not even Charlie would say that. And think of the difference in our inner response when the answer is either “I am a doctor”, or “I am an accountant.” The first gives one an immediate sense of greater value, of greater contribution and of making a greater difference to society. But if the accountant were to add: “I am an accountant for a hospital”, we would again get a sense of greater contribution.

Which, to a large extent is business’s own fault. Having beaten the drum of “here to make a profit” for so long, we have come to accept this demeaning description, forgetting that the real value of a business is not what it yields for shareholders, but the difference that it makes to our lives. That difference is contained in the axiom that our true value lies in our capacity to make a contribution to others. Linking work to this principle of service to others confirms that value.

We all value everything and everybody in our lives by the way they behave and not by what they possess. This is the underpinning motive behind everything we do because that is the way others value us. As doyen psychologist Viktor Frankl has told us, the search for meaning is at the root of all human endeavour. We can find it in many more things by simply questioning what difference they make to our lives – indeed it is more often the result of reflection, awareness, discovery and changing perceptions than of changing a circumstance.

To lose it in the workplace which is grounded in that principle is sad beyond description.

That is the tragedy of Charlie.he stipend/salary may be!

he stipend/salary may be!

Marikana as a microcosm.

How the tragedy reflects many serious socio-economic issues of our time.

It could have become one of the longest reports ever written. If the Commission of Enquiry into the Marikana massacre goes beyond its terms of reference and covers all of the nuances and underlying factors that went into the making of a tragedy on that outcrop at Lonmin’s platinum mine near Rustenburg, it will become a voluminous litany of socio-economic dysfunction.

One already has a taste of this not only from the widespread headline coverage that has saturated local and international media, but from the very disparate sources of comment and analysis – religious, political, legal, social and business. They all bear valid testimony to the very wide ranging issues involved. Well, not all. Emotion can sometimes produce some strange perspectives – like questioning platinum’s “noble metal” status in exploiting labour to “adorn elitist ring fingers” and for catalytic converters in “luxury yupmobiles”.

It is a hopeless and futile task to try and cover all of the key issues in a column like this and to avoid repetition. So it is not without some hesitancy that I become one of those bees whose swarm has been disturbed by the gunfire and who buzz in an already overflowing space of comment. But somehow I can’t help seeing in those excessively repeated video scenes, a severe indictment of a global economic state that is clearly in crisis and of voices that were not heard by the powers that were supposed to have served them.

In one of his first interviews after his ground-breaking Labour reforms, Nic Wiehahn told me: “If you have one worker who can bring your operations to a standstill, you had better talk to him.” He saw collective bargaining as an essential counter to industrial chaos and uncontrolled mobs of frustrated workers sabotaging their workplaces. He also saw union rights for all as at least one form of enfranchising the politically disenfranchised at the time and something of a safety valve for frustrated political expression. That automatically created a disproportionate bond between worker and political aspirations, the results of which are still evident today.

Power has an intrinsic anomaly – the more you centralise it, the more powerful and corruptible it becomes and the more it loses touch with its support base. What you are often left with is an elitist and aloof leadership and fragmented support consisting of many “minorities of one or a few.” In labour, that not only encourages competitive unions, which in itself is not a bad thing, but more frighteningly can lead to marginalised groups that become unruly mobs. While Marikana has been blamed mostly on union rivalry, the rivalry itself had to find some root in a disgruntled group. If this spreads to other workplaces, we could be in for a further and severe deterioration of industrial relations.

There clearly is also a gulf between leaders and supporters in centralised political power in South Africa. The three tier government structure is overwhelmingly dominated by the dictates of national parties. Recruiting support for their power bases both in government and labour produces a highly dangerous toxic mix of unrealistic expectations that fuel explosive situations of which there have been many since 1994.

Although formed and manifest differently, greater centralisation of economic power has created a similar alienation. Increasingly large corporate institutions, holding companies and big business have contributed to a growing public perception of a dehumanised business environment driven virtually exclusively for profit and viewing all involved, including customers, as resources to be exploited in squeezing out each drop to enhance shareholder value. It certainly has exacerbated income disparities and in the public eye at least, given these institutions undue influence over government and impact on their daily lives.

Mining has brought significant economic benefits to this country. Indeed overall, labour and government as a group have been bigger monetary beneficiaries than shareholders as a group. But no-where is business more dehumanised than in mining. In most other businesses at least, there is some sense of meaning beyond profit and pay – that of service to customers. Mining is not market driven, but market led or pulled. There is no sense of customers and service. No-one who has not worked underground for more than a brief spell, will fully understand the psyche of an underground worker. It is like going into battle, sometimes for up to 10-hours on rotating shifts, often crawling through narrow spaces to reach a dangerous claustrophobic area at the face, where the rock drillers have to struggle with heavy vibrating machines for hours on end.

It’s an environment that breeds tough, macho men for whom working close to death or injury daily intensifies frustrations and fortifies them for violent confrontations elsewhere and who, apart from a desperately needed pay cheque, hold it together underground through a palpable sense of soldierly camaraderie. In these conditions, you simply cannot explain huge pay disparities and a stipend (even at more than R8000 pm gross) that in most cases has to feed a much extended family – a burden that keeps on growing with rising unemployment. It’s a highly emotional context that will always overwhelm any rational academic argument based on supply and demand for skills and qualifications. Living conditions are often not much better, despite efforts by the industry generally to improve them. All of this has been born out of an unfortunate colonial history of real wage slavery, migrant labour, compounds, hostels, and frequent deaths and injuries underground. Remnants of those conditions still remain.

What’s highly incongruous is why any group of strikers find it necessary or are allowed to be armed to the teeth with lethal weapons. There was a time when faction fighting was a regular occurrence, and weapons were fashioned from any suitable object that could be found – spears shaped from heavy tempered-steel rock drills, spikes, choppers, axes, pangas, knobkerries, shanks and knives.

Many of these were brandished on that now infamous koppie at Marikana. If I had a machine gun and they came storming at me from the hill, I doubt whether I could have resisted the urge to open fire.

But then I am not a policeman trained – or at least who should be trained – to handle these things.

Misery has its merits.

Will societies emerge from economic hardships happier and stronger?

“Only when the tide goes out do you discover who's been swimming naked” is a memorable and still classic quote from billionaire investor, Warren Buffett. Its wisdom is rooted in a long held insight that like the seasons of nature, economic cycles are a healthy and necessary thing.

Not unexpectedly, the cyclical nature of economics is again receiving some attention in the current global slump. Early 20^th century Russian Economist, Nikolai Kondratieff defined “super-cycles” as being 50 to 60 year waves broadly based on periods of innovation and implementation. Cycles have received much attention in authoritative research and economic theory, with one of the best known being Joseph Schumpeter who dissected Kondratieff’s wave into four main cycles.

Downturns not only reveal who has been swimming naked, or which businesses are flaky and unsound, but those that do survive are affirmed as being viable and most likely sustainable. Even those who did not make it will have learned valuable lessons to apply in a next attempt or venture. This applies as much to individuals, societies and countries as it does to business. Will Greece or Spain ultimately emerge stronger from their current woes? Will Europe likewise be stronger and more cohesive? Or even if the Eurozone falls apart, will it be to the ultimate benefit of those departing and those remaining?

One cannot help wondering whether the current global economic slowdown, with its extended stop-start nature, and business confidence here in South Africa falling to a 12 year low are not reflections of a much deeper adjustment process that will change many conventional insights about economics itself.

It’s been a long while since I last adorned my ill-fitting guru gown and then despatched it in pieces to the bin reserved for car cleaning rags. But one does not have to be a futurist or highly paid scenario planner to sense intuitively that there are major economic shifts happening beneath our feet. It may eventually manifest itself in a completely new economic model which, as the Wall Street Journal reported some time back, has been the subject of some serious study involving a number of different disciplines. Even some countries, like Malaysia’s growth focussed approach and Bhutan’s Life Satisfaction focus, are reflecting a desire to experiment with different ideas that could contribute to a melting pot delivering a model that breaks from traditional ideological paradigms.

But the toying with ambitious new models is not the only reflection of the shift. It is more clearly discernible in tangible events that undoubtedly will leave the world a different place in the next few decades, albeit mostly structural. An obvious one is the rapid growth in government involvement in economies which up to know have been defined primarily as being Capitalist or Free Market. In many, including the United States, government’s share of Gross Domestic product has reached a post war high.

Mixed economies are with us, whether ideologically correct or not. And there’s little likelihood that government involvement will be rolled back when the global economy returns to growth. In future, assessing the health of economies will have to be based to a much larger extent on the behaviour of the government. Measurements such as GDP will increasingly lose their efficacy as assessors realise the importance of other criteria such government debt, productivity, accountability and effectiveness.

Another slow but inexorable development has been the growth of international government. The impact of international rules covering key areas such as labour, trade, environmental protection and financial controls are being felt on an ever increasing scale. Environmental considerations themselves will inevitably in time reflect important structural shifts in a number of areas, particularly in industry and manufacturing.

Companies are feeling the winds of change too. They may appear to be responding very reluctantly and slowly as evidenced by repeated misconduct based on greed, short-term profit maximisation and obsession with shareholder value, but public disapproval has been mounting and has become more tangible in protests, media attention, and rules and regulations covering business conduct, governance, transparency and sustainability.

Financial systems are already being overhauled and have been since they were primarily blamed for the crash in 2007. New rules governing banking and regulation of financial markets are being written regularly, and will continue until misconduct such as the recent Barclays Bank LIBOR fiddling is finally a thing of the past.

The fact that financial manipulation of that magnitude could still occur five years after the players in those sectors were identified as the main perpetrators of the financial calamity reflects a much deeper underlying malaise – an inability to confront the strong likelihood that the entire global financial and monetary system needs a major overhaul. Thus far, governments and regulators have bent over backwards to preserve the vestiges of a system that let it down in the first place. In the process they have shifted mountains of debt to individual taxpayers, moving the burden to ordinary workers and citizens and not flushing out the speculative froth that made a select few inordinately rich in the three or so decades to the mid-2000.

All that this means is that the real much needed transformation -- that of individual behaviour -- will be very slow and most likely incapable of coping with the regularly postponed but inevitable day of reckoning. The very things that slumps, downturns, depression and deprivation were supposed to have taught us will be absent.

There’s only so much an individual can do to cope materially. It has to go much further than having an emergency fund, savings or life insurance. That day will require people who are independent and self-reliant. They will need to be innovative, prepared to take risks, aspirational and expecting little in the full realisation that they are not in control of anything but themselves and their own responses. Prudence, patience and flexibility will be key attributes to survival.

I’m left wondering how we as South Africans will cope.

Using taxes for Employee share schemes.

Questioning the wisdom of giving tax breaks on Employee Share Options.

Sometimes politics can generate some curious suggestions. Despite its likely overall merits, the Democratic Alliance’s master plan to increase employment includes a proposal “to introduce tax breaks to help ordinary South Africans get shares in the companies they work for.” It is a bit like dishing up a wholesome plate of pasta with a spoonful of peanut butter on top of the serving.

Employee share options really do sound like a great-to-have – employees owning a stake in the company and working their tails off to ensure top dividends. But unless the ESOP is designed for employee control of or a significant say in the company, the merits of conventional programs have still not been clearly demonstrated globally. As I wrote in an article last year: they have “as many champions as detractors. The accounting conventions are still not fully understood, polished or even universally supported.” As a concept in organisational theory it certainly deserves on-going scrutiny. But to take it to a point where we should consider sacrificing part of our tax income in its wider promotion is putting the cart very far in front of the horse. In the United States, there have been some serious efforts to roll back tax breaks for ESOPs

One of the puzzling contradictions in the DA proposal is that it is clearly going to be of benefit mainly to employees (or more likely employers) of listed companies. It is then proposed to have “an employee bonus scheme for unlisted firms that replicate existing share incentive regimes for listed entities”. It suggests that “bonuses would be partially tax-free, in a ratio that is linked to growth in an appropriate share index over the five-year period”. Apart from a rather nebulous measure, it still means that the tax break will in practice only apply to larger companies, putting smaller and medium enterprises at an employee recruitment disadvantage.

Employee Share Option Schemes have been around for some time. But it has only been since the mid-seventies that wooing labour into the shareholder camp has gained momentum and has given rise to a whole array of schemes with some of the most complex, costly and imaginative forms of accounting targeted at the whole spectrum of employees from executives to the general workforce.

Despite their growing popularity in employee reward systems, particularly executive rewards, they have had inconsistent outcomes at best and apart from some anecdotal research I have not been able to find credible scientific global evidence to prove any real discernible difference in staff motivation, loyalty and productivity, between those that have and do not have them. While it has been argued that they tend to work better at a more senior level in an organisation, a PWC study has concluded that they are deeply flawed even at that level. Recent history is also increasingly questioning the behaviour of many executives in exploiting short term performance at the expense of longer term company health to gain maximum benefit from their options. Do we really want to add general staff into that collusion?

What is already clear from both the number of collapses of these schemes and the overwhelming number of participants who cash in their shares at the first opportunity, is that the schemes themselves seldom enjoy much loyalty. Of course, most employees will express willingness to be part of such a scheme, especially if they have heard about Kumba employees getting up to nearly R600 000 in share option pay-outs. But even here, given the opportunity to reinvest, less than 20 of the more than 6200 did so. Loyalty to an ESOP will be severely tested, and probably fail, if it hints in any way at flexibility in regular pay.

Minority holding ESOPs may eventually prove their value, but at this point their rationale is suspect. Their growth is rooted in the agency theory which seeks to align the interests of managers with the interests of owners. This became popular organisational thinking in the past 3 decades or so with the emphasis on shareholder value. Unfortunately, there has also been a coincidence of customer neglect over this period, leading to the question whether the pursuit of shareholder value itself is not to blame for a growing gap between shareholder and customer interests.

If the primary purpose of ESOPs is to encourage employee involvement in their companies and pave the way for flexible pay structures, then there are far easier and more effective ways of achieving this than through complex share ownership schemes. It is difficult at the best of times in any collective to align a common interest around rewards. It is especially so in companies where we simply cannot get away from the inherent conflict between profits and pay in the way our accounting formats are structured. And it is even more difficult in a confrontational labour environment such as in South Africa, despite its BEE benefits.

A common, unifying purpose is still best achieved through a focus on what everyone is there to contribute – service to others. Not only is this the only way of ensuring improved rewards for all, but it is the foundation of competitiveness, which in turn creates jobs and attracts capital. Once common purpose is forged, it becomes a lot easier to introduce common fate instruments such as profit-, gain- or fortune sharing. Only then will an ESOP make sense.

Giving credit where credit is due, the DA plan comprehensively and imaginatively tackles the problem of income disparities at one of its key sources – that of executive pay. Page 54 of its document says: “measures to reduce inequality will also have to tackle high-powered corporate insiders who extract salaries that are often out of proportion to the shareholder value they create by abusing remuneration committees that are not independent and shareholders who are not sufficiently informed.”

But as far as employee share ownership is concerned, and if I were asked to sacrifice some of my tax Rands, I would much rather do it on ensuring that employees are willing, contented and productive workers before being shareholders.

So far, there has been no substantiated link between the two.