Human capital

The human capital management function (HCM) has positioned itself as a strategic partner that creates value by supporting employees in establishing conducive working environments. The HCM operational strategy is aligned to the organisational strategy. We therefore see ourselves as a critical enabler of the NLC ultimate outcomes and as custodians of a competent, capable and relevant public entity. HCM resides firmly within the strategic objectives of the organisation and subscribes to the requirements thereof. HCM promotes cascading of performance at all levels, as shown in the below diagram.

Human resources oversight statistics

The public entity must provide the following key information on human resources. All the financial amounts must agree to the amounts disclosed in the AFS. Where considered appropriate provide reasons for variances.

Employment workforce

Equity target and employment equity status

As part of measures to redress the disadvantages in employment experienced by designated groups and ensure the equitable representation in all occupation categories and levels within the NLC, we successfully achieved most of our employment equity targets. However, improvement can be made by increasing the percentage of African female senior managers (targeting a 2% improvement). The NLC has exceeded the target for people living with disabilities within the organisation, with 4% of our staff complement consisting of people living with disabilities (2% above the target stipulated in the Employment Equity Act). The NLC endeavours to increase these numbers to encourage diversity within the organisation.

Vacancies

The NLC has nine (9) vacant positions on Senior Management level, eight (8) of the nine (9) are Distributing Agency Members. NLC has adopted an approach of filling openings/vacancies using their own internal succession and development plans.

Employment changes

Occupational level	Employment at beginning of period	Appointments	Termination	Employment at end of period
Top Management	7	0	0	7
Senior Management	33	4	1	36
Professional Qualified	44	3	1	46
Skilled	87	2	2	87
Semi-skilled	107	35	16	126
Unskilled	15	3	1	17

Due to the successful implementation of our succession plan and internship programme, the NLC has over the year appointed fewer people from outside the organisation to fill both higher and lower-level positions. Our internship programme ensures that our interns are trained and empowered with the necessary skills, competencies, and experience to prepare them for permanent roles.

On professional and Senior Management levels, the NLC makes appointments from both internal and external sources.

Reasons for staff leaving

The reasons for staff leaving vary:

• Resignation comprises interns not completing their internship programme and employees being appointed by other organisations.
• Interns leave for gainful employment to the external market due to being exposed to meaningful training from the NLC
• The expiry of contract comprises internship and fixed-term contracts (e.g. maternity relief)

Employee performance management framework

Employee performance management is an ongoing process for establishing a shared understanding of what is to be achieved at an organisational level. The focus is on aligning the NLC strategic objectives with the employees’ agreed measures, skills, competency requirements, development plans and the delivery of results.

The emphasis is on learning and development in order to create a high-performance culture to support the achievement of the overall business strategy.

The balanced scorecard approach is one of the performance management tools that the NLC utilises to assist line managers in cascading the NLC’s strategies into well-structured performance measures. The balanced scorecard offers a common platform for the entire organisation for performance evaluation. It demands a systematic approach for efficiently carrying out the NLC’s day-to-day, as well as long-term activities. The process sought to align the whole organisation into one system of descriptors that included inter-departmental assessment, cascading from the Annual Performance Plan through to a divisional performance framework.

NLC’s effective performance management process establishes the foundation for excellence by:

• Linking individual employee objectives with the organisation’s mission and strategic plans. The employee therefore has a clear concept of how they contribute to the achievement of the overall business objectives.
• Focusing on setting clear performance objectives and expectations through the use of results, actions and behaviours.
• Defining clear development plans as part of the process.

Employee wellness programmes

Since its inception, our employee wellness programme (Zithande) has evolved to be an essential part of our organisation, with its core focus on the physical, mental and financial health of our staff members and their families.

The success of the programme has been demonstrated through the increase in uptake of the programmes and services offered by Zithande, with utilisation of 23.5% at the end of financial year 2019/2020. The most prevalent areas requiring support included personal performance issues and organisational matters. Through robust staff engagement, these areas are addressed to support a conducive working environment for all.

Policy development

The NLC prides itself on its human capital management policies, which are aligned to legislature and supported by SOPs for ease of use. All functions are supported by relevant policies that are in line with NLC strategy and divisional operational strategies. The NLC policies are reviewed annually through the Policy Review Committee to ensure standardisation and alignment.

Achievements 2019/20

HCM has achieved all targets, including attaining quality assurance and conducting workshops on performance scorecards to ensure that these measures were understood on all levels. The leadership development programme was successfully completed and has impacted on the staff interaction across all levels.

As 4IR becomes ever more pervasive, HCM conducted digital readiness assessments and skills audits with the sole aim of assessing the digital readiness of our employees and their attitude towards new technologies. These assessments ensured that the NLC’s staff are able to support its regulatory mandate through the use of relevant technological, technical and soft skills.

Implementation of the performance excellences scorecard contributed to the igniting of a high-performance culture in the organisation.

Performance rewards

Programme/activity/objective	Performance rewards	Personnel expenditure (R’000)
Top Management	R5 743 015.43	R16 786.00
Senior Management	R10 941 438.48	R82 650.00
Professional Qualified	R6 943 278.00	R72 372.00
Skilled	R11 229 597.09	R99 894.00
Semi-skilled	R719 168.00	R15 087.00
Unskilled	R791 503.00	R15 345.00
TOTAL	R 36 438 000.00	R 302 138.00

Challenges faced by NLC

NLC has seen a fair share of labour relations matters, which are common across all industries. The challenges include, among others, conflict management and change management.

Labour relations: Misconduct and disciplinary action

NATURE OF DISCIPLINARY ACTION

Future human resources goals

HCM has planned to align the organisation to the new technological era by creating a platform that enables an innovation hub. The NLC organisational design has been evolving due to the legislative change and alignment to the grant funding and regulatory compliance operational model, as well as the implementation of the ERP system for efficiency improvement. The focus for the next financial year will be on the following:

• Future-fit people strategy
  The development and implementation of a future-fit people strategy, which will create an evolving organisation that is human-led and digitally enabled. The focus of the strategy will be on leadership, culture, competencies and the skills needed to facilitate value creation now, and in the future.
• Competent and credible workforce
  HCM will utilise talent analytics based on business intelligence and business analysis to support the NLC. Upskilling and re-skilling programmes, professionalisation and capacitation of the NLC will be a priority during this financial year.
• High-performance culture
  As a strategic business partner to all divisions, HCM will introduce programmes that cultivate a high-performance culture by focusing on the following strategic performance areas:
  

  –	180-degree performance management scorecard.
  –	Implement a total reward model.
  –	Return on human capital (labour costs, cost per hire and cost per trainee, as well as absenteeism rates) as measurements to manage the people cost.

More effort will be made to propagate and improve a culture of performance within the organisation, as well as to capacitate employees to understand and utilise the scorecard approach.

Personnel cost by salary band

Level	Personnel expenditure (R’000)	% of personnel exp. to total personnel cost	No. of employees	Average personnel cost per employee
Top Management	R16 786.00	7.98	7	R2 398 115.71
Senior Management	R82 650.00	21.82	36	R2 295 849.39
Professional Qualified	R72 372.00	20.58	44	R1 644 839.61
Skilled	R99 894.00	39.2	165	R 605 420.60
Semi-skilled	R15 087.00	4.2	25	R 603 494.00
Unskilled	R15 345.00	6.19	42	R 365 379.05
TOTAL	R 302 138.00	100	319	R 947 141.07

Training costs

Programme/activity/objective	Personnel expenditure (R’000)	Training expenditure	Training expenditure as a % of personnel cost	No. of employees trained	Avg. training cost per employee
Executive	R16 786.00	R879 997.80	5.2	5	R175 999.56
Senior Management	R82 650.00	R1 440 418.53	1.7	15	R96 027.87
Professional qualified	R72 372.00	R2 425 850.39	3.3	38	R63 838.16
Skilled	R99 894.00	R2 504 942.86	3	71	R35 280.88
Semi-skilled/Unskilled	R30 433 270.00	R87 490.42	0.28	36	R2 430.28
TOTAL	R 302,138.00	R 7,338,000.00		165