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By Tanya Rosenthal
Iscor's second method of improving the education level of the workforce is through training. Iscor's average annual expenditure on training of R47.9 million in 1996 is equivalent to 0.5% of turnover, 2.8% of the wage bill and R1,730 per employee. Table 5 shows that in 1996 the majority of time and money was spent on technical/administrative training for artisans and on in-task/on-the-job training for semi-skilled workers.
Table 5. Training, 1996
| Type of training | Hours | % of hours | Expenditure (R) | % of expenditure |
| Management | 8 736 | 0.8 | 924 000 | 3.8 |
| Supervisory | 21 600 | 2.0 | 87 750 | 0.4 |
| Technical/Admin. | 781 687 | 71.1 | 15 918 087 | 65.3 |
| ABET | 3 840 | 0.3 | 138 240 | 0.6 |
| In-task | 282 165 | 26.8 | 7 164 628 | 29.4 |
| Other | 1 854 | 0.2 | 131 808 | 0.5 |
The company has in-house training and training for new employees. Its policy is to develop skills within the company rather than recruit from the external labour market. It has identified where there is higher turnover and has increased training in those areas. The company is investing heavily in the training of black accountants -- starting an industrial school of accountancy for charted accountants who will do their articles at Iscor. Formerly, employees who underwent training were guaranteed jobs, but this is no longer possible. Iscor no longer requires them to work for the company once they have completed their studies. However, there are still critical areas where skills are in short supply, such as charted accountants.
Management claims that there is no Government support for this training. Should a lack of support continue, companies might be less willing to invest in training and increasingly rely on buying skills on the external market (or "poaching" from other companies). Government's reaction to this view is unknown.
Management attributes a lack of skills to apartheid but is optimistic that this may be reversed:
Apartheid created a large shortage of skills because not all race groups were trained. Now that all can be trained Iscor does not foresee a shortage of skills. However this will depend on a loss of skills due to the brain drain. Once more educated black employees enter the company the shortages of skills should decrease because they tend to stay in South Africa (Robertson & Viljoen, 1996).
One effect of the lack of skills in the past was that it limited the choice of equipment that could be installed. The company is insistent that this will now change:
We are a global player and can't say we don't have the skills for the equipment/ technology. We have to find and train people, as is done in the USA and Japan (Robertson & Viljoen, 1996).
Management claims that there are no skills that are in short supply which are crucial to production within the steel division. The skills shortage lies in more specialized and skilled areas -- chartered accountants, metallurgists, electrical or mechanical engineers and information technology experts.
When Iscor was a parastatal it was the largest trainer of skilled manpower in the country through its bursary schemes. However, the focus was on quantity and proved to be very costly. Iscor now believes that it is better to try and get the right person at the right time. At one stage during the apartheid era annual turnover was 40%. The current lower turnover has resulted in a decrease in the number of trainers and training facilities. Iscor management intends to retain training as a strategic issue.
There has also been a greater decentralization of management functions. The organization has been decentralized into four works with each centre having relative autonomy. Headquarters plays a smaller role in the governance style of the company. Its function appears to be the encouragement of, and support for, adopting more democratic styles of management. For example, head office managers spent five days with the management team and facilitators to generate information on governance style and vision. These discussions on governance style are continuing.
In order to make the decentralization effective, management has had to set up new information systems that allow for regular feedback. One important lesson is that the information systems must be put in place before the shift to a decentralized style is made in order to ensure vital feedback to the central level.
Decentralization has also required that professionals, such as managers and engineers, acquire new skills. For example, engineers have had to learn about financial management. Iscor has also tried to increase the international exposure of some managers by sending "high flyers" to international business schools.
The result is that Iscor's production managers are not just steelmakers; they are also now businessmen. They look at quality, safety, IR, etc. (Robertson & Viljoen, 1996).
Iscor also stresses that a cohesive management team that shares priorities and a broad vision is needed, and that it should be reflected at all levels of the organization:
When you drive responsibility down you need the same priorities (Robertson & Viljoen, 1996).
Senior management was also required to ensure that it provided room for mistakes from which people could learn and to place trust in people when making the shift.
Management was not sure at this stage whether the number of levels of supervision will change over the next five years. A more skilled workforce should require less supervision, but currently supervision levels are to remain the same. Management stresses that the criteria should not be the number of levels but how people manage. (Roberston and Viljoen, 1996).
The company intends to move towards more participative and transparent management in a proactive manner. It says that it will move in this direction, whether its employees at all levels want to or not, following international trends.
Negotiations take place at company level. Management describes the relationship between the company and the unions as very good -- a significant shift from the past. As evidence of this shift they note that they now have black ex-unionists working for them.
For Iscor management, good relationships with the unions are very important -- one reason being that the organization is very vulnerable to labour disruptions since it uses a continuous process that cannot be stopped and, in some cases, disruption would have health and safety implications. In order to contain damage from labour disruptions the company has contingency staff (e.g. the administrative staff can run the coke ovens).
Iscor notes that the level of industrial action has been decreasing over the last five years. This however is difficult to gauge since the last major strike was in 1987 at Vanderbijl Park.
An interesting change has taken place in the field of industrial relations. While NUMSA is perceived to have become more cooperative, the whites only MWU is regarded as having become more militant and not interested in the goals and concerns of the company. Reasons for the increased militancy include a perception by white workers that there has been a withdrawal of support for them by the State, plus a growing confidence and strength as a result of industrial action -- such as the one- day strike in 1995 on subcontracting.
Management notes that there is infighting between the traditionally white unions. The relationship between MWU and NUMSA is described as having both cooperative and conflictual elements.
As mentioned above, management believes it is moving from an authoritarian style of management to one of greater participation; consulting labour on certain issues and allowing it to have a meaningful influence on the decisions it takes. In some cases management considers labour's voice to have strongly influenced decision-making. MWU describes the change in management style and industrial relations as follows:
There has been a change in Iscor. A couple of years back there was no trust between management and the union in wage negotiations and there were disputes. This has begun to change. Now we meet on a regular basis and talk (du Plooy, 1997).
NUMSA, however, is more cynical about the shift in management style:
Management's style has changed. Now they tell you what they are going to do before they do it. But, if we disagree they still say that they will implement it (Galeni & Nhlapo, 1997).
NUMSA is therefore very critical of management's claims to have changed management style. Organizers also explained that:
Iscor is engaging people to discuss issues, but they are not doing it honestly. They do not take workers' views seriously. They have retained the orthodox management style -- you just need to see who speaks at meetings. Management listens to the white unions and only listens to us when we threaten action (Galeni & Nhlapo, 1997).
Management states that it is committed to sharing information. Currently the company meets with the unions twice a year to discuss the financial report and the information provided to analysts. Information disclosure is being debated now. Management recognizes that the unions want more information but considers that they are not sufficiently trained to understand the information given to analysts. For NUMSA, not enough information is being shared:
There is a problem of sharing information at the higher levels so we don't see trends. This inhibits our ability to make policy (Galeni & Nhlapo, 1997).
While the shift towards participation is management driven, discussions are taking place with representative trade unions. While no formal structures of participation have been agreed upon yet, it is probably safe to assume that they will be set up in each of the centres/plants and across plants within the steel division. This will formalize and deepen the participation that takes place in existing ad hoc structures.
Management hopes to enhance labour relations and improve communication and information flow to employees. This should improve employees' understanding of business and issues facing the company. It is also hoped that improved participation will enable the company to deal with disputes in-house rather than through the Government-established Commission for Conciliation, Mediation and Arbitration (CCMA). Iscor feels that using the CCMA might take longer and represent an unnecessary intervention from outside. Management hopes that a result of this process will be improved productivity and competitiveness.
As part of management's proposals for increased participation, Iscor is also discussing the idea of workplace forums, based on the German works council system, as provided for in the new Labour Relations Act. These forums provide an institutionalized voice for employees. The majority union in a workplace with over 100 members can demand the establishment of a workplace forum. The Act provides for joint decision-making on a number of issues -- disciplinary codes and procedures, workplace rules unrelated to work performance, affirmative action measures and appointment of pension and benefit fund trustees. If no agreement is reached on these issues the employer may not implement them and the matter must go to arbitration.
An employer may not take a decision on a number of issues without first consulting the workplace forum and trying to reach agreement. Issues for consultation include restructuring the workplace, job grading, education and training, and product development plans. If no agreement is reached on any issues that require consultation, the union can call a strike if the employer proceeds with an unpopular decision, unless the parties have agreed to some other form of dispute procedure.
The workplace forum is also legally entitled to obtain information from the company on matters being discussed in the forum. Employers are to report on company performance, expected performance and its financial and employment situation at regular meetings with a workplace forum.
A union-based participative structure has recently been agreed by management and the trade unions. It includes representation at plant, unit and divisional levels. This structure could, according to management, be developed into a workplace forum. However, while Iscor management is eager for workplace forums to be set up, they can only be introduced by the majority representative union. NUMSA, the largest representative union at the moment, will not initiate workplace forums until the decision is sanctioned by its central executive committee. NUMSA's perception of management's attempts to initiate workplace forums has created resistance:
Employers are trying to drag us into workplace forums. They call RBOs [meetings for relationship building] and discuss workplace forums there. They are dragging us and we are resisting. While the employers want it, we do not want it now (Galeni & Nhlapo, 1997).
A perception by NUMSA is that management is trying to extend its control of the union through "participation":
Management is pushing for a workplace forum because it wants to put its finger on the pulse of our members -- it wants to control us (Lazarus More, 1997).
A concern shared by both NUMSA and MWU is that unions and workers may be coopted into these new institutional structures and that the union will be undermined. These concerns of "union substitutionism" are shared by the broader labour movement.
With shop stewards there is a willingness to be part of the system but there is a lot of caution. They fear that they will be coopted or be part of a decision in the Forum that they would want to oppose (du Plooy, 1997).
In NUMSA, a decision has been taken to initiate forums for a trial period in a selected number of companies. While union officials have decided not to initiate the workplace forums yet, some organizers feel under pressure from rank and file membership to discuss the issue with management:
The workforce is forcing us to go to the RBOs. Shop stewards also like going because it gives them privileges -- they get off work to go to meetings, have lunches, etc. (Galeni & Nhlapo, 1997).
No clear response to workplace forums has emerged from NUMSA members in Iscor.
Given management's desire to have workplace forums, a concern is that a coalition between the white unions may initiate one. This alliance could usurp NUMSA's role as the largest trade union and its power to trigger and dissolve workplace forums. Should the coalition initiate forums there is a strong possibility the action will be challenged in court.
While Iscor is only beginning to explore indirect forms of participation, such as the consultation discussed above, it has considerable experience with direct participation on the shop floor -- specifically team work and quality circles.
The Omega programme (problem-solving in quality circles) was introduced in the early 1980s following a tour to Japan by Iscor managers. For management the Omega programme was attractive since it taught problem-solving techniques. It was first introduced to Iscor's skilled white workers in 1983 because quality circles were a foreign concept to black South Africans (Zikalala, 1992, p.48).
In 1988 Iscor decided to introduce the programme it to black workers and held a five-day conference with shop stewards on its introduction. It proved to be a disaster and is still not working in some plants (such as Vanderbijl) today. NUMSA's position regarding Omega was that it was a management tool and they would not participate in it. Management puts the failure down to three main reasons. Firstly, that the programme was not properly conveyed to African workers. Secondly, and related to the first point, is that Iscor may have created the impression to the shop floor that shop stewards were promoting the programme, thus creating tensions between worker leadership and rank and file. Lastly, literacy training should have been held first since, at that stage, 60% of the workforce were not well- educated. It was a costly mistake (Zikalala, 1992, p.48).
Share ownership is part of management's incentive scheme. When the company was privatized, all employees received 200 shares and could buy more at a discount of 20%. But most workers sold their shares and now have little financial stake in Iscor.
There is no employee representation on the board of directors. Management is cautious about this and believes that the skills are not there. There is also concern about confidentiality of strategic decisions -- not only with employees but also with management.
Iscor is also attempting to play a more proactive role regarding the environment. Two initiatives in this regard have been the employment of an environmental expert and the development of an environmental policy. The environmental expert's role is to oversee policy in steel -- she advises on deficiencies and suggests options to remedy them. In addition to the expert at head office, each centre has a person responsible for the environment -- specifically air, water and ground pollution -- whose task is to monitor standards and take action.
Although environmental policy is still being finalized, it is possible to point to some of the directions it may be taking. Iscor acknowledges the impact of its steel operations on the environment and aims to comply with the requirements of all relevant environmental legislation and regulation. Its commitment to the environment will ensure that environmental objectives and targets are set and/or reviewed on a continual basis and that all employees are sensitized to environmental issues through training. Iscor may investigate and implement new technology and environmental practices that contribute to continual improvement. Furthermore, it will report on environmental progress in its annual report.
While management has been developing creative policies towards environmental management, the largest union, NUMSA has, unfortunately, not contributed to this process due to a lack of a union policy. Union organizers acknowledge a deficiency is the union's ability to engage in environmental issues in a proactive manner at this stage.
Management has also identified actions to be taken by government to assist the industry to become more competitive. This includes the need for a more clearly-defined industrial policy appropriate for the 21st century. In particular, management identifies a need for government to restructure the schooling system to place more stress on scientific skills, practical application and basic business understanding.
Iscor believes that its survival will depend on training. However, cost is a constraint because training is not subsidized. The company makes a strong plea for more adequate compensation for training. Currently, poaching of trained workers is driving down the level of training and Iscor feels there should be a tax penalty for those who do not train employees.
Despite these difficulties in improving productivity, management is optimistic:
Things are coming right, but they are taking time (Robertson & Viljoen, 1996).
It is clear from this analysis that many features of the "apartheid workplace regime" persist at Iscor, both structurally and in workplace relationships. The result is an unstable industrial relations climate, a racial division of the workforce along lines of authority and tasks, and poor productivity. Iscor, aware of these problems, is attempting to move towards a new industrial relations climate and a way of operating more productively. However, the legacies of the past constrain forward movement. Antagonistic industrial relations and a low level of trust mean that issues such as training are not decided upon jointly and implemented in a manner that is satisfactory to all parties. On the other hand, when management attempts to change the structure of the company and its manner of operating without consulting the union, the union resists these initiatives. This often leads to a stalemate on the shop floor. Whether the new institutions proposed in the Labour Relations Act offer a way out of this stalemate remains to be seen.
Central Statistical Services (CSS) Labour Statistics.
Morris, M.; Kaplan, D. (1976). "Labour policy in a State corporation: A case study of the South African Iron and Steel Corporation", in South African Labour Bulletin, 2 (6 & 7).
United Nations International Yearbook of Industrial Statistics, 1996 (New York).
von Holdt, K. (forthcoming). "From the politics of resistance to the politics of reconciliation" in Adler, G.; Webster, E.C. (eds.) Democratisation in a liberalising world: Trade unions and transition in South Africa (London, Macmillan).
Webster, E.C. (1985). Cast in a Racial mould: Labour process and trade unionism in the foundries (Johannesburg, Ravan Press), p.43.
Zikalala, S. (1992). "Iscor violence: Union splits, shop stewards die", in South African Labour Bulletin, 16 (8).
IDC Industrial Development Corporation of South Africa
MAWU Metal and Allied Workers' Union
MWU Mynwerkersunie
NETU National Employees' Trade Union
NUMSA National Union of Metal Workers of South Africa
SAWU South African Workers' Union
Pieter du Plooy Organizer, MWU
Lazarus More Regional Organizer, NUMSA
Osborn Galeni National Organizer, NUMSA
Stephen Nhlapo National Organizer, NUMSA
Kevin Robertson Managing Director, Iscor
Hannes Viljoen Human Resources Director, Iscor
Marius Matthee Divisional Manager: Labour Relations, Iscor
