1. Business Studies Grade 12
HEAD FOR SUCCESS
Business Studies Grade 12

2. Topic 2: Human Resource Function
Term 1
Topic 2: Human Resource Function

3. HUMAN RESOURCE FUNCTION
INTRODUCTION:
The Human Resource Function is responsible for planning for a business’ future need for and supply of labour.
Aims to ensure that the right workers are available in the right numbers, in the right places and at the right time.
The HR function is also responsible for succession planning.
Succession planning is the process of identifying employees who can be trained for future leadership positions.
Succession planning aims to ensure that employees are prepared to replace key persons in an enterprise.

4. HUMAN RESOURCE FUNCTION
INTRODUCTION:
Other responsibilities of the HR function include:
Recruiting, selecting and appointing employees.
Salary administration and determination.
Skills development.
Appraising and managing work performance.
Establishing and maintaining employee wellness.
Managing employees’ careers.

5. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Job analysis
Recruitment
Selection / short listing
Interviewing
Contracts of employment
Induction
Placement
Remuneration
Skills development

6. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES :
Job analysis:
The exact labour needs of an enterprise must be determined before candidates can be recruited.
Enterprises should develop detailed descriptions of each job.
This not only helps HR-managers to find job candidates, it also tells employees what the responsibilities of their jobs are.

7. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES :
Job analysis:
Hence creating a job analysis is an important part of HR-panning:
Job description:
Job specification:
Written description of the job and its requirements.
Written description of the characteristics and qualifications required of the person that will fill the job.
Includes detail such as:
Job title
Main purpose of the job
Duties and responsibilities
Department in which the job is performed
Required performance standards
Physical requirements
Qualifications required
Training required
Minimum experience required
Expertise and skills required

8. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Recruitment:
a) Definition
All HR activities aimed at finding and attracting job candidates who have the necessary knowledge, experience, qualifications and skills to fill a job and to assist the business in achieving its objectives.
Reasons why businesses need to recruit people include:
Expansion
Employees who resign
Employees who are promoted
Employees who retire
Employees who die unexpectedly

9. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Recruitment:
b) Procedures
Determine the exact labour needs of the enterprise
Update the job description and job specification.
Determine the key performance areas of the job.
Choose the recruitment source – internal or external.
Decide on a recruitment method.
Implement the decision.
Allow sufficient time for response.

10. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Recruitment:
b) Procedures
The recruitment process involves the following steps:
Steps:
Step 1:
Analysis of the needs of the business for specific workers, together with a job description and job specifications.
Step 2:
Decide on the action of recruitment regarding the policy of the business.
Step 3:
Design, construction and placement of the advertisement.
Step 4:
Receiving applications and CV’s from potential employees.
Step 5:
Appoint a person / committee from the HR department to work through the applications to see whether they meet the job requirements and job description.
Step 6:
Telephonic verification of credentials, references, qualifications, etc.

11. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES Recruitment:
c) Recruitment sources
Job candidates can be recruited from a number of sources, for example:
Schools
Tertiary institutions
In-house employees
Recruitment agencies
Other employers (head hunting – when who are already employed by one employer, are asked to apply for a job at another employer)
There is a differene between internal and external recruitment:
Internal recruitment:
External recruitment:
Business recruit employees for vacant positions from its own ranks by promotion / transfers.
Employees recruited outside the business.
Employees that was referred by a recruitment agency.

12. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES :
Recruitment:
c) Recruitment sources
A Curriculum Vitae (CV) provides an employer with details of the candidate’s qualifications, work experience and employment history.
A CV is a very important marketing tool for employment – without a CV, a person cannot even apply for a job.
A CV should either be in chronological or functional format:
Chronological:
Functional:
Work experience is listed in reverse chronological order.
Work experience is organised into different categories, such as project management, leadership and financial administration.

13. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Recruitment:
d) Recruitment methods
Recruitment is usually done by placing a recruitment advertisement or by making use of employment agencies.
Recruitment advertisement:
Recruitment agency:
An advertisement that advertises a particular job and aims to attract suitable candidates.
Recruitment agencies recruit job candidates on behalf of employers.
Recruitment advertisements are usually placed in/on:
Newspapers (external)
The internet (external)
A business’ intranet (internal)
A business’ notice board (internal)
Recruitment agencies usually provide employers with a short list of candidates.

14. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Recruitment:
d) Recruitment methods
Recruitment advertisements should include:
An accurate description of the job, e.g. title of the job and its main responsibilities.
Some detail about the recruitment agency.
Qualifications and experience required.
Deadline for application.
Details about the application process.
Details about the remuneration package.
The final offer of remuneration does not always appear in a job advertisement, because candidates have different qualifications and experience.

15. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES: Recruitment: e) Advantages and disadvantages of different methods of recruitment
Method of recruitment
Advantages
Disadvantages
Advertisement in local newspaper
Relatively inexpensive.
Only reaches local people and not people in other provinces.
Competes with many other recruitment advertisements.
Temporary – most people discard newspapers after the paper has been read.
Advertisement in national newspaper
Reaches people across the country.
Expensive.
Internet recruitment on a business’s website
Inexpensive.
Attracts visitors to the business’s website.
People who do not regularly check business’s website might miss the advertisement.

16. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES: Recruitment: e) Advantages and disadvantages of different methods of recruitment
Method of recruitment
Advantages
Disadvantages
Intranet recruitment
Free.
Opportunity is given to in-house employees first to apply for a position.
Only people who are already working for the business can apply – hence the pool of candidates is limited.
Advertisement on a business’s notice boards
Only people who are already working for the business will see the advertisement – hence the pool of candidates is limited.

17. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES: Recruitment: e) Advantages and disadvantages of different methods of recruitment
Method of recruitment
Advantages
Disadvantages
Recruiting from tertiary institutions
Newly qualified and inexperienced candidates are often willing to work for a smaller salary than experienced candidates.
Candidates might not be available when they are needed by a business as they might still have to finish their studies.
Candidates are still inexperienced.
Tertiary institutions are located far apart – it will take time to visit different tertiary institutions.
Recruitment agency
Recruitment agencies usually know a business’s needs.
Time is saved as the agency works through applicants’ CVs.
Most agencies keep record of candidates’ CVs and should be able to make a recommendation quickly.
Usually, recruitment agencies are paid a percentage of the new employee’s remuneration package. This increases the cost of labour.
A business doesn’t know what CVs have not been recommended.

18. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Recruitment:
ADVANTAGES – Internal recruitment:
ADVANTAGES – External recruitment:
Staff morale and productivity is increased because they know they stand a chance of promotion in the business if they deliver excellent work.
New candidates bring new ideas, insight, talent and experience to the business.
Serve as motivation because employees know that excellent work is rewarded.
Businesses can comply to the legal requirements for diversity.
The business already knows the candidate’s skills, personality, strengths and weaknesses.
A larger variety of candidates that can be selected from.
Candidates know the company’s organisational culture, policies, strategies, etc.
Cost of training staff development will decrease, because the business chooses the candidate with the requisite qualifications, skills, personality, etc.
Recruitment and selection actions is faster and cheaper because there is a limited amount of potential candidates.

19. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Recruitment:
DISADVANTAGES – Internal recruitment:
DISADVANTAGES – External recruitment:
Existing employees does not necessarily bring new ideas to the business.
The selection process is not always effective, so the wrong candidate can be appointed.
Conflict between staff who applied for a promotion may arise.
Recruitment costs are higher because advertising and interviewing entails extra costs.
Employees who are not appointed in the vacant post can become negative.
Process takes longer.
Training costs are higher because the worker who is appointed in the job, does not always have the necessary skills.
New candidates do not always fit in immediately and do not always fit In immediately and this will initially harm the productivity.
A limited number of candidates that can be selected from.

20. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Selection / short listing:
a) Definition
The process of determining which applicants will best suit which specific jobs.
The best applicant is selected during this process.
Businesses follow various methods and selection procedures depending on the type of work that is advertised, the job level, the size of the undertaking and internal HR processes.
The more senior the job for instance Procurement Manager, the more complex becomes the selection process.
It will sometimes be necessary to have a background check done of the applicants, e.g. criminal history, etc. especially where strategic and confidential information is involved in the position.

21. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Selection / short listing:
b) Procedure
Determine fair assessment criteria.
Use the assessment criteria to assess all the CVs that were obtained through the recruitment process.

22. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Selection / short listing:
b) Procedure
Once assessment criteria are set, the following procedure can take place:
Steps:
1. Sort the applications
Sort the applications received, against the criteria for the job. All those who qualify are set aside and those who do not qualify, must be removed from the rest of the selection process.
2. List the candidates
Make al list of all applicants who qualify according to the requirements listed in the advertisement.
Work through applications and check references
Do background / credit / and reference checks on the candidates who qualify. Look inter alia whether they have criminal records, their credit history and their social media (facebook / twitter). Contact persons named as references and inquire about the applicants

23. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Selection / short listing:
b) Procedure
Stappe:
4. Preliminary interviews
If there are many applicants who qualifies, preliminary interviews may be arranged for those who do qualify, to sift out those not suitable for the position
Test applicants who qualify
(Remember that the Employment Equity Act prohibits medical testing, unless the medical test is justifiable in terms of the inherent job requirements)
For some vacancies tests are necessary, e.g. if the vacancy for a welder is advertise, applicants may be asked to complete a skills test
6. Set up a short list
Out of all the applicants who qualify, a short lost of +/- five candidates must be compiled.

24. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Selection / short listing:
b) Procedure
Stappe:
Notifying shortlisted
candidates
Contact the shortlisted candidates ad make them aware of the place, date and time of the interview.
8. Interview
The interview team should have a list of redefined questions that will be asked to all the candidates so that all the candidates will be measured against equal criteria

25. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Interviewing:
a) Definition
Commonly used for selecting candidates.
Interviews aim to determine if candidates are suitable for a job by comparing the job requirements with the candidate’s traits, personality, skills, experience and qualifications.
An interview is a conversation between a job candidate and the relevant managers of a business enterprise.

26. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Interviewing:
b) Procedure
Usually, interviews are conducted by a panel, including a manager from the relevant department, as well as the HR-manager.
Interviews have three components:
Preparation
The interview itself
Ending an interview

27. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Interviewing:
b) Procedure
Description:
Prepare for the interview:
Book a room where interviews can be conducted.
The managers conducting the interview must be familiar with the job description and job requirements.
The applicant’s CV must be studied.
Plan topics of the interview in logical order.
Do the interview:
Put the candidate at ease.
Explain the purpose of the interview.
Ask fair, work-related questions.
Avoid questions of a discriminatory nature, i.e. asking a female candidate about her plans to have children.
Ent the interview:
Provide the applicant with an opportunity to ask questions.
Tell the applicant when an answer can be expected regarding the outcome of the application.

28. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Interviewing:
c) Role of interviewer and interviewee
Role of interviewer
Role of interviewee
Put the candidate at ease.
Allow the candidate time to think about each question and to answer the question.
Explain the purpose of the interview.
Communicate the recruitment process to the candidate.
Prepare for the interview by reading the candidate’s CV.
Explain to the candidate how he/she can benefit from working for the business.
Analyse the candidate by also looking at his/her non-verbal communication.
Guard against being biased – do not get distracted by minor details.
Prepare for the interview.
Research the business by visiting its website.
Avoid simple ‘yes’ or ‘no’ answers – elaborate on answers.
Constantly assess the impression you are giving.
Be informative.
Try to give a clear picture of yourself and your capabilities.
Do not avoid difficult questions.

29. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Contracts of employment:
Once a candidate is appointed, the candidate receives a letter of appointment and a contract of employment.
The letter of appointment is an offer to the chosen candidate to work for a particular employer.
The contract of employment is a contract between the employer and the employee which binds both the employer and the employee and describes the duties, rights and responsibilities of both parties.

30. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Contracts of employment: :
Duties of the employee:
Duties of the employer:
To promote the employer’s business interests.
To pay the employee’s salary and remuneration.
To work efficiently and productively.
To provide safe working conditions.
To be respectful.
To register the employee with SARS and to provide the employee with an IRP-5
To refrain from misconduct.
To pay UIF.

31. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Contracts of employment:
The contract of employment must be in writing.
The contract is drafted by the HR department and both the employer and employee must sign this contract. Legal consultants can be used to ensure that the content and wording in the contract meets the requirements of labour legislation.
Employees must be issued with employment contracts within two months of having started working for the new employer.
Employment contracts can be changed if both parties (employer and employee) agree to the change.

32. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Contracts of employment:
South African labour law distinguishes between three types of employees:
Description:
Permanent employees:
Permanent employees are employed on an open-ended basis.
This means that permanent employees are not bound by any time periods.
Temporary or fixed-term employees:
Temporary or fixed-term employees are employed either for a specified period, or until a specified event occurs.
An example of the latter would be the employment of a temporary bookkeeper whose contract terminates when the permanent employee, who is on maternity leave, returns to work.
Part-time employees:
Part-time employees work for less than 24 hours per month. (for the same employer)

33. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Contracts of employment:
a) Characteristics and legalities of employment contracts
Employment contracts are legally binding documents.
Employment contracts must be in writing.
Employment contracts must be in accordance with the provisions of the Basic Conditions of Employment Act (No. 75 of 1997) and other labour legislation.
Employment contracts can only be changed if both the employer and employee agree to the change.
Employers must answer questions from employee regarding the employment contract.
An employer may not force employees to sign an employment contract.
Employees must be provided with a copy of the employment contract.

34. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Contracts of employment:
b) Information included in an employment contract
The following is a summary of the minimum information that an employment contract should include:
Details of the employer
The full name and address of the employer.
The employee’s place of work.
Details of the employee
The name of the employee and his/her occupation.
Working hours
Ordinary days and hours of work, plus arrangements pertaining to overtime.
Remuneration
Ordinary rate of pay, overtime rate, other cash payments and payments in kind.
Details of deductions to be made, for example PAYE, UIF and medical aid.
Frequency of payouts and the mechanics thereof, for example by direct bank deposit.

35. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Contracts of employment:
b) Information included in an employment contract
The following is a summary of the minimum information that an employment contract should include:
Job title and job description
Job title must be provided in the employment contract, as well as a clear description of the employee’s duties.
Date of commencement
The date of commencement of the employment relationship and details of a probationary period, if applicable.
Termination of contract
Explanation of how the employment contract can be terminated by both the employer and the employee.
Leave
Description of types of leave that the employee is entitled to – including paid leave and unpaid leave – when it may be taken, the duration of leave and the accumulation of leave.

36. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Contracts of employment:
Some contracts have a “restraint of trade” clause.
According to this clause, employees are prohibited from working for their current employer’s competitor for a certain period after they resign.
This contract can include a trial period clause (usually 3 months) to see if the employee is fit for the position in which he / she is appointed.
If the employee produces satisfactory work during the probationary period, the employee will be appointed as a permanent employee.

37. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Induction:
a) Definition
It is stressful to start working for a new employer.
induction is the process of introducing a new employee to a business enterprise, the office where he / she will be working, the work that is to be done, colleagues and procedures.
Induction / orientation aims to:
Reduce anxiety in new employees.
Create a feeling of security.
Create realistic expectations.
Ensure that new employees become productive as soon as possible.
Familiarise new employees with the business’ policies and “ways of doing things”

38. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Induction:
b) Procedures
introduce the employee to the business, the office where he / she will be working, the work that is to be done, colleagues, procedures, policies and manuals.
Appoint a colleague in the same department as the new employee’s mentor.
A mentor is an experienced employee who acts as a facilitator or coach to a new or inexperienced employee.
Inform employees about policies, rules, communication channels, procedures and information, such as:
Disciplinary code and procedure
Remuneration policy.
Employee wellness policy.
Work rules and standard procedures.
Issues relating to confidentiality.
Conditions of employment and benefits.
A brief overview of the company.
Training and development policy and facilities.
Often takes the form of training before the employee starts on a new job.

39. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Induction:
A good induction program has the following benefits:
ADVANTAGES:
Improve the employee’s quality of work and productivity.
Illuminates uncertainties about tasks to be performed.
Improve motivation.
Ensure that new employees understand the rules and restrictions in the business.
Eliminates the need for continuous provision of information to the employee.

40. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Placement:
a) Definition
Placement refers to the process of placing employees where they will function optimally and add the most value to the business.
The most appropriate person must be appointed in a particular vacancy.
The person must be placed in a position where the person’s skills, personality, etc. will be the best for the business.

41. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Plasing:
b) Procedures
The following aspects play a role in placement procedures:
Determine the employee’s strengths, weaknesses, interests and aptitude.
Define the specific responsibilities of the position, including knowledge and skills.
Determine the relationship between the position and the competencies of the employee.
Clearly define what the employer expects from the new employees.
Business enterprises should focus on retaining the best employees, because high employee turnover can result in:
Costs involved in training new staff members.
Loss of skilled employees.
Increased recruitment costs.
A decrease in productivity, because new employees need time to find their feet.

42. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Remuneration:
a) Definition
Remuneration refers to the payment earned by employees for the time, effort and skill they contribute to a business enterprise (employer).
Usually, employees earn salaries or wages or they work for commission.

43. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Remuneration:
b) Commission, salary and wage administration
The Basic Conditions of Employment Act describes minimum wages as well as guidelines relating to payment for overtime, working on public holidays and Sundays.
When an employee is appointed, an employer is, in fact “buying” the expertise of the employee – this is why employees earn different levels of remuneration.

44. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Remuneration:
b) Commission, salary and wage administration
Remuneration:
Definition:
Salary
Remuneration paid to an employee on a monthly basis.
Salaries are fixed (employees receive the same amount of money, month after month) and are not determined by the number of hours worked or the number of units produced.
Gross salary refers to the amount of money earned by an employee before any deductions are made.
Net salary refers to the amount of money earned by an employee after deductions have been made.
Businesses rank jobs in terms of skill, responsibility, risk and experience to determine appropriate salaries.
An employee’s position in the enterprise will determine his / her salary.
Employees receive a payslip or salary advice at the end of each month – this document provides detail of an employee’s payment, e.g. deductions, gross salary and net salary.

45. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Remuneration:
b) Commission, salary and wage administration
Remuneration:
Definition:
Wage
Remuneration paid to employees on a weekly or daily basis.
Piece meal remuneration:
Time-related remuneration:
Employees are remunerated for a specific piece of work.
Positive influence on productivity, because once an employee finishes a job he / she can start with a new job.
Employees are remunerated according to an agreed hourly rate, irrespective of the number of units produced.

46. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Remuneration:
b) Commission, salary and wage administration
Remuneration:
Definition:
Commission
Type of remuneration based on the performance of the employees.
Employees usually receive a basic salary.
Commission is paid according to the sales made by the employee, for example, 15 % commission on sales.

47. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Remuneration:
c) Employee benefits
Sometimes, employees do not only earn a salary, wage or commission, but other benefits as well.
Employers are not compelled by law to pay any benefits to employees, but employers who offer good remuneration packages shoud attract a wide range of candidates to choose employees from.
Companies use the term Cost to Company to calculate the total cost toe employ a candidate.
The following are examples of items usually included in the Cost to Company calculation:
Gross salary (salary before any deductions).
Company contributions to medical aid, pension fund or provident fund.
Use of company property, e.g. car, petrol, card, laptop.
Cost of any loans or bursaries.

48. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Remuneration:
c) Employee benefits
Description:
Pension
Employers are not compelled by law to make pension fund contributions for employees.
However, pension fund contributions could form part of an employee’s remuneration package.
The employer can decide what percentage to contribute.
In such a case, the employer and employee both contribute towards a pension fund.
According to the Basic Conditions of Employment Act, pension fund contributions must be paid to the relevant fund within seven days after the deduction or at the end of the period for which payment was made.
Upon retirement, a person receives 2/3 of the money in a lump sum.
The rest of the money is paid to a person in equal monthly instalments.
An employee, however, can be compelled to join particular pension fund.

49. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Remuneration:
c) Employee benefits
Beskrywing:
Provident fund
A provident fund is similar to a pension fund, but a person receives the whole amount as a lump sum upon retirement.
Employers are not compelled by law to make provident fund contributions for employees.
However, provident fund contributions could form part of an employee’s remuneration package.
Employers can decide what percentage to contribute.
In such a case, the employer and employee both contribute towards a provident fund.
According to the Basic Conditions of Employment Act, provident fund contributions must be paid to the relevant fund within seven days after the deduction or at the end of the period for which payment was made.
An employee, however, can be compelled to join a particular provident fund.

50. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Remuneration:
c) Employee benefits
Descripton:
Medical
Employers are not compelled by law to make medical aid contributions for employees.
However, medical aid contributions could form part of an employee’s remuneration package.
Employers can decide what percentage to contribute.
In such a case, the employer and employee both contribute towards a medical aid.
According to the Basic Conditions of Employment Act, medical aid contributions must be paid to the relevant fund within seven days after the deduction or at the end of the period for which payment was made.

51. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Remuneration:
c) Werknemersvoordele
Description:
Shares
Some employers offer share options to employees.
This provides employees with and opportunity to share in the business’ profit.
Incentive bonus
Some employers offer incentive bonuses to employees.
Incentive bonuses are usually linked to an employee’s performance.
This means that an employee receives extra money if performance targets are met.
Travel allowance
Employees who are required to travel a lot for their work, may receive a travel allowance.
This means that the employer pays the travelling costs of the employee.
Some employees also receive a company car.
Company cars belong to employers and is available for use by employees as agreed upon in the employment contract.

52. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Remuneration:
d) Personal tax and other compulsory deductions
Description:
UIF
Unemployment insurance contributions equal to 2 % of the value of each worker’s monthly pay must be made – the employer pays 1 % and the worker pays 1 %.
UIF contributions are capped at R148,72.
This means that employees, who earn monthly salaries of R or more, only contribute R148,72 towards the UIF – this contribution is matched by employers.
The maximum amount is subject to change.

53. HUMAN RESOURCE FUNCTION
Description:
SARS
All people, including employees, pay personal tax.
The South African Revenue Service (SARS) deducts personal tax from all sources of income including:
Salaries, wages, bonuses, overtime and fringe benefits.
Annuities.
Pensions.
Investment income, such as interest and rental income.
Personal tax is determined by income levels – the more you earn, the more tax you pay.
Employers are compelled to deduct tax from employees’ remuneration and to pay this money to the South African Revenue Service (SARS) very month.
Employees’ tax is better known as “Pay-As-You Earn” (PAYE).
PAYE must be paid within seven days after the end of the month for which the amount was deducted.
Once a year, employers issue employees with an IRP5-certificate.
The IRP5 shows the total amount earned and the total tax that was deducted.
SARS compares the amount of tax paid to the amount of tax that should have been paid.
SARS will charge people for insufficient tax payments and refund people for excessive payments.

54. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Skills development:
The HR function is responsible for skills development.
Skills development means to provide employees with opportunities to improve their skills, to become more productive and to empower themselves.
A skill refers to a person’s ability to do something, for example to do word processing.
Most businesses, especially larger businesses, employ people with a wide variety of skills.
It is therefore important to assess the skills of employees in order to determine the areas in which skills development should be focused.
The Skills Development Act provides employers with a vehicle to do skills development in an organised way.

55. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Skills development:
When certain requirements are met, employers can claim back some of the money paid to the skills levy for skills development.

56. HUMAN RESOURCE FUNCTION
ANALYSIS OF HUMAN RESOURCES FUNCTION ACTIVITIES:
Skills development:
Advantages of skills development for an employer, includes:
ADVANTAGES:
Greater productivity .
Skills development prepares employees for future positions.
Skills development saves a business recruitment costs, as employees can be trained in-house.
Skills development improves service delivery.
Skills development introduces employees to improved work methods.