HUMAN RESOURCES 2016/17 HUMAN RESOURCES STRATEGIC FOCUS AREAS 2016/17 PERFORMANCE HIGHLIGHTS

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1 29 HUMAN RESOURCES 2016/17 HIGHLIGHTS Developed and approved an integrated talent management plan with specific, targeted interventions. Started aligning the performance contracts of departmental heads to their respective departmental strategic objectives. Training expenditure amounted to R47.3 million reaching 72% of employees. Completed the roll out of the Total Reward Strategy across the SARB and enhanced the SARB s recognition awards. T o effectively execute its SFAs, the SARB is working towards offering an employee value proposition that attracts, retains and develops critical skills; particularly specialist, knowledge-based skills. 2016/17 HUMAN RESOURCES STRATEGIC FOCUS AREAS The 2020 People Strategy includes workforce planning, segmented employee value propositions, performance management, learning and development, talent management, and organisational design and culture. For 2016/17, the SARB focused on two areas, namely enhancing its talent management and performance management practices. Talent management The SARB has adopted an integrated talent management process where the key determinants are: > > performance: staff members who consistently outperform their peers and demonstrate the potential and expertise to drive the SARB s SFAs now and into the future; and > > potential: a staff member s ability, attitude, ambition and agility to be effective at the next career level. OVERVIEW MONETARY POLICY FINANCIAL STABILITY ENABLING FUNCTION REPORTS SUBSIDIARY REPORTS GOVERNANCE AND RISK FINANCIALS

2 30 SOUTH AFRICAN RESERVE BANK ANNUAL REPORT 2016/17 HUMAN RESOURCES REPORT continued The integrated talent management process TALENT STRATEGY & PLANNING Future planning scenarios (workforce planning), talent plans and gap and risk analysis 1 SOURCING & RECRUITMENT Recruiting (efficiency and effectiveness) 2 HUMAN RESOURCES SYSTEM & METRICS 3 Team alignment COMPENSATION Effective pay equity and comparative pay analysis 7 COMPETENCY 4 LEARNING AND DEVELOPMENT Career development LEADERSHIP DEVELOPMENT New leadership models and needs 6 5 SUCCESSION PLANNING Talent mobility, and talent pools and segments Adopted from a talent management framework developed by Josh Bersin. A SARB-wide talent review was undertaken during the reporting year which focused on, among other things, identifying the succession cover for departmental heads and their direct reports, understanding critical roles and skills, and highlighting succession and skills gaps and risks, and action plans to manage talent pools. Informed by the review, an integrated talent management plan with specific, targeted interventions was developed and approved. The performance process SARB S STRATEGIC FOCUS AREAS PLANNING AND CONTRACTING Performance management To align performance management to strategy, the Human Resources Department has started revising the performance contracts of departmental heads to reflect the objectives set out in their respective departmental strategic scorecards. This will promote the SMART (specific, measurable, achievable, relevant and time-bound) principles that will enable the SARB s strategic objectives. FINAL REVIEW REGULAR ENGAGEMENT INTERIM REVIEW

3 SOUTH AFRICAN RESERVE BANK ANNUAL REPORT 2016/17 31 ORGANISATIONAL CULTURE Employee engagement is measured using an entropy score, where a lower entropy score suggests improved employee engagement. The Barrett survey is undertaken every two years, with the survey for 2015/16 indicating a slight decrease in the entropy score from 27% in the prior year to 26%. The focus for this year, has been on areas of improvement identified in the 2015/16 survey, and a repeat survey is scheduled for 2017/18. EMPLOYMENT EQUITY Transformation and employment equity remain key focus areas and the SARB continues to build a sustainable workforce that reflects the demographics of the economically active population in South Africa. The SARB complies with the Employment Equity Act of 1998, as amended: the 2016/17 employment equity report was accepted by the Department of Labour and the SARB s sixth employment equity plan has been submitted to the department. Total number of employees (2015/16: 2 233) Regrettable turnover ratio 1.46 % (2015/16: 1.3%) Overall staff turnover 6.2 % (2015/16: 6.2%) Average age 42 YEARS (2015/16: 42 years) Years Average years of service 13 YEARS Employees Above Total HUMAN RESOURCES STATISTICS Employee profile Headcount over five years disaggregated according to race and gender NUMBER OF EMPLOYEES Black 1 White Men Women Employee complement 2012/ / / / / Black includes African, Coloured and Indian OVERVIEW MONETARY POLICY FINANCIAL STABILITY ENABLING FUNCTION REPORTS SUBSIDIARY REPORTS GOVERNANCE AND RISK FINANCIALS

4 32 SOUTH AFRICAN RESERVE BANK ANNUAL REPORT 2016/17 HUMAN RESOURCES REPORT continued Learning and development Training expenditure including study aid R47.3 million reaching 72% of employees Employment equity profile EMPLOYMENT EQUITY PROFILE (%) % 51.5% 48.5% Of the employees trained 80 % ARE BLACK 52 % ARE WOMEN 0.9 % ARE PEOPLE WITH A DISABILITY % 9.7% Men Women African White Coloured 5.4% 1.3% Indian People with a disability Training spend as a % of total payroll 3 % Note: comparative data for training is not available as the scope of the calculation has changed from that used in 2015/16. The figure only reflects employee learning and development and excludes training of people who are not SARB employees (as was previously reported). REMUNERATION During the reporting period, the SARB-wide roll out of the Total Reward Strategy was completed. The strategy promotes a flexible, balanced, integrated and cost-effective reward structure comprising direct and indirect reward elements and incentives as shown in the diagram alongside. The total reward vision To attract, retain and engage talented, high-performing individuals and teams the SARB s total reward vision focuses on providing simple, integrated and holistic solutions; common messages and a package that is differentiated from the market. FIXED PAY BENEFITS VARIABLE PAY AND RECOGNITION THE SARB S PEOPLE STRATEGY Performance outcomes Employee engagement Organisational culture WORK-LIFE BALANCE CAREER DEVELOPMENT & OPPORTUNITIES SARB S TOTAL REWARDS MODEL Adopted from a Total Reward Model developed by the World@Work.

5 SOUTH AFRICAN RESERVE BANK ANNUAL REPORT 2016/17 33 Total reward philosophy The core of the SARB s total reward philosophy is to reward employees for their performance and different contributions to the SARB s strategic objectives. Fixed pay During 2014/15, the SARB de-linked performance from fixed pay for employees outside the bargaining unit. Employees in the SARB s FC1, FC2 and FC3 employee bands are within the bargaining unit, while specialists and senior team leaders in the FC4 employee band and all managers are outside of the bargaining unit. In the current reporting period, this de-linking was extended to employees in the bargaining unit following consultation with the Finance Union (SASBO). This emphasises variable elements (incentives) for performance and means that all employees are granted across-the-board increases on an annual basis, excluding those rated poor performer. During the year under review, the SARB granted an across-the-board increase of 5.2% to employees outside the bargaining unit, based on the average consumer price index calculated from 1 April 2015 to 31 March Bargaining unit employees were granted a 6.6% acrossthe-board increase after consultation with SASBO. Variable pay The SARB makes provision for the payment of performance bonuses. This promotes a culture of high performance by increasing the variable component of reward for employees performing at acceptable levels. The SARB revisited its performance bonus pay-outs during the year to ensure they are attractive and competitive, and take into account prevailing economic conditions and the SARB s performance. Recognition awards The SARB recognises and promotes positive behaviours (values) and accomplishments that support the achievement of individual, team and the SARB s objectives (mission and vision). The SARB enhanced its recognition awards during the year in an effort to create a positive work environment and improve employee morale and engagement. SARB RETIREMENT FUND The SARB Retirement Fund is a single scheme that provides a full spectrum of pension benefits to the employees of the SARB, the SABN and the South African Mint. At 31 March 2017, the SARB Retirement Fund had contributing members, 75 deferred pensioners, 733 life annuitants, 247 life annuities (formerly the SARB Pension Fund), 37 living annuitants, and three deferred retirees (members who have retired from their employer in the Group but not from the fund). The total liability towards all of the above categories of members amounted to R5 828 million at year end. In addition to the statutory actuarial valuations performed every three years, interim actuarial evaluations are conducted annually. The latest statutory actuarial valuation, at 31 March 2015, found that the fund s financial position is sound. The fund s assets are managed by an external asset manager, with oversight by an Investment Committee. The Board of Trustees actively monitors changes in the retirement industry; including retirement legislation reform, the advent of Treating Customers Fairly legislation and the implementation of the Protection of Personal Information Act 4 of Members are kept informed regarding these changes through road shows, circulars and fund booklets. The operations of the fund are constantly reviewed to ensure compliance with legislative changes and leading retirement fund practices. The SARB proactively adjusted its Pay Policy to enable employees to take advantage of the changes to the Taxation Laws Amendment Act, enabling employees to contribute more towards their retirement from 1 March STAFF LOANS The SARB provides vehicle and housing loans to its employees at competitive interest rates. Employees are encouraged to take advantage of these loans to enable faster repayments than they would otherwise have achieved, thereby reducing their debt burden sooner. LOOKING AHEAD TO 2017/18 The main focus areas will be to: Mature talent management. Mature performance management. Refine the employee value proposition. Develop appropriate leadership and management programmes. Continue to develop the SARB s culture to enable it to deliver on its strategy. OVERVIEW MONETARY POLICY FINANCIAL STABILITY ENABLING FUNCTION REPORTS SUBSIDIARY REPORTS GOVERNANCE AND RISK FINANCIALS