Human Capital - A South African Perspective

How to quantify human capital

Doctoral Thesis / Dissertation, 2012

169 Pages



List of Tables & Figures

Foreword: Remember the future?

Chapter one: Building articulation and integration
1.1 Introduction
1.2 Literature survey
The case for accreditation
The relevance of accreditation to business
Accreditation and business needs
Vocational accreditation
1.3 The case for articulation
1.4 Corporate qualifications frameworks
1.5 Credit Accumulation
1.6 The Research Question
1.7 Research Objectives
1.8 The research question
1.9 Research design
1.10 The research assumptions
1.11 Research methodology
1.12 Data collection
1.13 Data analysis
1.14 The research stages
1.15 Research findings
1.16 Discussion
1.17 Themes that emerged from the study:
1.18 Summary of findings
1.19 Proposed further research
1.20 Conclusion

Chapter two: Quantifying human capital
2.1 From National Qualifications Framework to Corporate Qualifications Framework
2.2 The Private Provider example
2.3 Basic requirements of learning to ensure realistic quantification
2.4 How the CQF quantifies learning in industry
2.5 How to determination credit value:
2.6 The CQF and employer benefits:
2.7 Conclusion

Chapter 3: The role of Systems Thinking in Education
3.1 Existing creativity and innovation frameworks
3.2 The Innovation S-Curve
3.3 The innovation framework
3.4 Ambidextrous Organizations
3.5 Case Study: Innovation frameworks in the Infomage Rims Group
3.6 Human Capital
3.7 Technical Knowledge
3.8 Recommendations and Future Work
3.9 Compliance and the effect on creativity
3.10 The source of all creativity
3.11 Creativity Myths: the Rims Infomage RIMS Group
3.12 Conclusion
3.13 Summary

Chapter 4: The innovation funneling process
4.1 The Group Process of searching for ideas
4.2 Two Dominant Models of the Development Funnel
4.3 The environment and its current shortcomings
4.4 Identify the area in which you could gain maximum benefit from the implementation of the new technology or process
4.5 Improving process maturity & capturing all elements of the process and the environment
4.6 Drawing a Process Based Transformation Plan
4.7 Strategies that could be used
4.8 Goals & Objectives for Rims
4.9 The way forward
4.10 Justify the capital expenditure versus the benefits
4.11 Demonstrate how you would generate a sustainable innovation competency within your organisation
4.12 How will compliance with the BPMM be appraised in Rims?
4.13 How will the BPMM and its appraisal methods be used?
4.14 Project 2
4.15 Structures of engagement
4.16 South African Alliances
4.17 Conclusion

Chapter 5: Quality management system to support skills programmes & learnerships
5.1 Project implementation and quality assurance (PIMQA)
5.2. From start
to finish - twelve steps
5.3. Looking at the current QMS
5.4. The marriage of QMS & Project Management (PM)
5.4.5 Close out reporting
5.5. Conclusion

Chapter 6: Increasing your managerial awareness level
6.1 Functioning on the Meta Level
6.2. The levels of awareness
6.3. The Business Application
6.4. The Way forward


List of Tables & Figures

Table 1.1: Categories Developed from Personal Experience

Table 1.2: Categories Developed from the Literature Survey

Table: 1.3 Categories developed from the research questionnaire

Figure 2.1: Qualifications Feed

Figure 2.2: Level of Competency

Figure 3.1: The Innovation S-Curve with Phases

Figure 3.2: Systems Thinking

Figure 3.3: Project Innovation

Figure 3.4: Innovation

Table 3.1: Framework 1: Measuring Innovative Activity

Table 3.2: Framework 2: Measuring Investments

Figure 4.1: Funneling

Figure 4.2: The Group Process

Figure 4.3: The individual Process

Foreword: Remember the future?

- We train, to no avail because we don’t address thinking preferences…
- Thinking skills determines performance, not technical skills!
- Steve Bhiko said psychological change before anything else…
- We need to raise managerial awareness levels in the workplace in order to create an inspired workforce
- The way we think determines our future, so why don’t we develop our thinking ability?

It has been suggested that 2012 is the end of the world. There are those that imagine the world to blow up, explode and disintegrate on 21 December 2012. The apocalypse, the end of days maybe upon us all. Religion predicts the Day of Judgment whilst doomsday experts are building bunkers… However, the truth is probably far less dramatic, but in a way, to some of us, perhaps even more scary as the winds of change are accelerating at hurricane speeds. Amidst a tense climate in the mining sector, political rhetoric is exchanged in anticipation of the most grueling ANC gathering ever, to be held in the Free State in December 2012. Perhaps that would be where the end of the world starts after all…or perhaps it may signal the end of the world, as we know it. Lets face it, are we really happy with the results of our young democracy? Is this the vision the struggle had in mind? Are we really just going to allow spiraling non-delivery and accept that we are to pay more and more for less and less? Perhaps the end of the world in 2012 could represent the end of our complacency, our ignorance and lack of awareness.

Maybe 2012 signals the arrival of a new way of viewing the world where we could play a more active role in our future. There are those that believe that the “age of enlightenment” is upon us. That humanity itself is moving towards a new consciousness that suggests a better way of life. However, this could simply be an “airy fairy” view, unless we really look at what higher-level awareness could mean on a day-to-day basis.

To be more aware could mean so much – at the outset, if we could be more aware of the consequences of our actions… To be unaware, is to “not know what you know” and more alarming “to not know what you don’t know…” The impact of low-level awareness, or low consciousness on skills is profound. The impact on training and education has far reaching effects. It is important to note that low awareness does not indicate low levels of intelligence. The effect is often a highly trained or educated individual with limited ability to apply said skills. We have all heard friends and collogues complain about the limited ability of new employees to implement their knowledge. Although young graduates passed exams and assessments, skills are often de-contextualized. More often than not, the young learner finds the workplace a strange and scary place. This strangeness is due to the fact that we have failed to address the learners “Thinking Skills”. In fact, training and education seldom addresses the issues of thinking skills. According to Dr Ingrid Koch, a Johannesburg based psychologist, your work performance and success in life is determined by your thinking preference, as opposed to your qualification level! So, we could be well qualified, but without effective thinking skills success will be very limited. Thinking skills includes not only the ability to reason, but also attitude.

Thinking skills directly influence the creation of actions, and our actions create our reality. Steve Bhiko viewed psychological transformation as at the forefront of change. A view supported indirectly, by an army of motivational gurus, all in support of a new approach to the way we think…

In the business world the use of words like awareness and consciousness is often under-rated. Ill informed management often dismisses the concept as a “soft skill”. Consciousness is the result of thinking skills and as such, the driver of performance. Such increased awareness is the enabler of “seeing what you see”, of understanding the big picture and taking business thinking to a higher, or Meta Level. Business and management needs to develop systems to drive such awareness levels.

The development of aMeta Business Frameworksuggests a business consciousness that recognizes the role of thinking, and the development of alternative realities that recognizes the evolution of humanity. Meta Business suggests that business honours the relationship between mind and matter as well as the interconnectedness of all things. Thus, the evolution of educational thought, being integral to Meta Business, suggests the development of learning to serve business requirements, whilst business is designed for the benefit of humanity at large.

De Martini discusses the evolution of humanity on a personal level and suggests the management of evolution of self via skills and techniques that can be learnt. The purpose of the exercise is to open the mind to a level that incorporates a more spiritual and much more aware sense of existence. Such skills have great application and benefit to both individual and business.

Lowenstein discusses the issue of perfect wisdom. The idea should be to lead all beings to a state of bliss, where the sense of self is diminished. Braden calls this the “terra incognita”, that what science tells people about their brains and that which they experience via the brain. The integration of such thinking in the business world would increase to ability of all people involved to be more engaged in what they do on a daily basis. Thus, the purpose of the individual becomes clearer. Victor Frankl, a Nazi Concentration Camp survivor once said “he who has a reason why can cope with any how”. When we operate with purpose, we are driven, motivated and engaged. Thus, if we could find purpose in our lives, our way forward is inspired. This could be the cornerstone of empowerment. How we think and what we think, creates our reality. Thus, if our results or reality is not what we want, we should seriously consider the path of thinking that got us to this reality! Undesirable thinking, like a cancer, can metastasize and create a snowball effect of negative thinking and ultimately lead to disempowerment.

The great philosopher, Osho believes that, by allowing governments to decide what we read, believe and what we learn, we surrender who we are. We surrender our sole purpose and we lose our motivation to learn, to grow and to act, both spiritually and corporately. Therefore, the success and failure of our education system itself rests on its ability to be open and to allow itself to be challenged.

Des Squire believes that for the education system to be successful in the future, it will need to be more sophisticated than it is today. If we are to address the education backlog, the skills gap, poverty and productivity, in South Africa, the system will need to be more flexible and adaptive. Van der Linde discusses the role of good educational management in a changing South Africa. Commitments to change should include the following:

1. All qualifications should demonstrate a sense of understanding towards industry driven needs
2. Scholastic educational needs will have to be considered, including aspects related to pedagogy and didactics
3. Innovation skills will have to be a priority in developing qualifications and heuretic thinking will have to be evident in qualifications
4. Certain industry-based training and workplace learning will have to carry educational credits and a qualification will have to indicate how credit can be accumulated over time
5. Quality Assurance would have to be relevant, flexible and implementable
6. Qualifications would have to become the benchmark of contextualization and move away from being recognitions for knowledge only.

According to the SACP, the role of, government in education should be to bring education to the masses. One of the ways in which education can be brought to the masses, is the massification of delivery via e- learning. Various e-learning systems are available and many of the world’s leading universities are using a wide variety of such systems. Whether the Internet can be used to develop thinking skills needs further exploration. New Internet applications are developed every day that address all fields of learning.

The integrated conclusion suggests a redesign of the current educational system in South Africa, to become adaptable and effective, serving the needs of industry and society at large as opposed to creating skills in a de-contextualized world. We have to think happy and successful thoughts to be successful. We have find ways to became aware of our thinking process and develop ways to channel our thoughts to a brighter future.

Chapter one: Building articulation and integration


The purpose of this paper is to share experiences and findings from a research study on the possibilities of articulation and integration of work based training. The paper considers the relevance of accreditation for students as advocated by Brittingham (2010) and business as motivated by De Coi (2007).

The study reflects a grounded theory (Charmaz 2000) approach that draws from a literature study as well as feedback from 169 participating companies and the researcher’s personal experience. The findings suggest that, although non-formal learning experiences can articulate as credit in formal learning programmes, the development of personal purpose and contextual awareness is central to effective human development. It is this awareness that facilitates integrated job functioning and enables the individual to interpret, synthesize and evolve workplace activity to meaningful business outputs (Maggelan 2010).

1.1 Introduction

From a business perspective, the impact of a Corporate Qualifications Framework (CQF) on strategic planning needs to be considered as the research investigates the possibility that the relationship between strategic planning and skills planning is functioning less than optimally within South Africa. Similarly, the relationship between performance management, strategic management and human resource management is to be explored. In keeping, the relationship between education, training and certification needs to be compared with strategic needs and performance management requirements as the basis of future articulation. Knowledge creation and knowledge formation in educational institutions are driven by research in industry and academic decision (Veness, 2010). With the introduction of the Organizing Framework for Occupations, it can be deducted that such type of thinking should somehow become part of the curriculum of training (Robertson, 2011). Such job description should function as a performance standard, and be useful in obtaining formal qualifications (Moore, 2011).

1.2 Literature survey

The case for accreditation

Pharasad and Bhar (2010) give an overview of the Indian technical education system and show the value of accreditation as quality improvement and quality assurance of educational programs. Bear (1991) suggests accreditation as a process in which certification of competence, authority or credibility is presented. In the United States of America, organizations that issue credentials or certify third parties against official standards are themselves formally accredited or certified by accreditation bodies referred to as "accredited certification bodies” (United States Department of Education, 2011). The accreditation process in education and training suggests that the provider of tuition, content and assessment and moderation, as well as certification practices, are compliant with predetermined benchmarks (United States Department of Education, 2011).

Accreditation practices define the ultimate standards or benchmarks against which a measurement could take place. Only with a known benchmark can there be measurements, articulation, deviations or gaps identified and plans devised to manage such gaps (Crossroads, 2011). Educational institutions tend to recognize fellow accredited institutions, as this creates a basis for comparison (Bear, 1991) and thus articulation.

The relevance of accreditation to business

According to WorldWideLearn (2010) accreditation ensures a basic level of quality in the education received from an institution. Thus, accreditation for business implies that “achievements” (competency) could potentially be benchmarked and thus industry performance could be plotted against the same, leading to the satisfaction of the third objective, namely that a gap analysis becomes possible (De Coi, Herder, Koesling, Lofi, Olmedilla, Papapetrou and Siberski, 2007). Competence is viewed as effective performance within a domain/context at different levels of proficiency (Cheetam and Chivers, 2005). De Coi, et al. (2007) further elaborates that competencies are described as reusable domain knowledge. They suggest that a model, representing competencies, describes what a competence is and how it is composed of sub-competencies.

Earning internationally recognized accreditation, informs the public about the educational quality derived from being held accountable for international standards (Bear, 1991). However, in South Africa, the trend is towards local accreditation as opposed to international accreditation (Further Education and Training Colleges Act, 2006). “Accreditation can also serve as a selection criterion to assist a company in identifying high-quality schools from which to recruit” (Trapnell, 2010:68). Accreditation allows for articulation and to compare qualifications of employees with one another.

Accreditation and business needs

If ways could be developed to accredit training done in-house, to obtain credits towards the attainment of qualifications, it may enable the individual to consolidate personal development, academic learning and corporate performance. An employer may have high quality in-house training programs that could be considered for accreditation on a formal Qualifications Framework to earn credits. Ball (1989:64) believes that companies often have employees that perform very well and beyond expectations. “Often, these employees will not have the best academic credentials.” Such individuals would do very well if theirwork-basedlearning could count for credits (articulation) towards qualifications (Ball, 1989:64).

According to Kingston (2006) the Leitch report was developed to put employers at the heart of determining skills and qualifications needs. This report makes it easier for employers to have their own training accredited (Kingston, 2006). A number of employers have already successfully been involved, including McDonald, Network Rail and Flybe. According to Business Link, these three companies are now recognised awarding organizations. Others, including Honda have had their training accredited through working in partnership with existing awarding organizations.

Employer Based Training Accreditation (EBTA) (2011) is about finding ways to make the impact of in-house training more explicit (Coeducate Project, 2011). EBTA works with businesses to establish whether a university can accredit their internal training. It also supports employers who want to further develop training and build towards formal national qualifications. Government funding as part of its strategy to support business growth and development supports EBTA’s services. The real, academic benefit of EBTA is however that external verification of the quality and standard of in-house training and matching in-house training to national qualification standards becomes possible. In addition, the process can assist in developing capacity to improve skills. Effectively, this approach thus quantifies or measures non-formal training (EBTA, 2011). The development of such normative skills enables us to compare, remediate, review and re-develop in order to achieve new heights of innovation (Charlton, 2008).

Vocational accreditation

Vocational accreditation refers to measuring the vocation against a benchmark. Thus, supporting the notion that the industry or the job requirement should determine the level of required learning as opposed to the schooling system (Beere, 2007). The modern application of vocational accreditation does not exclude the academic notion, but rather embraces the practice thereof (, 2000), thus enabling articulation.

According to Bulgarelli (2009) the Council of the European Union adopted a resolution in November 2002 in Copenhagen for the promotion of such vocational accreditation. Policy documents provided the initial impetus for the Copenhagen process, a strategy that aims to improve the performance, quality and attractiveness of Vocational Education and Training (VET), focusing on the development of a single framework for the transparency of qualifications and competences, credit transfer in VET and quality assurance. These priorities have been successively confirmed by the Maastricht (2004), the Helsinki (2006) and the Bordeaux (2008) communiqués as well as by the recently approved council conclusions on a strategic framework for European cooperation in education and training (Bulgareli, 2009). Accordingly, a common quality assurance framework (CQAF) was developed in Europe. This enables the accumulation of credits in both the workplace and classroom, to measure the attainment of qualifications and also, the level of performance at which a person operates (Capella University, 2011).

Workplace learning is often introduced as workplace training in order to improve employee skills. Workplace learning can also happen via coaching and mentoring, observation or by repetition, enabling the development of an experience base (Kerka, 1998). According to the University of Massachusetts (2011) workplace learning is offered in various forms, such as supervisory training and management development.

In South Africa there are two ways to address the problem. Firstly the workplace could apply to become an accredited provider (SAQA, 2011). The second is to outsource the alignment and quality assurance to an existing provider. Such workplace learning could therefore, possibly become credit bearing within a formal qualification. Credits could possibly be accumulated in the workplace that may be transferred to formal qualifications (Capella University, 2011).

1.3 The case for articulation

Although accreditation could serve as the basis for skills or education standards, a review of accreditation without considering reciprocity and articulation, is not complete. According to Beach (1906) education reciprocity followed after trade reciprocity. The practice of reciprocity refers to the formal / informalrecognitionof qualifications between countries or systems (Colten, 1981). Reciprocity and articulation in this research is important as it pertains to the system of recognizing different educational programs (Tammaro and Weech, 2008). Reciprocity is the precursor to articulation. However, reciprocity operates as a system that compares the cross recognition of such qualifications and is also focused on the “how” of the recognition. As such, the United States Department of Education (2010) believes the term “reciprocity” is used widely across the country, but that the true meaning of the term is often overlooked, namely to enable articulation. The reciprocity is governed by the Interstate Agreement developed by the National Association of State Directors of Teacher Education and Certification (NASDTEC) (Plymouth state University, 2011). However, reciprocity does not guarantee that a license in one state can be "traded in" for a license in another state (Plymouth state University, 2011). Thus, decisions of reciprocity vary from state to state and are not governed by the Interstate Agreement.

Not all countries seem to have the ease of such reciprocity thinking. In some parts of the world, standards vary hugely from country to country and sometimes even within countries (Bear, 1991). Competent, certified and qualified individuals provide a skilled labour force. Employers need to have a framework to be able to know how to compare qualifications with one another. Where career paths are wellarticulated, it aids in the recruitment, selection and retention of skilled workers. One such a system is to create an Organizing Framework for Occupations (OFO). As such, the Canadian National Occupational Standards and the Tourism Techniques Articulation Project, aimed at integrating relevant national occupational standards into the curriculum of Cégep de Saint-Félicien, and achieving reciprocity between the Canadian Tourism Human Resource Council (CTHRC, 2010), allowing students to acquire a variety of management and occupation-specific skills. Upon graduation, it also leads to the automatic receipt of an emerit certificate for occupational knowledge. Individuals who receive this emerit certification could also receive recognition toward the Tourism Techniques program at Cégep de Saint-Félicien. As this sets a central benchmark of occupational standards, the same standards could be used in measuring the skills and performance of employees.

To meet future needs, the Canadian Tourism Human Resource Council (CTHRC) (2010) suggested the development of a foreign-credential-recognition (FCR) model. It was suggested that the FCR model should be developed and connected with the sector’s existing occupational standards as well as its professional certification (credential) programs.

In 2005, a comparative study of the CTHRC and the Caribbean Professional Certification Systems conducted a review of selected international credential-recognition systems. The study considered the systems and identified what is common amongst them and relevant to Canada. Similar work has been conducted on establishing joint recognition systems between South Africa and the European Union in skills that include industries such as Marketing and Hairdressing (Goosen: 2005). The Canadian project also looked at identifying concerns associated with establishing an FCR model (CTHRC, 2010). Although much related work has been done in South Africa, the South African drive in terms of a formal FCR model still needs to be formalized.

1.4 Corporate qualifications frameworks

Once the workplace articulates to formal standards, albeit by becoming a provider or aligning with one, programs offered at the workplace could possibly become credit bearing. As such, these programs obtain a position on the National Qualifications Framework. However, it may be unlikely that the workplace learning would constitute an entire qualification. As such, the learning so undertaken, could potentially present a partial qualification that addresses the direct needs of the workplace (Hong Kong Education Bureau, 2008). Such collection of training programs could constitute a Corporate Qualifications Framework for the workplace used by learners and employees to plan how these credits could be earned for career advancement, as wells as for formal qualification (Capella University, 2011).

1.5 Credit Accumulation

Where a strategic plan can be used to determine the required human capital in business and industry skills used as credit in such benchmarks, it could be possible to use such a system to determine normative skills gaps. This implies that there will be a need to collect and accumulate credits on a peace meal basis. Aberystwyth University (2011) discusses a concept called “Credit Accumulation and Transfer Schemes (CATS)”which is used by universities in the United Kingdom to monitor, record and reward “passage through a modular degree course and to facilitate movement between courses and institutions.” It is also possible to equate CATS with the Scottish Credit and Qualifications Framework (SCQF, 2011) and the European Credit Transfer and Accumulation System (ECTS) (2011).

According to Adam (2000) the task of the Leiria International Seminar was to discuss workable alternatives and build consensus about Credit Accumulation and Transfer Systems. This seminar was one of the international seminars agreed to in Helsinki. The purpose of this seminar was to discuss credit accumulation and transfer systems in the context of the Bologna process and the linkages to lifelong learning. Adam suggests that the experience gained by the European Credit Transfer System (ECTS) provided the framework for much of the national and international development of credit accumulation and transfer and the internationalization of higher education.

During the same seminar, the Minister of Education from Portugal stressed the need for more student and teacher mobility to aid European integration and more harmonization between different national educational policies. This would also lead to more competition between European systems, which would improve and sharpen individual educational provisions.

1.6 The Research Question

The research question considers the role of the workplace and non-formal learning opportunities, for possible application as formal learning. Thus, the question is whether such learning could be quality assured, assessed or RPL’d to articulate into formal qualifications.

1.7 Research Objectives

1. To demonstrate how non-formal learning and competencies can be aligned (articulated) to educational standards. For this, unit standards and / or other education and training qualifications could be utilized, in part or whole, as standards of required competency in South Africa.
2. To demonstrate how non-formal training can be assessed against formal benchmarks and become credit bearing (articulate). The study investigated whether industry experience, workplace learning, competency and non-formal training programs compares favorably to national benchmarks reflected in formal education programs, in an attempt to assess and quantify human capital within an organization.
3. To demonstrate how a Corporate Qualifications Framework(CQF) can be developed whereby industry can quantify and manage human capital for purposes of performance management.

1.8 The research question

The research considered the possibility of comparing industry experience, workplace learning and non-formal training with formal learning content, level and outcomes (articulation). The question extended to whether industry can quantify such human capital for skills assessment. The research intended to address the inability to “count”, measure, recognise or compare skills, irrespective of the origin of such skills.

1.9 Research design

The literature study investigated how educational thought about articulation evolved. In addition, the strategic objectives in 169 organisations were analyzed to determine the required tasks to be performed by employees. These tasks were then benchmarked against the system of educational standards and unit standards registered on the NQF. A grounded theory approach was followed in order to demonstrate:

-How non-formal training can be assessed against formal benchmarks.
-How non-formal programs can become credit bearing.
-How a Corporate Qualifications Framework can be developed whereby industry can quantify and manage human capital for purposes of performance management.

1.10 The research assumptions

-Unit standards and / or credits for training are acceptable in industry
-Industry accepts the measuring instruments of the NQF
-Industry stands to gain from human capital quantification
-Occupational profiles and job descriptions can have credit values
-Education institutions will accept the principle of non-formal credit accumulation.

1.11 Research methodology

The methodology consisted of gathering data, reflection and action planning.

a) The research process is reflective in as much as it “reflects” or considers the position of learning, skills and competency from various perspectives. The methodology further reflected on the role of future qualifications and job descriptions, including benchmarks related to education.
b) The potential CQF could possibly serve as an emergent theory. This may suggest a management system that informs business decisions about skills needs in a normative way, thus forming theory emerging from the data. The research started with a particular set of data or facts and investigates emerging theory from such data. Thus the research is “grounded” on existing data.

1.12 Data collection

The population, from which the sample was drawn, was Companies within the services industry in South Africa. Companies were invited to participate, based on the following sampling criteria:

-Companies must be service seta members
-Companies must have been levy paying members for 5 years or longer
-Companies must have a minimum of 30 and a maximum of 200 employees
-Companies must employ a qualified SDF with at least 5 years experience

From the above, 169 qualifying respondents were identified. Concepts and categories were developed from personal experience, literature survey and research questionnaires. Skills Development Facilitators completed questionnaires.

The steps that were followed:

1. Identifying the service industry as target sector
2. Identifying and listing of companies in industry whose training will be measured
3. Conducting formal quantification of human capital from selected companies
4. Interacting with Skills Development Facilitators to determine their opinions
5. Auditing skills set of companies - assessment of non-formal learning outcomes
6. Comparing non-formal learning outcomes with formal learning outcomes
7. Building an in-house Corporate Qualifications Framework
8. Identifying shortcomings

1.13 Data analysis

The analysis of data included:

-Inspecting Data - Identification and qualification of participants to partake.
-Cleaning Data - Consideration of the number of participants that support and are able to implement a CQF.
-Transforming Data – Investigating the ability of participants to unpack human capital required in relation to a strategic plan.
-Modeling Data - Align required skills to job descriptions and educational standards.
-Allocation of functional skills to jobs, as required tasks, from where the alignment to educational standards will commence.
-Modeling Data into the development of an integrated human capital management framework.

The data was tabulated in a spreadsheet format, known as data tables. Data tables generally present numerical data inside of a grid format. The findings of the research were documented in a way that enables results of companies to be compared with each other.

1.14 The research stages

Stage 1 involved documenting and analyzing a record of the researcher’s personal experience and exploring concepts and categories from the documented experiences.

Stage 2 involved the analysis of the literature survey. Concepts and categories developed from the literature survey.

Stage 3 involved the finalization and dissemination of the research questionnaire that was completed by 169 SDFs. The SDFs represented different industries from the service industry including industry expert practitioners and training providers.

As a result of the data gathered in stages 1 and 2, a research questionnaire was designed in an attempt to gather more information from participating stakeholders. The research questionnaire’s intent was to gain insight into the perceptions and experiences of organisations with regard to human capital management and to assess the validity of developing categories as identified during stage 1 and 2. Stage 4 involved the interpretation and analysis of data gathered from the researcher’s personal experience (Stage 1), the literature survey (Stage 2) and data gathered from the 169 participating companies (Stage 3). During this stage the researcher became involved in an iterative process of reflection and triangulation, identifying relevant concepts, categories and emerging themes.

1.15 Research findings

For purpose of the research report the personal experience of the researcher, the findings from the literature review and the results from the research questionnaire are reported separately. This is done in respect to the complexity of information resulting from the research process.

Concepts identified from researcher’s personal experience

The personal experience of the researcher confirmed specific concepts related to the objectives of the study:

-To demonstrate how non-formal training can be assessed against formal benchmarks and how non-formal programs can become credit bearing.
-To demonstrate how a benchmark system can inform GAP analysis.
-To demonstrate how a Corporate Qualifications Framework can be developed to quantify and manage human capital for purposes of performance management.

A total of 57 concepts were identified by the researcher in reflecting upon his experience in the field of human capital management.

Categories identified from concepts related to the researcher’s personal experience

The researcher has clustered the 57 concepts into 6 categories.

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Table 1.1: Categories Developed from Personal Experience

The researcher classified his personal experience into different phases, as related to time, employment and consulting. In view thereof, the 57 concepts were clustered along these parameters, into the above 6 categories. Category 1, 2 and 3 informs research objective 1 and underlines the problems of strategic planning and its limited application in skills planning. The lack of clear job descriptions and a lack of an integrated human capital framework has also been indicated as limiting factors in aligning strategic planning with human capital management within organisations. Category 4 indicates the need to develop an increased contextual awareness of higher purpose. This informs one of the research objectives related to “how” Corporate Qualifications Frameworks” are to be developed. The concept implies that caution should be exercised not to develop frameworks without considering the importance of contextual awareness. Category 5 suggests the need for refinement of an Organising Framework for Occupations (OFO), thus relating to the objective pertaining to performance management. Lastly, Category 6 indicates the need for education reform. This category informs all of the research objectives.

The literature survey

The literature review provided important insight regarding the aim and objectives of the study. Of specific interest is aspects related to the objective to demonstrate how non-formal training can be assessed against formal benchmarks and how non-formal programs can become credit bearing. In the following sections the researcher will provide details regarding the concepts and categories identified during the literature review.

Concepts that developed from the literature survey

The literature survey confirmed 128 concepts. In view of the 128 concepts, 6 categories were identified:

Category 1 informs research objective 1 and underlines the role of executive management to engage strategically in defining required competence and aligning educational standards with business objectives. Table 2: Categories’ that developed from the Literature Survey In line with the above, category 2, referring to the lack of clearly defined job roles, underlines the relevance of a Corporate Qualifications Framework in quantifying and managing human capital for purposes of performance management. Similarly, category 3, referring to limitations on integrated frameworks for workplace learning, confirms the relevance of a Corporate Qualifications Framework. Categories 4 and 5 seem not to relate directly to any of the predefined objectives of the research. However, taking into account the aim of the study, as referring amongst other, to the quantification of human capital, one needs to consider the potential impact of contextual awareness, purpose and psychological effect on employees if such quantification of human capital does not materialize. Category 6 refers to the relevance of alternative education systems, which forms one of the cornerstones of the aim of the study in developing and establishing a framework for the assessment of non-formal training.

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Table 1.2: Categories Developed from the Literature Survey

The research questionnaire

The research questionnaire evolved as a result from concepts and categories identified as part of stages 1 and 2 of the research. The questionnaire consisted of 12 questions and was completed by 169 respondents.

Concepts that developed from the research questionnaire

The Evaluation of the 169 reports confirmed 10 concepts as reflected in

Table: 1.3

Categories identified from the concepts related to the questionnaire

A logical clustering of the concepts confirmed 7 categories after the evaluation of the 169 reports as indicated in Table: 1.3.

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Table: 1.3 Categories developed from the research questionnaire

The research questionnaire was constructed to elicit comprehensive responses from participants in relation to the management of human capital. The questions were semi-structured and therefore allowed for interpretation and information sharing. Participants clearly demonstrated very specific group think on topics such as “the need for an integrated system of human capital management, benchmarking and credit accumulation” and “the need for a framework to address the issues of purpose, awareness and conceptual understanding at the workplace.”

Categories 1 and 2 inform the objectives of strategic planning in developing required human capital and the development of a Corporate Qualifications Framework, as stated in objectives 1 and 4. Categories 3, 4 and 6 inform the objective of developing a Corporate Qualifications framework to quantify and management human capital for

purposes of performance management. Category 5 relates to objectives 3 and 4, focusing on the importance of benchmarking performance against clearly defined job roles. Lastly, category 7 does not directly relate to a specific research objective.

However, it does raise the question of “how” a Corporate Qualifications Framework could impact on employees’ performance and either motivate or demotivate performance.

1.16 Discussion

The non-formal and ad-hoc nature of human capital management within modern day organisations seems to reflect a systemic dilemma for human capital management specialists. Underpinning this seemingly systemic dilemma is the need for an integrated human capital management system to facilitate the effective utilisation of limited human resources within an emerging socio economic environment. As indicated by the feedback from the 169 respondents, performance and subsequently productivity is largely hampered because of limitations within the existing human capital management system. In addition to the ad-hoc nature of human capital management, ill-defined job roles and limited contextual understanding indicates a further dilemma for the economy at large. At the same time, employees experience confusion in job roles, leading in turn to loss of contextual understanding as well as potential loss in productivity. As human capital management seems to be inappropriately defined, the development of systems that should utilize workplace learning as an opportunity to award formal credits in education, are hampered. The formal education system does not have the capacity to engage workplace learning for purposes of awarding credits in formal learning programs. The resultant social and psychological effects are that learners in the workplace remain under-recognised for both their performance and learning efforts. Taking into account the 3 stages, during which the research was conducted, the involvement of 169 respondents, the identification of 197 concepts and the emergence of 19 categories concludes into 4 emerging themes.

-The role of strategic management in the development of an integrated human capital management system.
-The role of skills development as productivity driver.
-The role of non-formal learning in a formal learning environment.
-The role of awareness and contextual understanding.

The evaluation of the researcher’s personal experience and the literature study suggests the development of a system that includes a long term approach to human capital development and management and in particular, the cultivation of a higher level of consciousness. The evaluation of 169 responses confirmed the need for an integrated framework that considers the need to address the above.

1.17 Themes that emerged from the study:

Theme 1: the role of strategic management in the development of an integrated human capital management system. In the experience of the researcher, industry has a very limited understanding of the link between strategy and job descriptions, as well as limited ability to integrate job descriptions with performance standards and

align such with education standards. From the identified concepts and categories, the researcher’s experience indicated that the integration of strategic drivers within the human capital management appeared to be limited. The research indicated that the ability to link strategy to skills requirements and purpose of work is limited in both cognition and application within South African companies.

Findings from the researcher’s experience, literature survey and research questionnaire, indicated that an organisational strategic plan could be used to determine required human capital within an organisation. The “lack of job descriptions developed from strategic planning, effective GAP analysis and human capital management per person” emerged as key components underpinning theme 1. In an attempt to contribute towards formalizing a framework for the assessment of non-formal training, participating companies were required to review their existing job descriptions and provide evidence that a performance measurement of staff have been conducted against a specific set of standards. In doing so companies could identify skills GAP’s in terms of educational standards. Based on the results from the 169 respondents the vision and mission statements of each of these businesses were utilised to define a set of business objectives specific to each participating company. This process also illuminated the absence of “contextual awareness” in human capital.

Theme 2: the role of skills as a productivity driver

The researcher’s personal experience indicated concepts and categories that suggest, “ Job roles are not well defined”. Given the “limited connection with higher purpose”, a motivation level of employees seems to be low. Furthermore the introduction of the OFO in South Africa suggests that job profiles would be developed

from which job descriptions and performance management systems will emanate.. Similarly the literature survey indicated concepts and categories that highlight the limited ability of the workplace to provide a sense of higher purpose to the individual. The need for an “integrated system” to manage human capital suggests a system that clarifies job roles and monitors performance against such job roles on a basis that addresses human purpose and productivity. The research aim “to develop and establish a framework for the assessment of non-formal training and the quantification of human capital” was partially addressed in this theme.

Theme 3: the role of non-formal learning in a formal learning environment

In the experience of the researcher very limited application of non-formal learning, as credits for formal learning, actually exists within South Africa. Current human capital management processes within South Africa seem to lack both “definition and integration”, thus leading to hampering the notion of a system that could recognise non-formal learning in a formal context. The development of a human capital management system that functions optimally should include “non-formal and informal learning as credits in a formal learning context”. In addition a “new approach for the education system” should ensure that such learning is accredited and also articulates

to further, formal qualifications. The “new education approach” should also incorporate a solution to the “limited connection with higher purpose”. Education programs would need to find ways to adapt curriculums to stimulate “contextual awareness” amongst learners and employees. The literature survey supports the introduction of an “evolving construct of a new education system”. By implication the very thought construct of the education system needs redesign to incorporate the requirements of amongst others, “credit bearing workplace learning.” The essence of such a system would require a flexible system to document learning. “Planning would need to be the basis for action”. Based on the results from the 169 participants in the research project, participants indicated that they are willing to align job descriptions to business objectives and educational standards. A “Corporate Qualifications Framework” can be developed whereby industry can quantify and manage human capital as above, for purpose of performance management, staff learning and objectives. The objective behind the development of the “Corporative Qualification Framework” is to create a simplistic system that can quantify competency for work as well as qualification purposes.

Theme 4: the role of awareness and contextual understanding

The research suggests that modern day training should aim at providing skills to individuals on a “contextual basis”. Learners often obtain the ability to perform tasks very well, without truly understanding the importance or the real need for such tasks. The “non-contextual” dilemmas discussed above could be related to the “limited awareness” challenge as indicated by participants. Limited awareness suggests that, amongst other, employees lack self-understanding of “purpose”. The net effect of “limited awareness” or “contextual understanding” can therefore be that an individual does not see the task as important and does not feel appreciated and is subsequently not inspired to perform in his or her job role. The pursuit of “purpose” per says ought to be a component in the design of all human development activity. The “evolving education approach” could assist in developing a system that recognises the importance of the consciousness level of the individual in what they do. Sustainable, responsible education and mindfulness about the job role could enhance motivation and thus “performance”. The literature survey further suggests that “awareness” or “consciousness” becomes part of the learning agenda.

The study shows that key performance areas should therefore not just focus on the task at hand. If job descriptions are developed to measure contextual awareness and consciousness, “alignment to educational standards” should be considered. Maggelan Research (2010) states that, a lot of energy goes into treating underperforming employees, while neglecting the health of the organization as a whole. The introduction of a “CQF” could in itself contribute to organisational wellness in the sense that an employee can measure their own “educational development pathway”.

1.18 Summary of findings

During the research study, the following aspects were addressed:

1. The role of an organizational strategic plan in determining the required human capital for an organisation.
2. The relevance of industry experience, competence and non-formal training as compared to formal education and training standards.
3. The potential use of non-formal learning as credits in formal learning programs.
4. The relevance of an integrated human capital management framework
and potential Corporate Qualifications Framework for South African organisations.
5. The development of contextual awareness in understanding learner development.
6. The role of skills and productivity in human capital management.
7. The identification of skills GAPs and the management thereof to the benefit of the organization.

1.19 Proposed further research

The research highlighted the need for further investigation into the


i. The practical application of a CQF in industry with specific reference to developing automated systems and software.
ii. Determining Return on Investment (ROI) on the investment of workplace education versus productivity.
iii. Effectiveness of workplace learning versus formal learning.
iv. The real recognition of South African qualifications in the global arena, reciprocity and international employment prospects.
vi. The real impact of a lack of contextual awareness on the poverty mindset.
vii. Possible cost implications of using non-formal learning as formal learning credits.
viii. Possible development of a South African system where workplace learning could enjoy formal recognition.

1.20 Conclusion

The integration of the research objectives suggests the use of a framework where business objectives are used as the guidelines to design competence objectives. Clustered together, this competence set constitutes a job description, a benchmark from which industry experience and also learning objectives can be deduced. Thus, to measure against this benchmark could enable performance management and the formalizing of learning objectives (Houron, 2008). In essence this approach suggests a framework where education, learning and workplace performance are measured all in one (Lategan, 2001).

Chapter two: Quantifying human capital


The Quantification of Human Capital enables us to recognise our learning in terms of a blue print, irrespective of the origin. Any system that tries to quantify human learning will have to do so with responsibility towards quality, evaluation and also moderation. The design of a corporate qualifications framework (CQF) addresses this function by looking at formal education institutions in South Africa and recognising their qualifications as a blue print against which fragments of education and learning called short courses, are compared. The process of comparing a learning programme to a blue print is called “accreditation”. Where such a programme is indeed “accredited” it implies that it is as good as the blue print.

The CQF goes a step further – it enables the practitioner to compare a partial programme to the blue print and determine which part of the blue print (the qualification) has been completed, as well as to determine which part is still needed to satisfy the qualification.

Key words: Unit Standards; Elements of Learning; Corporate Qualifications Framework; National Qualifications Framework; Private Providers; Competency; Standards Generating Bodies.

Glossary :

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2.1 From National Qualifications Framework to Corporate Qualifications Framework

All signs indicate that there will be an increased focus on educational quality control in South Africa. This is particularly true for the private providers and also for companies with in-house training facilities. The benefit of quality control is of course, an enhanced industry standard to the benefit of learners. The benefit to learners in turn, ensures a spin off of enhanced efficiency, competence and ultimately, productivity. The advantages all-round are thus, national and in the interest of all our citizens.

The objective behind the development of the CQF (Corporate Qualifications Framework) is to create a simplistic system whereby providers of learning, can quantify what it is that they do. The CQF system is a similar, but a more flexible system of counting than the unit standard system in use for training programs at present. The elements of learning are particularly useful where unit standards are still evolving, but training material already exists. The CQF system thus works on anelements of learning systemrather than unit standards, for this very reason.

The CQF system operates on the basis of the SA constitution which states that any person can operate as a private provider on condition that the same quality as subscribed to by the public institutions is maintained. In developing the CQF, the study analysed a broad spectrum of the subjects prescribed at public institutions as well as the delivery and evaluation standards employed by the institutions. The result of this study (limited to commerce) delivered the following facts:

- Subjects at Technikons are often recognised by Universities
- The requirement for a Technikon to recognise the subjects of another, presents an 80% overlap in the contents of such subjects.
- Subjects at Technikons can be broken down into “elements of learning” – simply a broad list of the detailed contents. As such, a Technikon subject can be quantified as consisting of 100 elements of learning .
- Subjects of private providers can be measured against and are relative to that of Technikons.
- Private providers can, in a cost effective manner deliver smaller parts of learning than public institutions. These smaller parts of learning, often called short courses, are nothing but a combination of loose elements of learning. This could present a solution to the current problem of such short-courses that can’t be accredited.

2.2 The Private Provider example

For purposes of this discussion, a private provider will be defined as any institution which offers training or education other than a government facility. In a study conducted for such a private provider, it was found that all the training and education programs could be quantified in terms of a Corporate Qualifications Framework (CQF). The proposed framework functions as a scoreboard that can be considered a “volume chart” that indicates the amount of credits a training programs can earn a student, based on elements of learning. The credits achieved, are called elements of learning. Every training program will generate elements of learning for the participants. A student can therefore, attend a two-day seminar and receive say, 50 elements of learning towards the traditional “Management I”. These values are determined by, for example, comparing the short course to the relevant Technikon or University subject and coming up with a proportional value.

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Figure 2.1: Qualifications Feed


Excerpt out of 169 pages


Human Capital - A South African Perspective
How to quantify human capital
The DaVinci Institute
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The work considers the role of Norms in Education and Training and concludes with a finding that underpins the importance of introducing Consciousness into training. The study is focused on creating awareness and thinking preferences. Recommendations are applicable on an international level. The development of a Corporate Qualifications Framework demonstrates how Strategic planning should be used to determine required &amp, actual human Capital. Performance can be measured against norms that can equated to educational standards.
human, capital, south, african, perspective
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Wynand Goosen (Author), 2012, Human Capital - A South African Perspective, Munich, GRIN Verlag,


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