An operationalisation of disproportional pay differentials across seven occupational levels

Date
2023-12
Journal Title
Journal ISSN
Volume Title
Publisher
Stellenbosch : Stellenbosch University
Abstract
ENGLISH SUMMARY: The Employment Equity Act (EEA) (1998) calls for South African designated employers to extend their commitment towards fair remuneration practices beyond the internationally principled standard of equal pay for work of equal value. Designated employers are also required to eliminate disproportional income differentials among the prescribed six occupational levels. This raises the question of how the construct ‘disproportional income differentials’ should be interpreted and applied to ensure all disproportionality in income differentials are eliminated. The EEA (1998) and its accompanying forms fall short in providing a clear conceptualisation or operationalisation of the construct. The general understanding derived from the EEA4 form used to report on income differentials seems to mix the construct up with unfair pay discrimination based on group membership, a construct governed by a different EEA (1998) section. It is, consequently, considered how the construct should be conceptualised and operationalised to equip the Employment Conditions Commission (ECC), who monitor income differentials, with proper and clear guidelines of what constitutes proportional pay differentials. Various definitions and understandings of the construct of ‘remuneration/pay/income’ are considered and two criteria are proposed to discern which benefits/aspects of remuneration should be included in the definition of ‘remuneration/pay/income.’ A variety of job evaluation approaches are considered to determine what would be an appropriate occupational level framework within which organisations can be expected to maintain proportional pay differentials. A conclusion is drawn on what would constitute a fair occupational level framework. Additionally, a thorough review is conducted to offer clear conceptualisations and operationalisations of remuneration fairness and proportionality within the context of pay differentials. These definitions and operationalisations are ultimately used as a foundation from where regression analysis methods and hypothesis tests are proposed that may be applied to individual employee remuneration data sets to measure an organisation’s degree of adherence to the principle of proportional income differentials. Additional measures are proposed to identify outlier employees considered to be prima facie evidence of individual unfair pay discrimination based on arbitrary grounds. Ultimately, a framework is proposed that the ECC can use and build on to develop standards of adherence to the principle of proportional income differentials.
AFRIKAANSE OPSOMMING: Die Wet op Gelyke Indiensneming (WGI) (1998) vereis dat Suid-Afrikaanse aangewese werkgewers hul verbintenis tot billike vergoedingspraktyke wyer as die internasionale beginselstandaard van gelyke betaling vir werk van gelyke waarde verbreed. Daar word ook van aangewese werkgewers verwag om disproporsionele vergoedingsverskille tussen die ses voorgeskrewe beroepsvlakke uit te skakel. Dit lei tot die vraag hoe die konstruk 'disproporsionele inkomsteverskille' geïnterpreteer en toegepas behoort word om te verseker dat alle disproporsionaliteit in vergoedingsverskille uitgeskakel word. Die WGI (1998) en sy gepaardgaande vorms slaag nie daarin om 'n duidelike konseptualisering of operasionalisering van die konstruk te verskaf nie. Die algemene begrip van die konstruk wat afgelei is van die EEA4-vorm, wat gebruik word om vergoedingsverskille te rapporteer, verwar klaarblyklik die konstruk met onbillike vergoedingsdiskriminasie gebaseer op groeps-identiteit, 'n konstruk wat deur 'n ander WGI (1998)-seksie gereguleer word. Dit word gevolglik oorweeg hoe die konstruk gekonseptualiseer en geoperasionaliseer behoort te word om die Diensvoorwaardekommissie (DVK), wat inkomsteverskille reguleer, toe te rus met behoorlike en duidelike riglyne van wat proporsionele vergoedingverskille is. Verskeie definisies en begrippe van die konstruk van 'vergoeding/betaling/inkomste' word oorweeg en twee kriteria word voorgestel om te onderskei watter voordele/aspekte van vergoeding ingesluit behoort te word in die definisie van 'vergoeding/betaling/inkomste.’ 'n Verskeidenheid posevalueringsbenaderings word oorweeg om te bepaal wat 'n toepaslike beroepsvlakraamwerk sou wees waarbinne daar van organisasies verwag kan word om proporsionele vergoedingsverskille te handhaaf. 'n Gevolgtrekking word gemaak oor wat 'n billike beroepsvlakraamwerk sou uitmaak. Daarbenewens word 'n deeglike hersiening gedoen om duidelike konseptualiserings en operasionaliserings van vergoedingsbillikheid en proporsionaliteit binne die konteks van vergoedingsverskille te bied. Hierdie definisies en operasionaliserings word uiteindelik gebruik as 'n grondslag vanwaar regressie-ontledingsmetodes en hipotesetoetse voorgestel word wat op individuele werknemervergoedingsdatastelle toegepas kan word om die mate waartoe 'n organisasie voldoen aan die beginsel van proporsionele vergoedingsverskille te meet. Bykomende maatreels word voorgestel om uitskieterwerknemers wat beskou word as prima facie-bewyse van individuele onbillike vergoedingsdiskriminasie gebaseer op arbitrere gronde te identifiseer. Uiteindelik word 'n raamwerk voorgestel wat die DVK kan gebruik en op kan voortbou om standaarde van nakoming van die beginsel van proporsionele inkomsteverskille te ontwikkel.
Description
Thesis (MCom)--Stellenbosch University, 2023.
Keywords
Citation