Repeated reference has been made to the flaw in the EEA9 schedule and the need to create seven instead of six occupational levels.   This is in the best interests of South Africa and the drive for equitable income differentials.   Unhappiness and appalling economic problems will arise until society achieves a clearer understanding of what is happening.

Wilfred Brown was an extraordinary man and after early experience in accountancy and selling he joined the Glacier Metal Co Ltd in 1931 and was chairman from 1939 to 1965.   Thereafter he various important positions including becoming a Member of the Privy Council in 1970.

Wilfred Brown contributed to the book Exploration in Management in 1960 and then wrote Organization in 1971 by Penguin Books.

Although the last book was written over 40 years ago it should not be forgotten that it took over 100 years to develop the thermometer.   A simple measurement device like that is now what is needed in South Africa to eliminate ‘disproportional income differentials’.

Here are some extracts from the book (page 295 onwards without footnotes and my emphasis)

Every manager knows that the capacity of individuals varies; that though at times particular occupations have to be paid at a higher rate because of scarcity of people with the necessary skills and training, in the long run we must pay in accordance with the level of responsibility carried by the occupation or the individual.

If we all deplore a situation where machine-operators earn more than foremen or more than tool-makers, or nurses earn less than female clerks, then we are agreeing that people must be paid in accordance with the ‘importance’ of the job rather than on the crude basis of supply and demand.

But a third manner of establishing the differential pattern of wages is now taking over from the labour-market basis and from the level-of-work basis.   This third method is power-bargaining by trade unions and others.   In effect this method, if pursued to its logical end, will result in those who have the best organization, the most power and the most effective position to disrupt the economy getting the highest earnings, and those in the weakest position getting the lowest earnings.   That will be a form of anarchy.

I am one of those who believe that the basic cause of recourse to power-bargaining is not primarily a drive for more absolute pay but a drive to keep up with the pay of others who are felt to be carrying the same level of responsibility: though once power-bargaining has started and people begin to realize just how powerful they are, the original motivation for its use is often supplanted by greed for more without reference to fair differentials.   Nevertheless, if a pattern of differential pay existed which was felt to be fair, then the heat would be taken out of power-bargaining.

If resort to power-bargaining receded then government policies to contain the size of the total national wage-bill within the economic limits set by national increase of output would become viable.   The economy could then be operated at its full productive capacity, real unemployment could be eliminated and the standard of living would rise.   This in turn would further diminish the tendency to resort to power-bargaining.   That is why the differential pattern of wages both for occupations and for individuals in the same occupation is so vitally important.

There is a deep wish in the individual to equate earnings to different levels of work and personal capacity.   If it were not so why should society be outraged by the grosser forms of what they regard as inequitable differentials?  Why should representative power-groups so often seek to justify their claims on the grounds that they are seeking parity in pay with others whom they claim to be performing work of the same level as themselves?  No group has yet dared to say in public that their object is to gain the maximum earnings that their power situation enables them to achieve.   They know that this would cut across the ethos of society.

I propose simply for convenience to use the term ‘equitable differentials’ to describe this inner drive to equate level of work and earnings, and ‘power wages’ to refer to the alternative.

I have little doubt that in the long run the drive for equitable differentials will force into existence the means to achieve them.   But unless a much larger proportion of society achieves a clearer understanding of what is happening, the unhappiness and economic problems that will arise before equitable differentials are achieved will be appalling.   I want, therefore, to examine some of the attempts to influence pay levels towards a fairer pattern of differentials that have been employed so far.

Job-evaluation techniques

With regard to job-evaluations techniques Wilfred Brown points out that although the techniques have proved useful –

As a management tool for comparing various types of jobs it would certainly bring more formality to the process and add consistency.  But the results are judgements – not measurements.   No attempt has been made to use it as a means of determining appropriate differentials between, say, teachers, electricians, miners and printers.   There would seem to be no hope of its being used in this way – owing to its subject of nature’.