Abstract
M.Comm.
Over the last ten years, Eskom, like all other parastatals, experienced an immense loss of skills. This "brain drain" is caused by various factors and it has serious implications on businesses. The loss of skills and knowledge caused organisations to find creative ways to retain critical skills and ensure continuity in terms of succession management. Eskom lost many of its top executive managers through retirements, affirmative
action and resignations. Reasons for resignations varied from emigration, the crime rate in the country, lack of opportunities to better financial offers in the external market.
Research was done on the results achieved from exit interviews that were conducted with employees who left the company and on remuneration trends and practices in the external market. The research indicated, that the current remuneration system in Eskom was too conservative and that there was a need for employees to structure their own packages according to their own personal requirements. Eskom does not offer a share option scheme and an incentive is needed to retain skills and knowledge in a similar way as in organisations when share options are available.
Financial considerations are not the only reason for people to leave the organisation. Employees in certain categories, (information technology, engineering and chartered accounting), also need to have opportunities to develop themselves and to keep abreast with the latest developments and trends in their fields. They have to be assured of proper career development. Employees on executive levels and in scarce categories feel that they have to be compensated for the value they add to the company.
Employees who feel that their worth in the market is recognised and that they share in the success of the business, are more loyal and are easier to retain. To be able to do this, it is important to give special attention to both the financial and non-financial incentives of employees. Compensation management and skills retention is a very dynamic field, which if applied correctly, can drive strategy in the business and can contribute in a positive way to the bottom line of the business.
To make sure that the contribution to the bottom line stays positive, it is imperative that Eskom reviews the Paterson grading system that is currently used, convert to a total package approach and make sure that proper career development takes place for specific job categories. Eskom will later also have to consider a share option scheme to make sure that its remuneration stays competitive on all levels