SKILLS DEVELOPMENT AND THE OCCUPATIONAL LEARNING SYSTEM

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CHAPTER 2 SKILLS DEVELOPMENT AND THE OCCUPATIONAL LEARNING SYSTEM

This chapter addresses the first research literature aim, namely: to conceptualise the construct of the occupational learning programme. The global skills development models were first discussed and the skills development systems of other countries, including that of South Africa, are highlighted. The South African occupational learning system, including its origins and the reforms that led to its introduction, are discussed. The elements of the South African occupational learning system are outlined in this chapter. The chapter also reviews the experiences of different countries in the implementation of the apprenticeship system. The implications of these experiences for the South African occupational learning system are examined. The chapter concludes with a summary.

GLOBAL MODELS OF SKILLS DEVELOPMENT

The modern workplace is characterised by the increasing need to renew approaches to workforce skills development in order to address the current skills shortages in an environment with an ageing workforce, declining numbers of youths and increasing competition for workers with the right skills (NCVER, 2008). In September 2001, the so-called “Declaration on skills development” was formulated and ratified at the Interlaken Conference on ”Linking work, skills and knowledge” held from the 10 to 12 September in Switzerland (Rwambulla, 2003). According to Rwambulla (2003), one of the purposes of the declaration was to send a strong signal to all stakeholders globally that skills development was a key development issue.
Clearly, improving the national skills set is a vital policy issue for all countries (Kuruvilla, Erickson & Hwang, 2001). The reason for this is that in most if not all countries, there are patterns of underinvestment in skills (Brunello & De Paola, 2004). This underinvestment has been attributed in different countries to a range of factors, including the following (Keating, 2009):
structural imperfections in labour markets and resultant disincentives for investments in skills;
dependence upon immigration;
disincentives caused by the poaching of skilled workers among enterprises;
the education and training background of employers;
the lack of wage incentives for workers to invest or cost disincentives for employers to pay for skills;
the short-term characteristics of the finance markets that discourage long-term investments in skills;
a trend towards small firm sizes;
overregulated labour markets; and
voluntarism in the absence of legislated compulsion to invest in training and cost pressures in short-term product cycles.
The underinvestment in skills is largely influenced by a wide variety of labour market and industry structures and cultures in different countries, as well as different structures and cultures of formal education and training systems. Raffe (2006) on the one hand, argues that industry and labour markets and education and training systems have some degree of interrelatedness. Offe and Ronge (1981), on the other, submit that these systems are partially autonomous of each other because they also have partially autonomous relationships with both the state and civil society. Consequently, countries around the world have used diverse and often fairly dynamic strategies to influence their skills markets. For example, countries have:
Induced employers to invest in skills development through the imposition of levies or taxation incentives or have adopted a voluntary approach and encouraged a social commitment.
Used labour market regulations to force industry to employ skilled labour, or alternatively, used deregulated labour markets to allow greater industry flexibility and labour market mobility as a means of encouraging the hiring of skilled labour.
Planned the supply of skills through formal training systems or adopted a more market-driven approach as a means of directing the supply of skills (Keating, 2009, p. 3).
The challenge that remains, however, is to explain and reconcile the apparent contradictions in strategies used by and within different countries. Nevertheless, in the age of globalisation, with its high premium on labour productivity and the supply of and industry match for skills, there should be some common strategies for the supply of skills emerging from countries, albeit mediated by local circumstances.
Ashton and Sung (2000) highlight two major models for developing skills in industrialising nations, namely the Anglo-Saxon and the Asian Tigers models. In a book published by the International Labour Office (ILO) (Ashton & Sung, 2002), they subsequently highlighted a third, the Germanic model, which is also included in the discussion below. This is in acknowledgement of the fact that much of the debate around the world today concerns the most appropriate framework within which skills development should take place. The debate is polarised between those who advocate a “market approach or the Anglo-Saxon model; those who favour a social consensus or social partnership or the Asian Tiger’ model; and those who champion the Germanic’ model (ILO, 1998). The sub-sections below discuss each of these three models of skills development.

The market approach or Anglo-Saxon model

The market approach or Anglo-Saxon model is based mainly on human capital theory (Becker, 1964) which suggests that because individuals benefit from general (or transferable) training, and companies benefit from more company-specific training, the arrangements for each should be handled separately (Mincer, 1989). Individuals should be responsible for undergoing general training, while companies should provide specific in-house training. In this model, the labour market is the principal mechanism in matching supply skills with the demand for skills (DTI, 2006). For example, if there is a skills shortage in IT, then companies that required these skills will pay a premium for them. Hence a larger number of people will be attracted to the industry and the excess demand will be eliminated. The Anglo-Saxon model is suited to countries in which the process of industrialisation has been in operation for an extended period of time (Ashton & Sung, 2000) and in which there is an efficient labour market.
The market approach is typified by so-called “Anglo-Saxon” nations such as the USA, Canada, the UK, Australia and New Zealand, even though there are variations between them in the way skill development activities are undertaken (Crouch, Finegold & Sako, 1999; Middleton, Ziderman & Van Adams, 1993). The principal argument in favour of this approach is that it maximises the choices open to individuals instead of placing institutional pressure on employers to provide training for all their workers (Hall & Lansbury, 2006).
According to this model, employers have autonomy in both the range of working practices and the way in which they are introduced (Ashton & Sung, 2002). This means that new practices such as teamwork, performance-based pay and, most importantly training, are seen as being part of the managerial prerogative. Trade unions do have an influence on the level of managerial discretion, but essentially, training is voluntary. This leaves the government little scope for action and the role played by the government is thus only to intervene in market failures such as unemployment and to encourage employers and individuals to voluntarily enhance skills through programmes such as “Investors in People” (Ashton & Sung, 2000).
Arguably, however, this model has a number of drawbacks. Firstly, there is a delay between the point of excess skills supply or skills demand and subsequent equalisation. Anglo-Saxon countries are therefore invariably confronted by a skills shortage at the peak of a business cycle, which creates a bottleneck in the labour market, restricting the process of economic growth (Ashton & Sung, 2000). According to Hall and Lansbury (2006), this bottleneck tends to perpetuate skills shortages when there is a buoyant economy. Consequently, Anglo-Saxon countries fail to adopt a long-term approach to maintaining and enhancing workforce skills.
The skills shortages experienced at the peak of a business cycle may be prolonged, especially in countries with limited access to education or, for whatever reason, in which the market does not perform optimally. Such a situation will cause an increase in unemployment or underemployment in times of an excess supply of skills, and companies may not be able to find competent employees in times of excess demand. Furthermore, companies are prone to retrench workers during economic recessions or tolerate high labour turnover in boom times instead of seeking to retain skilled workers on the basis that they have invested in their development (Hall & Lansbury, 2006).
Secondly, there is no encouragement for the development of specific soft skills such as planning, numerical and communication skills (Ashton & Sung, 2000) because employers focus only on job-related skills. Ashton and Sung (2002) comment that when financial markets generate pressure on companies to maximise immediate returns, such companies are more likely to dismantle costly training programmes in order to increase short-term profits, and this invariably reduces the supply of skills in the future.
Thirdly, no comprehensive national strategy has been established in countries that follow the Anglo-Saxon model to ensure that comprehensive skills development is provided for the workforce as a whole (Hall & Lansbury, 2006). Furthermore, firms tend to be driven by short-term pressure and are more likely to be willing to pay high wages for those with skills in demand instead of investing in longer-term skills development. This may result in widespread poaching by the so-called ’”free-riding” employers (Acemoglu & Pischke, 1998; 1999; Crouch, 2005). In the absence of institutions that serve to resolve (or ameliorate) the free-riding dilemma and other conditions where markets operate imperfectly, under provision of training occur.
The market model therefore leads to a fragmented approach to skills formation in which each of the parties tends to act independently. Nevertheless, there is clear evidence that most economies that have pursued a market approach have experienced chronic underinvestment in skills, persistent but poorly understood skills shortages and continuing strong growth in lower-skilled, lower-paid employment without clear paths or development opportunities (Hall & Lansbury, 2006).
Problems aside, this model has proven to be relatively successful in the UK, Australia and the USA. The skills base in the UK, for example, showed continuous growth throughout the 1990s, leading some analysts to speak of a ”skills revolution” (Ashton & Sung, 2000). Australia, in particular, has been able to overcome the bulk of the above-mentioned drawbacks, and Ashton and Sung (2002) recognise that country as the most successful proponent of this strategy. The next section discusses the social partnership approach to skills development.

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The social partnership approach or the Asian Tiger model

The Asian Tiger model is the converse of the Anglo-Saxon model. It is characterised by a high level of government involvement in matching the supply of and demand for skills in the labour market (DTI, 2006). This is relevant for countries that need to industrialise in a shorter period because it supplements the operation of the market. This strategy made it possible for the Asian Tiger countries to move from low- to high-skill economies, that is, higher value-added economies.
The Asian Tiger model is a consensus and partnership-driven approach to skills development and requires strong cooperation between the social partners (employers, trade unions and government) at company, industry or national level (Hall & Lansbury, 2006). In instances where this approach is adopted, the objective is to develop a strong skills base across all sectors of the economy. The emphasis is on shared training schemes and pooled resources between companies, subsidised by government training schemes.
In the Asian Tiger model, the government fulfils the role of driving skills development by matching the demand for and supply of skills, using policy to manipulate both. With regard to generating demand for skills, Ashton (2005) explains how Singapore initially operated according to a low-skill strategy, taking advantage of its relatively low labour costs, and then moved to a high-skill economy after achieving full employment and an increase in labour costs. At both points, the government used policy to create an attractive environment for multinational corporations (MNCs) to invest in Singapore. In other words, the corporations that initially required low skills were incentivised to invest, and once labour costs began to increase, they implemented policy to attract MNCs that required a higher skills level.
At the point of full employment, which began to push up labour costs, the Singapore government had two options: it could either implement measures to control the cost of labour or move to a more value-added strategy. South Korea adopted a similar policy but instead of attracting MNCs, it formed its own giant organisations referred to as Chaebol (DTI, 2006).
Taiwan, however, used a combination of state-sponsored organisations (which were later privatised) and small medium-sized enterprises. The common factor in the three strategies is that the three governments were able to facilitate the demand for skills. However, this is pointless unless there is a corresponding change in the supply of skills. In all three countries, the supply of skills was tightly controlled to ensure that the skills base was developing in line with the government’s strategy. Below is a summary of the initiatives implemented over an extended period in the above-mentioned three Asian countries (Ashton, 2005, p. 26; Ashton & Sung, 2000; Ashton & Sung, 2002):
All three countries centralised the control of education.
There was increased government expenditure on education.
Academic streaming was introduced (Singapore).
The minimum number of school years increased to ten years in Korea, nine years in Taiwan and ten years in Singapore.
There was a focus on vocational training in all three economies in the form of vocational secondary schools, and later technical and technological higher learning centres. This provided the initial (low-skill) base of artisans for the labour-intensive manufacturing, but the institutions were subsequently expanded and developed in order to focus on higher value-added skills.
All three limited the entrance to academic institutions, enabling the governments to generate skills in the areas in which they were required. Even when the “flood gates” to the universities were opened in the 1980s, the number of mathematics, science and engineering students was still strictly controlled. There is a strong need for science and engineering students in a higher-value added economy in these countries. In 1984, for example, 47% of Taiwanese undergraduates, 70% of master’s students and 74% of PhD students were enrolled in the fields of science and engineering (Ashton & Sung, 2000).
Companies were encouraged to provide training by means of government subsidies, as well as consultants who were also subsidised by the government.
Singapore discouraged the use of low-cost labour by imposing a levy on companies that utilised unskilled labour and using that money to fund other training initiatives.
However, for the system to work, all three governments established “super ministries”, which ensured that the specific demands of the country’s industries informed all decisions about the number of young people leaving the educational system at each level, as well as the types of skill to be acquired (Ashton & Sung, 2000). In their study, Ashton, Brown and Lauder (2003) expanded this concept of government intelligence to skills development. They highlighted Singapore’s Economic Development Board (EDB), which has outposts throughout the world and whose purpose is to identify changing trends in skills, technology and organisational practices required to compete in the chosen clusters and then feed that into their system. The fact remains that government administration has to be incredibly efficient to maximise this strategy.
The national systems of training have been criticised as being too expensive, difficult to administer and not sufficiently sensitive to the needs of individual enterprises (Crouch, 2005). However, the lack of a national approach makes it more difficult for employees to move across industries and to relocate during an economic recession. For these reasons, a national approach appears to be more effective in integrating the interests of the various parties or stakeholders (Hall & Lansbury, 2006). The ILO’s World Employment Report (ILO, 1998) outlines three advantages of the consensus and partnership-driven approach to skills development.
First, the social partners have incentives to use their influence in joint regulatory bodies to broaden the scope of training. This can help to correct market failures in relation to employer-initiated training, particularly underinvestment in occupational skills that are likely to be more general and portable.
Second, there is likely to be greater commitment to training goals, which employers may seek to evade in other circumstances.
Third, employer bodies and trade unions are likely to provide useful training services to their members, which support and add value to jointly supported skills development activities.
However, the declining levels of membership and coverage among both employer organisations and trade unions in many countries may weaken the support for tripartite approach to skills development.

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The Germanic model

The Germanic model lies somewhere between the two previously discussed systems (DTI, 2006). Under this model, the market drives skills development to some extent, but an extensive legal framework for industrial relations and training is in place to limit the discretion of managers (Ashton & Sung, 2002). This includes a form of company finance derived from cross-holdings and house banks, which places pressure on companies to secure the long-term survival of the organisation (Ashton, 2005).
In addition, industrial relations institutions such as works councils are involved in discussions about, say, staff reductions, and thus ensure that there is always a need for employers to adopt a long-term view on business. In the field of training, employers and trade unions are bound to enforce the apprenticeship system, which ensures high levels of skills formation and a sharing of the costs of training (Ashton, 2005).
This model has two important points, as explained below.
The first point has to do with ensuring that all stakeholders are represented in business decisions. Hence managers have less freedom to try to maximise short-term profits at the expense of human resources. Ashton and Sung (2002) argue that the legislative framework has been instrumental in generating trust between workers and employers by placing constraints on the actions of the managers, which leads them to be as concerned with the welfare of their employees as the returns to the shareholders. Similarly, the South Korean chaebol ensured employees’ lifetime employment, which meant that there was continuous training and development (Ashton, 2005).
The legislation in Germany seeks to fulfil a similar role for all companies in the country. In other words, because there is a culture of trust and a long-term orientation, companies are more likely to invest in developing their workforce. The drawback is that it is not that flexible because state, employers and unions are required to reach consensus on the issues. For example, it took relatively long for the new ICT trades to be incorporated into the apprenticeship system (Ashton & Sung, 2002).
The second point refers to the German apprenticeship model. Employers and unions are bound together to enforce the apprenticeship system, which ensures high levels of skills formation that are relevant to the industry, and to share the costs (Ashton, 2005). Many countries, including South Africa and Singapore, have implemented variations of the German apprenticeship model.
In the light of the strength and weaknesses of the three global models discussed above, it is worth noting that each nation in the world has its unique challenges and circumstances, but the long-term solution to all of these is skills development. All national systems have their peculiar qualities, but the question of skills development is relevant to all types of economies, both developed and developing. Table 2.1 provides a summary of the key aspects of each model. In the following sections, the skills development systems of two developed countries (Singapore and Australia) and two developing countries (India and South Africa) will be discussed. These countries have made a considerable effort in putting together a comprehensive system to develop the skills of their workforce.

TABLE OF CONTENTS
LIST OF FIGURES
LIST OT TABLES
DECLARATION
ACKNOWLEDGEMENTS
SUMMARY
CHAPTER 1 SCIENTIFIC BACKGROUND AND CONTEXTUALISATION OF THE RESEARCH
1.1 BACKGROUND TO AND MOTIVATION FOR THE RESEARCH
1.2 PROBLEM STATEMENT
1.3 RESEARCH QUESTIONS
1.4 AIMS OF THE RESEARCH
1.5 RESEARCH HYPOTHESES
1.6 STATEMENT OF SIGNIFICANCE
1.7 RESEARCH ASSUMPTIONS
1.8 PARADIGMATIC PERSPECTIVE OF THE RESEARCH
1.9 RESEARCH DESIGN
1.10 DESCRIPTION OF THE RESEARCH VARIABLES
1.11 VALIDITY AND RELIABILITY
1.12 UNITS OF ANALYSIS
1.13 ETHICAL CONSIDERATIONS
1.14 DELIMITATIONS OF THE RESEARCH
1.15 RESEARCH METHOD
1.16 CHAPTER LAYOUT
1.17 CHAPTER SUMMARY
CHAPTER 2 SKILLS DEVELOPMENT AND THE OCCUPATIONAL LEARNING SYSTEM
2.1 GLOBAL MODELS OF SKILLS DEVELOPMENT
2.2 SKILLS DEVELOPMENT SYSTEMS
2.3 THE SOUTH AFRICAN SKILLS DEVELOPMENT CONTEXT
2.4 SOUTH AFRICAN OCCUPATIONAL LEARNING SYSTEM
2.5 AN OCCUPATIONAL LEARNING PROGRAMME
2.6 CHAPTER SUMMARY
CHAPTER 3 TRAINING MANAGEMENT AND EVALUATION MODELS
3.1 TRAINING MANAGEMENT THEORY
3.2 PROJECT MANAGEMENT: AN APPROACH TO MANAGE OCCUPATIONAL LEARNING PROGRAMMES IN SOUTH AFRICA
3.3 QUALITY MANAGEMENT IN THE SOUTH AFRICAN OCCUPATIONAL LEARNING SYSTEM
3.4 GLOBAL QUALITY MANAGEMENT MODELS
3.5 TRAINING EVALUATION THEORY
3.6 INTEGRATION: A HOLISTIC AND INTEGRATED THEORETICAL MODEL FOR THE EFFECTIVE MANAGEMENT AND EVALUATION OF OCCUPATIONAL LEARNING PROGRAMMES
3.7 THEORETICAL EVALUATION
3.8 CHAPTER SUMMARY
CHAPTER 4 EMPIRICAL STUDY
4.1 DETERMINATION AND DESCRIPTION OF THE SAMPLE
4.2 RESEARCH METHOD: PHASE 1 (DEVELOPMENT OF SCALE)
4.3 RESEARCH METHOD: PHASE 2 (ITEM EVALUATION WITH EXPLORATORY FACTOR ANALYSIS
4.4 RESEARCH METHOD: PHASE 3 (CONFIRMATORY FACTOR ANALYSIS)
4.5 CORRELATIONAL AND INFERENTIAL STATISTICAL ANALYSES
4.6 VALIDITY OF THE RESEARCH AND ITS FINDINGS
4.7 CHAPTER SUMMARY
CHAPTER 5 RESEARCH RESULTS: EXPLORATORY FACTOR ANALYSIS
5.1 EXPLORATORY FACTOR ANALYSIS RESULTS
5.2. Factor structure for further rotation
5.3 RASCH ANALYSIS RESULTS
5.4 CONCLUSIONS
5.5 CHAPTER SUMMARY
CHAPTER 6 RESEARCH RESULTS: CONFIRMATORY FACTOR AND INFERENTIAL ANALYSES 
6.1 LPME SCALE, SUB-SCALES AND ITEMS RELIABILITY ANALYSIS
6.2 INTER-CORRELATIONS BETWEEN THE SUB-SCALES OF THE LPME SCALE
6.3 MEASUREMENT MODEL
6.4 MULTI-GROUP STRUCTURAL EQUIVALENCE
6.5 MULTIPLE REGRESSION ANALYSIS
6.7 DISTRIBUTION OF NORMALITY
6.8 TESTS FOR SIGNIFICANT MEAN DIFFERENCES
6.9 INTEGRATION AND DISCUSSION OF RESEARCH RESULTS
6.10 SUMMARY
CHAPTER 7 CONCLUSIONS, LIMITATIONS AND RECOMMENDATIONS
7.1 CONCLUSIONS
7.2 LIMITATIONS OF THE RESEARCH
7.3 RECOMMENDATIONS
7.4 EVALUATION OF THE RESEARCH
7.5 CHAPTER SUMMARY
REFERENCES
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