| Summary: | As a country, South Africa has undergone major social and political changes, specifically over the past two decades. Along with these changes, new legislation such as the scrapping of the Group Areas Act, changed the face of residential areas to one where suburbs now reflect the demographics of the country. Inevitably, changes in the business world also came about, one significant change being the promulgation of the Employment Equity Act (No.55 of 1998) which regulates employment practices in an attempt to make the workforce a true reflection of the South African population. The change in labour legislation came at a time when the effects of globalisation increased levels of competition amongst organisations. Understandably, certain business leaders raised concerns that the introduction of the Employment Equity Act could lead to a lowering of standards and therefore competitive advantage. The purpose of this research was to establish if these early concerns were indeed valid and if the implementation of this legislation had any negative impact on Telkom SA Limited (Telkom), the organisation selected for this study. Particular attention was paid to investigate the impact of the implementation of the Act on three critical areas of business, namely: Productivity; Profitability; and Customer satisfaction. In order to achieve the objectives of the research, the following approach was followed: Firstly, a comprehensive literature study was conducted to determine what led to the passing of this legislation and to establish what the literature revealed about the advantages and challenges of a diverse workforce; Secondly, the views of Telkom management in the Eastern Cape on the impact of the implementation of employment equity were obtained by means of an empirical study which involved the completion of a comprehensive questionnaire; and Lastly, the responses to the questionnaire were collated and analysed to determine the extent to which Telkom had implemented the legislation, and if the company had experienced any negative effects due to this implementation.
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