Investigating the link between performance and labour standards in the retail sector in South Africa

Abstract

The study presented in this thesis is centred around three research questions: (1) How have labour standards changed in South Africa over time? (2) What is the relationship between labour standards and performance? (3) What is the causal direction of the relationship between labour standards and performance? In addition to these questions the study tests the hypothesis that there is a relationship between retail performance and labour costs. To address the research questions and to test the hypothesis the study empirically examines South African labour productivity and labour costs data covering the years 1970-2014. The study utilises 184 data points pulled from 1967 to 2014. Analysis is done using the linear regression method (OLS), Ordinary Least Squares and error correction time series model.

The study highlights the connectedness between productivity, performance and labour standards within the South African context. Productivity is used through-out the document as a proxy for performance. The findings show that labour costs drive (performance) in the retail sector. The study also showed that there is statistically significant and positive relationship between labour standards and performance. The policy implications of this study is prioritisation of incentives that are tied to labour standards that motivate employees in the retail sector.