Abstract

Although many studies have been carried out in the field of human resource management and productivity, the mechanism through which human resource management affects productivity remains a big problem facing many organisations. In developing economy such as that of Cameroon empirical analysis especially in the agricultural sector is still lacking. This study therefore seeks to identify the different human resource management practices and how they affect productivity in the oil palm sector of the Cameroon Development Corporation, South West Region Cameroon. The study considered five human resource management practices which were; selection and recruitment, training and development, leadership, performance appraisal and compensation and reward. A sample of 200 employees was drawn from the population of staff of the oil palm sector based on purposive random and stratified sampling techniques. Questionnaires were self-administered and the data collected was analysed using principal component analysis, ordinary least square regression analysis and descriptive statistics. The findings revealed that compensation and reward has the highest positive effect on employee productivity, followed by training and development, leadership, selection and recruitment and least performance appraisal. The results also pointed out that leadership style is very positively related to the other aspects of human resource management practices considered in this study Furthermore the findings revealed that all the human resource management aspects considered simultaneously account for 75.65% variations in productivity of palm oil in the oil palm sector of CDC.  Based on these findings organisations are encouraged to pay attention to their human resource management practices, paying particular attention to their compensation and reward schemes, so as to encourage productivity.

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

The goal of every organisation is to attain high level of performance through productivity and efficiency. To achieve this goal the human resource (HR) needs to be well managed at the level of both individual effective performance and efficiency of people working in the organisation.

Being an important resource of the firm, the people making up the firm have to be well managed at the various levels of its operation. As a result, the human resource department (HRD) of the firm is expected to recruit and select the right kind of people for the organisation. By hiring high-performing employees, a company will have effective employees and this will in turn have a positive impact on the performance of the employees and thus the overall productivity of the company. According to Miksen (2015), employees are often ineffective because they do not care about their work or because they do not possess the right skills.

HRD of an organisation is also expected to train and develop its employees. Training and development of employees will offer the employees the skills and knowledge necessary to perform their jobs effectively. As Chandra (2009) puts it, training changes behaviour at work place and so increases efficiency and higher performance standards. According to Syed et al. (2014), providing continual training and development opportunities leads to improved employee retention and is also associated with higher job and company satisfaction.

To Kokemuller (2009), as companies grow and expand, developing leaders who are promotable is important. Leadership development, he adds, is also connected to employee retention in two ways. Firstly, employees often indicate poor manager leadership as a reason for leaving jobs. Secondly employees want more active leadership roles in decisions within their departments and jobs, which may necessitate training. According to Biro (2012), when a business invests in leadership development, it builds the best team, people will recognise the investment in them, and both the business and the individual will reap the rewards. According to Shanahan et al. (2014) drawing from Ostroff and Bowen (2000), training can be viewed as an investment in human capital that provides employees with unique knowledge, skills and abilities that add value to the firm and enable the performance of activities required to achieve organisational goals, thus resulting in positive organisational-level outcomes. In Admin’s (n.d) view, when employees are trained, they get the opportunity to sharpen their existing skills or develop specialised skills which in turn, will help them to take up some new roles. Thus training and developing employees will help employees’ effective performance at work and so increase the productivity of the organisation. Training and developing of employees also help organisations to retain their best employees.

Human resource management (HRM) encourages the people working in an organisation to work according to their potential and gives them suggestions that can help them to bring about improvement through regular performance appraisal. The HR team communicates with the staff individually from time to time and provides all the necessary information regarding their performances and also defines their respective roles. This is beneficial as it enables the employees to form an outline of their anticipated goals in much clearer terms and thereby, helps them execute the goals with best possible efforts. Performance appraisals, when taken on a regular basis, motivate the employees (Admin, n.d). According to Richason (n.d), positive motivation leads to better performance and higher productivity for the firm. To Chandra (2009), feedback received from performance management information is used by organisations to correct performance problems and assess effectiveness of their improvement efforts.

HRM team helps in capacity building which enables a business to develop a competitive advantage. Building the capacity of a company can enable it to offer a unique set of goods or services to its customers. To build an effective human resource, private companies compete with each other in a “war for talent” (Bianka, 2009). It’s not just about hiring talent, Bianka (2009) adds, this game is about keeping people and helping them grow and stay committed over the long term. Competitive advantage achieved through management of human resource is sustainable as it cannot be readily imitated by competitors. This is so because success that comes from managing people is not visible or transparent as to its source. As Çalişkan (2010) puts it, “it  is  often  hard  to  comprehend  the  dynamics  of  a particular  company  and  how  it  operates  because  the  way  people  are managed  often  fits  together  in  a  system”.

Human resource plays an active role in the development of an organisational culture (Bianka, 2009). People in an organisation come from diverse background and so bring in fresh ideas and perspectives which can contribute to prevalence of conflict. As Admin (n.d) states, “the performance of an individual in an organisation is largely driven by the work atmosphere or work culture that prevails at the work place. A good working condition is one of the benefits that the employees can expect from an efficient human resource team”. HRM team therefore has as responsibility, to develop a common culture for the organisation which will ease communication in the organisation, for as Biro (2012) puts it, good communication in an organisation builds team and trust while poor communication creates and feeds uncertainty.

Compensation and reward designed by HRM team are intended to attract, retain and motivate employees. Compensation includes both intrinsic and extrinsic rewards such as salary, bonuses, fringe benefits and long term incentives. To Noe et al. (2003, p 519), bonuses and other types of pay have an important influence on employees’ standard of living. Pay therefore is a powerful motivator and so increases job satisfaction (Brain, 2015).  Job satisfaction implies happy workers who are more productive. However high worker satisfaction could also be a sign that workers are overpaid or underworked (Edmans, 2014) and this could in the long run lead to fall in returns. Retaining efficient employees is necessary for every organisation as it is more costly to replace workers than retain existing ones. As Alnaqbi (2011) puts it, retraining new employees has a negative impact on productivity levels.

Dispute amongst employees or between employees and management can impede the smooth functioning of an organisation and consequently both individual and collective performances of the organisation. When the organisation confronts situations of disputes the HRD intervenes to sanitise the working atmosphere so as to enhance employee performance and organisational productivity.

Despite the various merits of HRM on both employees’ performance and organisational productivity, some employees regard HR as the policing, traumatising, systematising arm of executive management. These employees see HR staff as gatekeepers, people who hold little interest in employee concerns. They also see HR staff as supporting managers, not regular employees. They attribute nefarious goals and motives to HR staff (Heathfield, 2000).

Although many studies have been carried out on HRM and productivity (Bloom and Reenen, 2010; Çalişkan, 2010; Katou, 2009; Bartel, 2004; Law et al., 2003; Delaney and Huselid, 1996; Ichiowski, Kochan, Levine, Olson and Strauss, 1996; Becker and Gerhart, 1996; Huselid, 1995), the various facets of HRM are still peculiar to each organisation and the mechanism in which each influences productivity is still a big problem facing many organisations worldwide. With globalisation and the growing trends in business today, it is necessary for an organisation to have a competitive advantage over its competitors.

Indonesia, the leading palm oil producer in the world produced 25.4 million tonnes of the world’s 50 million tonnes in 2011 and Malaysia followed with 18.7 million tonnes (David and Patrice, 2012). In Africa the main palm oil producers are Nigeria, Ivory Coast, Cameroon, Democratic Republic of Congo and Ghana. Even though Cameroon occupied the World’s 13th largest producer of palm oil as at 2014 (Jator, 2014) and is Africa’s third producer after Nigeria and Ivory Coast (IndexMundi, 2015), annual domestic consumption still continues to exceed production as stated by Jator (2014).

1.2 Problem Statement

In recent years, the global demand for palm oil has increased rapidly and has gained a significant market share against other less accessible and more expensive vegetable oils such as soya bean, rapeseed and sunflower oils. This increase in demand is due to increased consumption in largely populated countries like China, India and other emerging Asian economies where palm oil is used extensively as cooking oil.  Currently, global palm oil demand exceeds supply, a trend that is likely to continue into the future (David and Patrice, 2012).

This growing trend of excess demand for palm oil over supply is also witnessed in Cameroon. The consumption of palm oil in Cameroon exceeds production as stated by the General Manager (GM) of the Cameroon Development Corporation (CDC) during the commissioning of the pioneer branch managers for the Manyu and Donga Mantung Oil Palm Development Projects, where the  GM declared that national palm oil deficit in the country stands at 60 thousand tonnes (Emmanuel, 2011). As at 2012, Cameroon imported 50 thousand tonnes of palm oil annually in order to cope with demand (David and Patrice, 2012); as at 2013, Cameroon suffered an annual palm oil deficit of over 35 thousand tonnes even though production capacity rose to 265 thousand tonnes in 2013, compared with 210 thousand tonnes in 2010, registering an increase of 55 thousand tonnes in three years-a production that still does not meet domestic demand (Jator, 2014). Latest publications estimate annual demand for the product to be 385 thousand tonnes against a supply 270 thousand tonnes per annum (CDC, 2014).

In 2008 when the Boa plain oil palm development project was initiated, it was projected that by 1st of July 2012, when the first fruit will mature; the CDC’s palm fruit yield per hectare will increase from 7 tonnes/hectare to 15-20 tonnes/hectare (CDC, 2012). This increase in fruit yield was meant to match supply with demand.

According to Nkongho et al. (2009), Cameroon has all the potentials needed for favourable palm oil fruit yield, yet current yields are estimated to be between 5 and 10 tonnes per hectare as against 25-30 tonnes in countries like Malaysia, even though Cameroon has a less ancient practice of palm groves (Business in Cameroon, 2011). With all the projections and favourable conditions for yields of the palm oil fruit, 2012 has come and gone, yet 2013 and 2014 demand still exceeds supply.

As organisations thrive to maximise productivity, the oil palm sector cannot afford to lag behind and given that palm oil demand is generally above supply in recent years and also that production of palm oil is mostly labour- intensive, there is need for research on how to step up productivity so as to match supply with demand. Also with the increasing demand for palm oil not only as cheap cooking oil but as raw material for many factories, palm oil producing factories need to optimise productivity so as to meet up with demand. The problem thus is to see how palm oil shortage in Cameroon can be overcome. Therefore, this study aims at seeking ways by which the oil palm sector in CDC can improve on the productivity of palm oil, to cope with palm oil demand in the industry, by answering the following questions:

1.3 Research Questions

1. To what extent do selection and recruitment influence employees’ productivity in CDC?
2. What role do training and development as aspects of capacity building play on the productivity of CDC workers?
3. To what extent do the reward and compensation schemes adopt influence workers’ productivity at CDC?
4. What role does the leadership style play on employee productivity at CDC oil palm plantations?
5. What role does the performance appraisal system play in employee productivity at CDC oil palm plantations?