1 Task Allocation and Human Resource Management at Glasshouse Holdings in the Flanders Nicole Taragola and Dirk Van Lierde Ministry of the Flemish Community Centre for Agricultural Economics (CAE) Treurenberg 16, 4 th floor 1 Brussels Belgium Guido Van Huylenbroeck Ghent University Coupure Links 653 9 Ghent Belgium Keywords : glasshouse horticulture, labour organisation, HRM, personnel Abstract As glasshouses are becoming fewer in number and larger in size, labour organisation and human resource management (HRM) will become more important. This paper attempts to provide a pilot study by examining the task allocation and the situation of HRM practice at Flemish glasshouse holdings. Data for the research are based on interviews at a representative sample of 148 glasshouse holdings belonging to the FADN. The sample consists of 59 glasshouse holdings specialised in production of vegetables and 89 holdings specialised in production of ornamental plants. The results reveal that the task allocation and HRM practices at holdings specialised in vegetable production and those specialised in production of ornamental plants are largely comparable. The personnel is almost exclusively employed in production activities. The hypothesis that HRM practices are more important at large glasshouse holdings can only be confirmed to a limited extent. No significant differences between small and large holdings could be observed with regard to involvement of personnel in decision-making, rewarding policy, training opportunities, With a further increase in scale of glasshouse production in the near future it will be important for the firm managers to attach a greater importance to HRM. INTRODUCTION Horticultural enterprises worldwide are entering a new phase in which integrated responsibilities for people (employment, health, education, human rights), profit (economic and financial continuity) and planet (clean environment and preservation of resource stocks) are becoming a necessity for good entrepreneurship (Van Lierde and Taragola, 22). Compared to the economical and environmental aspects, there has been little discussion thus far about the social dimension of sustainable development in Flemish glasshouse horticulture. Human resource management is an important aspect of this social dimension and is a relatively new area in horticultural research in the Flanders. As glasshouses are becoming fewer in number and larger in size (Van Lierde and Taragola, 2), the likelihood of glasshouse holdings employing permanent and skilled labour increases. A problem reported by several glasshouse managers is a shortage of skilled labour willing and able to work on the glasshouse holdings. Competition for labour and the management of that labour both belong to the field of human resource management (HMR).
2 There are a half of dozen of definitions of HRM, such as HRM involves all management decisions and actions that affect the relationship between the organization and employee its human resources (Beer et al., 1994), HRM is a distinctive approach to employment management which seeks to achieve competitive advantage through the strategic management of a highly committed and capable workforce, using an integrated array of cultural, structural and personnel techniques (Storey, 1995), But the essence of HRM is as simple as to get work done through strategic selection of suitable staff, training and development of competent and skilled workers, provision of incentive reward systems to retain employees and overall flow of management communication, performance appraisal to increase level of transparency and conflicts and achieve cost effectiveness (Price, 1997). From a resource-based view, human resources are the productive services human beings offer the firm in terms of their skills, knowledge, reasoning and decision-making abilities. Economists refer to these resources as human capital which emphasizes the fact that they are durable and created through investment in education and training (Grant, 1998). The objective of the research is to provide a pilot study by examining the task allocation between the firm manager, the partner, family members and personnel and the situation of HRM practice in Flemish glasshouse holdings, in relation to the size of the glasshouse. According to the contingency theory and research at small and medium-sized enterprises (Donckels et al., 1993) co-ordination problems will become more important as the scale of the organisation increases. Problems with human resource management can also be an important obstacle for firm growth. Consequently the hypothesis can be formulated that, independent of sector differences, large-sized glasshouse holdings will attach more importance to good practice HRM. One can expect that the firm manager of a large enterprise is more a manager than a doer. MATERIAL AND METHOD Data for the research are obtained from the stratified sample of glasshouse holdings belonging to the Farm Accounting Data Network (FADN) of the Centre for Agricultural Economics. The stratified sample is obtained by dividing the population (Census May 15 th, National Institute for Statistics, Brussels) into strata based on the type and economic dimension of the holdings and then selecting a random sample from each of the strata. For more information on the methodology of sampling, one can refer to Van Lierde and Taragola (2). In addition to the accounting data, in 1999 information was gathered on the management practices of the glasshouse managers by means of a structured and pre-tested questionnaire. In 1999 the sample is composed of 59 glasshouse holdings specialised in production of vegetables and 89 holdings specialised in production of ornamental plants. An important part of the questionnaire was dealing with task allocation and human resource management. In order to get an idea of the task allocation the different tasks were divided into four clusters of activities : production activities, commercial activities, human resource management and financial-administrative activities. For each of the clusters the respondents were asked to indicate the relative percentage of the time spent by the firm manager, the partner, family members and personnel. The HRM practices of the respondents with personnel were evaluated by asking them to rate the importance they attach to several HRM practices on a Likert-type scale from 1 to 5 (involvement of personnel in decision-making, training opportunities for personnel, ).
3 In order to test the formulated hypothesis the holdings are divided into three size classes (small, medium, large) according to their economic dimension. The economic dimension of a holding is calculated by multiplying the cultivated area of each crop to the corresponding Standard Gross Margin, resulting in the total Standard Gross Margin of the holding. The typology of the holding depends on the relative importance of the Standard Gross Margins of the cultivated crops (Van Lierde and Taragola, 2). A Standard Gross Margin 1998 (average of the standard gross margins for the accounting years 1996, 1997, 1998, 1999 and 2) of 5.35 Euro is corresponding to 1 Standard Gross Unit (S.G.U.). The three size classes are: small holdings : S.G.U.-class 1 : 4 - < 26 S.G.U.; medium-sized holdings : S.G.U.-class 2 : 26 - < 5 S.G.U. and large holdings : S.G.U.- class 3 : >= 5 S.G.U. For example, at a holding with year-round tomato production these limits are corresponding with following areas : S.G.U.-class 1 : 1.228 - <7.984 m², S.G.U.-class 2 : 7.984 - <15.35 m², S.G.U.-class 3 : >= 15.35 m². Analysis of variance (ANOVA) and the post hoc Duncan test are used to test the statistical significance of the differences in the mean scores obtained for the three size classes. RESULTS AND DISCUSSION Composition of the labour In table 1 the composition of the labour is represented for the glasshouse holdings of the sample specialised in vegetable production. In the table the labour units are converted to full-time labour units, permitting to make comparisons of the labour input. The data represented in the table show that firm size has an important influence on the employment of paid labour. At the 25 smallest holdings of S.G.U.-class 1, on the average only 1,93 full-time labour units are employed, of whom,49 are paid. of these holdings only employ familial labour (mainly the firm manager and the partner). At the 23 medium-sized holdings, belonging to S.G.E.-class 2, on the average 4,15 full-time labour units are employed, of whom 2,49 are paid. At the largest holdings of S.G.U.- class 3 on the average 7,91 full-time labour units are employed, of whom 5,88 are paid. At most of the holdings permanent as well as occasional labour is employed. The firm managers of the 59 holdings in the sample are all male, 56 of them are married and/or cohabiting. 55 of the 56 partners are employed in the firm. Table 2 gives an overview of these data for the glasshouse holdings of the sample specialised in production of ornamental plants. At the 59 smallest holdings of S.G.U.- class 1, on the average only 2,4 full-time labour units are employed, of whom,5 are paid. 31 of these holdings only employ familial labour (mainly the firm manager and the partner). At the 17 medium-sized holdings, belonging to S.G.E.-class 2, on the average 3,54 full-time labour units are employed, of whom 1,69 are paid. At the largest holdings of S.G.U.-class 3 on the average 6, full-time labour units are employed, of whom 4,46 are paid. At most of the holdings permanent as well as occasional labour is employed. 14 of the 59 smallest holdings only work with occasional labour. 86 of the 89 firm managers of holdings in the sample are male. The glasshouse holdings of the 3 female firm managers are situated in the smallest size class. 84 of the 89 firm managers are married and/or cohabiting; 7 of the 84 partners are employed in the firm. Task allocation among the firm manager, the firm manager, the partner, family members and personnel
4 Figures 1 and 2 give an overview of the allocation of the different tasks among the firm manager, the partner, family members and personnel at small (fig. 1) and large (fig. 2) glasshouse holdings specialised in vegetable production. Figures 3 and 4 present the results for the glasshouse holdings specialised in production of ornamental plants. The results reveal that the task allocation at glasshouse holdings specialised in vegetable production and those specialised in production of ornamental plants is largely comparable. The firm manager and the partner are playing an important role in all clusters of activities. The personnel is almost exclusively employed in production activities. The commercial activities are mainly performed by the firm manager, assisted by the partner and family members. Most of the time spent at human resource management and financial-administrative activities is allocated to the firm manager. Also the partner however is playing an important role for these two last mentioned activities, especially for financial-administrative tasks. At the glasshouse holdings specialised in vegetable production as well as those specialised in production of ornamental plants the task allocation is influenced by firm size. This is especially the case for production activities, as the contribution of personnel is becoming more important for this kind of activities at larger firms. At the small as well as the large glasshouse holdings specialised in vegetable production the firm manager is mainly responsible for the commercial activities, which makes that firm size does not have any influence on the task division of these activities. Contrary to the results of the vegetable growers, at the holdings specialised in production of ornamental plants a relation was found between firm size and the task allocation of commercial activities. At the small holdings with production of ornamental plants the commercial activities are mainly performed by the firm manager, while the partner and the family members are playing an important role at the large-sized holdings. Undoubtedly the difference between the vegetable producers and the producers of ornamental plants is influenced by the more complex character of commercialisation of ornamental plants in the Flanders. While vegetables are mainly commercialised through auctions, ornamental plants are commercialised through a variety of marketing channels, such as own export, export firms, Dutch auctions, etc At the small as well as the large glasshouse holdings specialised in vegetables or ornamental plants the firm manager is mainly responsible for the human resource management. However at the large holdings with vegetable production also an important role of the partner could be observed. With regard to the financial-administrative activities the influence of firm size is not so clear. The relative time spent at these tasks by the partner, as a percentage of the total time spent at financial-administrative tasks at the holding, is slightly higher at the small holdings with vegetables compared to the larger ones. At the holdings with ornamental plants on the other hand, the relative part of the time spent at the financial-administrative activities by the partner is lower at the small and medium-sized holdings and equals the time spent at these tasks by the firm manager. Human resource management Human resource management is often presented as a cycle which is composed of following activities: selection, performance, evaluation, motivation and remuneration, development and training (figure 1). An examination of empirical research in the domain of small and medium-sized enterprises shows that researchers do not necessarily focus on the same HRM practices when studying HRM systems of High Performance Work Practices (Sels et al., 23). In our study we decided to select the HRM domains that are
5 most relevant for personnel working at glasshouse holdings, such as involvement in decision-making, discussions about functioning, rewarding policy, opportunities for training, labour conditions, safety measures, etc. Also attention was paid to possible outcomes of HRM, such as changes in personnel, sickness rate, etc and to the problem of finding suitable personnel. In figure 6 the mean scores are presented for the small and the large glasshouse holdings specialised in production of vegetables. Also the statistical significance of the differences in the mean scores is indicated ((*),5>p>=,1; (**),1>p>=,1; (***) p<,1). As expected, the firm managers of the small holdings are attaching a significantly lower importance to HRM. No significant differences between the small and large holdings could be noticed with respect to involvement of the personnel in decisionmaking. The personnel is mainly charged with executive tasks, resulting in a low participation in the decision-making process. Also in the future almost no plans are mentioned to change this situation. Task allocation between the different personnel members is highly dependent on their skills at the large holdings, contrary to the small holdings where a lower amount of personnel is employed. Discussions about functioning or problems related to the labour organisation are significantly more important at the larger holdings. The firm managers of the small as well as the large holdings declare to have a rigid rewarding policy, where fixed wages are paid independent of the performance of the workers (opposed to incentive reward systems). Opportunities for training and development are almost not available as the majority of the firm managers of the small as well as the large holdings prefers on-the-job-training. The firm managers of the large holdings are more willing to improve the labour conditions of the personnel than those of the small holdings. On the average the large holdings mention to have more problems to find suitable personnel, which is quite logical due to the fact that their need for personnel is higher. However the difference between the small and the large holdings is not statistically significant. In general almost no specific actions are undertaken to find suitable personnel at the small as well as the large holdings. The firm managers declare to apply the legal safety measures, independent of firm size. With respect to the outcomes of HRM, one can observe that the rate of change in permanent and even casual labour is rather low independent of firm size. Also absenteeism due to sickness is low at the large as well as the small holdings. In figure 7 the results are presented for the holdings with production of ornamental plants. In general little differences can be noticed compared to the holdings with vegetable production. At the holdings specialised in production of ornamental plants, the wages are more depending on the performance of the personnel at the large holdings as compared to the smaller ones. The firm managers of the large holdings are also more positive towards extra training of personnel. A number of large holdings specialised in production or ornamental plants employ personnel with a management function. Some of the large holdings with ornamental plants also mention to have problems to find suitable personnel. CONCLUSION The results of the research give more insight into the task allocation and HRM practices at glasshouse holdings in the Flanders. The hypothesis that HRM is given more attention by the firm managers of large glasshouse holdings can only be confirmed to a limited extent. Although the firm managers of large glasshouse holdings declare to attach a high importance to HRM, almost no statistical significant differences between small and
6 large holdings could be observed for the specific items of the questionnaire. At small as well as large glasshouse holdings the personnel is mainly charged with executive tasks. With a further increase of the scale of glasshouse production in the near future it will be important for the firm managers to be aware of the techniques needed for a good HRM practice. The results of the research reveal that also the partner is playing an important role in HRM. Consequently training in HRM has to be encouraged for glasshouse growers and their partner. Despite of all efforts already made it will be necessary for the glasshouse growers to improve their image as an employer. An active effort of the glasshouse growers is needed with respect to involvement of their personnel in decisionmaking. The possibility to give more responsibility to the personnel has to be considered. The conclusion can be drawn that there is still a future for glasshouse horticulture, at condition that the firm managers will become more aware of the techniques needed for a good HRM practice. Literature Cited Beer M., Spector B., Lawrence P., Mills D. & Walton R.E. (1984). Managing human assets. New York, Free Press Donckels R. et al. (1993). K.M.O. s ten voeten uit, van onderzoek tot actie. Koning Boudewijnstichting, Roularta Books, K.M.O.-Studiecentrum, K.U.Brussel Grant R.M. (1998). Contemporary Strategy Analysis, third edition, Blackwell Publishers Price A. (1997). Human resource management in a business context. International Thomson Business Press, London Sels L. et al. (23). How HRM affects corporate financial performance : evidence from Belgian SMEs. Working Paper Steunpunt OOI Storey J. (1995). Human Resource Management : still marching on, or marching out? Human Resource Management : A critical text, edited by J. Storey, London Van Lierde D. & Taragola N. (2). Structuur van de Belgische tuinbouwbedrijven. C.L.E.-Studie A9, Centrum voor Landbouweconomie, Brussel Van Lierde D. & Taragola N. (22). Toekomst van de tuinbouwsector. C.L.E.- Document B14, Centrum voor Landbouweconomie, Brussel Tables Table 1. Composition of the labour at the glasshouse holdings specialised in production of vegetables (F.L.U. = full-time labour unit) - Number of holdings - F.L.U. total - F.L.U. familial - F.L.U. paid - Number of holdings with married and/or cohabiting firm manager from whom: - working in the firm - Number of holdings with paid labour from whom: - permanent and casual - only permanent - only casual S.G.U-class 1 S.G.U.- class 2 S.G.U.- class 3 Total 25 23 59 1,93 4,15 7,91 3,98 1,44 1,66 2,3 1,66,49 2,49 5,88 2,32 24 21 56 24 14 7 4 3 2 21 3 7 1 1 55 46 28 8 1
7 Table 2. Composition of the labour at the glasshouse holdings specialised in production of ornamental plants (F.L.U. = full-time labour unit) - Number of holdings - F.L.U. total - F.L.U. familial - F.L.U. paid - Number of holdings with married and/or cohabiting firm manager from whom: - working in the firm - Number of holdings with paid labour from whom: - permanent and casual - only permanent - only casual S.G.U-class 1 S.G.U.-class 2 S.G.U.-class 3 Total 59 17 89 2,4 3,54 6, 2,92 1,54 1,85 1,67 1,62,5 1,69 4,46 1,3 54 17 84 48 28 9 5 14 17 9 5 3 9 7 58 31 1 17 Figures Task allocation vegetables small (in %) Task allocation vegetables large (in %) 1 1 8 8 6 6 4 4 2 2 Production Commercial Personnel Administrative Production Commercial Personnel Administrative Personnel Partner Family members Manager Personnel Partner Family members Manager Fig. 1 & 2. Task allocation among the firm manager, the partner, family members and personnel at the small (left) and large (right) glasshouse holdings specialised in production of vegetables Task allocation ornamental plants small (in %) Task allocation ornamental plants large (in %) 1 1 8 8 6 6 4 4 2 2 Production Commercial Personnel Administrative Production Commercial Personnel Administrative Personnel Partner Family members Manager Personnel Partner Family members Manager Fig. 3 & 4. Task allocation among the firm manager, the partner, family members and personnel at the small (left) and large (right) glasshouse holdings specialised in production of ornamental plants
8 REM UNE- RATION SELECTION PERFOR- MANCE EVALUATION DEVELOP- MENT Fig. 5. Human resource management as a cycle (Donckels et al., 1993) IMPORTANCE HRM (***) INVOLVEMENT PERSONNEL TASK DIVISION PERSONNEL (*) DISCUSS. FUNCTIONING PERSONNEL DISCUSS. PROBLEMS PERSONNEL REW ARDING POLICY TRAINING PERSONNEL IMPROV. LABOUR COND. (*) SAFETY PERSONNEL CHANGES PERM. PERSONNEL CHANG. CASUAL PERSONNEL SICKNESS PERSONNEL PROBLEMS TO FIND PERSONNEL ACTIONS TO FIND PERSONNEL 1 2 3 4 5 VEGETABLES SMALL VEGETABLES LARGE Fig. 6. Human resource management at the glasshouse holdings specialised in production of vegetables IMPORTANCE HRM (***) INVOLVEMENT PERSONNEL TASK DIVISION PERSONNEL (*) DISCUSS. FUNCTIONING PERSONNEL DISCUSS. PROBLEMS PERSONNEL REW ARDING POLICY TRAINING PERSONNEL (*) IMPROV. LABOUR COND. SAFETY PERSONNEL CHANGES PERM. PERSONNEL CHANG. CASUAL PERSONNEL SICKNESS PERSONNEL PROBLEMS TO FIND PERSONNEL ACTIONS TO FIND PERSONNEL 1 2 3 4 5 ORNAMENTAL PLANTS SM ALL ORNAMENTAL PLANTS LARGE Fig. 7. Human resource management at the glasshouse holdings specialised in production of ornamental plants