Improving Operational Productivity at Farmbox Through Effective HRM

This report provides a comprehensive analysis of Farmbox's HRM practices, focusing on recruitment, selection, and onboarding processes and their impact on productivity and employee behavior. It identifies issues related to declining productivity following recent recruitment efforts. The report defines and evaluates various HRM models and theories, including AMO theory, Human Capital Theory, Agency Theory, and the Michigan models, assessing their appropriateness within the Farmbox context. It examines both the positive and negative aspects of these models, highlighting areas that need improvement. The report also recommends specific models, theories, and procedures for Farmbox to adopt to enhance operational productivity through more effective HRM talent management, concluding with suggestions for improvement and future strategy.

Managing People

Table of Contents
Introduction......................................................................................................................................3
Identify the issues that the company are experiencing with their productivity in relation to the
recruitment, selection and on-boarding procedures.........................................................................4
Define HRM recruitment and selection models, theories and concepts that Farmbox currently
have in place and explain how these can affect the behavior of the staff within the workplace,
that may also affect productivity......................................................................................................4
AMO theory (Ability, motivation and opportunity).................................................................................4
Human Capital Theory:...........................................................................................................................5
Agency Theory........................................................................................................................................6
The Michigan models..............................................................................................................................6
Assess the appropriateness of the models, theories and concepts that have been deployed by
Farmbox and identify the positive elements and any area of the procedure that may need to
improve............................................................................................................................................7
AMO theory (Ability, motivation and opportunity).................................................................................7
Human Capital Theory:...........................................................................................................................7
Agency Theory........................................................................................................................................8
The Michigan models..............................................................................................................................8
Identify and recommend models, theories and concepts, policies and procedures for Farmbox to
adopt to improve their operational productivity though more effective HRM talent management.9
Conclusion.....................................................................................................................................11
Reference.......................................................................................................................................12
Introduction
HRM is about managing coworkers, being the human side of corporate management with

policies, procedures, rules, and systems that affect the organization's staff, and it is about using
workers effectively and efficiently to achieve the organization's goals. As a recruitment and
selection consultant, I have to identify the HRM theories used by FarmBox and the potential
positive and negative aspects of them. How these theories effect employee behavior has also
been discussed alongside a recommendation of the theories which should be used by the
organization.

Identify the issues that the company are experiencing with their productivity
in relation to the recruitment, selection and on-boarding procedures.
From our case study, we found that our client, Farmbox has been using a specific HRM practice
in its company. Through that it has recently conducted a recruitment and selection program to
hire a few employees. Although the main reason was to improve its operations and productivity,
the recent recruitment of the company has resulted in a decline in the productivity of the
company and a change in its employee behavior. Many of them are looking to leave the company
once they have secured alternative employment. In other words, we can say that the company is
facing a recruitment issue, as the problems have begun after their recent recruitment. Here, I
must evaluate the client's internal recruiting and selection process to identify potential issues as a
recruitment and selection specialist consultant.
Define HRM recruitment and selection models, theories and concepts that
Farmbox currently have in place and explain how these can affect the
behavior of the staff within the workplace, that may also affect productivity.
Farmbox has employed a number of HRM models in its business and activities. These models
and theories are defined here briefly:
AMO theory (Ability, motivation and opportunity)
Ability, Motivation, and Opportunity are the three-independent work-system elements that shape
employee characteristics and ultimately contribute to organizational performance, according to
AMO theory. Organizational goals are better served by these three components and AMO theory
paves the way for line managers to use innovative methods that result in employee motivation.
To begin, ability refers to HR activities and policies that ensure that workers have or gain the
necessary expertise, experience, and ability to fulfill their tasks with minimal oversight, as
described by Yahya, Tan, and Tay (2017). Ability-enhancing HRM strategies are those that
improve employees' abilities and competencies in order to meet organizational goals. Ability-
enhancing activities, on the other hand, relate to the steps taken to ensure a successful recruiting
and selection process that results in the hiring of the best candidates with the right qualifications
for the job.
Second, motivation applies to job success, as well as HR policies for managing motivation in the
workplace. It also refers to the methods by which workers are encouraged to bring forward more

and extra effort in completing delegated assignments, mostly by thanking them for the efforts
they have already put forward in their work, as well as improving HRM practices within
companies to perform well, such as contingent incentives and performance improvement
(Armstrong, 2002).
The final component is opportunity-enhancing HRM practices, which seek to increase employee
participation by offering resources. The activities that transfer decision-making power and
responsibility from top level hierarchy to lower-level hierarchy by knowledge exchange are
referred to as opportunities-enhancing HRM practices.
Human Capital Theory:
Human capital depicts people's interest in themselves, or in their talents, which raises their
economic efficiency in the long run. Their philosophy is based on the premise that increased
intellectual resources contributes to increased innovation, which leads to increased personal
profits. Supporters of this hypothesis conclude that trained people are more creative, that is, they
are more productive and can earn more than the others of the society or country. According to
human resource economists, schooling raises workforce effectiveness and performance by
raising the level of cognitive stock of commercially efficient human capacity, which is the result
of inherent capability and investment in human beings (Taylor, 2006). The reasoning behind
investment in human resources is based on three points of view: first, new generations must be
given access to information that previous generations possessed. Second, the next generation
should be educated on how to use current knowledge to create and innovate new goods and
social services. Third, the younger generation should be motivated to use innovative tactics to
find radically new ways to meet the community's needs.
Agency Theory
The agency theory is applied to cases in which a principal (owner) assigns duties to an agent
(employees) on his behalf, with some decision-making power. When authority is assigned by
managing actions and building employee relations, this principle is applied to HRM to reduce
conflicts of interest between principals and agents. The tracking expense of the agency is directly
linked to the agent's behavior. As in FarmBox, the top management gave the HRM department
responsibility to recruit and select employees, this made the employees more empowered and

motivated to work than before. They were better engaged to their work and were willing to
contribute more for the organization. Moreover, thought the employees at Farmbox worked
together with the existing employees before the start of their work, but it was for a very limited
time, so it was not effective (Armstrong, 2002). This theory focuses on aligning individual
expectations with organizational goals, encouraging employees to take risks and act in the best
interests of the company. Employees can also be rewarded as their success improves.
The Michigan models
Hard HRM is the subject of the Michigan model (Fombrun, Tichy, and Devanna, 1984). It holds
that people should be treated like any other resource, meaning that they should be acquired
cheaply, used sparingly, created, and completely utilized. It also emphasized how HRM practices
are intertwined. Selection, assessment, progress, and incentives were all based on organizational
success in this model.
Here, as this model aims at treating employees like other resources of the organization, it makes
them feel motivated. the employees are more willing to work for the organization and are freer
and more open to any changes. As a result, it can increase the productivity of the organization as
well. As this model requires that the HRM strategies are aligned with the long-term strategies of
the model, it ultimately increases the productivity of the companies.

Assess the appropriateness of the models, theories and concepts that have
been deployed by Farmbox and identify the positive elements and any area of
the procedure that may need to improve.
In the previous section, we have discussed the various HRM theories and practices that Farmbox
have employed. Now let’s have a brief discussion on the positive and negative aspects of them
here.
AMO theory (Ability, motivation and opportunity)
This theory is one of the major models and theories implied by Farmbox in their human resource
management activities. There are quite a few positive and negative aspects of this theory. The
major positive side of this theory is that HRM activities that improve capacity include recruiting
and procurement, as well as preparation and advancement, which provide staff with the requisite
expertise and experience to execute duties (Boselie, 2005). In addition, this theory gives
employees the required opportunities they need to show their talent and perform effectively for
their organizations. This approach increases employee interest in the company and accelerates
productivity through collaborative efforts.
Human Capital Theory:
The positive aspects of this theory are that According to this theory, skilled people are more
prosperous, suggesting that they earn more money than the majority of the population. However,
some researchers believe that the connection between income and education is small. The ability
of HCT to assist politicians and analysts in evaluating the relationships between education and
training as inputs and economic and social gains as outputs is one of its major strengths. Another
advantage of HCT is that it offers a valuable window from which to see how policy can be
developed to encourage people to engage in their own education. Pursuing education has both
costs and advantages (for example, foregoing future earnings in the short term). “Simple
earnings-to-years-of-schooling ratios are very poor. Furthermore, when variables associated with
schooling are added to several regressions, the schooling regression coefficient is very small
(Purcell, 2007).
HCT has a drawback in that it believes that schooling improves worker efficiency, resulting in
higher employee incomes, but it has no insight into how education and training are converted
into higher salaries. Education and preparation account for around 30% of the variation in

individual incomes in mathematical models, implying that HCT doesn’t explain a big amount of
variability.
Agency Theory
There are quite a few positive and negative aspects of this theory. A major benefit is that when
the business is owned by the director, conflicts of interest are avoided, and adequate incentives
are in place to guarantee that the agent does not affect the principal, the expense of the agency
can be reduced (Boselie, 2005).
Coming to the negative aspects, First, there's the issue of risk sharing, which arises where the
agent and the principal have opposing risk interests, such as one being a risk taker and the other
being risk averse. The other issue is the Agency problem, also known as the principal-agent
problem, as described by the Investopedia dictionary, is an issue that arises as a result of a
conflict of interests is known as an organization problem.
The Michigan models
According to this model, people should be treated like any other resources. It has a number of
positives and negative aspects. The model's benefit was its connection to business success and
organizational development. Internal human resource practices should be merged with external
company policy, according to the study. This model emphasizes a manager's strategies for
organizing workers and recognizes mutuality in all enterprise. Managers seek solutions that can
help them to better use staff within the company while still developing operating processes and
means of deploying workers that are appropriate for individuals to allow their talents to be
recognized and their contributions to be valued (Katou, 2010). It also resulted in cost-cutting
because workers were seen like any other advantage that could be purchased cheaply. The model
focuses on achieving the engagement, loyalty, and cooperation of workers. Employees are
motivated to complete their duties and help the company prosper and thrive through reward
programs and motivating strategies. To achieve a win-win scenario, this model focuses on
achieving employee loyalty and cooperation. While the first emphasizes on strategic plans and
mission attainment, the second argues that employees are the company's most valuable
commodity, and that developing and empowering employees, as well as strengthening employee
satisfaction, are critical to the company's success.
However, there is a risk of commercial loss due to a lack of understanding of the environment.
More importantly, HRM preparation to ensure the organization's present and potential job needs

was limited since the emphasis was on business rather than human resources. Furthermore, with
the increasing use of right-based methods, such a paradigm would disintegrate in the face of
community diversity and intra-group tension (Chuang et al, 2004), resulting in organizational
failure.
Identify and recommend models, theories and concepts, policies and
procedures for Farmbox to adopt to improve their operational productivity
though more effective HRM talent management.
HRM's policies and procedures, as well as its position within the company, are critical. However,
because of the variations in organizational structure and setting, the HRM function of one
organization may be generalized to another. It is critical for businesses to develop best HRM
practices and policies that allow workers to continue learning and have a flexible work
environment. FarmBox has been using different types of HRM theories through which it has
conducted its selection and recruitment. However, to improve their productivity and staff
behavior, Farmbox should try to implement a number of HRM theories and models through
which it can solve its current problems. We shall recommend some of these theories and their
implementation in this section briefly. Any organization's effectiveness is determined by its
employees' desire to learn and accomplish set objectives. On of our recommended theory is the
contingency theory, which suggests that HRM functions must align with the organization or
external world dimensions to accomplish operational objectives, according to this theory.
Contingency theory in HRM, according to Harney (2016), is dependent on external and internal
fit. HR activities must be externally compatible with the organization's policy and operating
environment. Besides that, by adopting HR practices such as promoting policies that encourage
employees, companies can foster employee habits that are aligned with company strategy. Since
employee behavior is influenced by an employee's capacity and motivation, an enterprise can
influence staff actions by enforcing HR practices such as promoting policies that motivate
employees. Contingency considerations such as history, globalization, and company size, on the
other hand, have a significant impact on HRM functions. Since various cultures imply different
HR practices, as an organization enters a new world with a culture that differs from the existing
culture, it must adapt its HR practices accordingly. More knowledge is needed by HRM in order
to make decisions, manage transitions, and ensure a balance of employee behavior in a new

context. Since the effects of globalization include introducing companies to emerging
technologies, which necessitates more training for employees and the hiring of skilled labor, and
globalization leads to new opportunities, which necessitates more training for employees and the
hiring of skilled labor, globalization is a condition of HR activities (Katou, 2010). Often,
organization size affects HRM because in smaller businesses, the HR department does not exist
or be very limited, and the role may be assumed by the production manager, while larger
businesses have a different HR department that can handle more issues and requires more HR
experience to be attentive. As Farmbox has experienced decline in its productivity and its
customers service has been hampered, implementing the contingency theory will be able to solve
this problem for the organization.
Another theory which should be used is the transaction cost theory, which deals with the
employee behavior and performance. It examines the issue of human trade (contract) through the
lens of finance and economics. This hypothesis pertains to the HR department's interpretation of
the employee's contract. In the contract, transaction cost theory is used to solve opportunism and
rationality. To begin, opportunism refers to a relationship between parties that operate in their
own self-interest; a firm must have provisions in the contract as guarantee to ensure that the
parties should not behave in their own best interests Second, logic implies that the deal lacks
sufficient facts, preventing the organization from making the best decision possible. Employee
motivation can be described using transaction cost theory at the worker, group, and
organizational levels. The theory refers to the pay structure and the provision of appropriate
incentives for an employee's success. Often, whether any gaps, mistakes, or unanticipated
disruptions exist between the partners, the transaction cost principal aids in contract execution.
Apart from these two theories, we can also recommend some other theories like institutional
theory, resource-based theory and others to improve the productivity and employee performance
of Farmbox.

Conclusion
To conclude, HRM is the opportunity to use employees successfully and efficiently to reach an
organization's goal, and HRM theories assist HR in accomplishing this goal while also increasing
employee engagement and dedication. Different types of theories that can increase the
employee’s performance and Farmbox’s productivity were explored in this report. AMO theory,
agency theory, contingency theory etc. are described here in light of our organization. Finally, we
have recommended the contingency theory and the transaction cost theory for improving the
productivity of the firm.

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