1

OF

(HRM IN SMALL AND MEDIUM ENTERPRISES)

Sub: HUMAN RESOURCE MANAGEMENT

Submitted to:

Miss.CHANJYOT KAUR

Submitted by;

Mohammad Abbas

Roll No. RS-1904A24

10906034

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Acknowledgements

I am thankful to Miss.CHANJYOT KAUR for providing me

the task of preparing the Term Paper of human resource

management. We at Lovely believe in taking challenges and

the term paper provided me the opportunity to tackle a

practical challenge in the subject of human resource

management. This term paper tested my patience at every

step of preparation but the courage provided by my teachers

helped me to swim against the tide and move against the

wind.

I am also thankful to my friends and parents for providing me

help at every step of preparation of the Term Paper.

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CONTENTS;-

INTRODUCTION OF HRM

INTRODUCTION OF SMALL ENTERPRISES

ADVANTAGES OF SMALL AND MEDIUM ENTERPRISES

PROBLEMS FACED BY SMALL AND MEDIUM ENTERPRISES

HRM in SMEs - deficient or different? 

PRACTICES IN SMALL AND MEDIUM ENTERPRISES

RECRUITMENT

SELECTION

ORIENTATION

DEVELOPMENT & CONTINUED EMPLOYEE

INVOLVEMENT

RETENTION

HRM IN SMALL AND MEDIUM ENTERPRISES IN BRIEF

CONCLUSION

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The definition of human resource management

The function of human resource management (HRM) in large organizations

involves a wide range of activities, and crucial ones among them include

deciding on what staffing needs a firm has and whether to use Independent

contractors or hire employees to meet these needs, recruiting and training the

best employees, ensuring they are high performers, dealing with performance

issues, and ensuring your personnel and management practices conform to

various regulations.

Activities also include management approaches, employee benefits and

compensation, employee records and personnel policies. Usually small

businesses (for-profit or non profit) have carried out these activities themselves

because they can't yet afford part- or full-time help.

INTRODUCTION

A small business is a business that is privately owned and operated, with a small

number of employees and relatively low volume of sales. Small businesses are

normally privately owned corporations, partnerships, or sole proprietorships. The legal

definition of "small" varies by country and by industry. In the United States the Small

Business Administration establishes small business size standards on an industry-by-

industry basis, but generally specifies a small business as having fewer than 100

employees. In the European Union, a small business generally has under 50

employees. However, in Australia, a small business is defined by the Fair Work Act

2009 as one with fewer than 15 employees. By comparison, a medium sized business

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or mid-sized business has fewer than 500 employees in the US, 250 in the European

Union and fewer than 200 in Australia.

In addition to number of employees, other methods used to classify small

companies include annual sales (turnover), value of assets and net profit

(balance sheet), alone or in a mixed definition. These criteria are followed by

the European Union, for instance (headcount, turnover and balance sheet totals).

Small businesses are usually not dominant in their field of operation.

Small businesses are common in many countries, depending on the economic

system in operation. Typical examples include: convenience stores, other small

shops (such as a bakery or delicatessen), hairdressers, tradesmen, lawyers,

accountants, restaurants, guest houses, photographers, small-scale

manufacturing etc.

The smallest businesses, often located in private homes, are called micro

businesses (term used by international organizations such as the World Bank

and the International Finance Corporation) or SoHos. The term "mom and pop

business" is a common colloquial expression for a single-family operated

business with few (or no) employees other than the owners. When judged by the

number of employees, the American and the European definitions of a micro

business are the same: under 10 employees. There is a notable trend to further

segment different-sized micro businesses; for instance, the term Very Small

Business is now being used to refer to businesses that are the smallest of the

smallest, such as those operated completely by one person or by 1-3 employees.

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Advantages of small business

1. A small business can be started at a very low cost and on a part-time basis.

Small business is also well suited to internet marketing because it can easily

serve specialized niches, something that would have been more difficult prior to

the internet revolution which began in the late 1990s.

2. Adapting to change is crucial in business and particularly small business; not

being tied to any bureaucratic inertia, it is typically easier to respond to the

marketplace quickly.

3. Small business proprietors tend to be intimate with their customers and

clients which results in greater accountability and maturity.

4. Independence is another advantage of owning a small business. One survey

of small business owners showed that 38% of those who left their jobs at other

companies said their main reason for leaving was that they wanted to be their

own bosses. Freedom to operate independently is a reward for small business

owners.

5. Many people desire to make their own decisions, take their own risks, and

reap the rewards of their efforts. Small business owners have the satisfaction of

making their own decisions within the constraints imposed by economic and

other environmental factors. However, entrepreneurs have to work very long

hours and understand that ultimately their customers are their bosses.

6. Several organizations also provide help for the small business sector, such as

the Internal Revenue Service's Small Business and Self-Employed One-Stop

Resource.

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Problems faced by small businesses

1. Small businesses often face a variety of problems related to their size. A

frequent cause of bankruptcy is undercapitalization. This is often a result of

poor planning rather than economic conditions - it is common rule of thumb that

the entrepreneur should have access to a sum of money at least equal to the

projected revenue for the first year of business in addition to his anticipated

expenses. For example, if the prospective owner thinks that he will generate

$100,000 in revenues in the first year with $150,000 in start-up expenses, then

he should have no less than $250,000 available. Failure to provide this level of

funding for the company could leave the owner liable for all of the company's

debt should he end up in bankruptcy court, under the theory of

undercapitalization.

2. In addition to ensuring that the business has enough capital, the small

business owner must also be mindful of contribution margin (sales minus

variable costs). To break even, the business must be able to reach a level of

sales where the contribution margin equals fixed costs. When they first start out,

many small business owners under price their products to a point where even at

their maximum capacity, it would be impossible to break even. Cost controls or

price increases often resolve this problem.

3. In the United States, some of the largest concerns of small business owners

are insurance costs (such as liability and health), rising energy costs and taxes.

In the United Kingdom and Australia, small business owners tend to be more

concerned with excessive governmental red tape.

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4. Another problem for many small businesses is termed the 'Entrepreneurial

Myth' or E-Myth. The mythic assumption is that an expert in a given technical

field will also be expert at running that kind of business. Additional business

management skills are needed to keep a business running smoothly.

HRM in SMEs - deficient or different? 

The most stable insight of empirical investigations into the characteristics of

Human Resource Management (HRM) in SMEs compared to larger

organizations seems to be an observable lesser degree of institutionalization and

formalization regarding HRM procedures and activities (Behrends/Martin 2006;

Cassell/Nadin/ Gray/Clegg 2002). As such smaller companies often do not have

a separate HR-department (or designated HR-experts) at their disposal, nor do

they usually apply many of the elaborated HRinstruments (Behrends 2002 and

2004). Instead, HR-related activities are often limited to a mere processing of

administrative tasks (such as pay-rolls etc.); while more strategic matters (if at

all) are usually taken care of rather en passant" by senior management. But does

this apparently inattentive treatment of HR-related tasks by many SMEs

necessarily reveal a management deficit? When taking a closer look at the

relevant literature we can find basically two - fundamentally different -

interpretations (or even: "interpretative paradigms") concerning the linkage

between organizational size and HRM. 

The "deficit model" 

Many publications tend to construe the observable absence of (formal) HRM in

small and medium-size enterprises as a severe management deficit". Thus they

stress the need for stronger regulation of HR-related activities by implementing

standardized tools and structures. However, this line of argumentation is

obviously underpinned by a notion that regards the highly differentiated HRM-

systems of large corporations as the one best way and therefore as a desirable

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ideal for SMEs as well. Often already through their empirical design, the

respective studies are mainly focused on exploring the degree of proliferation of

those modern HRM-practices usually found in large corporations. As a

consequence, this view may only inadequately account for the specific

structural realities in SMEs and thus lets this type or organizations nearly

inevitably appear to be unprofessional and deficient (Curran/Blackburn 2001). 

The "equivalence model" 

In contrast to the "deficit model" a second perspective on explaining size-

dependent differences concerning HRM - the so called "equivalence model" - is

informed by the consideration that there is no one best way for handling the

challenges of HRM. Building on a functionalistic understanding of

organizations, this research perspective emphasizes the fact that certain

indispensable HR-functions have to be fulfilled in any given social system in

order to secure its long-term survival (Martin 2001). But as there usually exists

a wider range of alternative options for handling these elementary functional

requirements (so called functional equivalents), the suitability or

appropriateness of an organization's particular approach towards HRM can not

be assessed generally but only against the backdrop of its specific context and

action requirements (Bartscher-Finzer/Martin 2006; Behrends/Martin 2006). So

instead of a priori taking a "large corporations"-research perspective the

equivalence model is basically open to the existence of rather different ways of

coping with fundamental HR-related challenges.

PRACTICES IN SMALL AND MEDIUM ENTERPRISES.

Recruitment

The process of recruitment involves identifying adequate numbers of suitably

skilled and competent persons to apply for the position that has become

available within the organisation (Cook 1998). Other authors have suggested

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that it is to draw a group of appropriately qualified people who want to apply

for employment vacancies that exists (Crompton, Morrissey and Nankervis

2002). Small business, it is suggested, have lacked the formality found in the

recruitment processes that are carry out by big business(Carroll, Marchington,

Earnshaw and Taylor 1999). This of course is the result of the fact that

recruitment for larger organisations that have specific HR staff and departments

to deal with such matters must employ formal strategies to maintain control. On

the other hand, it is apparent that in the family owned and managed small

business, restraints of time and money may contribute to the lack of formal

process involved in the attraction of possible new employees to the business.

Notwithstanding this, small business must “attract” a sufficient number of

employees from which to select and retain employees within the same

competitive environment as large business. Attracting the appropriate employee

is the first phase in establishing the relationship between employer and

employee. From this, is it possible to identify what characteristics of the small

business recruitment processes contribute to effective attraction out comes.

Having briefly reviewed recruitment, attention is now turned to staff selection.

Selection

Selection of staff from those attracted through the recruitment process can often

be a more complex experience. The selection process can include activities such

as checking references, interviewing in order to obtain an appropriate match

between the vacancy and the possible new employee (Worthington 1992). Other

selection activities can include testing the employee’s abilities to see if they

meet the organisations needs. Cook (1998) recognized that it is important that

the candidate selected must be the person who can most effectively contribute to

the businesses goals.

Small business owners are repeatedly forced to have a reactive recruitment and

selection process due to financial and time constraints (Carlson, Upton and

Seaman 2006). Holliday (1995) suggests that often lack of understanding of the

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requirements of the position impede successful recruitment outcomes. The

selection process can be enhanced however through the establishment of a good

“fit” between the employee and employer this can contribute to the matching

process of the relationship. The prospective employee employer match at this

early stage of the association can form the basis for a bond for “attraction”

which can develop and will enhance long term economic goals of both parties.

Staff orientation is now briefly reviewed.

Orientation

Orientation must be conducted as soon as possible after the employee

commences work within the business. Orientation and induction of new

employees has a focus toward “Building the relationship”, that is the employer

developing a relationship with the employee, based on the “attraction” that had

been established in the recruitment and selection phases. Holton (1996)

confirms that orientation is “the most common type of training provided by

organisations” and forms part of a socialization for new employees.

Orientation has been defined as the “introduction of new employees to their job,

their colleagues and the organisation” (Stone 2005). This definition confirms

the importance of building on the “attraction” of the recruitment and selection

process through the rapid development of the initial employee relationship

orientation with not only the other employees but also their relationships within

the organisation. An orientation process that is soundly planned can have the

intended effect of improved productivity as well as retention levels (Brown

2005). The effect of the family-like relationships found in the small business

environment can enhance the new employee’s orientation and ability to rapidly

adapt and fit into the organisation.

Provision of important information as part of the orientation process such as

business guidelines, regulations and rules can significantly reduce the

possibility of mistakes that can lead to stressful situations. Mentoring and

coaching programs established during the orientation process can enhance the

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relationship match established in the selection process. More experienced

employees can enhance the development of relationships by ensuring the new

employee understands the relationships necessary to attain goals and desired

performance outcomes.

Support of new members of staff through encouragement and involvement can

enhance the relationship past the orientation process toward a long-term

relationship of continual employee involvement (Kram 1985). Staff

involvement is enhanced by staff development.

Development & continued employee involvement

The initial orientation provides the new employee with foundation on which his

or her relationship will develop within the organisation, large or small. The

importance of the fulfilment of promises made during the recruitment, selection

and orientation phases will in turn have a major impact upon the development

of the long-term relationship between employee and employer. Employee

satisfaction which can be attained through the development and involvement

within the organisation leads to long-term retention and in tern rewards and

profitability for the employer. Employees must feel that the promises made are

being met by the employer.

Small firms, it is suggested by (Storey 1994), modify their management style

toward the employees and the contributions they can make to the organisation.

It is evident therefore that in small business the impact on each member of staff

has a much greater level of significance than in larger organisations. Chell

(1997) found that by increasing their focus on the relationship with employees,

owner/managers of small business developed more effective performance

levels.

Training and development, which frequently in small business takes the form of

on-the job training, due to the reduced cost factors in comparison to off-the-job

training, can contribute to meeting the promises established during the

recruitment, selection and orientation phases (Harris, DeSimone and Randy

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1994). The added benefit of on-the-job training is that it develops and enhances

relationships at a more personal level and this in turn cultivates and deepening

level of trust between employer and employee within the smaller business. On-

the-job training develops the expertise of the trainer and trainee alike, enriching

a sense of long-term attachment that creates reductions in turnover.

Having identified trust as a factor, the next section outlines the importance of

trust in relationships.

Retention through development of trust

Retention can be enhanced through training and development as well as through

the matching of employee, employer and organisational needs and meeting

promises and expectations established initially within the relationship (Kram

1985). Trust is however something that can only be attained with a sound

understanding of the wants and needs of the employee. Trust is established

when a willingness is established and a reliance develops between both

employer and employee. Behaviours reflect within the relationship a belief that

the employee feels no uncertainty within the relationship with the employer and

the employer likewise feels no vulnerability toward the reliance that he or she

places within the relationship with the employee. Employees have career

expectations that need to be met. If these expectations are not achieved, this can

cause dissatisfaction and lead to employees seeking work elsewhere (Herriot

1989).

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HRM IN SMALL AND MIDDLE SCALE INDUSTRIES

Small-scale enterprises are important for modern economy and it is widely

recognized that they contribute to employment growth. About 99% of all

European companies are small and medium sized and they provide 66% of all

working places. Over the last decade, enterprises with less than 10 employees

provided more new jobs than bigger companies. Surprisingly, personnel

management of small businesses is widely ignored in popular textbooks as well

as in empirical research .However, employee effectiveness might be even more

important in small companies compared to bigger companies. A weakness of

small enterprises is their low labour productivity combined with lower than

average wages .Improving Company’s effectiveness through rationalization is

hardly possible in small companies because of weak financial resources and a

limited number of employees. While task differentiation is low in small

enterprises, individual employees have to work in various areas. Consequently,

the employees and an optimal utilization of their knowledge, capacities, and

motivation are essential for small-scale business success. Human resource

management (HRM) involves practices that ensure that employees’ collective

knowledge, skills, and abilities contribute to business outcomes .The traditional

conceptualization of HRM focused on managing, measuring, and controlling

organization’s workforces. Tactical or technical .HRM includes selection

testing, training, performance measurement and administration of benefits.

Huselid et al identified empirically a second dimension of HRM activities:

strategic HRM includes employee participation and empowerment,

communication, team based work design, and development of managers of the

organization. Arthur (1994) identified two types of human resource systems

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similar to those found by Huselid et al (1997): Commitment and control. The

human resource system that is based on commitment is focusing on the

psychological links between organizational and employee goals. It is associated

with higher involvement in managerial decision, participation, providing

training and rewards. A human resources system that is based on control

focuses on directly monitoring and rewarding employee behaviour or the

specific outcomes of that behaviour (Arthur, 1994).

The theoretical literature suggests that HRM practices increase productivity by

increasing employees’ skills and motivation. Moreover, HRM practices

contribute to business objectives through strategic innovation or technical

competence. Recent empirical studies on larger companies supported the basic

assumptions of HRM theory (Arthur, 1994; Huselid, 1995; Huselid et al., 1997).

However, does this theory apply to small-scale enterprises as well? HRM also

carries costs and they might neutralize the positive effects of HRM in small-

scale enterprises. HRM is an investment, and thus, it costs time and/or money.

The current performance of employees may even be decreasing because of the

time spent on training. Moreover, HRM can only have effects when employees

stay in the company for a certain period of time. Otherwise the company suffers

a loss because of the investments in HRM. Thus, the benefits of HRM must

exceed costs invested in HRM. Since small-scale enterprises have limited

financial resources it is very well possible that large investments in HRM do not

pay off. With respect to small-scale enterprises, the literature on personnel

issues is more conceptual than empirical/ data based (Hornsby & Kuratko,

1990). However, a few studies have analyzed whether HRM practices were

used in small firms.Golhar and Deshpande (1997) found that many HRM

practices of small and large manufacturing firm were similar. However, bigger

firms used external sources of recruitment, written tests, and panel interviews

more frequently. In small firms, employee’s ability to inspect their own work

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was more important than in large firms. Similarly, Hornsby and Kuratko (1990)

found that the perceived concern over the most important future human resource

issues is not affected by firm size. However, larger companies (up to 150

employees) used questionnaires, application blanks, benefits, and performance

appraisal more frequently than small businesses (1–50 employees). The authors

concluded that “personnel practices of smaller firms are much more

sophisticated than the literature leads one to believe” (p. 16). However, the

more interesting question is whether HRM practices affect small business

success positively. To our knowledge, there are no studies about the relationship

between HRM and success of small-scale enterprises. Welbourne and Andrews

(1996) found that HRM predicted long-term survival of mid-sized initial public

offering firms. The literature on larger companies also suggests that there is a

positive relationship between HRM and success (Arthur, 1994; Huselid, 1995).

Therefore, our first hypothesis is: Hypothesis 1: HRM practices have positive

effects on small-scale business success. Human resources do not just have to be

developed but there is, of course, already a certain amount of human capital in

each firm consisting of the human capital of employees and of the owner.

Human capital consists of skills, knowledge and experience that help in the

tasks of getting one’s work done. General human capital consists of aspects,

which are not specifically related to a particular job, for example years of

schooling, years of work experience (Bruederl, Preisendoerfer, & Ziegler,

1992). Specific human capital must be adapted to a specific task or a specific

firm. Specific human capital of business owners consists of self-employment

experience, industry specific experience, leadership experience, and self-

employed parents (Bruederl et al., 1992). Theoretically, human capital acts as a

resource to the small firm. It makes business owners/employees more efficient

in doing their work, which results in business success. A second mechanism of

human capital is due to selection effects. For example, people with higher

human capital had higher earnings prior to self-employment, and therefore, can

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set up larger and better financed businesses (Bruederl etal., 1992). Several

studies on small-scale business owners supported the basic assumptions of

human capital theory (see reviews by Cooper & Gimeno-Gascon, 1992; Rauch

& Frese, 2000). While entrepreneurship research was frequently concerned with

human capital of business founders/owners, the human capital of employees of

small enterprises has been widely ignored. However, the theoretical

assumptions of human capital theory should hold for employees as well. Thus,

the human capital of employees makes the employee more efficient in their

daily work and this should, in turn, affect business success. Human capital of

business owners has a positive effect on business success Human capital of

employees has positive effects on small business success. While the positive

relationship between human capital of business owners and success is well

established the relationship is no high enough to make human capital the

decisive factor for business success. Analyzing seven studies Quantitatively,

Rauch and Frese (2000) found an average correlation of .09 between human

capital and small business success. Given the small effect of human capital on

business success, it may be useful to look whether human capital impacts on the

effect of HRM on success. With respect to HRM, human capital of business

owners is important because better educated people are expected to be more

receptive to new ideas and novel ways of leading people (Sagie, 1997, p. 401),

to be able to consider recommendations of employees, to communicate specific

goals and objectives, and to use better strategies in leading employees.

Therefore, HRM is more effective when business owners have high human

capital.

Moreover, employees’ human capital should also be a moderator of the

relationship between HRM and success for two reasons: First, employees with a

high level of education can effectively contribute to decision making and goal

setting (Sagie, 1997). Second, HRM provides a tool to increase firm-specific

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skills that are not available in the labour market. Better educated and qualified

employees should be able to increase their firm specific skills and knowledge

quicker and more easily than less educated and qualified employees. Therefore,

human capital of employees moderates the effect of HRM on success. Drawing

on the above rationale. Human capital of business owners moderates the effect

of HRM on business success. Human capital of employees is a moderator in the

relationship between HRM and business success.

Article Review

1. AUTHOR: rosemary batt Abstracts

This paper examines variation in the use of high involvement work practices in

service and sales operations. I argue that the relationship between the customer

and front-line service provider is a central feature that distinguishes production-

level service activities from manufacturing. In particular, through strategic

segmentation, firms are able to segment customers by their demand

characteristics and to match the complexity and potential revenue stream of the

customer to the skills of employees and the human resource system that shapes

the customer-employee interface. Unlike manufacturing, where high

involvement systems have emerged in a wide variety of product markets,

therefore, service organizations are likely to use high involvement systems only

to serve higher value-added customers because of the high costs of these

systems and the labour-intensive nature of services. Data from a nationally

random sample of 354 call centres in US telecommunications documents this

pattern: from classic mass production approaches for back office workers and

increasingly for front office residential service agents, to greater involvement

for small business service providers and high involvement practices for middle-

market service agents.

2Author: Jim mc Donald

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Abstracts: While there is extensive management and academic literature on the

topic area of high performance management internationally, research on high

performance management practices in the Australian context is limited.

Furthermore, research on high performance management practices has focused

predominantly on large organisations and is largely a new direction for research

in SMEs.

This study attempts to fill some of the gaps in existing studies by considering a

wide range of high performance management practices in Australian SMEs.

Owing to the dearth of national data on high performance management in

Australian SMEs, the results of this study are used to determine whether there is

any evidence of a ‘high performing' scenario in relation to management

practices in Australian SMEs.

The results, reporting a national study (N=1435) on employee management in

Australian SMEs, reveal a moderate take-up of high performance management

practices. The findings by themselves do not support a ‘high' performing

scenario in relation to management practices in SMEs; however the low

application of participative practices in the context of low unionization, and a

low incidence of collective relations, indicates that many SMEs need a make-

over if they are to meet the demands of competition.

It is evident from the findings in this study that high performance practices

in SMEs stand to benefit from modernisation and improvement.

3Author: david birchall Subject: personal and human resource management

Abstracts: Some staggering figures can be found if one looks, for the numbers

of individual’s whoare working, but may not be receiving training. However, if

we listen to some of the players in the 'Learning' market, we may hear that HRD

is a very competitive area and that colleges, practitioners, consultants, and the

Business Support Network are vying for position in satisfying the need, whilst

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complaining about the poor take up or response to developmental programmes

by the most prolific area of the economy, the Small&Medium Sized Enterprise

(SME). But should we really be surprised? In this article the author questions

existing policy/practice and presents a number of facts, with anecdotal evidence

to bring to 'the table' for discussion some concerns which he believes deserve

more research. The objectives are to establish the current position, promote a

learning culture within SME's, and by better understanding of the SME by

practitioners, create a climate for growth and the ability to tap into a major

market for education in all its forms which hitherto appears to be

disenfranchised.

4 Author: paula m.caligiuri:linda k.stroh

Subject: personnal and human resource management

Abstracts: This paper examined the relationship between multinational

corporations' global management strategies and the resulting international

human resource practices. Four global strategies, which vary in their extent of

global integration and local responsiveness, were examined (ethnocentric,

regiocentric, polycentric and geocentric). Data from international human

resource professionals in forty-six companies generally supported the

hypothesis that HR practices (recruitment, selection, socialization) varied by

global strategy. In particular, strategies varied especially between the

ethnocentric and geocentric companies. These strategies were further found to

be related to a composite Multinational Corporation Success Index of economic

variables (return on capital, sales growth, return on equity, profit margin).

Companies which had ethnocentric strategies were found to be less successful

than companies operating under any of the other three strategies. Findings

suggested that local responsiveness should be incorporated into the global

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strategy of multinational companies. Recommendations for international human

resource practices based on these results have been given.

5 Authors: Nicolas Bacon; Peter Ackers; John Storey; David Coates

Abstracts: it has become widely acknowledged that, during the past decade or

so, large mainstream companies in the UK have adopted a new agenda for

managing people. Relatively little is known about the impact of this new agenda

on small businesses. The small business sector has been long regarded as the

natural home for 'bleak house' employment relations practices typified by direct

management control, poor terms and conditions, high staff turnover and little

training. In March 1993, however, a large survey of 560 companies in

Leicestershire revealed a surprisingly high take-up and awareness of new

management ideas among small business managers. These findings are at odds

with a crude 'bleak house' scenario. This large-scale telephone survey was then

followed up with detailed case study research. This article presents and reflects

upon the evidence and reformulates ideas about people management in small

businesses.

6-Human resource management in SMEsby Terry R. Pearson, Donna Y. Stringer, LaVelle H. Mills, David F. Summers | July, 2006

ABSTRACT

Human resource management (HRM) practices, support systems and personnel profiles were examined in urban and rural enterprises. The investigation is an exploratory descriptive study employing a discussion of the results of a questionnaire. The authors' hypotheses are that urban and rural small and medium sized enterprises (SMEs) would differ significantly in HRM practices, support systems, and personnel profiles. Data were analyzed using t-tests and

22

chi-square tests, as appropriate, to detect statistically significant differences between urban and rural SMEs. No interventions were performed; data were self-reported responses to questions on a survey instrument. The research findings suggest the authors' hypotheses are generally incorrect. The results from the study may advance the concept that technology and information availability have developed equity in HRM activities and functions in both urban and rural enterprises. Moreover, rural firms are performing at a higher level of sophistication and experience in HRM practices, support systems and personnel profiles.

7-Management training in small and medium-sized enterprises: methodological and conceptual issues

Article Abstract:

Small and medium-sized business establishments achieve obvious benefits from management training programs. Managers are reluctant to invest in training, however, because business training benefits are not easy to quantify in financial terms. Businesses which have already invested in management development strategies are less likely to achieve as much as those which have not. Other aspects of training are considered.

8-The Construction of Human Resource Management System in Small and Medium-sized Private EnterprisesJieyun Zhang, Juhong Gong

Abstract

The small and medium-sized private enterprises (SMEs) play an increasingly

important role in creating output value and providing new employment

opportunities, but there are a lot of problems with human resources in SMEs,

such as poor quality of business owners, lack of strategic planning on human

resources, etc. It’s necessary, therefore, for SMEs to strengthen the setup of

human resource management system. This paper puts forward some

implementation details according to "human resource evaluation,

assessment, & examination methods" and "job evaluation table", and draws

23

up the diagram on implementation of these steps, both vertically and

horizontally evaluating human resource management system in SMEs

9-Human Resource Management within small and medium-sized firms

ABSTARCT

Human resources are recognised as one of the main sources of economic

growth. The management of these resources (HRM) is therefore an important

issue. However, while roughly half of all employees are employed in small and

medium-sized enterprises, scientific studies on HRM are to a large extent

limited to large enterprises. This thesis is an attempt to increase our

understanding of how small and medium-sized enterprises manage their

employees. The thesis examines main determinants of HRM practices within

small and medium-sized enterprises, and how certain differences in HRM

practices may affect an enterprise's performance and size

10-Strategic HRM in Small and Medium Enterprises: A CEO's Perspective?

Recent research studies in Australia have reported a gradual but apparently

growing convergence between the theory and practice of strategic HRM,

especially in larger organizations and from the perspectives of HRM

practitioners themselves. Little empirical evidence has been produced on HRM

strategies and practices in small and medium enterprises (SMEs), or on the

opinions of their chief executive officers (CEOs). This article reports the

findings from a sample of CEOs in Australian SMEs in an attempt to add more

pieces to the jigsaw of this desirable convergence. While the findings are not as

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encouraging as earlier presented, there are signs that SMEs may eventually

reflect such models of SHRM.

11-Exploring human resource management practices in small and medium

sized enterprises

Author(s): Catherine Cassell, Sara Nadin, Melanie Gray, Chris Clegg

Abstract: 

The paper reports on empirical work recently conducted about the use and

effectiveness of HRM practices in small and medium sized enterprises (SMEs).

A telephone survey was conducted with 100 senior managers of SMEs to

ascertain their use of a range of human resource practices and the extent to

which they had found those practices successful in aiding the achievement of

company objectives. Additionally in-depth interviews were conducted with

senior managers from a further 22 SMEs. Findings suggest that there is

considerable diversity amongst SMEs in relation to their use of HR practices. A

model is provided that identifies the key criteria that underlie the adoption of

HRM practices, and the implications of the model are discussed. 

12-The relationship between total quality management and human

resource management in small and medium-sized enterprises [In special

issue: Small Business, Entrepreneurship and Enterprise Development]

There is an extensive body of received wisdom in the literature on both total

quality management (TQM) and human resource management (HRM). This

paper examines past research as it affects small firms. Conclusions are drawn as

to the linkages between TQM and HRM in small and emerging businesses. It is

accepted that effective HRM policies are essential if TQM programmes are to

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deliver any of their benefits. However, there has been less research on small

organizations, even though both are recognised as strategic issues in the pursuit

of business development. Only a truly professional approach to creating a

culture that is soft, individualistic and user-focused will provide the conditions

for total quality enhancement to become a reality.

13-Human Resource Management within small and medium-sized

enterprises

Abstract: Human resources are recognised as one of the main sources of

economic growth. The management of these resources (HRM) is therefore an

important issue. However, while roughly half of all employees are employed in

small and medium-sized enterprises, scientific studies on HRM are to a large

extent limited to large enterprises. This thesis is an attempt to increase our

understanding of how small and medium-sized enterprises manage their

employees. The thesis examines main determinants of HRM practices within

small and medium-sized enterprises, and how certain differences in HRM

practices may affect an enterprise's performance and size.

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Conclusion

The purpose of this paper has been to provide some evidence regarding the

SMEs’ managerial practices and problems. With respect to the practices, the

findings suggest that SMEs are generally not aware and most likely will not

utilize the various managerial practices. Among the managerial problems, it

seems that the problems tend to revolve around high product cost, high

overhead cost, undedicated employees, difficulty of finding good workers, and

SMEs faces stiff price competition.

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