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Implementing HRM Programs in Small and Medium-Sized Enterprises Essay

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Updated: Feb 16th, 2022

Introduction

The implementation of human resources management (HRM) programs in small and medium-sized enterprises (SMEs) may differ from those used in large corporations. Approaches to interaction with personnel require assessing various factors, including both external market trends and internal aspects of development. Moreover, in the modern HRM environment, the variability of methods and tools of intervention distinguishes this sphere from that in earlier periods. Strategically designed and targeted approaches are the typical drivers of successful HRM in SMEs in the 21st century.

Antithesis

A strategic approach to organizing HRM in modern SMEs can be justified in the context of the specifics of business models that various firms promote. For instance, according to Reid et al. (2002), in enterprises with family management practices, the unique characteristics of interaction among employees are supported, which are not typical for standard organizations. Also, when evaluating the relationship between HRM and performance outcomes, one can cite the arguments of Ogunyomi and Bruning (2016) who state that both these indicators correlate directly with each other and should be considered in a single context. Moreover, the assessment of the specificity of SMEs proves that in small firms, managers often promote individual practices and procedures for interacting with subordinates, which cannot be implemented in large companies (Edwards and Ram, 2009). Therefore, the value of productive HRM in SMEs is justified by an opportunity to maintain a favorable microclimate in the team by creating a unique work environment.

At the same time, while evaluating a strategically targeted approach to HRM in SMEs, one can mention some potential disadvantages. For instance, as Georgiadis and Pitelis (2012) argue, it is more difficult for small firms to implement advanced personnel management practices than for large corporations due to a less stable material base and fewer available resources. In addition, according to Doherty and Norton (2014), the ideology of individual SMEs’ leaders is based on the imitation of large market participants’ behavior, which, in turn, cannot always be realized within a small business. Therefore, strategically targeted HRM practices are not always favorable for all SMEs without exception.

However, despite potential shortcomings, the HRM model under consideration has more positive than negative aspects in the activities of SMEs in the 21st century. Jarvis and Rigby (2011) state that preliminary analytical work is a productive background to use all available development indicators, for instance, geographic or size parameters, to implement and maintain an optimal HRM system. Strategically targeted approaches eliminate any unforeseen situations and allow establishing a unique mode of interaction among employees, which reflects the specifics of the business and its distinctive characteristics. According to Psychogios et al. (2016), the value of this practice for SMEs is explained by both external factors, for example, economic or political drivers, and internal developmental features, including short-term and long-term goals and objectives. As an example, the authors cite the countries of the south-eastern European region and note that the post-communist background has had a particular influence on the development of local SMEs, which grow distinctly from small Western firms and apply individual work planning strategies (Psychogios et al., 2016). Therefore, the considered approach to HRM in SMEs is a valuable tool in today’s market environment.

Summary

In modern SMEs, strategically targeted HRM approaches based on preliminary analysis and the assessment of business specifics are effective tools for successful staff interaction. The unique characteristics of companies are taken into account, and appropriate interventions are aimed at maintaining positive communication between managers and subordinates. Despite potential shortcomings, for instance, the ideology of imitation or a weak material base, strategic HRM practices meet the developmental characteristics of SMEs in the 21st century.

Reference List

Bacon, N. and Hoque, K. (2005) ‘HRM in the SME sector: valuable employees and coercive networks’, The International Journal of Human Resource Management, 16(11), pp. 1976-1999.

Doherty, L. and Norton, A. (2014) ‘Making and measuring “good” HR practice in an SME: the case of a Yorkshire bakery’, Employee Relations, 36(2), pp. 128-147.

Edwards, P. and Ram, M. (2009) ‘HRM in small firms: respecting and regulating informality’, in Wilkinson, A. et al. (eds.) The Sage handbook of human resource management. 1st edn. London: Sage, pp. 524-540.

Georgiadis, A. and Pitelis, C. N. (2012) ‘Human resources and SME performance in services: empirical evidence from the UK’, The International Journal of Human Resource Management, 23(4), pp. 808-825.

Jacobs, K. (2014) Web.

Jarvis, R. and Rigby, M. (2011) Web.

L’Écuyer, F. et al. (2019) ‘Strategic alignment of IT and human resources management in manufacturing SMEs’, Employee Relations: The International Journal, 41(5), pp. 830-850.

Molina, D. C., Déniz-Déniz, M. C. and García-Cabrera, A. M. (2019) ‘The HR decision-maker’s emotional intelligence and SME performance’, Management Research Review, 43(1), pp. 56-81.

Naz, F., Aftab, J. and Awais, M. (2016) ‘Impact of human resource management practices (HRM) on performance of SMEs in Multan, Pakistan’, International Journal of Management, Accounting & Economics, 3(11), pp. 699-708.

Ogunyomi, P. and Bruning, N. S. (2016) ‘Human resource management and organizational performance of small and medium enterprises (SMEs) in Nigeria’, The International Journal of Human Resource Management, 27(6), pp. 612-634.

Psychogios, A. et al. (2016) ‘A three-fold framework for understanding HRM practices in South-Eastern European SMEs’, Employee Relations, 38(3), pp. 310-331.

Rauch, A. and Hatak, I. (2016) ‘A meta-analysis of different HR-enhancing practices and performance of small and medium sized firms’, Journal of Business Venturing, 31(5), pp. 485-504.

Reid, R. et al. (2002) ‘People management in SMEs: an analysis of human resource strategies in family and non‐family businesses’, Journal of Small Business and Enterprise Development, 9(3), pp. 245-259.

Where data and detail matter (2020). Web.

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IvyPanda. "Implementing HRM Programs in Small and Medium-Sized Enterprises." February 16, 2022. https://ivypanda.com/essays/hrm-in-small-and-medium-sized-enterprises/.

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IvyPanda. 2022. "Implementing HRM Programs in Small and Medium-Sized Enterprises." February 16, 2022. https://ivypanda.com/essays/hrm-in-small-and-medium-sized-enterprises/.

References

IvyPanda. (2022) 'Implementing HRM Programs in Small and Medium-Sized Enterprises'. 16 February.

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