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- Foundations of Small Business Enterprise (Routledge Studies in Small Business)
- Managing Labour in Small Firms
- Associate Dean Research; Director SBRC
According to Michiels, Voordeckers, Lybaert and Steijvers , SME firms are less likely to be perceived as the first-choice employers by potential employees in the labour market. SME firms counterbalance this by taking advantage of reward savings stemming from agency relationships.
Michiels et al. This familial environment aligns the interest of the owner-manager with that of the rest of the employees thus eradicating any need for agency payments. This implies that any agency cost that a normal firm would encounter to align managerial interests to those of the rest of the employees will be done away with, given that any possible acts of self-interest will be tempered by the lure of kinship, altruism and loyalty Michiels et al. This line of thinking leaves the author to conclude that unlike the widely held BPA prescriptions, the reward management systems in SME firms are most appropriate given their size, resource constraints and environmental influence.
This theoretical article is an attempt to draw the line between HR practices in SME firms and those prevailing in larger businesses. The article does this by exploring the veracity of the BPA-based perception that a prescribed set of HR practices can be applied generically to all organisations big or small with the same result.
Managing Labour in Small Firms (Routledge Studies in Small Business) | Susan Marlow | download
In other words, there is a distinctive difference in approach to people management between small and large firms, and these different approaches are beneficial to either size of enterprises. The article therefore makes a significant contribution to the field of HRM in SMEs by revealing how the unique nature of people management practices in small firms debunks the commonly held perception that HR practices in small firms are inferior to those used in large organisations.
Firstly, the findings of the article show that HR practices in SME firms are at best described as a spectrum of stereotypes.
This explains the unique nature of HR practices that characterise firms that are glaringly absent in larger firms. On the basis of these arguments, one may conclude that HR practices in SME firms can also be described as stereotypically characterised with unique, eclectic and appropriate for SME firms.
This article casts aspersions to this view and seeks to assert that, on the contrary, HR practices that work in SME firms are different from and may not work in larger enterprises. Finally, the article provides a basis for testing theories that are commonly applied to explain HR management in both large and small organisations.
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The findings help us to reconcile the previous conflicting arguments about the applicability of these theories to explain HR practices in SME firms. This article concludes that this state of affairs does not reflect anything wrong with the practice of HR in SME firms but rather explains the unique nature of HR practices that characterise SME firms, which are glaringly absent in larger firms. Given the theoretical nature of this study, it follows that this article is based on the reasoning and perceptions by different scholars and not on empirical research.
This same theoretical view can be challenged on an equal footing by drawing on alternative existing literature to make new theoretical propositions that prove that HR practices in SME firms are similar to those in large enterprises. As a result, it is recommended that future researchers take it from here and conduct empirical research to validate the finding of this article. Future researchers are challenged to tunnel deeper and question the nature of the HR management practised in SME firms. Indeed, research should be carried out that will further entrench the view that HR practices in SME firms are unique and most appropriate for the structural environment characterising SME firms.
The authors declare that they have no financial or personal relationships that may have inappropriately influenced them in writing this article. This article is derived from the PhD thesis of W. The authors acknowledge that funding for the production of this article was kindly made available by the Central University of Technology, Free State. Data sharing is not applicable to this article as no new data were created or analysed in this study. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of any affiliated agency of the authors.
Ahmad, M. Performance Management , 63 4 , — Armstrong, M. London: Kogan Page. Bacon, N. Barney, J. Firm resources and sustained competitive advantage. Journal of Management , 17 1 , 99— Berisha, G. Defining small and medium enterprises: A critical review. Birdthistle, N. Small family businesses as learning organisations: An Irish study.
PhD thesis. Brisbane: Griffith University. Braun, V. Using thematic analysis in psychology. Qualitative Research in Psychology , 3 2 , 77— Cameron, L. Melbourne, Australia. Cunningham, L. Dekker, J. The effect of family business professionalization as a multidimensional construct on firm performance. Journal of Small Business Management , 53 2 , — Dundon, T. Wood, Human resource management.
A critical approach pp. London: Routledge. Fabi, B.
Journal of Small Business and Enterprise Development , 16 1 , 7— Forth, J. The impact of management practices on SME performance. Guercin, S. Interaction approach and liabilities: A case analysis of start-up firms. Journal of Business-to-Business Marketing , 23 4 , — Harney, B. Human Resource Management Journal , 16 1 , 48— Kotey, B. Journal of Small Business Management , 45, — Formal human resource management practices in small growing firms. Restore content access Restore content access for purchases made as guest. Article Purchase - Online Checkout. Issue Purchase - Online Checkout. People also read Article.
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