Human resource management in small and medium-sized enterprises: a performance model definition

Abstract

Background: Nowadays, studying small and medium-sized companies, particularly with regard to the management of human resources that takes place in them, is particularly relevant. Effectively, knowing that about 99.8% of companies are small and medium-sized, contributing very significantly to high levels of employability, it is extremely important to understand the role that people management assumes in these organizations, as well as which are the factors, both internal and external, that exert the greatest influence on them.

Purpose: In this paper we investigate internal and external factors of small business likely to correlate with a more formal and structured human resource management.

Study design/methodology/approach A conceptual model was defined through the literature on human resource management and its consistency was tested through three methodological steps (exploratory interviews; readjustment of variables with the Delphi method; multivariate statistical tests). From a survey of 186 smaller firms in Portugal, we tested conceptual model by structural equation modelling.

Findings/conclusions: The analysis reveals that dimensions such as organizational structure, management and communication style, career management, organizational flexibility, organizational strategy and national culture are positively related to more formal and structured human resource management practices and policies.

Limitations/future research: Due to its complexity, both at the level of the conceptual analysis and the empirical level, this study presents some limitations, namely, and among others, the complexity of the number of dimensions and variables under analysis, and the complexity of the model being tested. A broader line of research could include collecting data from employee. This analysis would allow for a different perspective of the company’s procedures and would broaden some issues that are less detailed in this study.