Australian Small and Medium Sized Enterprises (SMEs): A Study of High Performance Management Practices

By Wiesner, Retha; McDonald, Jim et al. | Journal of Management and Organization, September 2007 | Go to article overview
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Australian Small and Medium Sized Enterprises (SMEs): A Study of High Performance Management Practices


Wiesner, Retha, McDonald, Jim, Banham, Heather C., Journal of Management and Organization


ABSTRACT

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.

Keywords: high performance management practices; high performance management systems; high performance management organizations; small and medium size enterprises; Australian SMEs; organizational change

The SME sector represents a significant large employer group in Australia (Bartram 2005) and are regarded as playing a pivotal role in focusing on the behavioural and interpersonal aspects of leadership and management required by Australian industry to address the challenges such as globalisation. However, despite the importance of small and medium size businesses to the economy and the growth in human resource management (HRM) practices in Australian organisations (Fisher, Dowling & Garnham 1999; Wiesner 2001), there has been a shortage of data during the past decade concerning the broad nature of the patterns and trends in human resource management and more specifically high performance management practices in SMEs.

Furthermore, even though there has been a growing emphasis upon the role of high performance management practices as a source of competitive advantage (Dessler, Griffiths, Lloyd-Walker & Williams 1999) and evidence of numerous studies that certain HRM practices improve organisational performance (Bartram 2005; Arthur 1992; Ichniowski, Shaw & Prennushi 1994; Delery and Doty 1996), there is little systematic research available concerning the adoption and character of these practices in Australian small and medium size enterprises.

High performance management practices describe a set of management practices that enhance employee relations through employee involvement and participation; and which increase organisational performance and profitability through quality communication and consultation between management and employees (Gollan 2005). The notion of high performance management practices is explored in greater detail in the next section.

We define SMEs as organisations employing between 20 and 200 employees (Baron 1995) with small businesses constituted by 100 or fewer employees, (following the ABS definition of small business in manufacture) and medium sized businesses ranging from 100 to 199 employees. The longitudinal survey of Australian small business found that organisations with more than 20 and up to 200 employees constitute 6.1 percent of all businesses in Australia, and together employ 27.7 percent of the workforce (Morehead, Steele, Alexander, Stephen & Duffin 1997). If data on workplaces is restricted to those with more than 20 employees (the Australian Workplace Industrial Relations Survey 1995), the proportion of workplaces between 20 and 199 employees in size is 92 percent, employing 56 percent of the workforce.

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