Academic journal article Academy of Entrepreneurship Journal

A Profile of Human Resource Personnel and Practices in Micro, Small, and Medium Sized Enterprises

Academic journal article Academy of Entrepreneurship Journal

A Profile of Human Resource Personnel and Practices in Micro, Small, and Medium Sized Enterprises

Article excerpt

ABSTRACT

Human resource management (HRM) practices, support systems, personnel profiles and desired education, and credit methodologies were examined in micro, small, and medium sized enterprises (MSMEs). The investigation is an exploratory descriptive study employing a discussion of the results of a questionnaire. The results suggest that human resource management practices, support systems, and HRM personnel profiles impact HRM education needs. The research findings demonstrated that MSMEs perform a wide variety of basic HRM practices internally, utilize a flexible informal style of management, require employees to execute HRM duties along with other job responsibilities, and typically employ inadequate support systems. However, a majority of the firms are adopting management information system processes that may advance the concept that MSMEs are using technology instead of HRM personnel. HRM personnel in MSMEs have multiple years of HRM experience, although the data would proport that improvement in HRM professional expertise and education through succinct seminars or web-based courses that result in certification or continuing education credit is indicated.

INTRODUCTION

Are people our most important asset? Will businesses seek sustainable competitive advantage through sophisticated human resource management practices? Large organizations have long recognized human capital as part of the mix for superior performance as well as national economic growth (Price, 2004). Entrepreneurs have always been dependent on human capital when compared to financial or physical capital (De Kok, 2003). Micro, small, and medium sized enterprise (MSME) success will depend on recruiting and retaining human capital.

Human capital has become the new buzzword for companies in today's knowledge-based economies. Labor shortages for qualified employees and the need for highly skilled employees to fuel this knowledge-based economy has become apparent (Audretsch and Thurik, 2000; Audretsch and Thurik, 2001; Audretsch et al., 2002). Small and medium sized enterprises (SMEs) form an important component of our modern knowledge-based economies, however SMEs are very divergent from large enterprises along many considerations (De Kok, 2003).

Research on HRM and performance illustrates that HRM practices can impact performance which further strengthens the need for HRM investigation (Boselie et al., 2001; Boselie, 2002). Due to the importance of SMEs to the economies of the world, it is somewhat discouraging and problematic to discover the dearth of SME research concerning HRM practices in SMEs (Heneman, 2000). Therefore, what HRM advice can be offered to SMEs, "not as much as we'd like" (Katz et al., 2000). The investigation of HRM personnel and practices in MSMEs is divided into the literature review; data collection and methodology; results and discussion; implications; limitations and future research directions; and the conclusion.

LITERATURE REVIEW

A review of human resource management related literature for the past twenty years repeatedly indicates that some scholars realize the importance of the role of HRM practices in SMEs (Hornsby and Kuratko, 1990; Deshpande and Golbar, 1994; Heneman, 2000; Katz et al., 2000). Research findings have demonstrated that managers of small firms have ranked personnel management as the second most important management activity behind general management activities (Hornsby and Kuratko, 1990). From information presented in the literature; the extent of the utilization of traditional human resource management functions; outsourcing trends; the level of support systems; the education, experience and expertise of the employee(s) responsible for human resource actions; and human resource education requirements in MSMEs is substantially lacking. As a result, the goals of this study are as follows:

   Goal One (G1)--Identify the breadth that traditional human resource
   practices are currently being utilized by MSMEs and determine
   whether these practices are performed by the firm internally or
   outsourced. … 
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