Academic journal article Journal of Small Business Management

Small Business Personnel Practices

Academic journal article Journal of Small Business Management

Small Business Personnel Practices

Article excerpt



A growing interest in small business personnel management is shared by personnel specialists and members of the small business community, as demonstrated by a number of recent articles in professional publications, some of which--like this journal--have devoted entire issues to the topic. In part, this interest may stem from employee concern for "quality of work life" and increasing legal constraints and directives from various government agencies. However, a more significant impetus for this surge of interest may be a concern for the part that personnel practices may play in small business success or failure.

Startling statistics on small business failures have appeared regularly in the popular press. Surveys investigating the reasons for these failures have often placed personnel-related problems at or near the top of the list. A recent survey of small businesses in rural Texas, for example, found that personnel problems were by far the most frequently cited (44 percent of respondents). A 1970 survey conducted by Dun and Bradstreet similarly indicated that most of the business problems frequently cited by small business managers were personnel-related; furterhmore, 64 percent of these practitioners named personnel as the most serious business problem, when presented with an unranked list of eleven important business problems. Finally, a recent Roper Organization poll revealed that the most difficult problem for small busineses was "finding competent workers, then motivating them to perform."

There is little doubt, therefore, that the effective management of human resources is a key to succesful small business management. Most articles written on this topic give advice on how to improve personnel practices without first documenting the need for improvement. One exception is a previous study by the author. The research reported here extends the earlier study and focuses on identification of aspects of small business personnel practice which could be improved.


The sample for this study consisted of 84 of the 258 small businesses (between 25 and 250 employees) located within three zip code districts near a major Midwest metropolitan area. The sampling procedure involved both random (one zip code) and convenience (two zip codes) sampling. Since analysis did not reveal any major differences in business types or responses from the two sampling procedures, the results are reported here for the sample as a whole.

Thirty-four percent of the participating firms had between 101 and 250 employees; 66 percent employed 25 to 100. Within the selected zip codes, 15 percent of the business population employed 101 to 250 employees, and 85 percent employed 25 to 100, indicating a tendency for "larger" small firms to be more willing to participate in the survey. The average number of employees in the participant firms was seventy-eight. One-fourth of the businesses were unionized. Two-thirds of the participating firms were either in retail, construction, or manufacturing, with minor representation from wholesale, restaurant, financial, automobile, and other sectors.

Data were gathered by by means of a thirty-six item questionnaire that was filled out by an interviewer during a thirty minute interview with the person responsible for personnel management at each firm. Interviews were conducted by students from a personnel management class, in partial fulfillment of course requirements. Interviewers were instructed to ask for a business card from the respondent and/or a sample application blank from the firm to return with the completed survey form. Interviewers also asked the respondents if they would be interested in receiving a copy of the survey findings. Seventy-three percent requested, and were sent these findings.


The results of this survey are organized under headings pertaining to various aspects of human resource management. …

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