Table of Contents

Human Resource Management in Small Business

Human Resource Management in Small Business

Achieving Peak Performance

New Horizons in Management series

Edited by Cary L. Cooper and Ronald J. Burke

Human Resource Management in Small Business fills a gap in our understanding of economic performance. Small businesses are more numerous, have more employees, and contribute more to the economies of nations throughout the world than do large organizations. This book examines a range of issues, including the significance of human resource management (HRM) practices to small business success, the management of work hours and work stressors, work and family issues, succession planning, employee recruitment and selection, and managing staff. It also explores how individuals develop HRM skills, and learn from their own and others’ experiences. The role of HRM practices in successful small businesses is illustrated through a range of case studies.

Chapter 2: Human Resource Management in Small- and Medium-sized Enterprises: Benefits and Challenges

Ronald J. Burke

Subjects: business and management, entrepreneurship, human resource management, organisational behaviour


* Ronald J. Burke INTRODUCTION This chapter serves as a primer for the analysis of the benefits from and challenges of introducing sound human resource management (HRM) practices in small- and medium-sized enterprises (SMEs). It identifies central themes in this area and serves as an introduction to the more intensive chapters that make up the remainder of the volume. The chapter addresses factors contributing to the success of SMEs. This area receives less attention than that devoted to large organizations. This is ironic since there are significantly more SMEs than large organizations, SMEs employ more people, SMEs exist in every country, SMEs seem to be weathering the current economic recession better, and some SMEs eventually become large organizations. More individuals are now in SMEs with the downsizing of large organizations, and the frustration many people feel, particularly women, with their careers in large organizations. In a nutshell, the economic performance of an economy is inextricably linked to the SME sector, and SMEs rely heavily on their people and on their HRM practices for their success (Brand & Bax, 2002; Way, 2002). Consider these facts: ● ● ● ● Small businesses account for over 95 percent of all businesses in the US and Canada (Heneman et al., 2000). Small businesses represent 99 percent of employers (Williamson et al., 2002). Small businesses create 66 percent of new jobs and produce 39 percent of the gross national product (GNP) in the US. In Canada, small businesses, defined by the Federal Government as firms having 100 or fewer employees, account...

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