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Edited by Rowena Barrett and Susan Mayson
Chapter 11: Growing Pains: Managing the Employment Relationship in Medium-Sized Enterprises
Susan Marlow and Amanda Thompson Introduction There is a growing body of literature on the management of labour in small and medium-sized enterprises (SMEs), usually deﬁned as those with fewer than 250 employees (DTI, 2004). However, the bulk of this literature focuses on small ﬁrms, which are those with fewer than 50 employees. This literature is said to represent, ‘a key exemplar of analytical advance [where] research has made empirical and analytical progress’ (Ram and Edwards, 2003: p. 719). Whilst mindful of heterogeneity within the sector, the evidence suggests informal management of the eﬀort-wage bargain (Holliday, 1995; Marlow, 2003; Marlow et al., 2004; Moule, 1998; Ram and Edwards, 2003; Ram et al., 2001). Arguably this informality arises and persists from the spatial and social proximity between employers and employees. Additionally owner–managers have limited awareness or regard for formal policy and practice, which in turn leads to a devaluing of HRM and a consequent reluctance to delegate labour management to professionals (Marlow, 2002; Marlow et al., 2004; Mazzarol, 2003; Ram et al., 2001). Since 1998 the UK Workplace Employment Relations Survey (WERS) has paid attention to SMEs including ﬁrms with as few as 10 employees in 1998 and ﬁve employees in 2004. The ﬁndings from these surveys indicate that while the extent of formalization varies within and across smaller ﬁrms, in general, formality increases with organizational size, (indicated by employee numbers and ﬁnancial performance) (Cully et al., 1999; Kersley et al., 2006). Informality arising from social and spatial...
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