Achieving Peak Performance
Edited by Cary L. Cooper and Ronald J. Burke
Chapter 2: Human Resource Management in Small- and Medium-sized Enterprises: Benefits and Challenges
* 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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