HRM and SMEs

HRM and SMEs



HRM and SMEs

DQ#1: HRM Should be Studied as a Distinct Discipline from Traditional HRM

            Human Resource Management has long been an issue in the running of small and medium enterprises. Many argue that human resource management is not common in the small and medium enterprises since the organizational hierarchy in SMEs is not fully developed. Human resource management would be beneficial in all kind of organizational settings as it promotes an organized labor market and provides a strong basis for a company’s future competitiveness. Human resource management should be studied distinctly from the traditional human resource management, as this will help highlight its benefits in the small and medium enterprises, which form the bulk of the market in the global economy. Both human resource experts and the owners of SMEs underestimate the power and need for human resource management in organizations. This may be due to lack of proper methods or underdeveloped conceptual frameworks that are needed for the effective governance of the SMEs. This is reason enough to bring the change in the management of human resources in organizations not to mention the myriad of benefits that would be accompanied by doing so.

            Small businesses may not be able to pay their workers as much as the large enterprises do. Because of this, small and medium enterprises have to deal with issues relating to worker retention. These firms should therefore adopt a strategy that will give them the upper hand over larger market enterprises. Studying human resource management will help potential owners of small and medium sized businesses understand the importance of having a proper human resource structure in their organisation and the implications of ignoring this vital aspect in the management of human resources (Cooper, & Burke 2011). Both current and potential business owners will be able to identify the unique aspects of their own businesses, which gives them the advantage over their competitors. Small and medium enterprises offer a small environment for the worker that is usually the most suitable for the betterment of the quality of an organization’s workforce.  

            Studying the relationship between human resource management and small market enterprises separately from the traditional human resource study will help managers of small and medium size firms to focus on the resources that are available to facilitate the success of the workers. Small and medium business owners will get the initiative to build on their company’s labor resources once they learn the importance of a well-developed human resource conceptual framework. The size of small and medium enterprise businesses translates to easier communication between the workers and the employers unlike in larger market enterprises. A proper conceptual framework will also enable the communication lines between the workers and the employers to open up and the workers will feel important when their views are opinions are recognized in policy and decision making of these businesses. Recognition of workers contribution to the betterment of the firm usually lowers workers turnover rate and discourages mobility of workers to bigger companies (Cooper, & Burke 2011). Labor market challenges are likely to get worse with the growing competition and therefore the small and medium enterprises need to be well prepared and guarded against any sudden labor losses. This will succeed only if human resource management and SMEs will be studied separately from the traditional HRM, as both current and potential businesses will be empowered.

DQ#2: Reason Why Small Business Owners and Entrepreneurs are Reluctant to Apply HRM Theories in their Ventures

            Small and medium size enterprises are unwilling to adopt human resource theories into their business venture for various reasons. They tend to ignore very important aspects of managing human resources such as development through training of workers or opening the channels of communication between workers and employers.Their lack of interest is attributed to the skewed opinion that human resource management is not tailored for their businesses and that it is unresponsive to small organizations. Managers also viewed human resource management as being a costly undertaking for their businesses, something that only large or well-established businesses can afford. Managers believe that human resource practices are not appropriate for small businesses, are too bureaucratic and are time consuming.  

             Interestingly, although small and medium market enterprises claim that adopting human resource practices into organisations is cumbersome, they have not tried to put these measures into place to determine their effectiveness (Cooper, & Burke 2011). Lack of responsiveness in the human resource domain of small and medium market enterprises has regrettable implications. Small and medium market enterprises loose out on the competition for skills with bigger organizations. SMEs are not able to pick out competitive workers as in the case of large market enterprises. In the end, SMEs pick out employees who are not skilled and this contributes to the negative growth of the businesses. Small businesses will not be able to expand and this will affect the rest of the community negatively.

            Managers of SMEs are also reluctant in adopting human resource practices in their businesses because they believe that human resource management is a uniform phenomenon. HR is diverse and varies between different organizational structures irrespective of the size of these businesses. An organization’s human resource department is given the task of developing its own human resource strategy that is in line with globally accepted human resource policies and practices. This means that the size of a firm is not a determinant of whether or not a company should have a proper human resource strategy. It is also possible that the management of these firms lack the expertise or proper knowledge of the different human resource practices and approaches in small and medium enterprises. Human resource management should be viewed from a heterogeneous point of view in order to understand its diversity and identify ways that it can be applied in an organisation (Cooper, & Burke 2011).

            Many managers argue that their firms are not differentiated into departments and this makes it virtually impossible to develop a human resource conceptual framework. Managers also fear shifting their focus from what they consider the main purpose of business, product development and doing business. Prachee Kulkarni says that, “in SMEs, working of the company is based on the mutual understanding between the employer and the employee rather than strict compliance of labor laws. The employees are comfortable with the terms and conditions put forth if they are paid adequately.” (2012). Managers of SMEs believe that human resource management is not a priority as the rest of the organization’s functions. Outsourcing of human resource responsibilities can beneficial as it will help the business grow. One of the most important aspects of SMEs is the management of the labor force. Small and medium market enterprises should set time bound goals that will give both the workers and employers clarity of vision. Goal setting is the initial step towards goal achieving in human resource management.

DQ#3: Review of Research findings and the Recommendations for HR Practitioners

            Research findings on the study done by the Department Dimensions International (DDI) yielded rather surprising results. The study conducted analyzed the attitudes and behaviors of hiring managers. The results indicated that employers felt that they lacked adequate information on the candidates they were hiring. Hiring managers believed that poor economic conditions resulted in a large number of people who were unemployed but this did not necessarily result in foolproof hiring. They are faced with the challenge of looking for skilled workers in a much bigger unemployed population. The abundance of candidates who are available for hiring does not necessarily translate into better hiring methods or hiring of workers who are more skilled. The study also concluded that a large number of hiring managers relied on their instincts to choose the best recruit for the job. Interestingly, many managers also do not know which questions are illegal to ask and which are not. Questions concerning a person’s marital status, age, religious affiliation can result in lawsuits. According to the study, 80 percent of hiring managers are not aware that asking health questions is also illegal. The survey relates that the increasingly large number of unemployed people results in greater scrutiny of hiring managers as they become more exposed to possible lawsuits by potential employees. There is a positive correlation between the recession and the likelihood of candidates to claim they were asked illegal questions.

            Today recruiters are searching for skilled workers in a constantly diminishing pool of talented candidates (Cooper, & Burke 2011). Human resource managers should develop an effective staff model that creates an achievable and sustainable human resource procedure. Human resource managers should follow an easy and achievable process where they can effectively measure results and progress over time, deliver on those results and in the end improve the quality of the hiring process. Hiring managers should employ proper planning methods in order to ensure that various factors relating to human resources are properly managed such as leadership of teams and the workers’ competencies. It is important for the hiring manager to have sound knowledge of the existing labor market and anticipated obstacles in the hiring process so that they may be able to provide the right perspective on important human resource issues.

            Human resource managers should also work in collaboration with recruiters and other human resource partners in order to ensure that the hiring process is most effective. They should understand that time is of essence especially when interviewing workers who are skilled as they are in demand. Usually, such workers have many options in the job market and will not wait for lengthy and unproductive interview sessions. In instances where the parties involved in making the hiring decision are more than two, it is crucial that they all send a message of consistency concerning the company’s culture and the position to the candidate being interviewed. The human resource manager should encourage the contribution of all the members of the recruiting team but not necessarily guarantee that all the parties involved have to endorse the hiring of the candidate. During interviews, hiring managers should ensure that they sell the opportunity during the interview. Interviewees also analyze how the recruitment team meets their requirements of a good employer (Cooper, & Burke 2011). Because of this, hiring managers should be adequately prepared in order to sell the opportunity to the candidate that is suitable for the job.

DQ#4: Investigating Job Applicants on Social Media and the Ethical Ramifications

            There has been mixed emotions on whether recruitment managers should use social media platforms to get information on candidates. Various social media platforms such as Facebook, Twitter or Linked In provide a medium through which candidates can post their professional information and recruiters can access this information and possibly recruit from these sites. Today many recruiters and hiring managers use these sites to acquire information on potential employees. The DDI study showed that many interviewers especially those who are young depend on these sites to source information on candidates. The study also indicated that more than half of the hiring managers who sourced their information from social media used that information to make hiring decisions. Few candidates however believe that what they write in their social media accounts will influence their recruitment.

            In my opinion, job recruiters can investigate job applicants on social media. It is however important that they do not use all the information they find on these sites as they risk stumbling upon personal information regarding factors such as racial background or religious affiliations which may be a cause for bias. In IT jobs for example, it is important that a candidate display an interest in matters relating to IT and social media is one such factor. The hiring manager in this case can use a candidate’s social media presence to gauge whether a candidate is suitable for a job. Hiring managers should however not make decisions based entirely on a candidate’s social media profile. They should make an all round assessment based on the performance of the candidate during the interview, their level of expertise and experience and the competence of the candidate. Social media sites are useful tools in recruitment as some such as Linked In provide a platform where a candidate can put their professional information. This reduces the costs and time taken in the recruitment process as human resource managers find professionals more easily online without having to cover the costs of advertising (Cooper, & Burke 2011).

            There are however many ethical ramifications of using social media to screen job applicants. Limiting job recruitment by basing it on social media presence is discriminatory and unethical to those who do not have social media profiles. It is not fair for a candidate to be denied an opportunity to work just because they are not active on social media sites. In addition to this, it is easy for managers to overlook skilled workers, as they will have limited their search for job applicants. Investigating candidates by accessing their social media profiles may also result in getting information that may lead to the rejection of a candidate for a job offer. Many people use social media sites for leisure and it is common for people to be very expressive in their profiles. It is also possible that the information posted on social media is falsified which makes these sites quite unreliable. However, this is not to say that sourcing information from social media is entirely wrong, but rather how a hiring manager uses this information should be the cause for concern. Social media presence is important for candidates applying for IT related jobs but the information therein should not be used as a basis of decision-making during hiring.


Cooper, C. L., & Burke, R. J. (2011). Human resource management in small business: Achieving peak performance. Cheltenham, UK: Edward Elgar.

Kulkarni P. (2012 September 28). Human Resource Experts Not a Priority For SMEs in Primpri-Chinchwad. The Economic Times. Retrieved from

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