HRM and Oraganizational Effectiveness

HUMAN RESOURCE MANAGEMENT AND SMALL AND MEDIUM ENTERPRISES

Running Head : Human Resource Management and Small and Medium Enterprises

HUMAN RESOURCE MANAGEMENT AND SMALL AND MEDIUM ENTERPRISES

In APA style

Human Resource Management and Small and Medium Enterprises

HR Practices and in SMEs and Multinationals

The global business environment has grown into a time where the role of HRM can no longer be underestimated . As multinational corporations have proven that structured and carefully planned HRM programs generated significant positive impact toward organizational operations and growth the attention now turns on Small

and Medium Enterprises (SMEs ) and how they deal with their HRM programs

SMEs are now considered as the new backbone of economic growth in many countries , especially new and emerging economies . This type of organizations is receiving increasing attention from governments and private investors due to their large growth potential and their flexibility in facing market challenges . Therefore , the study of Human Resource Management and Human Resource Strategies has now turned to SMEs in to provide these growing organizations with larger chance of survival and growth

Researches have indicated that HRM practices in SMEs and multinational corporations have quite significant differences . Some of those differences are

Sources of recruitment

In SMEs , recruitment process generally uses only word of mouth among relatives , associates or colleagues . Owners and managers of SMEs generally do not feel the necessity of hiring professionals by advertising in mass media , or other means of public communication . In multinational corporations on the other hand , a greater range of formal recruitment sources , like news advertisement and government recruitment agencies are utilized in the recruitment process

Candidate screening

In SME 's candidates are generally screened through one or two simple process . In most small companies , one interview is all that is required to decide on which candidate is suitable for the position . In large multinationals on the other hand , numerous formal selection processes is in before any decision could be made regarding employment

Training and performance appraisal

In SMEs , programs of developing employees ' skills and appraising their performance are generally managed directly by owner of the company or top managers . This is logical due to the small size of the firm and the necessity to personally guarantee that these new recruits are worth their compensations . In large multinationals on the other hand responsibilities to train and appraise performance are delegated to middle level managers because top managers are already burdened with various strategic concerns

Managerial staff development

In SME 's managerial personnel are considered the evaluators and they themselves seldom (if ever ) experience a formal evaluation session . This is also logical considering the small size of the firm and thus managerial officers are generally evaluated informally by owners and the frequency of evaluation is often uncertain . In large multinationals even top level managers received a formal evaluation and these formal evaluations are performed periodically

Documentation of human resource policies

In SME 's human resource policies are often maintained in an informal way . There might be no real document...