The role of human resources in SMEs

The Role

Of

Human Resources Management

In

Small and Medium Enterprises Introduction

Competitive advantage to a firm accrues from the judicious employment of three basic types of resources , namely

Physical Capital Resources , such as Finances , Plant and Equipment

Organizational Capital Resources - Structure and systems in the organization

Human Capital Resources , which include the skills , competencies experience and intelligence of employees

Human resources are among the most important resources that an organisation utilises and hence its importance to any organisation can be easily understood . Small-to-Medium Enterprises (SMEs

) are no exception to this rule , although this aspect is frequently lost sight of . This examines the role and importance of Human Resources in SMEs , and compares SMEs from two different cultural backgrounds - Taiwan and the UK

Role of Human Resources in SMEs "The study of human resources management in SMEs needs to be strongly encouraged . CEO /founders in SMEs view human resource management decisions as very important to the growth of their enterprises

A study into the perception of important HR issues in small organizations showed that "top six issues were wage rates , availability of quality workers , government regulation , training , benefits , and job security " The role of Human Resources in SMEs is to contribute meaningfully to organisational objectives in a flexible and demanding environment

Lack of strategic employee management is widely accepted as characteristic of small enterprises . Decision-making has been perceived to be of relatively short-term nature compared to larger organisations making small enterprises more flexible and less conflict-prone . At the same time , this also means that the advantages of long-term planning such as greater efficiency and effectiveness are lost . On the human resources front , this means that such organisations tend to have reduced capability to attract , retain and motivate the best human resources This becomes important in view of the fact that out of thousands of small businesses that are established every year , only a few manage to survive in the long-term . While long-term planning and HR strategy are not the only reasons for this , they are among the important reasons Hence an examination of the HR function as a strategic part of business and its relevance to long-term planning , is in . In addition , the role of recruitment and selection , training , and performance management are also relevant to any discussion on the role of human resources

Planning and Human Resources Management

Strategic planning for the organisation needs to be linked to individual goals . In turn , this means that the job design should take into account the long-term objectives of the organisation . A framework for strategic management incorporating HRM involves developing a mission statement that answers questions of what businesses the organisation is in determining goals that are general and long term and establishing objectives that are short term and measurable . It should also encompass a complete SWOT analysis that incorporates HRM as a functional unit of analysis

One of the essential requirements of Human Resources Planning is proper job design . Human resources planning involves the matching of the knowledge and...