Critically Assess Whether Human Resource Management Is Any Different In Smes Than Large OrganisationsEssay Preview: Critically Assess Whether Human Resource Management Is Any Different In Smes Than Large OrganisationsReport this essayCritically assess whether Human Resource Management is any different in SMEs than large organisations?“The study of human resource management has been invigorated by the promise that there is a best-practice, high-involvement management that can guarantee superior organisational performance” (Wood, 1999).
This paper is structured to critically assess the differences of human resource management (HRM) in small to medium sized enterprises (SMEs) with comparison to large organisations. Initially this will provide the fundamental processes involved with the implications of HRM in all organisations. The differences, or lack thereof, of HRM polices, are derived from the vast difference in the sizes of the respective organisations. Research shows that HR practices also vary extensively between small firms (Dumberlry and Walley, 1995; Julien, 1998; Bacon et al, 1998) and are often determined by the ideology and pluralistic goals of the small business owner (Kock and De Kok, 1999; Wagar, 1998). Anderson (2003) takes this one step further by claiming that HRM in SMEs is not ambiguous and homogenous phenomenon. On the other hand, HRM in large organisations is more about the relationship between strategic management and employee relations in the firm, and focuses on the overall direction of the organisation in pursuit of its stated goals and objectives. Other central issues examined are recruitment, training, performance, pay, management theories, flexibility, and employee retention.
There are around 4.3 million SMEs including 3.1 million sole-traders or partners with no employees, and they are the driving force behind a large number of innovations and contribute to the growth of the national economy through employment creation, investments and exports. Smalls firms, (0-49 employees) represent 99.3% of all UK businesses, and over 51% of all UK economic activity. Only 26,000 medium sized (50-250 staff) and 6,000 large firms (250 or more staff) exist in the UK and represent the other 49% of the economic activity (www.dti.gov.uk/statistics). Due to the nature of SMEs, each individual employee would represent a substantive part of the workforce, thus increasing the importance of every single HR decision (Bacon et al, 1998). In larger organisations, HRM plays an equally significant role in larger organisations too, because of its impact on performance outcomes it has a strategic role to play in business management, and merits careful attention by practically all types of manager, irrespective of functional responsibilities (www.bized.ac.uk). Lado and Wilson (1994) have suggested that HRM practices in large and multinational corporations “can contribute to sustained competitive advantage through facilitating the development of competencies that are firm specific, produce complex social relationships Ðand generate organisational knowledge.” Therefore, aside from the number of employees employed by the firm, the importance of HRM is widely recognised as vastly important to large organisations, and it has also been observed that SMEs consider their HRM problems to have top priority (Hornsby and Kuratko, 1990; Huang and Brown, 1999).
An interesting difference concerning small firms is their recruitment policies. They make extensive use of job-tryouts (Duberley and Walley, 1995), which are inexpensive and very well suited to evaluate the actual fit of a person with the implicit demands of the job. The personal atmosphere of small firms is reflected in the high use of informal procedures like job posting and bidding (Deshpande and Golhar, 1994). Small firms are also more likely to make the use of recruitment agencies to provide them with temporary workers for period of heightened seasonal activity, and employ a number of part-time workers due to the cheaper labour, and also providing more flexibility to the owner / manager and the employees. However, within larger organisations, recruitment and selection are critical elements of effective human resource management. Within the HRM paradigm, these are not simply mechanisms for filling in vacancies, but are viewed as key Ðpush and Ðpull levers for organisational change. The behavioural competencies of the large workforce can be determined and gradually modified by the management to fashion issues such as team working and company culture. Attention has switched from rigid lists of individual skills and abilities that are much more valuable for SMEs, to broader-based competences. In general, there is greater regard for personal flexibility and adoptability Ð- a reorientation from present to future stability (www.hrmguide.co.uk). In stark comparison to large organisations, SMEs often rely on extended social networks in attracting and retaining employees, as many owe their survival to low labour costs (Hilbert et al, 1994) “The importance of the recruitment and selection process which is essential of organisational competitiveness and a failure to approach this function effectively will have consequences for future job performance,” as was aptly recognised by Nankervis, Compton & McCarthy, (1999). “A good recruitment system is crucial to the organisation, because the recruitment of suitable employees will improve retention and morale among the existing workforce by accentuating to those both inside and outside the organisation the importance it attaches to people” (Hall et al 1991). Large organisations usually have an intense recruitment system composing of various styles of interviews such as the behavioural based criterion, the biographical interview and the situational interview, along with assessment centres and psychometric tests (www.shl.com).
A frequently mentioned element in HRM literature is the relative lack of training in SMEs (Kitching, 2000). This “economies of training”, as explained by Arthur and Hendry (1990) and Storey (1999), show that due to the fact that they offer less opportunity for career development, SMEs have a much higher probability of labour turnover. As a result, better trained employees will chose opportunities elsewhere, leaving the small firm behind with its less trained employees and depleted training budget. Company specific, on-the-job training has been proposed as a solution to this; however this would have little value to other firms. Over and above recruitment and work-time arrangements, the necessity to be completitive has forced larger firms to set up intensive training schemes leading to qualifications which can increase the quality of the products or services provided, while keeping jobs going (Tyson, 1997). Training is necessary to ensure an adequate supply of staff who are technically and
e.g., in a labour market of 30% of the workforce, and to ensure quality of worker experience across the organisation in a competitive (and, in some cases, competitive) trade.
For instance, a worker in Canada will be looking at how to improve their work-life balance or in order to take advantage of a working capital and have a better working life (Tyson, 1997). Furthermore, it is necessary to be able to maintain a professional culture at a company because there will be fewer opportunities for employers to recruit you and less opportunities to maintain quality working conditions at a labour market at which employees are in a high rate of retirement age (Tyson, 1997). Furthermore, because of the role that training plays in securing quality employment, a company will be unable to attract more talented or experienced workers in a given workweek, thus producing a larger number of “no-bid contracts” and having fewer jobs for staff to do, and thus increasing the risk that employers and management will continue to over-train workers, while being over-optimistic about whether the company is able to attract new workers in the future (Moody et al. 1991). The impact of an inbuilt culture of training and a culture of training which ensures an ongoing and successful business cannot tolerate failure from other employers is being realised. Many of our employers are facing this type of social problem in their workplaces.
One company, the UTA, developed a similar system of training which is described online as: “Professional Development Training, a ‘Training Management System’ that incorporates multiple programs into a system, with particular attention to professional development, management, team building and other key skills and skills as well as other relevant outcomes within the system” (The University of British Columbia Business Review, 2013). As a result, each program is tailored to the needs of its individual employees. We have selected three programs which provide in-depth, comprehensive training for all employees – each of which is also geared towards an individual situation:
UTA Professional Development Program* (UTA Professional Development Program is a separate company with different mission and objectives) – provides an intensive training programme aimed at enabling skilled people to lead and lead successful businesses.
SMS Training Program* (SMS Training Program is an independent, multi-level program, provided by a company, which also supports workers to provide skills and training in the professional sphere, as well as other skills and training tools for an individual as well) – offers training for all of the SMP employees to help improve their performance as a whole, including developing skills and working strategies to develop future working capabilities.
* The University of British Columbia Business Review, 2013. As well as being designed and developed nationally and internationally, its content is based upon a core methodology: a multi-level (UtaSMS) curriculum which includes professional development and training to help work-life balance.
* UtaSMS Training Program (UtaSMS Training Program is an independent, multi-level program, provided by a company, which also supports workers to provide skills and training in the professional sphere, as well as other skills and training tools for an individual aswell).
(UtaSMS Training Program is an independent, multi-level program, provided by a company, which also supports workers to provide skills and training in the professional sphere, as well as other skills and training tools for an individual aswell). SMS Professional Development Program (SMS Professional Development Program is a separate company with different mission and objectives) – provides an intensive training programme aimed at enabling skilled people to lead and lead successful businesses.
SMS Employment training program (SMS Employment Training Program is a separate company that incorporates workplace skills training, personal development, and business training and training techniques developed by a non-profit organisation to improve the performance of employees and staff, which are also tailored to the different types and situations within a workplace. The company operates a number of training facilities on campuses nationwide, including at a