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Abstract
Human resource management (HRM) practices in 262 U.S. small businesses were investigated for purposes of examining and comparing HRM practices in small business to those reported in a study conducted by the authors over a decade ago. Most empirical research has focused on larger U.S. firms, or on smaller firms outside the U.S. Results of the current study indicate little advancement in the human resource functions of smaller firms over the last ten years. The critical HRM issues, as viewed by the owners are also reported and compared to the 1990 study.
Key words: HR Practices, Smaller Firms, Human Resource Management.
Employees in small firms are frequently the key factor distinguishing successful from unsuccessful ventures. The literature emphasizes the importance of well-motivated, highly skilled workforce as a determinant of a small firm's ability to remain competitive in the contemporary business environment. (e.g., Hodgetts & Kuratko, 2001; Longenecker, Moore, & Petty, 2000). Researchers began to examine the Human Resource Management (HRM) practices of smaller ventures in the early 1990's; however, little subsequent research has appeared. The current study, based upon the responses of 262 owners of small and emerging ventures in the U.S., provides a comparison of HRM practices to those reported in a study conducted at the beginning of 1990.
Background
Human resource management issues in larger firms have received extensive attention within the literature. Topical areas receiving the greatest focus have included the importance of human capital (Stewart, 1992); the impact on performance and turnover (Arthur, 1994); the impact on financial performance (Huselid, 1995); the impact on organizational performance (Delaney & Huselid, 1996; Huselid, Jackson, & Schuler, 1997); and HRM's effect on competitive advantage (Lado & Wilson, 1994; Barney, 1991; Kamoche, 1996). In addition, articles have addressed the critical role of human resource management in regards to the changing environment (Jackson & Schuler, 1995; and Mirvis, 1997), as well as human resource needs for the twenty-first century (Burk, 1997). There has also been an emphasis in the literature on the strategic forms of human resource activities that enable the firm to achieve its goals (Truss & Gratton, 1994; Wright, McMahan, & McWilliams, 1994; Martell & Carroll, 1995; and Wright & Snell, 1998). In addition, the challenges of managing a global workforce...