Critically 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