A quarter‐century review of HRM in small and medium‐sized enterprises: Capturing what we know, exploring where we need to go

Abstract

Despite the proliferation of HRM research, only a small fraction explores the context of small and medium‐sized enterprises (SMEs). Where HRM in SMEs has received attention, the literature base remains fragmented and variable, comprising a plurality of definitions, explanations, and methods. To advance understanding, this paper uses a quarter‐century systematic review drawing on an evidence base of 137 peer‐reviewed articles. A cumulative framework is presented capturing key developments and synthesizing existing areas of research focus. Analysis of limitations and knowledge‐gaps finds a failure to differentiate across various types of SMEs, limited appreciation of SME characteristics and contextual conditions, and a dominance of managerial perspectives. An agenda for future research on HRM in SMEs is outlined with respect to definitional parameters, HR practices, HRM–performance, key determinants, and presenting issues. The paper concludes that SMEs offer a unique, fruitful, and timely context for investigations of HRM.

Why do small businesses seek support for managing people? Implications for theory and policy from an analysis of UK small business survey data

“…The data provide a snapshot and cannot offer an assessment of the impact of HRM support, and the purely quantitative nature of the data somewhat limits the depth of understanding of reasons for action. Future quantitative research could usefully explore the links in the model, in particular examining the impact of HRM support on future SME performance, both the immediate and proximal impact in terms of adoption of HRM systems and practices and their effects, but the distal impact on growth, diversification and sustainability (Harney and Alkhalaf, 2020). The content of the model also provides the basis for an agenda -which we have detailed in Table 2 -for in-depth qualitative research that explores the inter-relationships between growth intentions, workforce development intentions and the provision of strategic HRM support.…”

HRM as a catalyst for innovation in start‐ups

“…Although existing research offered pertinent insights into the intensity with which HRM practices affect innovation in SMEs (e.g., Popa et al, 2017;Sheehan, 2014;Aït Razouk, 2011;De Winne and Sels, 2010;Schmelter et al, 2010), it tends to be dominated by quantitative studies that disregard the contextual complexities that may shape the adoption of HRM in innovative startups, and fail to uncover deep details about individuals' experience and understanding of these practices. In a recent review of a quarter-century research on HRM in SMEs, Harney and Alkhalaf (2020, p.15) (Harney and Alkhalaf, 2020). Startups for instance might rely on more formal or hybrid approaches to workforce management where direct interactions and spontaneous exchanges are among the main facilitators of innovation.…”

Exploring the Interactions of Factory Workers in China: A Model Development Using the Grounded Theory Approach

“…Workplace interaction has proved to improve work efficiency and workers' sense of belonging effectively, but such benefits are ignored by the military-style Taylorist management system. Small and medium-sized enterprises (SMEs) usually seek to replicate the HRM of large enterprises, but have a predominance of informality in their workplace practices [7,8]. China's SME factories are not as well-equipped as large-scale factories in terms of capital, resources, and industrial chain.…”

“…Besides, Chinese SMEs pay more attention to performance management than larger firms [7]. As HRM practices can improve corporate competitiveness and organizational performance, they have become the focus of HRM research for SMEs.…”

“…In contrast, worker interaction has not been effectively utilized to benefit productivity in large factories, nor has it been proven that it can effectively improve organizational performance and sustainability in SME factories. Hence at present, adoption of new HRM practices is unrealistic for SME factories [7]. FWI is similarly neglected in the existing HRM practices of SME factories.…”