Human Resource Management Practices
HUMAN RESOURCE MANAGEMENT PRACTICES IN SMEs: AN OVERVIEW Dr.R.SEENIVASAGALU Associate Professor, PG & Research Dept.of commerce, Government Arts college(Autonomous), Nandanam, Chennai- 600 035.
Abstract In this article, the current state of Human Resources Management practices in Small and Medium Enterprises (SMEs) is explored. The owner-managers play important roles in managing human resources in SMEs. This study specifically examines the current HRM practices prevailing in SMEs and its implications. Data were collected by using questionnaire from79 Small enterprises and 44 Medium enterprises located in and around Chennai cit (Tamilnadu) on the prevailing HRM practices. It was found that the formal HRM systems in SMEs were low and owner-managers played a central role in the HR functions of their enterprises. Compared to small enterprises, the level of formal HRM practices was found to be higher for Medium enterprises and also higher when employee strength is more. An inverse relationship between the extent of involvement of the owner-manager in managing human resources and the extent of a formal policy for HRM was evidenced. Implications of decisions by owner-managers to keep HR functions informal or formal in SMEs are also analysed. It is necessary for SMEs to find ways in which formal and flexible systems can co-exist. There are about 7500 large enterprises and 11.8 million small enterprises in India. These enterprises employ 28.3 million people (Economic Survey Report, 2005-2006). They contribute more than 50 percent to India’s GDP. Since independence, the government’s industrial policy promoted small scale industries, protected them from competition from large industries, and extended tax benefits. The SMEs were mostly family managed and had loose management structure; they did not invest in specialised technical and professional skills. Among SMEs, in some sectors like information
Abstract In this article, the current state of Human Resources Management practices in Small and Medium Enterprises (SMEs) is explored. The owner-managers play important roles in managing human resources in SMEs. This study specifically examines the current HRM practices prevailing in SMEs and its implications. Data were collected by using questionnaire from79 Small enterprises and 44 Medium enterprises located in and around Chennai cit (Tamilnadu) on the prevailing HRM practices. It was found that the formal HRM systems in SMEs were low and owner-managers played a central role in the HR functions of their enterprises. Compared to small enterprises, the level of formal HRM practices was found to be higher for Medium enterprises and also higher when employee strength is more. An inverse relationship between the extent of involvement of the owner-manager in managing human resources and the extent of a formal policy for HRM was evidenced. Implications of decisions by owner-managers to keep HR functions informal or formal in SMEs are also analysed. It is necessary for SMEs to find ways in which formal and flexible systems can co-exist. There are about 7500 large enterprises and 11.8 million small enterprises in India. These enterprises employ 28.3 million people (Economic Survey Report, 2005-2006). They contribute more than 50 percent to India’s GDP. Since independence, the government’s industrial policy promoted small scale industries, protected them from competition from large industries, and extended tax benefits. The SMEs were mostly family managed and had loose management structure; they did not invest in specialised technical and professional skills. Among SMEs, in some sectors like information