KEY WORDS: financial performance, HRM, productivity, small business management, voluntary turnover
JEL CLASSIFICATION: C39, M50, M51, M52, M533
Prior studies indicated that small business managers often face HR related management problems (Julien, 2001;McEvoy, 1984). Recruiting, motivating and retaining employees seems to be a major challenge for small firms (Gatewood and Field, 1987; Golhar and Deshpande, 1997; Hornsby and Kuratko, 1990). Studies by McEvoy (1984) and Marlow and Patton (1993) revealed effective management of human resources to be a good predictor of small business survival. Research by Dun and Bradstreet (2001), in turn, showed that managerial incompetence, especially in the field of HRM, is the main cause of failures in smaller firms. It is therefore not surprising that research on HRM in small businesses is recently receiving increased attention (e.g. Cassell et al., 2002; de Kok, 2003; Duberley and Walley, 1995; Golhar and Deshpande, 1997; Hornsby and Kuratko, 2003; Wagar, 1998)....