The article analyzes the way of HRM practice in small-medium enterprises(SMEs) and the reason why it is important element for SMEs. Over the past years, small-medium enterprises play an increasingly significant role in European economy. It is mainly because European countries including UK have large amount of SMEs but with small scale of big enterprises. However, HRM, as an important part of a company, is utilized in tremendous different ways between large and SMEs firms. SMEs are reluctant to use HRM when considering high cost and time. This situation brings a lot of issues. Unfortunately, very few of the research for HRM in SMEs have been published till now(Domingo Ribeiro Soriano,et all,2011) .For example, according to the US academic journals from 1988 to 1998, more than 207 papers had been written about HR recruiting ,etc. However, just 7 of the articles mentioned about SMEs in Journal of Applied Psychology, Academic of Management Review and Personnel Psychology;. For these reasons,it is important to investigate the study of HRM in SMEs.
Negative and positive arguments about HRM practice in SMEs
Large amount of Debates about the efficiency of HRM in SMEs are illustrated in the earlier studies. Small business see few advantages of HRM when comparing to the large firms(Akroyd1995,adapted by Cassell.C et all,2002 ).Especially in the training ,Storey and Westhead described that the employees in the SMEs have few chances to get involved in structured training. (1997,adapted by Cassell.C et all, 2002) .After conducting several cases, Holiday also mentioned that training is not utilized well in SMEs(1995,adapted by Cassell.C et all, 2002). Cassell.C, et all(2002)did both interviews and telephone survey to a number of SMEs, and conclude that HRM practices especially selection and training process are transferring to other department in informal ways. They also found that 53% of SMEs that they investigated in recruited their employees via relatives or friend’s recommendation. It means HRM is not very formal in SMEs. In another word, HRM in SMEs are full of different issues. But according to the following study HRM indeed bring some benefit to companies. In1995 Leicestershire, and Storey (adapted by Cassell.C et all, 2002)did a study which comparing the difference between traditional HRM and new practices among the large and small companies. The result of 15 cases implied that although the initiative of every employee in large companies has more opportunities to be enabled, it is more sustainable process in small-medium firms. In my opinion, SMEs might be developing better when they employ formal HRM practices. For example, during the study of HRM of SMEs,Williamson, Cable, &Aldrich, (2002,adapted by Patel, C. P, et all, 2010) found that that SMEs can be more competitive and legitimated with formal HRM activities since it helps firms attract more high quality employees. HRM can also create harmonious group culture, highlighting the relationship between employers and companies. (Cameron & Quinn, 1999,adapted by PATEL, C.2010).
In order to explore whether it is beneficial for companies when they use formal HRM practices, I conclude the research which was done by PATEL, C. P et all(2010).They did a research to discover the relationship between HRM and company productivity. In this study, high group culture means that a strong team works and effective working environment, which is usually created by strong HRM.) That it surveyed 145 firms and 6 industries including different size of firms. The correlation can be described by the following charts.Chart1 suggests: under high group culture, companies increase the use of HRM when market competition increase;
Product market competition (chart 1,adapted by PATEL,C.P,andS. CARDON,S.M )...