Human Resource Management in Small and Medium Enterprises

This chapter presents an overview and evaluation of the existing research on the unique case of Human Resource Management (HRM) approaches, practices, and nuances within the context of small and medium enterprises. These debates are assessed within the context of varying country definitions of small and medium enterprises, in comparison with human resources within the typical large-firm literature. For decades, practitioners have assumed that the same HR strategies used within large firms can be used the same way within smaller businesses. Most management and training provided to smaller businesses have largely been based on the formal management practices used within larger firms. However, small and medium businesses are not larger firms, since they experience ‘resource poverty,’ which requires different management approaches, practices, and principles. Indeed, smaller businesses are not little big businesses. Unique characteristics and several factors influence the type of HRM practices used within small and medium enterprises. Therefore, small/medium businesses and larger firms may not be able to use the same formal practices in the same way due to nuances unique to smaller entities. The emerging research in these areas is investigated, and gaps are outlined.