Human Resource Management in Small and Medium Sized Enterprises (SMEs). A Literature Review

Abstract

Literature in the discipline of Human Resource Management (HRM) is mostly based on research conducted is large, formal and established firms. However, most people in developing economies like Zimbabwe are employed by the Small and Medium Sized Enterprises (SMEs) which, unlike large firms, operate informally. As such, it follows that a body of literature focusing on people management practices in SMEs. This paper steps in to close this gap in literature by systematically examining literature informing the practice of HRM in Small and Medium Sized Enterprises (SMEs). The methodology used to examine the literature entailed identifying studies related to HR Management in SMEs in peer-reviewed journals were searched on the Academic Search Premier, ERIC, Business Source Elite and Business Source Premier databases. Boolean logic was then used to refine the literature searches within the range of 100–150 hits per keyword search. This had the effect of focusing on the arguments making up this paper. The findings indicate that extant though HR management functions carry the same nomenclature between small and large firms, in practice there is a difference. Whilst, HR management in SMEs is informal, cheap, eclectic and driven by non-professionals, in large firms, HR is the hands of professionals and as such it becomes formal, expensive and dominant in the HR management discourse. The study recommends that future researchers should refocus their attention to HR management in SMEs as the sector is a major contributor to economic development in developing countries and as such demands research attention.