Performance management problem of four small and medium-sized enterprises (SMEs): towards a performance resolution

Abstract

PurposeThe purpose of this paper is to examine the underperformance problem of four UK-based small and medium-sized enterprises (SMEs) from management's and employees' perspectives in order to advance knowledge on a neglected area in small business and management studies.Design/methodology/approachBased on performance management's theoretical frame of managerial/entrepreneurial, market shaping and system-wide resource (re)organisation and the microstories obtained from 85 surveyed employees and managers, the data are analysed using an interpretivist paradigm.FindingsThe key findings of the study highlighted the adoption of tough performance implementation measures by management, the development of learning initiatives, the adaptation of roles, the redefinition of what a performing employee meant and three areas for performance improving in all four SMEs. This study reveals the crucial role of personal, conversational agency and implementation attributes, which are neglected aspects in current performance management in small firms.Research limitations/implicationsThe drawbacks of the study centre on the limited nature of the survey sample and the fact that it is solely based within the UK. This suggests that the findings are not to be generalised to other contexts.Practical implicationsThe study identifies key employee and management behaviours, attitudes and lived experiences that need to fundamentally change in order to resolve the four SMEs' underperformance. In addition, an innovative environment encouraging inter-departmental agency collaborations and grassroots implementation are needed to effectively and holistically revive the four companies' performance.Social implicationsThe study's results highlight the impact of manager/entrepreneur/employee relations on the social aspects that could either facilitate or hamper micro- and macro-level performance. It is therefore critical that owner entrepreneurs are mindful of the impact that their actions/activities and practices could have on the social lives of their employees and partners and on the ultimate bottom line of business success or failure.Originality/valueStudies focussing on small businesses' underperformance in the UK are a rarity. The paper advances the traditional performance management literature by proposing employee learning and skills' developmental as non-tangible resources to complement managerial attempts. In addition, a “can do” attitude and a more holistic, organisational and individual approach to performance resolution is proposed to fill the performance implementation and theoretical gap faced by academics, employees, managers and owner entrepreneurs.