Human resource management in small enterprises

Abstract

Small enterprises with fewer than 50 employees form the backbone of the economy in many countries and significantly contribute to gross domestic product, employment, and exports. Given their importance and role in economic development, economies can benefit from a strong, productive, innovative, growing small enterprises sector. Employees play an essential role in the development of small enterprises. For this reason, it is important to examine the extent to which small enterprise owners pay attention to human resource management and its development. Previous research on human resource management has mainly focused on large enterprises, while there is little evidence on how small enterprises manage and develop their employees. This paper analyses the approach to human resource management in two small Croatian enterprises. Based on six semi-structured qualitative interviews conducted with three different groups of employees – the senior manager, the middle manager, and the senior staff, two qualitative case studies were conducted to gain a deeper understanding of the approach to managing and developing employees in small enterprises. The findings suggest that small enterprise managers know the importance of their employees and the need to support their future development. Although small enterprises implement and adapt human resource management practices according to their capabilities and limitations, it is evident that fostering and empowering employees is embedded in their organizational culture.