Small firms, big ideas: The adoption of human resource management in Australian small firms

Abstract

Relatively little research has been conducted on human resource management (HRM) in Australian small firms. This study, using AWIRS 1995 data, investigates the adoption and character of HRM in small firms. The dominant findings indicate that, relative to medium and large firms, small firms in Australia are generally less likely to adopt ‘formal’ HRM practices, including recruitment and selection procedures, written OH&S guidelines, and performance evaluation practices. In contrast, small firms were just as likely as medium and large firms to utilise workplace innovations such as TQM. Regardless of establishment size, management have similar views regarding the devotion of resources to HRM and the development of a corporate ethic. Management in small firms, however, were less likely to receive training in employee relations and less likely to develop a formal organisational strategy. Industry differences are also apparent within the adoption of HRM by small firms. This study provides a greater understanding of where small firms are in the adoption of HRM in Australia relative to medium and large firms, as well as some of the critical issues that small firms may face. The paper concludes with a call for greater research regarding the adoption of HRM in small firms.