The Impact of Performance Appraisal and Training and Development on The Financial Performance of Small and Medium-Sized Enterprises (SMEs)

Abstract

This study aims to measure the influence of human resource management (HRM) practices on the financial performance of small and medium enterprises (SMEs). It notably focuses on analyzing the effects of training and development programs and performance appraisal methodologies. In order to carry out this study, a quantitative methodology was employed, which entailed the use of self-administered questionnaires. A linear regression analysis was conducted on data obtained from 130 small and medium-sized enterprises (SMEs) to examine, assess, and improve the relationship between performance appraisal, training and development, and the financial performance of SMEs. The results indicate a clear and direct association between training and development, performance appraisal systems, and the financial success of small and medium-sized enterprises (SMEs). The findings highlight the critical importance of HRM practices as strategic investments rather than just administrative tasks. These findings provide useful insights for scholars and practitioners, offering a framework for implementing training and development and performance evaluation procedures to achieve financial success in small and medium-sized enterprises (SMEs), not just in Kosovo but also in similar global contexts.