The Role of Human Resource Management in Small and Medium Sized Companies in Central-Eastern Europe

Abstract

Human resource management (HRM) in contemporary economics is linked to a company’s success measured through numerous organizational measures (profitability, productivity, rate of innovation, market share, environmental performances, etc.). The role of HRM in large enterprises is relatively known, especially when the competitiveness and sustainable development are in question. On the other hand, small entrepreneurial and medium sized (SME) companies have not been greatly studied in relation to the HRM in the past. Although there is a lack of literature and empirical research in this area, several studies in the past decade and recent years emphasized the importance of the HRM for the survival and success of the SMEs. The reason why more and more authors today are arguing about the success of the SMEs is the perceived advantages of SMEs in a turbulent and unpredictable business environment. SMEs are seen as the driving force for vulnerable economies, a source of innovation, employment, and flexibility. Bearing in mind SMEs and their advantages, the authors have focused their attention on the economies in the Central and Eastern Europe countries (Slovenia, Serbia, Hungary and Bulgaria) where the SMEs are recognized as potential possibilities for economic recovery and development. Since human capital is recognized as one of the most important factors of enterprise success, the aim of this work was to explore the role of HRM in SMEs in the economies of Serbia, Bulgaria, Hungary and Slovenia, to determine the type of linkage between HRM and the success of small and medium-sized companies that operate in the CEE region, in light of the Cranet 2008/2010 survey data. The objective in this chapter was the exploration of the existence of organizations’ business strategy and HR strategy in SMEs, as well as HR departments, and the role of HRM in the business of the SMEs. The special task in this research was the exploration of the HRM activities and trends (recruitment, selection, compensation, performance management, training and development, human resource information system, etc.) that are present in the SMEs in the CEE region. The ranking of the SMEs’ performances is also presented and the relations between the existence of HRM and the several performance measures in these companies. Descriptive statistical methods, t-test of independent samples and ANOVAs tests have been used during quantitative analysis to explore the presented relations.