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Managing human resources in small organizations: What do we know?

Human Resource Management Review
Publication Date
DOI: 10.1016/j.hrmr.2004.06.001
  • Human Resource Management
  • Entrepreneurship
  • Small Firms


Abstract While much of our knowledge concerning traditional HR topics (e.g., recruiting, compensation, or performance management) in large firms may also apply in small or emerging organizations, evidence suggests that new ventures are different and that management of people within them may not clearly map to management within larger, more established organizations. This paper reviews extant research on managing people within small and emerging ventures and highlights additional questions that have not yet been addressed. Our review suggests that as scholars, our understanding of the HR issues important to small and emerging firms is limited. While we have begun to understand how these firms should hire, reward, and perhaps even motivate their employees, we lack much of the theory and data necessary to understand how small and emerging firms train their employees, manage their performance, promote or handle organizational change, or respond to potential labor relations and union organization issues. The existing literature presents an often-confounded relationship between size and age, between the issues important to small firms and the issues important to young ones. Given the potential early HR decisions have to impact the organization's downstream success, it is important that we understand how these functional areas of HR (as well as their integration and evolution) affect small and emerging firms, and how the HR decisions made during the formative stages of firm development impact the firm's long-term goals.

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