Strategic human resources management practices are key to small, medium and micro enterprises effectiveness in South Africa

Abstract

Orientation: Small, medium and micro enterprises (SMMEs) are prone to failure primarily because of inadequate human resource (HR) procedures despite their reputation for flexibility, closeness to dependable clients, adaptability and adoption of new technologies.

Research purpose: This study aims to explore strategic human resources management (SHRM) strategies for small businesses in South Africa to enhance survival rates. It investigates the pivotal role of HR in SMMEs, emphasising effective selection, recruitment, retention, and performance management for productivity and competitive advantage. Additionally, it elucidates the impact of SHRM practices on organisational efficacy and assesses the correlation between performance and training.

Motivation for the study: The goals of SMMEs are to manage relationships, perform better and boost employee satisfaction through the effective use of HRs. This study’s interpretation of human resources management (HRM) is that it should be used to improve resource efficiency by applying HRM techniques. Further, performance management is another method that HRM shows up.

Research approach/design and method: A desktop research on a PhD thesis published in 2014 used a positivist paradigm, descriptive research design, quantitative research approach and a survey research strategy, which included 50 respondents and was conducted in Polokwane in South Africa. The simple random probability sampling method employed a saturated sample technique as well as descriptive and path analytic tools.

Main findings: The findings revealed that: (1) the results portray strong evidence between organisational capabilities (skills, knowledge) and organisational effectiveness and (2) business skills affect SMMEs’ profitability in South Africa.

Practical/managerial implications: Through the advancement of a Resource-Based Entrepreneurship Theory (RBET), the study added to the body of knowledge.

Contribution/value-add: This study makes a compelling case for the necessity of HRM procedures for the organisational efficacy of SMMEs.