Approaches to commitment and control can both be seen in human resources management (HRM). By rewarding employees, the control approach to HRM aims to increase organisational efficiency. Conversely, the commitment approach to HRM seeks to shape employee attitudes by establishing psychological connections between the objectives of the organisation and those of the person. According to empirical research, commitment-based HRM practices and organisational success are positively correlated (Collins & Clark, 2003; Collins & Smith, 2006).

The distinction between collaborative and calculative HRM techniques is highlighted by Gooderham et al. (1999). While calculative HRM strategies concentrate on the effective use of personnel, collaborative practices strive to improve employer and employee goals.

Pfeffer (1994) listed 16 ‘HRM techniques that boost an ‘organisation’s output. These include sharing of information, involvement, empowerment, education and skill development, job stability, hiring and selection processes, competitive pay, benefits and employee ownership. Furthermore, according to Delaney and Huselid (1996), seven progressive HRM approaches use incentives and training to raise employee performance. Additionally, Huselid (1995) identified two categories of HRM practice factors: organisational structures and employee skills and motivation. He discovered 13 HRM practices that have a direct bearing on turnover, company productivity and organisational effectiveness.

The goals of small, medium and micro businesses are to manage relationships, perform better and boost employee satisfaction through the effective use of human resources (HRs). Human resources management strategies include career planning, compensation, performance management, training and development, recruiting and selection, reward systems and HRs planning in an effort to increase worker productivity (Zhang & Morris, 2014).

Firstly, this study’s interpretation of HRM is that it should be used to improve resource efficiency by applying HRM techniques (Snell et al. 2007; 1996).

Secondly, performance management is another method that HRM shows up. Enhancing individual employee performance is the goal of HRM. An improvement in the performance of each worker benefits the organisation as a whole. Human resources management procedures give businesses the ability to raise worker performance on an individual basis. The goal of HRM should be to encourage employees to behave and think positively about the company. Positive attitudes and behaviours are precursors for individual performance and employees’ productivity (Wright & McMahan, 1992).

Thirdly, managing the relationship between employees and employers is the goal of HRM. Training and career planning are two tactics used by organisations to build partnerships. Individual employee performance has been found to rise when employers invest in their workforce (Noe et al., 2012).

Fourthly, the goal of HRM is to make employees happy. One of the secondary beneficial organisational behaviours and attitudes that improve organisational performance is job satisfaction (Foss, 2003).

Work practices are the protocols, guidelines, standards and techniques employed in a particular field that involve human labour. There is no clear definition for this idea of work practices because there are numerous viewpoints. Brown et al. (2005) clarifies, however, that organisational actions intended to manage HRs capital constitute HRM practices. In this study, work practices are defined as HRM procedures, interpersonal interactions, human behaviours and other elements that affect employees in a workplace. The study investigates how these practices are used in small- and medium-sized enterprises (SMMEs) in conjunction with strategic business strategies. Research indicates that the practices of HRs in SMMEs are not well documented (Cardon & Steven, 2004; Dun Bradstreet, 2001; Gilman & Edwards, 2008; Mazzarol, 2003).

Many research outputs indicate that HRM is associated with improved work practices (Whyman & Petrescu, 2011). There are differing perspectives on the relationship between superior organisational performance and effective HRM practices. This study is supported by proponents of the universalistic approach, who maintain that best HRM practices lead to superior organisational outcomes (Delery & Doty, 1996). On the other hand, the contingency approach says that there are best practices that fit every circumstance. These theories explain how HRM practices are essential to the efficient operation of SMME businesses. This research was conducted to verify the HRM practices used by South African SMMEs and micro-businesses. The research advances by offering insights into how HRM practices affect the efficacy of SMMEs in South Africa.

What is the connection between HRM practices and SMMEs’ effectiveness on growth and survival in South Africa?

According to Tan (2011), the theoretical framework facilitates the application of diverse HRM systems and HRM practices to accomplish goals. Wright and Snell (2009) elaborate that managers have a selection of strategic human resources management (SHRM) practices from which to choose when designing HRM practices. Managers choose HRM procedures that select, hire, train, inspire and keep organisational personnel. These actions demonstrate actions that yield results, allowing the company to use tactics to meet targets.

Proponents of HRM provide a wide range of theoretical perspectives that guide HRM practices such as systems theory, opportunity-based theory (OBT), the resources-based view theory (RBV), multiple stakeholder theory, strategic reference point theory, systematic agreement theory, firm theory, resource-based entrepreneurship theory (RBET), contingency theory and configurationally theory (Delery & Shaw, 2001; Armstrong, 2012; Barney, 2001a, 2001b).

The goal of the RBET is to match opportunities and resources strategically. Schmidt and Cohen (2013) shows how SHRM increases firm effectiveness and maintains a competitive advantage. Resources-based view is a theoretical perspective that advises businesses to rely on assets and resources as the main foundation for sustainable competitive advantage, according to SHRM proponents such as Srivastava (2013).

The RBET purports that businesses are profit-maximising establishments under the direction of competent managers operating in clearly defined markets (Kraaijenbrink et al., 2010, p. 4). Resource-based entrepreneurship theory experts also assert that firms are profit-maximising entities that follow firm performance. This is in addition to RBV. This results from a successful fusion of firm performance and management techniques. This creates a gap in the body of knowledge (Barney, 2007).

The RBET theory maintains that an organisation needs to acquire, retain and manage unique resources more effectively than its rivals to be granted a sustainable competitive advantage. Eccles et al. (2013) reveal that firms that are sustainable and competitive, possess and maintain a variety of resources that bear similarities to characteristics that impact organisational performance. These competencies enable organisations to maintain their competitiveness over time. Numerous factors preceded RBET (Foss & Klein, 2011). The contributions of Barney (1991), Barney, (1995) and Wernerfelt (1994) gave rise to RBET. Three categories – Liquidity Theory of Entrepreneurship (LTE), Human Capital Theory (HCT) and Social Network Theory – are used by academics to divide the RBET theory (Muogbo, 2013).

The human capital in this study describes knowledge, skills, experience and capabilities that guide organisational performance (Muogbo, 2013).

Human resources are viewed as more important than other resources, much as in RBV theory. It is flexible because it uses mental abilities; therefore, businesses with strong HRs can be sure to produce results. Advocates of SHRM assert that an organisation can achieve sustainable competitive advantage through strategic management of its HRs. This creates a gap in the body of knowledge (Whyman & Petrescu, 2014; Wright & McMahan, 1992; Pfeffer, 2007).

Many studies have unearthed varied HR practices in SMMEs. According to research by Fabling and Grimes (2010), SHRM practices improve organisational results. A more relevant research by Karami et al. (2008) reveals that SHRM specialists foster organisational competitive advantage. In addition, Wang et al. (2010) explored the influence of planning strategic practices and concluded that SHRM practices were prevalent in well-established successful SMMEs.

Syed et al. (2012) pointed out that SHRM improves organisational performance. This study, conducted in South Africa, confirmed findings from a survey conducted in 2012 by Bhatti et al., who make the same claim as this study – namely, the majority of SMMEs experience severe HRs issues. According to Vanhala and Hilson (2013) and Vanhala and Ritala (2013), HRM studies predominated for 20 years, primarily demonstrating the link between profitable and creative HR practices.

A company’s capacity for survival and growth in a dynamic, cutthroat market is known as its sustainability (Kehoe et al., 2006, p. 12). A business needs to be innovative, obtain a competitive edge and implement sound management techniques to be sustainable. Employee learning, engagement, performance management, leadership development and organisational change are the main components of HRM practices. Chan (2012) affirms that the strategic role of HRM will ensure organisational success because of the changing environment. Furthermore, globalisation, quick technological advancements and shifting supplier and customer demands have elevated HRM’s strategic importance. This creates a gap in the body of knowledge.

This study reviews several HRM practices as follows:

Exploratory research design is primarily focussed on the exploration of novel insights regarding a specific phenomenon. Saunders et al. (2019, p. 458) elucidated that exploratory research designs allow researchers to engage in a comprehensive review of existing literature to enhance their comprehension of a phenomenon. According to Strauss and Corbin (2016), a quantitative research approach emphasises data quantification, analysis and collection. This particular research approach is grounded in a deductive method that highlights the testing of theories derived from a positivist paradigm, as indicated by Saunders et al. (2019). Bryant and Charmaz (2018) noted that surveys employ questionnaires and interviews to evaluate the attitudes, opinions, perceptions and preferences of the subjects relevant to the researcher. Consequently, surveys can be conducted via telephone calls, online platforms or in-person interactions to gather data. The present study adopted an exploratory research design, a positivist paradigm, a quantitative research approach and a survey research strategy.

This section explains the study population, sampling techniques, research instruments and methodology. Methods for gathering and analysing data are known as research methods. Data from SMME managers in Limpopo province, South Africa, were gathered for this desk research. A quantitative, correlational research design was employed to collect data. Based on hypotheses, the quantitative research is particularistic and deductive. The quantitative paradigm was chosen for this study because it enables the formulation of the research question and testing hypotheses. Quantitative approaches lessen judgement’s subjectivity.

The study sample of 100 SMMEs was chosen using a random probability sampling procedure. According to Welman et al. (2009), this sample makes the proper population sampling fraction of 10%. Of the 1000 SMMEs in Limpopo, 100 were chosen as a representative sample.

Self-administered questionnaires were chosen for this study because they are easy to attend to and allow SMME managers to respond positively.

According to Saunders et al. (2018), research involves a lot of ethical considerations that revolve around plagiarism, being honest when reporting and treating participants’ dignity. The researcher also sought permission from the management, which was approved before the commencement of the study, and this was achieved through writing to the management informing them about the desire to undertake research and obtaining a consent letter.

Descriptive and inferential statistics were compiled using Statistical Package for Social Science (SPSS) (Library Contact Accessibility Privacy Copyright and disclaimer Aboriginal acknowledgment © Copyright 2024 La Trobe University. All rights reserved. La Trobe University CRICOS Provider Code Number 00115M China).

Table 1 indicates that many SMMEs train once a year and get little income of ±R300 000.00. The SMME that received training four times a year realised R1 million and R3 million as income and the SMME that received training every week enjoyed above R6 million as income. The results reveal that prosperous small businesses train more frequently and keep abreast of the changing market environment (Table 1).

Table 2 shows that 76% of managers, realising low income of between R50 000.00 and R3 million had grade 8, 12 or a diploma certificate while 24% of managers who received above R6 million were university graduates (Table 2).

Results indicate that majority (47%) of the SMME managers responded that they were very poor in strategy and business planning HRs practices (Table 3). Furthermore, 32% of the SMME managers revealed that they were poor and 46% revealed that they were very poor in SHRM (Table 4). Results also indicate that 62% managers fail to do research and development in HRs practices (Table 5).

Less than 5 is the expected count for A15 cells (75.0%) and 1.12 is the bare minimum anticipated count and sustainability to ensure that jobs are always created. Family businesses are run by SMME owners and managers, and it is assumed that these managers require additional training to increase their knowledge, abilities and competencies. Additionally, it has been noted that training inspires, motivates and gives workers skills. Because the 95% confidence level was used in the test, the p-value had to be less than 0.05. Results reveal that training frequency affected the rate of SMME turnover. This shows that training has an impact on SMME performance and profitability (Table 6).

This study contributed that: Firstly, employees are considered human capital in SHRM.

Secondly, positive organisational attitudes and behaviours increase employee commitment. Thus, positive organisational attitudes and behaviours are critical to SHRM.

Thirdly, strategic HR practice comprise HRM practices, human capital, HR systems and HR governance and performance management.

Human resources practices lead to positive employee attitudes, and behaviours increase individual employee commitment and performance will increase organisational performance.

This study demonstrates the continued success of employment models that incorporate organisational strategies and human practices. Additionally, this study links management practices and HRs to training, hiring, motivation and performance management (Figure 1).

This research, like all studies, had limitations. The study’s limitations impacted the results significantly. One limitation was that some participants may have missed important information by not completing questionnaires. Another limitation was the inability to make causal inferences because of cross-sectional data. Additionally, the study focussed on HR issues in South African SMMEs. The study’s population was limited to SMMEs in Limpopo province, preventing generalisation. The study also highlighted the lack of data from the Limpopo province. Lastly, the study recognised the limitations of applying American and/or British viewpoints to the South African context.

It is recommended that HRM techniques that support successful SMME outcomes be used by SMMEs. Fedderke and Luiz (2008) recommend that SMMEs in South Africa implement a well-established institutional framework that includes efficient policies, procedures and practices. For SMMEs to maintain their competitiveness, they must invest significantly in HRM initiatives and follow best management practices.