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Managing HR in the Small and Medium Enterprise: The Impact of Professional Employer Organizations

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  • Brian S. Klaas
  • John Mcclendon
  • Thomas W. Gainey

Abstract

Due to their limited size, many small and medium enterprises (SMEs) cannot justify full-time HR professionals in their organizations. Thus, the complex and time-consuming nature of many HR activities can result in a significant drain on existing managerial resources. Professional employer organizations (PEOs), however, offer SMEs an alternative for handling their workforce by providing compensation programs, regulatory compliance, and other HR-related services. This study examines the satisfaction levels of 763 customers of one large PEO. Results show that firm growth, past HR problems, workforce size, contractual detail, service representative-client relations, value congruence, and overall PEO usage are significantly related to managerial satisfaction with PEO services.

Suggested Citation

  • Brian S. Klaas & John Mcclendon & Thomas W. Gainey, 2000. "Managing HR in the Small and Medium Enterprise: The Impact of Professional Employer Organizations," Entrepreneurship Theory and Practice, , vol. 25(1), pages 107-124, October.
    • Handle: RePEc:sae:entthe:v:25:y:2000:i:1:p:107-124
    DOI: 10.1177/104225870002500109
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    References listed on IDEAS

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    Cited by:

    1. Nazlina Zakaria & Siti Rohaida Mohamed Zainal (PhD) & Prof. Dr. Aizzat Mohd. Nasurdin, 2012. "Investigating The Role Of Human Resource Management Practices On The Performance Of Sme: A Conceptual Framework," Journal of Global Management, Global Research Agency, vol. 3(1), pages 74-92, January.
    2. Nazlina Zakaria Author_Email: nazlina@uum.edu.my & Dr. Siti Rohaida Mohamed Zainal & Prof. Dr. Aizzat Mohd. Nasurdin, 2011. "Investigating The Role Of Human Resource Management Practices On The Performance Of Sme: A Conceptual Framework," Annual Summit on Business and Entrepreneurial Studies (ASBES 2011) Proceeding 2011-021-153, Conference Master Resources.
    3. Murmann Johann Peter & Korn Jenny & Worch Hagen, 2014. "How Fast Can Firms Grow?," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 234(2-3), pages 210-233, April.
    4. David Urbano & Desislava Yordanova, 2008. "Determinants of the adoption of HRM practices in tourism SMEs in Spain: an exploratory study," Service Business, Springer;Pan-Pacific Business Association, vol. 2(3), pages 167-185, September.
    5. Britton Lombardi & Yukako Ono, 2008. "Professional employer organizations: What are they, who uses them, and why should we care?," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 32(Q IV), pages 2-14.
    6. Brian S. Klaas, 2003. "Professional Employer Organizations and Their Role in Small and Medium Enterprises: The Impact of HR Outsourcing," Entrepreneurship Theory and Practice, , vol. 28(1), pages 43-62, January.
    7. Abdul Raziq, 2014. "The Relationship between Firm Size and High Performance Management Practices in Pakistani SMEs," Indian Journal of Commerce and Management Studies, Educational Research Multimedia & Publications,India, vol. 5(2), pages 27-36, May.
    8. Jim Dewald & Frances Bowen, 2010. "Storm Clouds and Silver Linings: Responding to Disruptive Innovations Through Cognitive Resilience," Entrepreneurship Theory and Practice, , vol. 34(1), pages 197-218, January.
    9. Irwin, Kristin C. & Landay, Karen M. & Aaron, Joshua R. & McDowell, William C. & Marino, Louis D. & Geho, Patrick R., 2018. "Entrepreneurial orientation (EO) and human resources outsourcing (HRO): A “HERO” combination for SME performance," Journal of Business Research, Elsevier, vol. 90(C), pages 134-140.

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