Different Water and in a Smaller Bottle: Understanding Motivations and Differences in Human Resources Management Needs of Small Firms — Common Systems to Unique Requirements

Functions of human resources (HR) are often considered the most convenient issues to neglect or cancel in times of crisis or when there is a lack of resources by many organisations. This inaccurate approach is more common in start-ups and small scale firms where resources are more scarce. Good HR is good HR for both large and small firms. Evidence indicates that effective HR activities yield higher levels of performance in small firms as it does in large firms. Independent from the number of employees working in an organisation, the need for HR functions at the individual level remain same. Members of a small enterprise also need motivation, recognition, feedback training and development opportunities, and all other HR related efforts. Although the literature on strategic human resource management is dominantly focused on providing solutions for large scale organisations, there is still much to adapt from this knowledge for small firms. Besides, small firms may have unique conditions necessitating different solutions and investigations. This chapter aims to provide information regarding how small scale firms differ in their needs and conditions and further our knowledge on how we can create HR solutions specific to small firms or how best we can provide ways to adopt well-known systems and processes in small firms. A specific emphasis on the motivations for not adopting HR efforts will allow us to provide recommendations that would be easier and more motivating to adopt.