Small and Large Organizations

 Size

Organizations can range from single-person businesses to multinational corporations employing hundreds of thousands of people. Generally, the sophistication and importance of HR is greater in larger organizations. However, sophistication does not necessarily lead to effect people management.

 HRM in small organizations

Serious appreciation of HRM in small and medium enterprises (SMEs) is a comparatively recent phenomenon. HR researchers have largely ignored the SME sector. (...)Yet smaller companies should be fruitful subjects for study because many conduct people management in the direct fashion advocated by HRM models.

 See these articles on bestbooks.biz:

Research on entrepreneurship

Starting your own business

What it takes to start a business

Growing the business

 Cooperatives

The work team has been a fashionable obsession amongst human resource theorists and consultants in the 1990s. In the small cooperative the work team isthe organization.

  HRM in large organizations

As organizations grow larger and technology becomes more complex, it also becomes increasingly difficult to coordinate the people involved in an enterprise. Beyond a certain size it is impossible for one person to know what people are doing or even what their names are.

Extra detail: Benchmarking and 'best practice' have become widely used terms in the past decade. HRM benchmarking is a process which provides:

* Knowledge of the key HR 'levers' which are important to business success;
* Comparison with other businesses with better performance;
* Ways of using that information improve HR processes.

It allows us to quantify HR processes and outcomes so that objectives and targets can be set meaningfully. Cost, quality and quantity are measurable and indices can be devised to estimate the effectiveness of a variety of processes. This is revolutionary thinking for many HR professionals who have traditionally used subjective descriptions and values for their work. Often they have been more concerned with process than results. As a consequence, the profession has had little respect from other business specialists accustomed to 'objective', quantified measures of performance.

Benchmarking helps us identify best practice in particular areas of HRM such as development or induction. 'Best practice' has an obvious common sense meaning: literally the methods and techniques ways which produce superior results in HRM. In reality the concept is more problematic. Often it is difficult to demonstrate that a particular initiative produced 'superior' result. Fitz-enz (1993) surveyed 600 large US companies and found that excellent outcomes might be reported by two companies with diametrically opposed HR practices. His conclusion was that the 'best practices' they examined was just 'the visible tip of something much deeper in the organization's management philosophy and system'.

He argued that the critical elements were the sets of qualities and values which drive and support an organization's decision making. Eight traits were developed to categorise these qualities and values in order to 'benchmark' (compare and rate) best practices in different organizations:

* Strategic commitment - Making sure that an element of HR is a priority for the organization. There is no point in setting up a best practice career development scheme within a company which is about to close major units.
* Culture - Ensure that a particular practice fits the culture of the business. Some best practices are highly effective but depend on a specific kind of culture. Most practices need to adapting when they are copied from another organization.
* Dual value focus - Practice needs to be both value-added and value-driven. Value-added entails a measurable benefit to business costs; value-driven implies more global values, human as well as financial.
* Communication - People need to be consulted and informed about new practices. Understanding and commitment do not come readily when practices are imposed from on high.
* Partnership and customer focus - Taking care of the needs of external customers and using the opportunities opened up by external partnerships.
* Interdependence - All HR practices should fit into an integrated framework so that strategy, structure and systems work together to promote maximum effectiveness and efficiency.
* Risk taking - Maintain a balanced degree of risk .
* Continuous improvement - Create a feedback loop, so that new or 'improved' practices are continuously evaluated and adjusted as necessary.

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