مدیریت منابع انسانی در سازمان های کوچک : اطلاعات ما در چه حد است؟ ? Managing human resources in small organizations: What do we know

Abstract While much of our knowledge concerning traditional HR topics (e.g., recruiting, compensation, or performance management) in large firms may also apply in small or emerging organizations, evidence suggests that new ventures are different and that management of people within them may not clearly map to management within larger, more established organizations. This paper reviews extant research on managing people within small and emerging ventures and highlights additional questions that have not yet been addressed. Our review suggests that as scholars, our understanding of the HR issues important to small and emerging firms is limited. While we have begun to understand how these firms should hire, reward, and perhaps even motivate their employees, we lack much of the theory and data necessary to understand how small and emerging firms train their employees, manage their performance, promote or handle organizational change, or respond to potential labor relations and union organization issues. The existing literature presents an often-confounded relationship between size and age, between the issues important to small firms and the issues important to young ones. Given the potential early HR decisions have to impact the organization’s downstream success, it is important that we understand how these functional areas of HR (as well as their integration and evolution) affect small and emerging firms, and how the HR decisions made during the formative stages of firm development impact the firm’s long-term goals. D 2004 Elsevier Inc. All rights reserved. Keywords: Human resource management; Entrepreneurship; Small firms 1. Introduction ‘‘Firms profess that people are the source of their competitive advantage, whether they be technological experts, accommodating customer service experts, or visionary managers…At a time of unparalleled 1053-4822/$ – see front matter D 2004 Elsevier Inc. All rights reserved. doi:10.1016/j.hrmr.2004.06.001 * Corresponding author. Tel.: +1-216-368-2092; fax: +1-216-368-4785. E-mail addresses: mcardon@case.edu (M.S. Cardon), christopher.stevens@case.edu (C.E. Stevens). 1 Tel.: +1-216-368-4317; fax: +1-216-368-4785. www.socscinet.com/bam/humres Human Resource Management Review 14 (2004) 295 – ۳۲۳ technological development, it is the human resources that paradoxically spell success or failure for all firms, and especially entrepreneurial ones’’ (Katz, Aldrich, Welbourne, & Williams, 2000, p. 7). In a recent special issue of Human Resource Management Review, Baron (2003, p. 253) argued that the field of human resource management could benefit from looking more closely at HR processes within new and small firms. He suggested that new ventures started by entrepreneurs offer a ‘‘unique and potentially valuable business context for testing the principles and theories of HRM.’’ Human capital in new ventures has been recognized as critical to venture success for some time (Deshpande & Golhar, 1994; Hornsby & Kuratko, 1990), but it is only recently that scholars have meaningfully explored this aspect of new venture creation. In order to successfully add to the literature on HRM in entrepreneurial ventures, it is essential to know what work has already been done, and what we still do not understand well about new venture HRM. This paper reviews what we know about HRM in entrepreneurial organizations in order to highlight important gaps in this understanding. An emerging area of study has focused on the role of the founder in new venture creation, specifically on the characteristics of those individuals, such as leadership (Vecchio, 2003), self-efficacy, perseverance, risk-taking ability, and role transitions they experience during venture emergence (e.g., Johnson & Bishop, 2002). This stream of research is clearly essential to our understanding of new ventures, including their development process and their performance. However, the focus on the entrepreneur or founding team as the only source of human capital fails to recognize the important role that other employees in the new venture may play. We know that as new firms grow in sales or production rates, they must also grow in the number of people they employ. However, few studies have examined how these individuals are recruited, hired, trained, motivated, or rewarded for their contributions to the venture (for recent notable exceptions, see Katz & Welbourne, 2002). While much of our knowledge concerning these traditional HR topics in large firms may also apply in small or emergent ventures, evidence suggests that new ventures are different and that management of people within them may not clearly map to management within established organizations (Barber, Wesson, Roberson, & Taylor, 1999). For example, new and small firms may have more difficulty recruiting employees (Williamson, Cable, & Aldrich, 2002) and often lack formal HR policies or systems (Markman & Baron, 2003). In general, liabilities of newness and smallness leave new ventures with fewer resources and greater challenges than their large established organization counterparts (Stinchcombe, 1965). Moreover, although not often clarified in the literature, issues concerning smallness and newness are not necessarily the same for entrepreneurial organizations, as some small firms are simply emerging nascent firms that will continue to grow as they become more established, while other small firms are already well established yet remain small for the life of the venture. Keeping these distinctions in mind, we use a functional HR framework to explore extant literature on HRM in small and emerging organizations. While a functional approach to human resource management research has been criticized (e.g., Heneman, 1969; Ulrich, 1997), traditional HR topics are widely understood by both scholars and entrepreneurs and therefore offer a useful framework for highlighting currently underdeveloped areas of inquiry concerning managing others in emerging ventures. Furthermore, even recent theoretical frameworks that seek to move us past a functional HR view (e.g., Heneman & Tansky, 2002) still incorporate common HR practices such as compensation, staffing, and training in their model. This suggests that a functional perspective of HR remains valid, and we use this framework through the paper. 296 M.S. Cardon, C.E. Stevens / Human Resource Management Review 14 (2004) 295–۳۲۳ The purpose of this paper is to review research on managing people within new ventures and to highlight additional questions that have not yet been addressed. Within each section below, we provide a table that summarizes academic journal articles and book chapters about each area of HR in an entrepreneurial context and discuss key questions that need additional study. In these tables, we distinguish between theoretical and empirical papers and note whether each article discusses small or medium, and emerging or established firms, if such a distinction could be found. After reviewing prior research in the areas of recruitment and selection, compensation, training and development, performance management, organizational change, and labor relations, we suggest that we do not yet have much theory or data concerning issues of training, performance management, organizational change, or labor relations in small and emerging firms. Therefore, our understanding of key HR challenges in emerging ventures, including establishing firm identity and legitimacy, attaining critical skills and capabilities, maintaining flexibility, and developing sustainable practices is limited. Further, underlying these functional areas are three fundamental aspects of human resource management we do not yet understand in this context: retention and ongoing employee issues, the integration and interaction among HR practices, and the development and changes in HR practices throughout firm emergence. After reviewing what we already know about managing nonfounder employee assets in new ventures, and recognizing what we have yet to understand, these areas for additional inquiry and for greater synergy between HR and entrepreneurship will be discussed. First, we explore further the distinction between small and emerging ventures and explain our approach to reviewing relevant literature.