High performance management practices in owner-managed SMEs

Abstract

Objectives: While there is extensive management and academic literature on the topic area of high performance management practices (HPPs) internationally, research on HPPs in the Australian context is limited. Furthermore, research on HPPs has focused predominantly on large organisations and is largely a new direction for research in SMEs. This study attempts to fill some of the gaps in existing studies by considering a wide range of HPPs in Australian SMEs, with particular focus on owner managed SMEs. The objective of this paper is to examine the extent and nature of HPPs in owner managed Australian SMEs and the impact of certain organisational characteristics on these practices. The research questions under examination include: What is the prevalence of HPPs in owner managed Australian SMEs?; and what is the impact of firm size, the presence of a HR manager, and the existence of a strategic plan on HPPs in SMEs? Prior work: Undertaking this research is justified on the basis of: there is a gap in the theory relating to HPPs in SMEs and in particular owner managed SMEs, owing to the fact that most studies on HPPs are based in large organisations; globalisation and the pace of economic change are forces that are driving the need for greater understanding of HPPs (Burke 2002); and there are high expectations for growth and performance of SMEs in the economic growth and development plans for the Asia Pacific and Australian region (Asia Pacific Economic Cooperation 2002). Approach: A survey questionnaire was sent out to 4000 Australian small and medium-sized enterprises (35% response rate). A Dun and Bradstreet database was used and a stratified sample employed. A chi-square analysis was employed to determine whether there were significant differences in relation to high performance practices in small vs. medium organisations, SMEs with and without a HR manager; and organisations with and without a strategic plan. Results: The results of this study indicate that the overall picture regarding the incidence of high performance practices in Australian owner managed SMEs looks quite bleak. Significant positive relationships were found between demographic variables and HPPs in SMEs. Implications: Large firm solutions may not be appropriate. A more balanced approach to prescribing and researching management solutions in SMEs is needed; an approach with a greater emphasis on the SME sector. Value: This paper will provide an improved understanding of HPPs in Australian SMEs which will help the sector to better meet performance expectations.