HRM practices and its impact on performance - Exploratory Literature Review in the context of Indian SMEs

Abstract

Human Resource Management (HRM) involves all management decision and practices that directly affects the people, or human resources, who work for the organization. Prior studies have found substantial positive evidence for statistical associations between HRM practices and improved firm performance. The role of SMEs in the economic growth and development of emerging countries like India is significant. However, the current state of knowledge and practice in the field of HRM practices and its impact in SMEs in the Indian context is limited. The objective of this paper is to explore existing literature for establishing relationship between HRM practices and firm performance. Performance can be measured in many ways but present study is to measure operational performance, financial as well as non-financial performance. Research methodology used here for this paper is secondary data as it is for building the concept of HRM practices and performance. Research construct like management style, Social capital as well as culture are used to find the moderating effects on this relationship. Implications of this study will be for SMEs, Policy makers as well as for academic research in finding the impact of HRM practices on the firm.

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