Exploring the HRM process: a small firm perspective

Given their economic and social importance, it is surprising that we still know very little about HRM in small firms. Traditional prescriptive and content based searches for a bundle of generalizable practices is less relevant for small firms given their particularistic complexities and resource constraints. Recent evidence calls for more attention to be paid to the process perspective representing the implementation/conversion/enactment process of HRM and how it influences performance. This research follows a process perspective using the Bowen and Ostroff framework (2004) to animate and afford a better understanding of how HRM is applied and rendered effective in the small firm setting. Empirically the research involves two in-depth multi-level case studies of award-winning, knowledge-intensive, small firms. The method responds to previous research limitations and enables a more comprehensive higher-level assessment and contextualization of HRM in a smaller firm setting, including taking a simultaneous look at both content and process. Findings from 57 interviews and engagement with both organisations support the primary claims of the framework; distinctiveness, consistency and consensus features are influential in transferring the HR message to staff, whether intended or not. This is significant given that high skilled service-based staff (knowledge workers) have greater discretion over the delivery of the service. Findings suggest that process features have the potential to complement, reinforce and compensate for content (HR practices). Of particular relevance to small firms, the case evidence suggests that consistency and consensus may compensate for a lack of ‘fit’ and sophistication of practices, thus shedding more light on the utility of the proposed framework, the process perspective and its potential value for smaller firms. In advancing the understanding, the critical role of leadership, the context in the form of various financial pressures and employee scope to negotiate, coupled with the dynamic nature of formality/informality emerge as key themes hitherto underexplored in process research. The implications for management practice are that a strong system supports managements’ ability to close the gap between intention and implementation. Ultimately process does matter (Ostroff & Bowen, 2016), by influencing the conversion process, it illuminates how HR operates in the small firm context