Employee relations in SMEs : an empirical approach using the Workplace Employment Relation Survey (WERS 2011)

This thesis is a paper-based thesis. Using a large-scale matched employee-employer dataset, three empirical studies were undertaken to empirically examine: 1) the relationship between employee attitudes, human resource management practices and firm performance in SMEs; 2) the effect of the firm size on firms’ and employees’ experience during the recent financial crisis, particularly firm’s employment related responses to the economic hardship; and 3) the impact of firm size on employee’s experience of work stress during economic recession. The findings of the first study suggest a direct relationship between HRM practices and SME firm performance, but this relationship is moderated by high employee job satisfaction. The results suggest that HR policies and practices may improve small firm performance, especially within firms with low levels of commitment and satisfaction. The estimation results presented in the second study show that SMEs are more vulnerable during times of economic hardship than larger firms, but those with HR practices have shown more resilience to the downturn. There is a significant firm-size effect on the choice of specific HRM measures in response to the recession, and having HR practices increases the likelihood of the firm to adopt organizational measures. Also, the results indicate that the differences in workers’ job experience are moderated by high management formality. For the final empirical research, employees in SMEs experience lower level of overall job stress than those in large enterprise, although the effect disappears once the employee-level and firm-level characteristics are taken into consideration. Finally, the findings suggest that the association and magnitude of estimated effects of the work stressor presented in the Cooper and Marshall’s work stress model differ significantly by firm size. Overall, the thesis has made significant contribution to the employee relations in SMEs literature and provide interesting academic and policy oriented findings