Professional HRM practices in family owned-managed enterprises

textabstractHuman resource management (HRM) has been defined as the “process of attracting, developing and maintaining a talented and energetic workforce to support organizational mission, objectives, and strategies” (Schermerhorn, 2001, p. 2400). Audretsch and Thurik (2000, 2001) argue that effective HRM practices are becoming increasingly important in the modern “knowledge-based” economy, as companies face the double challenge of the need for more highly trained employees coupled with the shortage of qualified labour. These challenges, coupled with the third trend toward smaller firms in general, reinforce the need for effective HRM practices in the small firm (Audretsch and Thurik, 2000, 2001). Empirical research confirms that in general, smaller firms make less use of professional HRM practices than larger firms (Barron et al., 1987; Hornsby and Kuratko, 1990). For example, smaller firms make less use of formalized recruitment practices (Aldrich and Langton, 1997), provide less training to their employees (Koch and McGrath, 1996; Westhead and Storey, 1997, 1999) and are less likely to use formalized performance appraisals (Jackson et al., 1989). In spite of the size effect, a growing base of research evidence suggests that far from being homogeneous, small firms nevertheless vary widely in the professional HRM practices in use (De Kok and Uhlaner, 2001). For example, Deshpande and Golhar (1994) find HRM practices within many small manufacturing firms to be as sophisticated as those in larger companies. Similarly, Hornsby and Kuratko (1990) find that while firms of all sizes use primarily informal recruitment and selection techniques (mainly employee referrals and the interview), even among small firms, HRM practices are often more sophisticated than they had expected. Using a small set of cases, Hill and Stewart (1999) also demonstrate variation in level of sophistication of HRM practices among smaller organizations