E/B/41. Small companies are less hierarchical, more personal and know their employees this offer a better setting for the introduction of HRM. Do you agree?

It is well known that the people are the key element to success in any business, and they play the most important role in the business operation. Personnel management, also called Human Resource Management (HRM), it deals with different aspects of management of employees, such as hiring processes, compensation procedures and training methods, and so on. But all the HRM theories are based on the large organisations; there is very limited information about the Human Resource policies in the small companies. As the drastic growth of the small and medium companies, their management practices are not yet well understood. According to Gilbert and Jones (2000) HRM practices in small businesses are qualitatively different from those in large organisations, yet relatively little research has addressed the nature and significance of these differences. As there are an increasing number of employees are working in the small companies, current research on HR practices has focused on larger firms. Henemen et al. (2000) identified 403 articles from 1984 to 1997 that made some mention of HR practices in small and medium enterprises (SMEs), only 17 of these articles used quantitative methods to test specific hypotheses. Henenmen et al. (2000:20) concluded that studies in HR in SMEs are Ërich in prescriptions, limited in sound descriptive surveys, and sparse in analytical research. The small firms are more likely to operate in an informal and flexible manner than larger firms are. In this paper, we are going to discover whether the small companies are more suitable for the introduction of HRM.