Human resource management in growing small firms
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Краткое описание
This review is intended to indicate general structure and style; it is not presented as an
ideal / model answer. The review would benefit from a thorough proof-read and I might reconsider the
balance of words allocated to each section, for example I think I could deal with my methodological
criticisms more succinctly. If revising this review I would probably make more of an effort to find some
positive aspects of Barrett and Mayson’s study in order to give my view some balance. Please don’t
forget that critical review in this context means to study the paper in detail and to think carefully about
what you’re reading (good and bad). You are not being asked to attack the paper you have read!
Finally, I’ve used headings here to indicate structure. You must address each section required in the
handbook but please don’t use headings in your submitted work.
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PLEASE NOTE: This review is intended to indicate general structure and style; it is not presented as an
ideal / model answer. The review would benefit from a thorough proof-read and I might reconsider the
balance of words allocated to each section, for example I think I could deal with my methodological
criticisms more succinctly. If revising this review I would probably make more of an effort to find some
positive aspects of Barrett and Mayson’s study in order to give my view some balance. Please don’t
forget that critical review in this context means to study the paper in detail and to think carefully about
what you’re reading (good and bad). You are not being asked to attack the paper you have read!
Finally, I’ve used headings here to indicate structure. You must address each section required in the
handbook but please don’t use headings in your submitted work.
[Full Harvard Reference] Barrett, R. and Mayson, S. (2007). ‘Human resource management in growing
small firms.’ Journal of Small Business and Enterprise Development, 14:2, 307-320.
[Brief Synopsis] Barrett and Mayson contend that there has been only limited research into the nature
of human resource management (HRM) practices in small Australian firms. They argue that this
represents an important research gap on the grounds that small firms in Australia are markedly smaller
than those found in the USA or in European countries where much of the research into HRM and small
firms has been conducted. Barrett and Mayson also express some concern regarding the lack of
standardisation apparent in studies’ examination of small firms’ HRM practices, suggesting that there
has been limited “consistency across the studies in terms of the HRM practices under examination.”
(2007: 307). To this end the researchers set out to explore the extent to which formal HRM practices are
present in a sample of growing small firms in Australia.
[Methods] The paper is based on analyses of data gathered as part of a CPA Australia telephone survey
of 600 randomly selected small firms and 105 CPA accountants. The survey was designed to gather a
range of information regarding small businesses and employment practices. Reviewing the author’s
approach taken to gather and analyse the data collected reveals a number of concerns.
Firstly, while the use of telephone surveys as the sole data collection strategy to gather details about
small firms’ employment practices appears straight-forward, it is potentially problematic in the context
of small firms. The questions posed to participants asked respondents to confirm or deny the presence
of specified HRM practices in their firm. One significant difficulty with such an approach to data
collection is that existing research into HRM in small firms has indicated that survey results might not be
accurate reflections of business practices. Bacon et al (1996) discuss how their site visits conducted to
follow-up an initial telephone survey revealed a wide variety of interpretations regarding reported HRM
practices among research participants; thus it might be said that telephone surveys alone are unable to
provide reliable information on the practices in use. Barrett and Mayson do not appear to have any
safeguards to protect against the ‘misreporting’ of practices in use. Furthermore, their research
approach is unable to detect differences in practices that may be grouped under a HRM practice label
such as “training” or “incentives” which seems to be a particular risk when studying small firms with
informal and diverse employment practices informality (Scott et al, 1989; Abbott, 1993; Holliday, 1995;
Cassell et al, 2002; Marchington et al, 2003).
Secondly, the difficulties posed by the risks of ‘misreporting’ are compounded in the present study by
the researchers’ reliance on single-respondents, in this case the business owner-manager. A criticism
levelled at much earlier studies of HRM in small firms is that it adopted a ‘managerialist’ perspective,
that is it did not seek to understand the employees’ side of the employment relationship (see for
example the criticisms of the 1971 Bolton Committee Report by Curran and Stanworth, 1981; Rainnie,
1989; Goss, 1991; Scase, 1995). Barrett and Mayson’s research approach provides them only with an
uncritical acceptance of managers’ reports of the practices used in their own firms.
Thirdly Barrett and Mayson’s definition of the firms included in their study lacks precision. Throughout
their paper the authors use terms such as ‘small firm’ and ‘entrepreneurial’ interchangeably (a fault that
can be found elsewhere in their writing, e.g. Barrett and Mayson, 2006). As has been demonstrated
clearly by the work of Hornaday (1990) and Watson (1995) the labels ‘small’ and ‘entrepreneurial’ refer
to distinct characteristics are not inter-changeable. This apparent lack of clarity concerning the types of
business the researchers are interested in is also present when trying to determine which of the
surveyed firms can be considered ‘growing’ (2007: 313).
The authors determine growth by the answers to the question: “Have you employed any new
permanent full-time or part-time staff in the last 12 months?” (2007: 313). If the respondent answered
that the business had employed a new staff member owing to business expansion or diversification then
this firm was classified as growing. One problem with this approach is that ‘growth’ is interpreted on the
basis of recruitment activity rather than growing employee numbers.
Another problem is that the question asks about ‘new’ rather than ‘additional’ employees meaning that
a respondent could answer in the affirmative while total employee numbers could remain flat owing to
staff turnover. This problem is particularly relevant when the reason cited relates to business
diversification because it could label as ‘growing’ a firm that has decided to target a profitable sector so
dismisses its staff to replace them with more relevant new staff. In other words, the authors’ approach
to determining business growth is not capable of producing a reliable group of growing firms.
Finally, despite bemoaning the lack of standardisation used in studies of small firms’ HRM practices, the
authors do not explain their reasoning behind their selection of practices for this survey. If a lack of
standardisation is a problem, it might have been helpful had Barrett and Mayson adopted the list of
practices used by an earlier study or at least explain how the practices they had selected to survey relate
to earlier literature. Without drawing such links, Barrett and Mayson seem to compound the very
problem they identified in the literature. Mindful of these problems with Barrett and Mayson’s research
approach, their results must be discussed with some caution.
[Results] Barrett and Mayson spend much of the space devoted to the research results talking in general
terms about HRM in the small firms surveyed. While interesting, reporting these general findings does
little to advance their argument that small growing firms benefit from using formal HRM practices. The
key data analyses relied on by the authors are comparing responses between ‘growing’ and ‘non-
growing’ small firms (See page 314). The results indicate that the owners of firms identified as ‘growing’
were more likely to report the use of certain HRM practices than owners of ‘non-growing’ businesses.
The differences were found to be significant at confidence levels greater than 95% which seems
acceptable.
Drawing on the identified differences between reported formality in growing and non-growing firms, the
authors move to arguing that this supports their argument that “small growing firms should exhibit
more formalized HRM practices if they are to gain or maintain a competitive advantage.” (2007: 314).
The authors could do more to explain their assertion that the data support their argument because from
the data presented their line of thinking is unclear.
The survey findings indicate that firms defined as ‘growing’, that is have recruited in the past 12 months,
have reported using more formal practices than those firms that have not recruited in the past 12
months. Leaving aside questions over how far reported practices correspond with practices in use, the
descriptive findings do not necessarily support a normative argument for greater formality in small
firms’ HRM practices. This limitation in their argument is briefly alluded to by the authors in their final
conclusions (see page 315) where they concede that a causal relationship between formality and
‘growth’ is not addressed in their research.
[Practical implications] Barrett and Mayson do not set out any practical implications but they might
claim that small firms with intentions to grow should adopt formal HRM practices. The difficulty with
making such a recommendation however is that the data may not support such a strong claim and,
given the problems with the data collection methods, drawing any practical implications for owners of
small firms might best be avoided.
[Strengths and weaknesses] Despite the concerns set out above there are some strengths to this
research. The authors are right to highlight the paucity of research into small firms in Australia and to
caution against the blind ‘transplant’ of theories developed in the USA and in European countries to the
Australian context. To this extent their research interest is relevant and topical. Their reliance on owner-
managers in providing responses to their survey questions might also be defended, on the grounds that
the owner-manager is likely to know which practices are deployed in their businesses (e.g. Sels et al,
2006). Nevertheless the paper remains subject to fundamental problems, not least those related to a
lack of precision in language and a limited data collection strategy. Ultimately these concerns over the
quality of research approach mean that the paper’s contribution to research on HRM in small firms
remains at best limited.
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References
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Curran, J. and Stanworth, J. (1981). 'The social dynamics of the small manufacturing enterprise.' Journal
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