HRM Strategy and Good Practice in Small to Medium sized Organisations

Running head: HUMAN RESOURCE MANAGEMENT
Human Resource Management
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1HUMAN RESOURCE MANAGEMENT
a) Discuss the multiple responsibilities of leaders/managers in a small to medium sized
organisation (under 250 employees), focussing on how they should incorporate HRM
strategy and good practice within their business organisation.
Every businesses need a strong, motivating and inspiring leadership backing and they
are vital for every aspect of all types of organisation (Wlodkowski and Ginsberg 2017).
However, it is particularly more important for the small and medium sized businesses, also
called the SMEs. It is the strategies, decisions and the practises of these leaders and managers
that determine the period of growth of a particular company. Hence, the key to understanding
the requirements of leadership in the SMEs is being aware of the fact that they are not a new
start-up or any large and mature organisation. This essay is going to discuss on the roles and
responsibilities of the leaders in small to medium sized organisation and would further focus
on leaders should incorporate Human Resource Management strategy (HRM) and good
practices within their business organisation.
HRM plays a very important role in the management of every organisation. Its
importance lies in its potential to increase the organisational productivity from the manpower
resources with each passing day and becoming a strong factor in the strategic management of
the organisation. With the same, HRM also increases the organisational performance and
human capital by means of managing them in effective manner (Johnson and Szamosi 2018).
Effective HRM attract the skilful and well-trained employees and provide them the proper
guidelines for improving the work force’s efficiency. However, it calls for the activities in the
field of recruitment, compensation, selection and appraisal. These activities ultimately
influence the working environment within the organisation and finally result in employee
commitment and increase in their level of job satisfaction. Notwithstanding this fact, good
leadership is very crucial in this process. According to Reiche et al. (2016), leadership is the
“process whereby an individual influences a group of individuals to achieve a common goal”.
In SMEs, it is a very difficult realm and calls for the managers and leaders to play the part of

2HUMAN RESOURCE MANAGEMENT
both the boss and the leader at the same time. It is also to mention that leadership is regarded
as effective and efficient when it is seen that it is bringing some really positive efficacy of
organisational and employee performance.
Roles and responsibilities of the leaders or managers in the SMEs is very different
from that of the start-ups and the large matured organisations. The start-ups require a system
of hands-on management. It requires the leaders as managers who are constantly involves in
the daily activities. On the other hand, in the large and mature companies, they require less
than a day to day engagement and involvement and with the same, they also require the
leaders who establish the long lasting vision for the company and implement effective
strategies for achieving it. On the contrary to both, the SMEs fall under the category of the
middle one. They require the leaders or the managers to manage the entire company
dynamically by means of setting direction for the company. As per Cashman (2017), in
absence of effective leadership, the businesses often develop slower and they often lose the
proper direction and ultimately, fall behind their competitors. Hence, the leaders in the SMEs
require to successfully undertake the important roles for providing the companies with
effective leadership.
There are three most important roles and responsibilities of the leaders in SMEs.
Firstly, they need to take the responsibility for the finances of the company. It is very
important because in absence of a healthy financial situation, the business would
automatically fail. Secondly, they need to make good and well-calculated decisions which
would ensure that the business is operating effectively and competing successfully with its
competitors. Thirdly, they need to inspire the entire team and encourage them so that they can
feel values and motivated during their work and would work hard for the success of the
company. Furthermore, within every roles of the leaders, they are required to make sure that
there is a presence of consistency and clarity in the vision of the company. They should