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Posted on September 20th, 2012, by

Human Resource Management plays a very important role in the performance and development of organizations. At the same time, the role of HRM in small organizations is often underestimated since such organizations are viewed as insignificant from the point of view of the development of a complicated HRM structure and strategy. In other words, small organizations do not have a huge staff that needs the implementation of some sophisticated HRM methods and approaches to maximize performance of each employee. Instead, small organizations have a small personnel where each employee and manager know each other and managers are, as a rule, well informed about the potential, capabilities, knowledge and experience of each employee. However, in actuality, HRM in small organizations is not less significant than in large companies. At any rate, nowadays, many small organizations, like my organization, face the problem of the effective HRM since often they cannot fully use the potential of employees and, what is more important, they have difficulties with the progress of employees and growth of their professional level. In this regard, it is necessary to develop effective strategies and policies to improve the quality of HRM, which is particularly important in the contemporary business environment when human resources constitute the major value of small organizations as well as large companies.

Basically, the development of small organizations is based on the effective use of human resources, which nowadays may be viewed as the major asset of small organization. It proves beyond a doubt that they can hardly compete with large companies, especially multinational corporations, because their material, technological and financial resources are consistently higher compared to small organizations. As a result, small organizations are simply forced to focus on the development of some new products or services which larger companies do not offer to customers. In other words, small organizations are, as a rule, oriented on the innovations and the development and introduction of innovations may be one of the major challenges for human resources of small organizations. At the same time, the effective HRM in small organizations has to stimulate the development of innovations by the personnel of these organizations that raise the problem of the professional development, training and education of the personnel.

On the other hand, there was even more serious problem that is actually the primary problem small organizations face. This is the problem of recruiting of well-qualified and perspective personnel. In fact, small companies do not always can afford the employment of experienced and well qualified employees who traditionally need high salaries small organizations cannot pay. In such a situation, there appears a gap between small companies needs to employ qualified and preferably experienced personnel and the unwillingness of experienced highly qualified specialists to get employed in small companies where their career opportunities are lower compared to larger companies as well as the level of salaries is lower too.

Also it should be pointed out that the modern epoch is characterized by the rapid changes on all levels of human life which inevitably affect HRM. One of the major trends in the modern HRM is the development of international cooperation between organizations and growing market expansion that leads to the entering of new markets and development of business in new countries. In such a situation, one of the major challenges HRM faces at the moment is its ability to adapt to the current situation in the market and to the local specific conditions.

In this respect, it should be said that the process of international market expansion naturally implies the employment of personnel that has different socio-cultural background, traditions, norms, lifestyle, etc. Consequently, one of the main tasks of a human resource manager is to unite people working in a small organization and, what is more, make them work effectively. As a rule, this implies the necessity of the development of some common standards that could be acceptable for all employees working in the organization. In other words, it is necessary to develop universal standards meeting the needs of culturally diverse personnel.

Furthermore, another serious problem many organization face in the present epoch is the problem of high level of personnel turnover.

Basically, for many companies it is a serious problem to prevent the personnel of the company from leaving their job. In fact, such a situation is basically provoked by the growing competition between companies that is accompanied by the growing struggle of companies for the well-qualified personnel. As a result, they attempt to attract highly professional employees from other companies in order to improve their own performance. On the other hand, the reason for high level of the personnel turnover is poor conditions of work. In fact, in the situation when employees are dissatisfied with their work, the level of wages, or environment, they naturally chose to change the job and get employed in a new company where they could have better perspectives or where they could work in a friendlier environment.

In addition, it should be said that the technological progress may impose another serious problem on HRM. It is not a secret that the technological progress in recent years has been very rapid and the development of technologies that could be applied in an organization at large and in HRM in particular has been unparalleled. The development of technologies has a dubious effect on an organization and HRM.

On the one hand, the development and implementation of new technologies evokes the problem of the training of the personnel because it is quite natural that people cannot catch up the technological progress without the assistance of the administration, management of the organization. In such a situation, people need to have a chance to get special training courses and get prepared to the use of new technologies and, what is even more important, it is necessary to prepare employees to the permanent changes which inevitably accompany the implementation of new technologies. On the other hand, the development of IT opened new opportunities to the development of HRM because new software and IS can provide an organization with larger opportunities to assess the potential of employees more effectively. In fact, nowadays a company can use new IS to collect data concerning its employees and assess their progress and potential. In such a way, it is possible to use the existing personnel more effectively, but the problem is that many organizations do not fully use the potential of new technologies in HRM.

Moreover, one of the major problems that small organizations may face is the problem of conflicts within the organization. In this respect, it is possible to speak about the conflict between internal and external influences on the organization and human resources, as well as about the conflict between interests and needs of employees which can come into clashes with interests and strategic goals of the organization.

In spite of all possible challenges and problems HRM can encounter at the present days, it is necessary to underline that the effectiveness of the functioning of the organization is highly dependent on the correlation between HRM and the business strategy and development of the organization. In other words, the organization should develop its HRM in accordance with the general business strategy in order to overcome possible conflict of values of employees and the organization. In terms of CVF model, the organization attempts to find a balance between human resources interests, needs and values, on the one hand, and organizational values and its strategic goals, on the other hand.

For instance, the company focuses on the introduction of innovations and development of new products and, therefore, the company stimulates employees to creative work, generate ideas, as well as it is possible to employ new, perspective and creative employees to stimulate the development of new products and introduction of innovations. In general, it is possible to speak about several types of interdependence between HRM and business strategy which actually define the effectiveness of the functioning and performance of the organization (Minehan, 1997, p.168).

Thus, it is possible to conclude that the organizational performance is highly dependent on the correlation between human resources and the organization’s strategy and tasks employees and are supposed to perform. It is very important to balance employees’ values, interests and needs with those of the organization to achieve positive organizational performance.

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