Human Resource Development in Small Organizations

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Table of Contents

Introduction
Brief Definition of Concepts
Factors making HRD Effective in Small Organizations
Conclusion
References

Introduction

Organizations, large and small, are experiencing spectacular shifts that have substantial implications not only on how human resources are managed, but also how the human resource development (HRD) function is best organized and managed (Lawler & Mohrman, 2000). Today, more than ever, organizations are increasingly realizing that to be effective they must have employees who are committed to make important contributions to organizational success, and that HRD is critical to the processes of establishing performance expectations for the employees, addressing higher-level problem-solving skills, and accounting for organizational as well as societal outcomes (Tseng & McLean, 2008). The success of HRD, however, has been shown to be dependent upon many factors such as leadership and management, employee development plans, firm size, and strategic planning (Rauch et al., 2005; Saru, 2007).

In firm size, a substantial body of evidence suggests that most small and medium enterprises (SMEs) simply do not have the HRD skills, infrastructure and general resources which larger enterprises more frequently enjoy (Hill & Stewart, 2000), and therefore most HRD initiatives do not succeed (Rauch et al., 2005). The present paper aims to argue on the contrary, by identifying and discussing strategies that have been employed by human resource (HR) professionals to make HRD effective within the context of small organizations.

Brief Definition of Concepts

Swanson (1996) cited in Tseng and McLean (2008) &defined HRD as a process of developing and unleashing human expertise through organization development and personal training and development for the purpose of improving performance (p. 421). HRD is not only both strategic and practical, but also implicit in organizing and managing, and is to a large extent concerned with variables such as leadership, culture, learning and development, as well as change (Hill & Stewart, 2000). Small organizations are considered as entities with 200 employees or fewer, but are significant contributors to economic outlook in most countries including the United States (Rauch et al., 2005).

Factors making HRD Effective in Small Organizations

A foremost factor revolves around the concept of uncertainty external and internal. According to Hill and Stewart (2000), &internal uncertainty in large companies is typified by key issues such as the fundamental need to ensure that decisions made at the top of the organization are delivered effectively through the ranks (p. 107). This issue is not so problematic in smaller organizations where, characteristically, the owner or HR manager is closer to the employees and, therefore, better placed to not only deliver information and decisions personally to all workers, but also receive immediate feedback and evaluate the likelihood of success (Hill & Stewart, 2007; Saru, 2007). Additionally, the owner/HR manager will have the leeway to monitor the progress of the HR decisions made, as well as build confidence that these decisions will be executed according to the original intent (Brown et al., 2006). The lack of formal human resource practices in delivering information and critical decisions to employees made possible by close management-employee relationships, as well as the lack of sophistication of personnel methods used to monitor progress of HR decisions and build confidence among employees, provides an enabling environment for HRD to become effective in small organizations (Saru, 2007).

Second, it is well known that a critical function of HRD concerns the training and development of people in an organizational setup (Saru, 2007). A strand of existing literature (e.g., Hill & Stewart, 2007; Rauch et al., 2005; Saru, 2007) demonstrates that many small organizations fail to initiate employee training and development programs. In small enterprises where such programs are initiated, according to these authors, not only are they reactive and informal but also shorter-term and almost entirely oriented at the solution of instantaneous work-related challenges rather than the longer-term development of people.

Although the above arguments are valid as postulated by the authors, it can be argued that &each small organization is unique in its composition and culture and, therefore, not readily seduced by formality and standardization (Hill & Stewart, 2007, p. 115). This in-effect implies that most small organizations develop HRD models that directly address their immediate needs and to a degree that is relevant to them. Consequently, it is rare for a small organization to implement a HRD training strategy or policy that does not directly addresses the needs of the organization as deemed relevant by management. However, it is increasingly easier for a large organization to attempt to implement an employee training policy that is not only costlier to the organization, but fails to respond to the HR needs of the entity due to inadequate knowledge about the training needs (Saru, 2007). Hence, it can be argued that the directed models of training and development used by small organizations are more effective than the standard performance management processes prescribed for large organizations because they target particular needs, thus reducing waste, spurring performance, and sufficiently providing optimum benefit for operational as well as commercial needs (Tseng & McLean, 2008).

The third point revolves around the twin germane issues of corporate strategy and organizational learning. To provide a brief background of these issues, extant literature demonstrates that &facilitation of organizational learning and HRD outcomes can take place only in a supportive environment where there is a clear link between HRD and corporate strategy (Tseng & Mclean, 2008, p. 424). Additionally, it has been premised that organizational learning forms a central core of HRD by which workers are expected to gain empirical knowledge of their specific organizations as well as their specialties, with the view to realize the organizations corporate and/or business strategy (Ruona & Gibson, 2004). However, many HR studies are categorical that organizational learning and the realization of corporate strategy are more realistic facets of working in a large organization that possesses inherent and well-laid out power and promotion structure, but are untenable in small organizations due to lack of clear organization (Tseng & Mclean, 2008; Sambrook, 2009).

But it will be argued that organizational learning is a more realistic aspect in small organizations than in large organizations, hence it is much easier to have a clear and closer link between HRD and corporate strategy in small organizations than it is in big firms. First, not only are employees in small organizations better able to integrate with organizational core mission and goal statements due to the close-knit structure reminiscent of small firms , but they are more exposed to top-management support, commitment and involvement, in large part because of the presence of a horizontal/flat-based paradigm of authority sharing (Brown et al., 2006). A closely-knit organizational structure where management knows each employee by name, as well as top management support, commitment and direct involvement in issues affecting employees, form critical stimulants to organizational learning initiatives directed at aligning workers to the corporate and/or business strategy of the firm through self-directed individual and team learning (Poell et al., 2003; Smith et al., 2007). It follows that these factors (closely-knit/flat-based organizational structure, management support, commitment and direct involvement) act as predictors to how an organization is better able to implement HRD initiatives, including organizational learning geared towards aligning employees to the core mission, vision and strategy of the firm. Consequently, HRD becomes effective in small firms due to the presence of these variables.

Additionally, due to the corporate strategy-organizational learning continuum, people in small organizations are endowed with the capacity to increasingly competitive market conditions by organizing and managing their knowledge assets in more effective ways due to close management support and commitment (Tseng & Mclean, 2008). Human resource accounting and intellectual capital development, for instance, not only form a critical component of HRD but are used by many organizations to develop knowledge assets that are then employed to generate profits and competitive advantage. It can be argued that HRD professionals working with small firms are better placed to identify and analyze the available and required knowledge, and more easily plan and control actions aimed at developing knowledge assets than would be the case in large organizations (Smith et al., 2007), due to close management support and commitment, better positioning of information delivery channels, and efficient feedback mechanisms (Hill & Stewart, 2007; Saru, 2007).

With regard to the third point, it can be therefore concluded that HRD becomes effective in small organizations not only because of the workers capacity to follow and fulfill the corporate strategy and vision statements, but also due their ability to respond swiftly to the changing business trends by organizing and managing their knowledge assets in more effective and efficient ways. Indeed, this view can be reinforced by an acknowledgement made by Hassan (2007), who argues that the corporate strategies, learning programs and vision/mission statements developed by enterprises assist them to generate excitement and commitment to organizational goals and objectives.

The fourth issue, which is intrinsically related to the first, revolves around the creation of feedback and reinforcement mechanisms that are central to any HRD initiative. Management literature demonstrates that performance review and provision of feedback are critical in any HRD initiative (Brown et al., 2006), and that feedback and reinforcement mechanisms contribute to value addition for the organization (Hassan, 2007). Feedback and reinforcement, according to Rauch et al (2005), empower workers to give more towards the realization of the organizations key objectives and goals. Hill and Stewart (2000) suggest that managers and HR professionals in small organizations are better equipped to provide feedback and reinforcement to workers than their counterparts in large organizations, in part due to the flatter organizational structures and minimal hierarchies of authority witnessed in these organizations. Consequently, it can be argued that HRD initiatives are effective in small organizations due to the capacity for feedback and reinforcement, which empower employees to remain committed to the goals and objectives of the organization.

The last point deals with the relationship between the manager(s) and the employees. Extant literature demonstrates that managers in small organizations are able to establish close personal relationships with their employees (Brown et al., 2006; Hassan, 2007). This capacity, according to the authors, has important HRD implications in that the managers of small organizations are able to replace formal control systems prevalent in big organizations with closer, more personal relationships. Consequently, the managers of small firms are afforded the opportunity to not only influence employee activities directly, but also motivate them to see the strategic value of their own work and hence enhance their performance for the overall success of the organization. It therefore follows that the manager becomes a real link between strategic planning and workers, implying that HR competencies developed under the HRD umbrella are passed onto the employees with much effectiveness. These opportunities are not available for managers of big companies, not only because of their complex organizational structures, but also due to huge volume of employees, located in different locations worldwide (Hill & Stewart, 2000).

Conclusion

The present paper has discussed salient issues and factors that make HRD effective in small organizations. It has been demonstrated how managers in smaller organizations are closer to employees and, therefore, better placed to not only deliver information and decisions personally to all workers, but also receive immediate feedback and evaluate the likelihood of success of HRD initiatives. It has also been demonstrated that the targeted models of training and development used by small organizations are more effective than the standard performance management processes prescribed for large organizations because they target particular needs, thus reducing waste, spurring productivity, and sufficiently providing optimum benefit for operational as well as commercial needs. Additionally, it has been found that HRD initiatives become effective in small organizations not only because of the workers capacity to follow and fulfill the corporate strategy and vision statements, but also due their ability to respond swiftly to the changing business trends by organizing and managing their knowledge assets in more effective and efficient ways. Issues of feedback and reinforcement, as well as the close relationship between the manager and employees, have been comprehensively delineated to demonstrate what makes HRD effective in small organizations.

References

Brown, L., Murphy, E., & Wade, V. (2006). Corporate e-learning: Human resource implications for large and small organizations. Human Resource Development International, 9(3), 415-427.

Hassan, A. (2007). Human resource development and organizational values. Journal of European Industrial Training, 31(6), 435-448.

Hill, R., & Stewart, J. (2000). Human resource development in small organizations. Journal of European Industrial Training, 24(2), 105-117.

Lawler, E.E., & Mohrman, S.A. (2000). Beyond the vision: What makes HR effective. Center for Effective Organizations. Web.

Poell, R.F., Pluijmen, R., & Van der Krogt, D. (2003). Strategies of HRD professionals in organizing learning programs: A qualitative study among 20 Dutch HRD professionals. Journal of European Industrial Training, 27(2), 125-136.

Rauch, A., Frese, M., & Utsch, A. (2005). Effects of human capital and long-term human resources development and utilization on employment growth of small-scale businesses: A causal relationship. Entrepreneurship: Theory & Practice, 29(6), 681-698.

Ruona, W., & Gibson, S. (2004). The making of twenty-first-century HR: An analysis of the convergence of HRM, HRD and OD. Human Resource Management, 43(1), 49-66.

Sambrook, S. (2009). Critical HRD: A concept analysis. Personnel Review, 38(1), 61-73.

Saru, E. (2007). Organizational learning and HRD: How appropriate are they for small firms? Journal of European Industrial Training, 31(1), 36-51.

Smith, P.J., Sadler-Smith, E., Robertson, I., & Wakefield, L. (2007). Leadership and learning: Facilitating self-directed learning in enterprises. Journal of European Industrial Training, 31(5), 324-335

Tseng, C.C., & McLean, G.N. (2008). Strategic HRD practices as key factors in organizational learning. Journal of European Industrial Training, 32(6), 418-432.

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