Topic

:

ROLE OF HR PRACTICES IN SMEs OF LAHORE

Submitted by:

Asim ul Haq

Roll: no:

11574

Program:

M.S/M.Phil

possessing some sort of HRM picture is still a question mark. HRM and Pakistani SMEs Pakistan is facing a big challenge to manage its human resource in many aspects. Since last decade. The outcome of the study indicates that the majority of the units do not have any human resource policy in place. However they pursue same human resources practices like recruitment. This paper suggests professional approach to various dimensions of human resource management in the light of various constraints the small and medium units encounter Introduction Small and Medium enterprises (SMEs) are considered as an important component of the economy in some developing countries like Pakistan. The proposed study can add something important and valuable to . This study on Human Resources Management was made in small and medium industries located in Lahore. The SME sector is a less formally organized sector in the country and the economic environment also creates structural problems which hinder enterprise competitiveness. SMEs are considered as backbone of Pakistani economy as according to Small and Medium Enterprises Development Authority (SMEDA the only official managerial authority for small business management in Pakistan) it is fair to say that our economy is an economy of SMEs. Pakistani SMEs having dynamic and varied characteristics. SMEDA has formulated an SME policy for further implementation to boost up this sector in the country. selection. Small business constitutes major part in any economy which can play key role in developing country’s economy but how and what are the ways which can lead to that development is still unidentified and lack of interest to disclose is continued at both government and private level in this country. the government of Pakistan is continuously engaged in formulating and implementing policies to assist SME sector so that it can play its role in the economic development of this country. compensation. especially for small business management which constitutes up to 78% of all private enterprise employment as mentioned above. Small firm management comes across several challenges which badly impact firm productivity and performance.ROLE OF HR PRACTICES IN SMEs OF LAHORE Abstract Human resource management (HRM) is a new concept for Pakistani Small and medium Enterprises. training. performance appraisal. Pakistan. It is important to note that Government of Pakistan approved this SME policy for the first time in January 2007. grievance redressal and so on in a haphazard and arbitrary fashion.

development. work task. compensation. these characteristics or facets may not be of equal importance to every organization. directing. However. To accurately measure “human resource practices”. integration . This study will add to determine the influence of HR Competencies on HR professionals’ effectiveness. This definition clearly indicates that the organizations’ objectives are dependent on their work force productivity. Businesses profiles are not uploaded on the website and it is even so difficult for field researchers to collect basic information through interviews. however. cross cultural applicability of different management practices is also questionable Literature Review Pakistan’s SMEs sector is very different from SMEs working in industrialized world. maintenance and separation of human resources to the end that individual. Selected literature is reviewed for this study whose results are generalizable to any other environment. Here. Research Objective This proposed study will investigate HRM system (policy. Many studies investigating human resource management practices have looked primarily into an organizational structure construct. a number of HR functions may need to be evaluated. organizing." Stone (2005) defined human resource management as it involves the productive use of people in achieving the organization’s strategic business objectives and the satisfaction of individual employees need. freedom in work. Edwin B. Limited academic studies are conducted so far on HR practices in Pakistan’s SME environment. (2006). this paper just concentrates on human resources management practice in SME sector. Freedom of public information is only on paper. controlling of procurement. work environment. Flippo who is the author of Personnel Management defines HRM as "planning. small and medium size businesses are usually not documented mostly with purpose. opportunities provided and the benefits are provides are few of the most important needs a worker may perceive.the empirical work on this specific context. Pakistan has also a unique culture of not sharing information with others. One of the most comprehensive and widely used measures for human resource practice is presented by Dessler (2008) and Fisher et al. Problem Statement There are many issues in SMEs of Lahore that need to be addressed. Recommendation of this study will be very important for poor performing unsuccessful SMEs. discussing the . The effective HRM practices are able to link these practices with organization structure and objectives. structure and practices) in SMEs of Lahore. At the same time. Moreover. organizational and social objectives are achieved. This study thus dependent on earlier researches conducted in environment other than Pakistan for conceptual understanding and theory development.

e. 100 questionnaires were distributed for collecting the data. H2: The extent of human resource planning is related significantly to success. Moreover. survey questionnaire) in order to understand the better picture of HR professionals’ effectiveness and their competencies in SMEs.Interrelationship between HRM practice and enterprise performance that has been studied rarely in detail before in Pakistan. the respondent would be more comfortable with questionnaire rather than interview because they could fill questionnaire according to their own convenience and availability of time. The data has been collected through self administered questionnaire. The response rate was very good Characteristics of the Respondents The characteristics of the respondents are presented in the following table. H3: The extent of training is related significantly to success. The survey research have inherent strengths compared to other research methods is ideally suited for remotely collecting data about a population that is too large to observe directly HYPOTHESES Job analysis. H4: The extent of performance appraisal is related significantly to success. Questionnaire was adopted as survey instrument because the study was of explanatory nature and the respondents were better able to identify the factors of human resource practices which could influence the performance of SMEs in Lahore. Methodology This preliminary study has mainly employed the quantitative method (i. H1: The extent of job analysis is related significantly to success. Quantitative Data Collection and Methodology For quantitative analysis survey research was conducted survey research. human resource planning. Variable(s) Frequency %age Variable(s) Frequency Gender Marital Status Male 70 70 Married 35 Female 30 30 Unmarried 65 Total 100 100 Total 100 Age 20-25 yrs 26-30 yrs 31-35 yrs 36-40 yrs 41-45 yrs 29 18 11 32 10 29 18 11 32 10 %age 35 65 100 Owner but not manager Owner and manager Manager but not owner Total 14 20 66 100 Position in Firm 14 20 66 100 . training and performance appraisal were chosen to be the HRM practices to be investigated.

Phil PhD Total 100 13 58 29 2 0 100 100 Work Experience 13 1 .4 Years 58 5 – 7 Years 29 8 – 10 2 11 – 13 0 14 – 16 100 Total 22 17 31 19 11 100 22 17 31 19 11 100 QUESTIONNAIRE 1) Do you agree your organization have written job descriptions for individual jobs? a) Agree b) Disagree 2) Which of the following methods are used in your organisation for job analysis? Please tick the appropriate number alongside each method.Total Education Intermediate Bachelors Masters MS/M. Observation Interview Logs Questionnaire Don`t Know 1 1 1 1 Never 2 2 2 2 Rare 3 3 3 3 Sometimes 4 4 4 4 Always 5 5 5 5 3) Do you agree there should be a human resource plan for your organization? a) Agree b) Disagree 4) Which of the following methods are used in your organization to forecast required staffing levels? Please tick the appropriate number alongside each method Trend Analysis Ratio Analysis Computerized Forecast Managerial Judgment Don`t Know Never 1 2 1 2 1 2 1 2 Rare 3 3 3 3 Sometimes 4 4 4 4 Always 5 5 5 5 5) Do you agree there should be a Specialist Training Department in your organization? a) Agree b) Disagree .

Every 6 months 12) Which methods of appraisal are used in your organization? Please tick the appropriate number alongside each method Management by Objective Computerized Appraisal Don`t Know 1 1 Never 2 2 Rare 3 3 Sometimes 4 4 Always 5 5 . and add any you use Don`t Know 1 1 1 1 Never 2 2 2 2 Rare 3 3 3 3 Sometimes 4 4 4 4 Always 5 5 5 5 Job Analysis Performance Appraisal Review of Problem areas Managerial Judgment 7) Do you agree your organization organize in-house training courses for employees? a) Agree b) Disagree 8) Which of the following training methods are used in your organization for different types of in-house training? Please tick the appropriate number alongside each method Seminar Group Discussion Case Study Simulation exercise Don`t Know 1 1 1 1 Never 2 2 2 2 Rare 3 3 3 3 Sometimes 4 4 4 4 Always 5 5 5 5 9) What is the % of training expenditure to total staff payroll in your organization? 10) Do you agree your organization should have a system of performance appraisal? a) Agree b) Disagree 11) How often are performance appraisals carried out in your organization? 1.6) By what methods are training needs analyzed in your organization? Please tick the appropriate number alongside each method. Never or rarely 2. Every 1 year 3. Every 2 years 4.

≤ 5 2. 5. >100 16) Are you satisfied with your income? 1. >15 15) What is the number of employee in your organisation? 1. >5 . 2. <2 2. >10-≤15 5. >10 . 4. > 50 . >5-≤10 4. 3.≤ 100 5. 2-5 3. Very Unsatisfied Dissatisfied Neither Satisfied Very Satisfied 17) Are you satisfied with your personal success? 1.Self Rating Graphic Rating Scale 1 1 2 2 3 3 4 4 5 5 13) For which of the following purposes is your performance appraisal scheme used? To set performance objectives To improve current performance To assist career planning discussion To Assist future potential Don`t Know 1 1 1 1 Never 2 2 2 2 Rare 3 3 3 3 Sometimes 4 4 4 4 Always 5 5 5 5 14) What is the number of years of your company in business? 1.≤10 3. 4. 3. Very Unsatisfied Dissatisfied Neither Satisfied Very Satisfied .≤ 50 4. 2. 5.

2.3+Q.14-Q. Very Unsatisfied Dissatisfied Neither Satisfied Very Satisfied 19) Are you satisfied with the economic development of your businesses? 1.2) were correlated with their success indices (summation Q. 4. 5.14-Q. the summations of the responses of item 3 and 4 of different companies (Q. 5. 3. 2.4) were correlated with their success indices (summation Q.1+Q. Very Unsatisfied Dissatisfied Neither Satisfied Very Satisfied RESULTS Job Analysis and Success To test for H1: the extent of job analysis was related significantly to success.18) Are you satisfied with your progress made towards your overall career goals? 1. Human Resource Planning and Success To test for H2: the extent of human resource planning was related significantly to success. 4.20) using correlation analysis . 3.19) using correlation analysis. the summations of the responses of item 1 and 2 of different companies (Q.

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