Topic

:

ROLE OF HR PRACTICES IN SMEs OF LAHORE

Submitted by:

Asim ul Haq

Roll: no:

11574

Program:

M.S/M.Phil

ROLE OF HR PRACTICES IN SMEs OF LAHORE Abstract Human resource management (HRM) is a new concept for Pakistani Small and medium Enterprises. The SME sector is a less formally organized sector in the country and the economic environment also creates structural problems which hinder enterprise competitiveness. 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. possessing some sort of HRM picture is still a question mark. training. SMEDA has formulated an SME policy for further implementation to boost up this sector in the country. It is important to note that Government of Pakistan approved this SME policy for the first time in January 2007. 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. 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 . Pakistani SMEs having dynamic and varied characteristics. Pakistan. This study on Human Resources Management was made in small and medium industries located in Lahore. 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. Small firm management comes across several challenges which badly impact firm productivity and performance. The outcome of the study indicates that the majority of the units do not have any human resource policy in place. especially for small business management which constitutes up to 78% of all private enterprise employment as mentioned above. HRM and Pakistani SMEs Pakistan is facing a big challenge to manage its human resource in many aspects. However they pursue same human resources practices like recruitment. Since last decade. grievance redressal and so on in a haphazard and arbitrary fashion. compensation. performance appraisal.

" 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. work environment. To accurately measure “human resource practices”. a number of HR functions may need to be evaluated. these characteristics or facets may not be of equal importance to every organization. integration . This study will add to determine the influence of HR Competencies on HR professionals’ effectiveness. Research Objective This proposed study will investigate HRM system (policy. Freedom of public information is only on paper. Pakistan has also a unique culture of not sharing information with others. freedom in work. This study thus dependent on earlier researches conducted in environment other than Pakistan for conceptual understanding and theory development. Many studies investigating human resource management practices have looked primarily into an organizational structure construct. opportunities provided and the benefits are provides are few of the most important needs a worker may perceive. The effective HRM practices are able to link these practices with organization structure and objectives. this paper just concentrates on human resources management practice in SME sector. structure and practices) in SMEs of Lahore.the empirical work on this specific context. Limited academic studies are conducted so far on HR practices in Pakistan’s SME environment. (2006). discussing the . 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. However. organizing. Moreover. 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. organizational and social objectives are achieved. Edwin B. Here. work task. compensation. At the same time. 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. One of the most comprehensive and widely used measures for human resource practice is presented by Dessler (2008) and Fisher et al. Recommendation of this study will be very important for poor performing unsuccessful SMEs. however. Problem Statement There are many issues in SMEs of Lahore that need to be addressed. Flippo who is the author of Personnel Management defines HRM as "planning. directing. controlling of procurement. development. small and medium size businesses are usually not documented mostly with purpose.

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. Moreover. survey questionnaire) in order to understand the better picture of HR professionals’ effectiveness and their competencies in SMEs. The data has been collected through self administered questionnaire. 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 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. training and performance appraisal were chosen to be the HRM practices to be investigated. 100 questionnaires were distributed for collecting the data.Interrelationship between HRM practice and enterprise performance that has been studied rarely in detail before in Pakistan. human resource planning. Quantitative Data Collection and Methodology For quantitative analysis survey research was conducted survey research. Methodology This preliminary study has mainly employed the quantitative method (i. H1: The extent of job analysis is related significantly to success. H2: The extent of human resource planning is related significantly to success. H3: The extent of training is related significantly to success. The response rate was very good Characteristics of the Respondents The characteristics of the respondents are presented in the following table. 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 .e. H4: The extent of performance appraisal is related significantly to success.

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 .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.Phil PhD Total 100 13 58 29 2 0 100 100 Work Experience 13 1 .

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 .6) By what methods are training needs analyzed in your organization? Please tick the appropriate number alongside each method. 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. Every 1 year 3. Every 2 years 4. Never or rarely 2.

>15 15) What is the number of employee in your organisation? 1. <2 2.≤10 3. 5. 2.≤ 50 4. 2-5 3. 5. >10 .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.≤ 100 5. ≤ 5 2. >100 16) Are you satisfied with your income? 1. 4. > 50 . 3. 3. >5-≤10 4. >10-≤15 5. 4. Very Unsatisfied Dissatisfied Neither Satisfied Very Satisfied . 2. Very Unsatisfied Dissatisfied Neither Satisfied Very Satisfied 17) Are you satisfied with your personal success? 1. >5 .

2) were correlated with their success indices (summation Q.19) using correlation analysis.18) Are you satisfied with your progress made towards your overall career goals? 1. the summations of the responses of item 1 and 2 of different companies (Q.4) were correlated with their success indices (summation Q. 3. 5. 2. the summations of the responses of item 3 and 4 of different companies (Q.3+Q.1+Q.14-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. Human Resource Planning and Success To test for H2: the extent of human resource planning was related significantly to success. Very Unsatisfied Dissatisfied Neither Satisfied Very Satisfied 19) Are you satisfied with the economic development of your businesses? 1.20) using correlation analysis . 3. 2.14-Q. 5. 4. 4.