Human Resource Management Of Small Enterprises In India And Its Impact On Performance Of The Enterprises

Abstract

In Northeast India, small enterprises play a pivotal role in regional economic development by providing employment and fostering innovation. This research investigates the impact of various human resource management (HRM) practices on the performance of these enterprises. The study explores key HRM elements including human resource planning (HRP), recruitment and selection (R&S), organizational climate (OC), training and development (T&D), performance evaluation (PE), and employee compensation (EC). Employing a sample of 50 small enterprises from Silchar, Assam, the research utilizes descriptive statistics, Spearman rank correlation, and ordinal logistic regression models to analyze the relationship between HRM practices and enterprise performance. Findings indicate that HRP, R&S, OC, and EC have significant positive effects on performance, while PE and T&D show weaker correlations. Specifically, effective HRP and competitive EC are strongly associated with increased profitability, aligning with previous research by Huselid (1995) and Pfeffer (1994). Conversely, a more positive organizational climate paradoxically correlates with lower profitability, suggesting potential issues with balancing employee satisfaction and performance pressure. The study highlights the need for small enterprises to prioritize strategic HR planning and competitive compensation while reassessing the efficacy of performance evaluations and training programs. These insights contribute to the broader discourse on enhancing small enterprise performance through refined HRM practices and provide a foundation for future research in this domain.