THE IMPACT OF HUMAN RESOURCES AUDIT PRACTICES IN INDIAN SMES: NOVEL APPROACH

Abstract

TDevelopment of small and medium enterprises (SME) represents primary goal of every modern economy. It is complex challenge which includes great number of directly concerned parties in every sector of the state and economy. SME stimulate private ownership and entrepreneurship. Their characteristic is that they are flexible and can easily adjust to changes in supply and demand on the market. At the same time, they open possibilities for increase of employment, promote diversification of economic activities, support sustainable growth and give significant contribution to export, trade and increase the competitiveness of the entire economy. Importance of SME for economy is undisputable. This work aims to assess human resource factors and best practices in small and medium enterprises (SMEs). The human resources (HR) components considered in this paper are organizational structure, personnel training and promotion, and organizational culture.

To achieve the objective of this study a combination of inclusive literature review, visits, observations and a survey of 100 respondents was used. These results are consistent with previous findings which reported that the SMEs performance was affected with the practices of human resource management. The main limitation in this work is the non-availability of timely data from many SMEs due to their lack of trust in these studies towards improving SME performance. The findings of this research not only show the positive relationship between HRM and SMEs, but also focus on elements leading to success, other lead to flair and some other mixed, which can be easily adapted to organizational structure, organizational culture and personnel training elements. These results could be applied on any other SMEs. This is the one of the first studies to examine HR factors and best practices through organizational structure, personnel training and promotion, and organizational culture of SMEs.