Publication

Research Report

Sustaining growth – the HR dimension HR practices and management and leadership skills of High Growth SMEs

Published: 30 June 2016

Prior business demographics research conducted by the ERC identified that only a small minority of UK SMEs experience sustainable growth over an extended period of time. For instance, of the firms that were newly established in 1998 just 6% showed an appreciable employee growth by 2013. What lies behind such a remarkable performance on the part of so few companies? In this paper, we investigate the leadership behaviours and high performance work practices (i.e. those HR practices that are intended to align employees’ performance with organizational goals through self-regulation rather than sanctions) that are associated with growth.

Author

Koryak, Oksana, Nicolaou, Nicos

Associated Themes
  • Management and Leadership
  • Productivity and performance
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Sustaining growth – the HR dimension HR practices and management and leadership skills of High Growth SMEs

This research set out to investigate human resource management (HRM) practices and leadership behaviours in UK SMEs that represent a small proportion of firms to have achieved long-term growth. We interviewed 30 senior leaders of such SMEs and found that most leaders espouse key high performance work practices such as selective hiring, employee development, open communication, and, to a varying degree, performance management and employee participation. Through flexible informal practices, SME leaders tap into employee’s intrinsic motivation to enhance performance and to develop personal trust and reciprocity. Overall, our research paints a picture of HRM in growth-oriented UK SMEs as a complex phenomenon where a number of formal and informal HR levers interact, guided by a compelling vision, and creating a positive company culture in the process.

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