Enhancing SMME effectiveness in South Africa through Human Resource Management practices
Keywords:
Resource Based Entrepreneurship Theory, Resource Based View, SMME, Management practicesAbstract
Small, Medium, and Micro Enterprises (SMMEs) play a critical role in national economic growth, yet their survival and competitiveness are significantly influenced by management practices and pressures from globalization. While SMMEs are often recognized for their adaptability, close customer relationships, flexibility in operations, and early adoption of technology, they remain vulnerable to failure, primarily due to inadequate Human Resource (HR) practices.
This study investigates strategic Human Resource Management (SHRM) practices that South African SMMEs can adopt to mitigate failure risks and enhance organizational sustainability. It assumes that human capital is the most vital asset for SMMEs and that effective recruitment, selection, retention, and performance management strategies can foster productivity and sustainable competitive advantage.
Through analyzing the relationship between training, skills development, and organizational performance, the study demonstrates a clear link between employee capabilities and SMME effectiveness. Findings provide empirical evidence supporting the positive impact of strategic HR practices on profitability and overall organizational performance. Furthermore, the study extends the Resource-Based Entrepreneurship Theory (RBET) by emphasizing the role of human resources as a foundational driver of SMME effectiveness. This paper underscores that robust HRM practices are indispensable for enhancing the performance and sustainability of SMMEs.
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