An Empirical Study to Understand HR Practices Implemented by Small and Medium Enterprises at Central India

Author Name(s): Ms. Priyanka Pramod Mankar, Mr. Prashant Phule
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The purpose of this study is to understand the Human Resource (HR) practices implemented by Small and Medium Enterprises (SMEs). SMEs play a very important role in contributing towards Indian economy. After agricultural sector SMEs in India is the second largest sector in providing employment. This sector has employed almost 60 million people in the country. Human Resource Management is getting top priority in the Organisation. Almost all organization regardless of their size have HR Department that ensure implementation of HR policies. Traditionally HR department was to look after salaries and administration, housekeeping, time-keeping that are monotonous activities. But the role of HR has seen tremendous change in the last two decades. SMEs as an engine of growth have incorporated innovative techniques regarding Technology Transfer, Funding, Sales & Marketing. Are they implementing innovative tools with respect to HR practices is the central theme of this paper. SMEs which are registered with District Industries Centre-Nagpur, Government of Maharashtra are identified for the current research. HR practices implemented by SMEs in Central India are identified through Questionnaire which is designed based on different functions of HR Department. Researchers have used Test of Hypothesis for Data Analysis & Interpretation. It is found that HR practices followed are unsystematic & haphazard in nature.

Keywords Small and Medium Enterprises (SMEs), Human Resource (HR) Practices


SMEs globally are recognized for their contribution to Gross Domestic Product. It provides number of advantages for any Economy. From the last five decades SMEs have emerged as a highly dynamic and vibrant sector of Indian economy. SMEs plays a vital role in Nation’s development through its high contribution towards defense production, innovation and development to indigenous technology, export earnings and import substitution, training and skills development, domestic production, generating new entrepreneurs by providing knowledge, etc. There are almost three million SMEs present in India from which 42 per cent accounts for India’s total export and 50 per cent accounts for industrial outputs. SMEs always played a significant role in transition of economies and work as a growth engine for every country. Also it provides greater employment opportunities at low capital cost comparatively than large industries, industrialization of rural and backward areas.



It is concluded that the management lack systematic formulation which is evident from researcher’s survey. The need of Human Resource Planning is realized during the festive season but it is ignore due to the dependence upon labour contracts. For the process of recruitment and selection non-scientific methods are followed by the sample organizations. For selecting an employee SMEs often abstain themselves, majorly the recruitment done from family, staff and friends. There is no provision for Training and Development policies followed. There is no specific assistance given, the employees were left to work at their own ways. Only few organizations are ISO certified and no other documents are there to tell the exact responsibility to the organizations position. Compensation and benefits given mostly on the basis of performance based incentives. Trade unions (TU) are present in few organizations because of their belief that the activities made by TU reduce production and leads to accidents in the organization, but the actual reason is festive season and harvesting season. Large communication gap is recognized between the employees and the employers. No suggestion boxes and news letter was found as they considered taking suggestion from employees is wastage of time. No assistance provided to the employees for their work. They are expected to come on duties on time, perform their jobs, go home and come back again. Worker’s Participation Management is non-existing in the sample organizations. Therefore it is concluded that the SMEs at Central India not follow the HR practices in the organizations

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