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Human resource practices, employee attitudes and small firm performance

Lookup NU author(s): Dr Stewart Johnstone



This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License (CC BY-NC 4.0).


This article uses the matched employee–employer dataset from the Workplace Employment Relations Study of 2011 (WERS2011) in Britain to empirically examine the direct relationship between human resource management (HRM) practices and small and medium-sized enterprise (SME) performance in the United Kingdom, as well as the potential moderating effect of organisational commitment/job satisfaction on the HRM-performance linkage. We find a positive and direct relationship between the use of certain formalised human resource (HR) practices and SME performance, measured by financial performance and labour productivity. More importantly, we find that the positive relationship between HR practices and financial performance varies between SMEs with high job satisfaction and low job satisfaction, and that the relationship is weakened in SMEs with high job satisfaction. The results suggest that certain HR policies and practices may improve small firm performance, especially within firms with low levels of commitment and satisfaction.

Publication metadata

Author(s): Lai Y, Saridakis G, Johnstone S

Publication type: Article

Publication status: Published

Journal: International Small Business Journal

Year: 2017

Volume: 35

Issue: 4

Pages: 470-494

Print publication date: 01/06/2017

Online publication date: 04/04/2016

Acceptance date: 10/02/2016

Date deposited: 07/04/2016

ISSN (print): 0266-2426

ISSN (electronic): 1741-2870

Publisher: Sage Publications Ltd


DOI: 10.1177/0266242616637415


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