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“Sustainable HR”: A Need For A Sustainable Enterprise
1Pooja Das, 2Smrutihara Biswal
Lecturer in Commerce M.P.C (Auto) College Takatpur, Baripada, Odisha
Lecturer in HR & General Mgt Academy Of Business Administration Harida, Kuruda, Balasore, Odisha, India
Email : 1[email protected], 2[email protected]
Abstract : In status quo the word
“sustainability” is a commonly used word. It’s a challenge for everyone everywhere beginning from environment to economy. But the modern competitive & globalized business world has expanded the meaning and the value of sustainability. This article represents the role of Human capital & its management in a sustainable enterprise. It further represents various path of HR to manage & to face the hue & cry of sustainable development in the corporate world. In the 21st century the essence of human assets has been recognized as the central cause for economic growth. So the key role of HR for SUSTAINNLE DEVELOPMENT in an organization is a crucial & important task. This article outlines some of these crucial roles.
Key word: sustainability, HR, Corporate, Competition, Challenge, Organization, Status quo, Globalisation.
I. INTRODUCTION
Corporate competition is an incredible image of Globalization now. Here the quote- Struggle for existence suits the best. But of course it‘s in the business perspective. In this competitive world sustainability is the need of the hour. In this paper the word sustainable is used two times i.e. sustainable HR & sustainable enterprise. In both the word the meaning of sustainable is partially the same & partially different. In the
corporate world & in the business perspective ,sustainability can be defined as the organization‘s ability to achieve the organizational goal & long-term profit by utilizing social, economic & environmental opportunities. the These will be discussed later in this paper, However to face the competition the organization or the enterprise must be sustainable. In the past renowned economist like Adam Smith &
Alfred Marshall have already expressed human beings as the means of economic development. However it has only been realized in the 21st century. As of now all the enterprises are considering their employees as their real assets and are investing a lot for their development & management and retainment with the help of different HR activities. This noble effort of the company can be termed as sustainable HR.
‖ If people are thought of as human capital, the different aspects of people management will gain importance. Issues as corporate culture, workplace environment, safety, health, and diversity, among others, can be analyzed to determine if a company is engaged in a sustainable way of doing business‖ (Van Marrewijk & Werre, 2003).
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II. SUSTAINABILITY: AN EMERGING ISSUE IN BUSINESS
WORLD
The term ―sustainability‖ means different things to different people, It is basically concerned with meeting the needs of people today without compromising the ability of future generations to meet their own needs.
As such sustainability helps people to satisfy their present needs and requirements as well as it also takes care of the future requirements of our coming future generation. Sustainability is thus the capacity to endure and it is not a movement but a necessity to growth.
Sustainability essentially, is doing business without harming people or the planet and can affect company culture and behavior in many ways, from recruiting and employee engagement initiatives to training, customer interactions and even the business brand and value propositions.
For human beings, sustainability is the long- term maintenance of well being, which has environmental, economic, and social dimensions, and encompasses the concept of stewardship, the responsible management of resource use.
Thus, sustainability is emerging as a people issue in areas of the business and, as such, a human resource issue. But HR professionals may not be fully prepared to lead organizational sustainability efforts. From a business perspective, sustainability has been defined as
"company's ability to achieve its business goals and increase long-term shareholder value by integrating economic, environmental and social opportunities its business strategies".21st century business leaders have started recognizing the crucial role employees play in driving and delivering sustainable business strategy. Companies are integrating sustainability into corporate culture and fostering ―sustainable development
capabilities‖. But sustainable business strategy is incomplete without developing sustainable human resources. The concept has become significant since 1980s.
Sustainable development is development that meets the needs of the present without jeopardizing the ability of future present without jeopardizing the ability of future.
In a highly competitive global economy where other factors of production--capital, technology, raw materials and information are increasingly duplicated, the caliber of the people will be the only source of sustainable competitive advantage available to those organizations who have identified potentialities of their employees Therefore, attention must be paid to and resources must be ploughed into the management of global talent for business enhancement. To do this attention must be paid to several areas, in particular to maximize long-term retention and use of international cadre through career management so that the company can develop a top management team with global experience and develop effective global management teams. Changing a company‘s culture and outlook requires a contribution from everyone, working as a team. The requirement of this enlarged responsibility also demands innovative HR professionals.
III. SUSTAINABLE DEVELOPMENT
Sustainable development (SD) is a pattern of resource use that aims to meet human needs while preserving the environment so that these needs can be met not only in the present, but also for generations to come.
A sustainable society is one that can progress without catastrophic setbacks in the foreseeable future.
―The use of sustainability programs in organizations is growing rapidly.
Organizations are becoming increasingly aware of the benefits of sustainability both
to society and to their own bottom lines,‖
said Mark Schmit, Ph.D., SPHR, SHRM‘s director of research. ―Sustainability programs make good business sense and help to maintain our environment.‖
Getting involved in sustainability strategy and programs ―is a great way for HR to work at a higher level,‖ said Gerlinde Herrmann, GPHR, president of The Hermann Group Limited, an executive search firm, and a member of SHRM‘s Corporate Social Responsibility and Sustainability Special Expertise Panel. ―HR needs to grab a hold of this and champion it.‖―To effectively execute on sustainability initiatives requires breadth and depth of connection within the corporation and the ability to affect the right levers,‖ stated Pravir Malik, founder and fractal systems architect at Aurosoorya. ―HR is well positioned to step into such a role.‖
Sustainability is important for all employees, but particularly for the youngest workers, noted Mary Cheddie, a former SHRM Board member. ―It‘s very appropriate that HR take the lead‖ in driving such initiatives.
IV. SUSTAINABLE ENTREPRISE
Sustainable business, Is an enterprise which has minimal negative impact on the global or local environment, community, society, or economy. Often, sustainable businesses have progressive environmental and human rights policies. In general, business is described as sustainable if it matches the following four criteria:
It incorporates principles of sustainability into each of its business decisions.
It supplies environmentally friendly products or services that replace demand for non-green products and/or services
It is greener than traditional competition.
It has made an enduring commitment to environmental principles in its business operations.
A sustainable business is any organization that participates in environmentally friendly or green activities to ensure that all processes, products, and manufacturing activities adequately address current environmental concerns while maintaining a profit. In other words, it is a business that
―meets the needs of the present world without compromising the ability of the future generations to meet their own needs.‖
V. ESSENTIAL FEATURES OR QUALITIES REQUIRED BY
MOST SUSTAINABLE ENTREPRISES
To become sustainable there are some basic qualities required. We identified seven distinguishing qualities that are critical to understanding and evaluating the sustainability of some of the world‘s most sustainable companies:
Deeply ingrained values-To develop a sustainable enterprise it is important that the values of the employees and the top management must all be ingrained with the benefits and the desire of creating a sustainable enterprise.
Strategic positioning- If strategy defines the lens through which all company decisions are assessed, then a company‘s strategic position is simply the view of a company that results from the strategy driven decision making.
Top management support-Without the whole hearted support of the top management nothing can be undertaken properly in an enterprise. Therefore it is top management who needs to be ready for creating such an enterprise.
Systems alignment –All the structures, processes of an enterprise needs to be
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developed and coordinated around sustainability
Holistic integration (across functions) - While the increasing capability of tools to cross integration is a significant development, the main thrust behind holistic integration efforts inside enterprises should be focused on bringing together the disparate integration teams (for application, B2B, process, and data integration) to create a comprehensive enterprise integration strategy and implementation plan.
Stakeholder engagement- All the stake holders of an enterprise namely employees, suppliers, Government officials, financial institutions etc must be oriented towards the objective of creating a sustainable enterprise.
VI. ADVANTAGES FOR CREATION OF A SUSTAINABLE
ENTREPRISE
Sustainability is rapidly emerging as a critical element of business strategy, driven by a convergence of factors — increasing regulation, changing customer expectations, competitor and technology advances, value chain partner requirements, brand equity protection, and global risk management.
Companies must undertake sustainability- driven transformation efforts in order to improve financial, environmental, and social performance. Sustainability, approached the right way, can be a significant driver of enterprise value and must generate economic value in order to evolve from an environmental specialty to a mainstream growth engine. Leading companies have begun driving improved shareholder value by broadening the definition of ‗Sustainable Enterprise‘ and by executing green practices where doing so delivers positive returns.
Thus the creation of a Sustainable enterprise provides a great deal of benefits.
They are:-
Improved employee morale.
More efficient business processes.
Stronger public image.
Increased employee loyalty.
Increased brand recognition Figure-1: Advantages of Sustainable
Enterprise:
VII. SUSTAINBLE HR
―Human Resources‖ or ―Manpower‖ may be thought of as ―the total knowledge, skills, creative abilities, talents and aptitudes of an Organizations workforce as well as the values, attitudes and benefits of the individuals involved. It can be called as Sustainable HR when the source can face the present & plan the future without any compromises. Thus the term is meant for all the activities related to the employee- employer relationship in an organization. It can be expressed as one type of encyclopedia, dealing with some information and activities of the employees in an organization.
VIII. ROLE OF HR IN CREATING A SUSTAINABLE ENTREPRISE.
It has been seen that the role of HR in creating a sustainable enterprise has tremendously increased in the recent years.
With the help of various Hr practices the picture of a sustainable enterprise becomes all the more clear. The Hr function can serve as a partner in determining what is needed or what is possible in formulating corporate values and sustainability strategy. There has
been a number of areas in which HR was or could be making a contribution to support human capital for the sustainability of the companies.
Areas of HR’s Greatest Contribution As noted, the greatest contributions by the HR function to sustainability effectiveness were seen in: leadership development, training and development, diversity /multiculturalism, and ethics and governance. Significant contributions in areas of effectiveness also were seen across many of the companies in talent management and workforce engagement.
These include:
1. Development of leadership 2. Training and development, 3. Change management.
4. Team management.
5. Talent management.
6. Diversity management.
7. Ethics and governance.
8. Workforce engagement.
9. Work-life balance 10. CSR.
1. Development of leadership –HR has made a significant contribution for the creation of a culture of leadership development for their high potential employees and these are oriented around a core of sustainability as an overarching corporate goal..
2. Training and Development-HR‘s role is also considered essential in educating people about sustainable development. With proper training all the employees may be made to understand the importance of sustainability and how a sustainable enterprise can be created.
3. Change Management-It so happens that whenever a new thing is to be introduced in
an enterprise it is first restrained by its employees. It may be because of many reasons which is basically related with the uncertainty involved. This is when the task of hr becomes all the more important. It is with the motivation and persuasion that the restraints are converted into readiness.
4. Team Management - Hr can help to create an environment built on cooperation, collaboration and teamwork by bringing people together which is essential for the creation and the development of a sustainable enterprise.
5. Talent Management- Significant contributions were also made by HR in support of sustainability from the perspectives of talent management. In the context of sustainability, the key to the recruiting and staffing that make up talent management was providing the right people with the right mental models and values, in addition to their functional expertise and this is one of the important task of the HR . 6. Diversity Management - Challenges related to transparency in the maintenance of diversified policies and procedures as well as the achievement of ―cognitive diversity.‖
all around the organization can be possible with the help of proper hr practices..
7. Ethics and Governance- HR participation in this area covered high-level HR leadership involvement on the ethics and compliance oversight committees, self- assessments, design and administration of mandatory ethics and compliance training programs (including appropriate ways to be working as well as sustainability and values), and e-learning programs. Several companies were signatories to the UN Global Compact and indicated they have policies and performance standards that in many cases go well beyond local laws and regulations, especially in developing countries.
8. Workforce Engagement- Employee engagement was seen as strongly related to
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the sustainability of the company as not only the right thing to do but as an enabler of customer satisfaction and business growth.
Moreover, getting employees involved in the journey to sustainability was seen as a major challenge for which HR‘s help was solely needed.
9. Work-life Balance- Human personalities are different. Accordingly they approach different problems or situations differently.
And we the Indians are very emotional.
There has to be a balance between work and life. Absence of it may cause decrease in performance, conflicts, sickness, absenteeism or personal problems like divorce, conflict at home, forgetfulness.
Some times it may also lead to dangerous circumstances like suicides, heart attacks etc. So HR plans different ways, different trading programs for this balancing. Ex- Some companies like IBM the software company allows its employees to work from home if the situation demands.
10. CSR-Human resource (HR) in organizations that perceive successful corporate social responsibility (CSR) as a key source of their financial performance, enhances their brand image etc. The more the HR practitioner can understand the importance of Corporate Social Responsibility, the greater their ability to pass these insights along to their business partners towards the organization‘s objectives in integrating CSR throughout their operations and business model.
IX. AREAS NEEDING MORE HR CONTRIBUTION
Although HR has made significant contribution in the process of creation of a sustainable enterprise but still then there are a few more areas in which the contribution of HR will be needed.
1. Change Management-
Change is the movement from the present state to the desired. There‘s lots of different
reactions to change, some people jump right on board, and they‘re ready to go and ready to change, and there‘s others that kind of watch and go along more slowly, and there‘s those who have a very difficult time with change . . . so it‘s everything from the personal counseling to helping to educate our leaders on how to manage change that can help achievement of the objective better.
2. Collaboration and Teamwork-
The ability to lead cross-functional collaborative teams was seen as an important competency for HR to do the required. The teams involved in sustainability require the ability to lead cross-functionally and that is an important competency and It‘s very much an integrated approach that relies on different disciplines of people since often times you‘ll see legal, supply chain, business marketing people, HR people, etc.Typically sustainability teams are cross-functionally matrixed structures. Several companies also had teams organized around specific issues, such as water or energy, with internal portals for information transfer and building communities of practice. HR also is needed to support relationships beyond the company, such as with nongovernmental organizations (NGOs) and other community stakeholders.
3.Creating and Inculcating Values.
Sustainable values were seen as an essential foundation to sustainability in every company. ―People without having a sustainable mindset, won‘t be promoted‖. In fact, several companies had recently gone through dramatic transformations, even downsizing. The unwavering commitment to their values was seen as the underlying engine to the changes. Many of the companies described how they actively strove to balance both results and values.
Every program is built off the values . . . the values carried the enterprises through the transformation.
4.Health and Safety.-
The health and the safety of the people working in the organizations have a great impact on their thinking and their mindset.
And it is the HR Department who can make a great contribution in this regard safeguarding and protecting the health of the people and ensuring their involvement in creating a sustainable enterprise.
X. THE ROLE OF HR PROFESSIONALS IN SUSTAINABLE ACTIVITY
Among all functional and professional groups within an organization, HR specialists in particular can be singled out as being best placed to take on a central role in the art and science approach to sustainability. A number of key areas in which HR input is needed
or in which HR specialists can potentially add value to the sustainability initiative can be identified as follows.
1. Raising Awareness and Promoting Dialogue -Awareness and understanding of environmental sustainability and related issues among all employees is essential for securing their engagement in and commitment to the sustainability initiative, and in developing the types of approaches and values necessary for sustainable business. The HR department with its responsibility for training will ideally be centrally involved in the development and delivery of training programs and awareness raising materials to meet these needs, especially.
2. Provision of Art and Science Skills and Expertise-Overall, the HR department is responsible for ensuring that the organization possesses the right levels and combination of art and science skills necessary for successful implementation of strategic sustainability, which can be achieved either through training and
development of existing employees, or recruitment. The department should take the lead in conducting an organization-wide review of skills and expertise in order to identify current strengths as well as gaps that need to be addressed, and also to ensure that the right individuals are allocated to key roles in the development and implementation of the sustainability initiative. In doing so, the department will need to work closely with organizational leaders as well as department heads to secure the necessary levels of investment in training and recruitment, and the co- operation necessary to change or modify the jobs of individuals selected for key roles in the sustainability initiative. HR professionals will themselves need to demonstrate strengths in science as well as art skills in order to achieve these objectives including the ability to accurately estimate the budget requirements for training and recruitment and to help build a robust business case for sustainability, as well as the communications and negotiation skills necessary to convince senior executives and managers of the need for these.
3. HR Policies and Procedures-In order to successfully deliver the art and science skills needed for strategic sustainability, there may also be a need for the HR department to redesign its own policies and processes, especially relating to performance management, rewards and recognition, and recruitment and selection processes. There are two main objectives:
first to ensure that the
a. The policies and processes are designed to provide the organization with the required mix of art and science skills for strategic sustainability, and
b. To ensure that sustainability-related factors are incorporated in organizational competencies and in individual, team and departmental plans and goals. As discussed earlier, art skills are highly important in the achievement of strategic sustainability; but it
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is also becoming increasingly evident that both art and science are required in most jobs and should be reflected as such as job descriptions and core competencies.
4. Socially Responsible
Employment-It can be argued that sustainability begins ―at home‖ and that being a socially responsible employer goes hand in hand with being an environmentally sustainable organization, since a company is likely to be judged on its corporate social responsibility performance overall. HR specialists can ensure that the organization and its suppliers comply with or exceed employment standards and provide favorable terms and conditions of employment to their staff and contractors (Glade; Rimanoczy and Pearson 14). They can act as source of information, guidance and support both to the parent organization and its supply chain participants on how to be social responsible employers, and arrange training in this area if necessary.
5. Sustainability Champions and Change Management Specialists-The types of art and science skills already held by many HR specialists and needed in their day to day work make them ideally suited to take on key roles – either on a full or part- time basis in the development and implementation of sustainability initiatives.
There is evidence that companies with dedicated sustainability leaders tend to exhibit stronger sustainability performance and gain greater business benefits from their initiatives Such leaders may a central role in driving progress towards sustainability goals through collaboration and communication with internal and external stakeholders and in ensuring that sustainability stays firmly on the core business agenda.HR professionals are usually skilled communicators and effective negotiators, with high levels of people acumen but also an astute understanding of business needs and how best to develop a company‘s human resources to meet these. The nature of HR work also requires expertise in planning,
budgeting, risk management and a range of other science-related skills. Few other professional groups exhibit such a strong combination of the art and science skills that are also essential for driving progress towards sustainability objectives.
6. Performance Measurement- Finally, it will be crucial to monitor and measure progress towards the organizational sustainability goals, in order to highlight and capitalize in business terms on their achievements, reveal areas where improvements are needed, and demonstrate the return on investment of various measures and activities such as training courses or recruitment for sustainability-related posts.
Overall, this will require an art- and science- approach to capture the tangible and non- tangible dimensions of performance in sustainability, as well as the changing attitudes and behavior of employees. HR professionals will need to play a central role in relation to the performance measurement of employee-related aspects of sustainability, by developing appropriate metrics and designing and implementing data collection methods and tools.
XI. DRIVERS FOR CREATING A SUSTAINABLE ENTREPRISE
From the above explanations it has been clear that for organizations sustainability has bought a lot of advantages and benefits.
Apart from these benefits there has also been a lot of driving forces behind it that compels enterprises to take up the challenge for creating a sustainable enterprise. Firstly as organizations take a lot of input from the society it is considered to be responsibility of them to give something in return to the society. Secondly in today‘s world the organizations that have achieved the sustainability objective have been able to get competitive financial advantage over its competitors. Thirdly taking the environmental resources deterioration into consideration also if organizations do not take such steps then sooner or later they will
have to face its repercussions. Fourthly organizations also gain on operational costs by creating a sustainable enterprise. Last but not the least it also has various health and safety considerations that act as drivers of investment in sustainability are. They are listed in short below:
1. Contribution to society.
2. Competitive financial advantage.
3. Environmental considerations.
4. Saving money on operational costs.
5. Health and safety considerations.
Figure-2: Drivers for a Sustainable Enterprise:
XII. BARRIERS IN CREATING A SUSTAINABLE ENTERPRISE
The presence of Black increases the beauty of White. So with the drivers some barriers will be there. In building sustainable enterprise & the development &
maintenance of sustainable HR there are so many obstacles. Some of those barriers are- 1. Lack of proper sustainable strategy 2. The difficulty of measuring return on
investment,
3. Absence of co-ordination or co- operation
4. The costs of maintaining sustainable practices,
5. Lack of knowledge & awareness Sustainability is the need of the competitive business environment. Acceptance of this truth is important not only to compete but to sustain in the business. Barriers can be expressed as the weakness or the threat of the organization. So before this negative result the barriers should be addressed properly. Now a days most of the good organization‘s R & D departments are involved in it. Proper planning, right implementation & advance knowledge can Drivers for
Sustainable Enterprise
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help organizations to be the sustainable enterprise.
XIII. CONCLUSION
In any machine there is a limit in performance. But research says human efficiency has no specific limit. Now all the good organizations give second thought for the sustainability HR. It helps in the attraction of new blood (talent) to the organization & also for the retention of such talent. To build up a sustainable enterprise the new problem like employee turnover must be addressed. Sustainability HR plays a key role in decreasing the attrition rate.
Sustainability HR demonstrates the way how sustainability performance of of workforce will reach the organization goal.
Still then some organizations couldn‘t implement it or those are not interested.
Really this ignorance is a naked threat for them which cannot be under control or cannot be faced lately. The word sustainability itself is very vast. In a growing environment it should addressed with the right approach or method (may be for the HR or Enterprise. Though sustainable HR is NOT THE ONLY WAY for the sustainability Enterprise but it is the FOUNDATION in a sustainable Enterprise which cannot be ignored or avoidable. More
& more research are going on for the development & maintenances of sustainability HR as it is the most crucial issue in the LPG (Liberalization, Privatization & Globalization) era.
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