140
“A STUDY BASED ON EMPLOYEE RELATIONS IN SME’S”
Ms. Anamika Sisodia
Assistant Professor, Acropolis Faculty of Management & Research
Abstract: The SME’s are the most important part of our economy which will help in the development of an entire skilled employee category to enhance the effectiveness of the business at the ground level. It is required to access the possibilities and opportunities in the current scenario. The following paper is dependent upon the evaluation of employee relations in SME’s are helpful in creating the smooth relations within the organization. The hypothesis here is that the employee relations are required to enhance the productivity.
There are some concepts which will help in the enhancement of employee relations.
Key words: employee relations, SME, productivity and organization.
1. INTRODUCTION
According to Werner, (2017). The employee relationship management is the concept which belongs to a specific field of HRM that adopts, controls and practise the objectives to maintain the employee relations for smooth functioning of the organization. The SME’s are kind of complex kind of organizations to handle, they are small and medium sized organization belonging mainly to the manufacturing sector which is responsible for giving the organization a good growth rate.
The employee relations and SME’s play a very important role which reflects a firm’s process in hiring, training, maintaining, rewarding and handling the disputes in the organization. (Brelik, 2017). It is important to understand the relationship management in SME by the impact of external environment, larger customer base which can impact the management of SME and it is different from the larger firms. The SME lacks the international labour markets and the flexible practices which are likely to adapt. It is also clear that the SME’s are an important source of growth in the country and they will help in the development of collecting bargaining and enhancing the employee relationship in the organization. (Reutzel, 2019). The SME has evolved as the divergent employment systems which will be used as the mixed methods in most of the organizations.
2. LITERATURE REVIEW
Nature of Employee Relations in Sme –
The nature of employee relations in SME can be analysed by the description of the kind of organization the SME is, that is an organization having 10 to 15 employees is a small organization and the one which have around 250 employees is a small organization.
(Mishra, 2018). To maintain the employee relations, it is necessary to give utmost importance to human resources. For example – in a manufacturing firm the employees are been managed by the managers to handle the personal tasks and understand the issues of the employees where they work in shifts. There are most of the managers relying on their past experiences to provide solutions to current situations. In industrial setup the experienced managers play a very important role, there are many issues which are addressed here are – fraternalism, benevolent autocracy and paternalism. Here the nature of employee relations has more issues because of absence of unions, the employee rights are not being entertained at the industrial standards. There are a range of employees who do not even know about their rights in the organization. It is required to choose the policies for workforce in order to generate quality and effectiveness in the work culture. The SME’s lacks in the structural orientation where employees can enjoy their rights. (Uotila, 2020).
According to Susomrith, (2020), the SME and employee relations are impacted by the policy of decentralization, it impacts the treatment of employees in an organization and the manner in which the employees acts. This prominence of SME has increased in the areas where large manufacturers withdraw their operations, this is an opportunity where these organizations can proceed further by excelling their human resources and providing them the resources and benefits by giving a better livelihood. In most of the SME, the
141 authorization is not granted to handle the employees at a certain level; this brings dissatisfaction and impacts the productivity.
The response of SME towards the competitive environment is required to be updated on the higher scale. It is also required to improve the working conditions for employees where most of the industries stand poorer. The heterogeneity of the small firms is also responsible for the conditions and the least accepted relation between employee and employer in SME.(Pauli, 2020). It is also observed that some of the SME’s have closer relations with their employees which has made the working environment self-sufficient and motivated to let employees work successfully in the market. The low rate of trade union participation has made the impact closer and employees discuss their issues directly with the employer, this has more chances of personal attention towards the issues, the decision making process becomes tedious as the information gap is seen in the organizations. (Pauli, 2020). There are some reports stating that there is nil involvement of the employees in decision making and the art of absenteeism without information has been reported in most of the SME, employee grievance is one of the aspects which has made the SME become highly viable towards employee performance.
Difference between SME and large organizations
According to Rastogi, (2018). The SME and large organizations can be differentiated on the basis of various factors such as – number of employees, political environment in the organization, structure of organization, salary, wedges and culture. There is the major point of differences which has highlighted the areas of improvement and progressive issues to be resolved in the comparative analysis of the organizations. Due to different layers of management in the large organizations, it is being observed that the politics play less effective role in the larger organization, in the small organization, the personal connection with the firm’s owner and it is common. The direct influence of some employees on leaders is common in SME while in larger organization this activity is seen quite less. The beurocratic and hierarchical structure of the organizations is the clear point of difference in both type of organizations. (Abubakar, 2017). The structural orientation of these businesses has reported in giving larger business a higher probability to give a progressive future to its employees. The environment of these structures is very different and practice are done.
Another point of difference is the kind of workforce. In the SME the workforce is more diverse in comparison with the larger firms in terms of age where as in larger firms age constraints does not reflect much diversification. The larger organizations have employees seeking for job security more whereas in SME the job security is not a concern. Salary and culture is one of the aspects which will reflect the expectations of the employees from larger firms and they also provide perks and benefits like life insurance, provident fund and medical insurance for family members. (Khajeheian, 2018). SME and larger companies combat highly on the platform of their culture which is reflected by the tenderness towards taking risk. Small firms do take risk but larger ones are reluctant towards the risk factor.
SME do not have an open culture, employee suggestions and issues are not addressed promptly whereas the larger ones have special provisions for this aspect. Celebrations, parties, appraisal, are a part of larger firm cultures which completely lack in the SME culture. (Sonfield, 2019).
According to Bryson, (2018). The SME and larger organizations performance also holds the issue of communication with its customers, the channel by the help of which the communication can be established is difficult whereas larger firms have channels of communication and a dedicated team to establish effective communication. There are various more concepts on the basis of which the differentiation can be made understood such as –purpose of development in the organization, global operations, requirement of knowledge, impact of collaboration and appropraibility. The larger firms focus on product platform development, global market focus, gives more preference to internal knowledge, influence on the process involved and strong sense of appropriability. (Aragon-Amonarriz, 2019). The SME on the other hand are focused on the product development based on key
142 features of technology, major focus on domestic market, prefer the external knowledge, higher influence on their products and weak in appropriability.
Challenges faced by SME’s and recommended solutions for the challenges
The challenges faced by SME’s are addressed in every area of their functionality. These challenges are – Leadership, culture and strategies, building of an elite team, executing the strategies that have been formed, system management and process, considering the employee as the first priority, measuring performance, productivity and appraisal methods are some of the common challenges that these organizations face. Leadership and culture goes hand in hand as it has to be evolved with acceptation of the scenarios but due to huge cultural diversity this adaptability and lack of education becomes a challenge. (Delaney, 2019). There are some more specific challenges that the SME faces they are-
Issues in accessing finances
There is an issue in raising money for the small forms because any banking institutions refer to offer money to the larger enterprises. In the fig. 1 taking an example of Japan the situation of SME has been reported. It depicts that the larger enterprise has lower risk of default and their credit value in the market is very high. (Delaney, 2019).
Figure no.1 Situation of SME in Japan Source – Online
Lack of information infrastructure – The asymmetric information issue between the suppliers and the SME creates the issue of information flow, that is why the information infrastructure s very essential for the organizations. The larger companies have their suppliers on the stock list which provides the credit worth of large enterprises and hence it becomes beneficial for them. (Maksimovic, 2017).
Lower level of business R & D –
R & D practices are conducted in the limited type of large firms which has been reported as the significant share in the R & D process. It is also a challenge for the SME because they don’t have higher investment units to work for progression and development. (Maksimovic, 2017).In many economies the progression is considered as the benchmark for industrialization, but if no investments are considered in the research it is zero progression. Many SME face this challenge and need to upgrade their units for basic and domestic research.
143 To overcome these challenges there are some recommendations which has been suggested such as-
Development of credit guaranteed scheme will resolve the issue of accessing the finances, it will be going to help the organization in the financial upliftmnt, moreover focusing and seeking help from the specialized private banks made for SME financing. (Etemaddar, 2019).
Developing the trust funds for SME by the help of which the issue of financing and credit worth can be overcome, that is to generate the regional fund scheme where different SME can generate the funds together. (Etemaddar, 2019).The Figure no. 2 explains this process as –
Figure no. 2 Hometown investment firms Source – Online
By developing the various information centres and employee trainings can resolve the issue of information centres where the channel development will help them in developing the business worth. The customer interaction, resolving the issues and providing order details will be managed by a successful information flow and the infrastructure for this requires qualified personnel, so hiring of such leaders will be a progressive step. (Yahmadi, H.M.A.A., 2019).
To develop R & D the collaborative effort from similar kind of SME’s is required, it is essential to work together in being progressive for research. The efforts made will be considered as the stepping stone towards the SME progress and oit will add to the domestic firm development. The financial schemes can be utilized in making the research work. (Yahmadi, H.M.A.A., 2019).
3. OBJECTIVES OF THE STUDY
To analyze the importance of employee relations in success of SME’s.
4. RESEARCH METHODOLOGY
Research Design – In this research the exploratory research design has been used.
Data Collection – In this study the secondary data has been used. It is been collected with the help of different journals, reports articles, and websites.
Findings –
From the above analysis of the evidences present about the different researches taken from the secondary data, it is ascertain that the sensitivity towards employees is the ultimate part of the employer in order to maintain the harmonious relations.
The non – formal means of communication is something which helps in the connection of the employee with the employers.
The means of communication and maintenance of relationship with employees is dependent upon the labour unions which will act as the support system of the organization.
The adoption of new management techniques such as cultural change, flexible management of team and creation of quality task forces.
144
The difference between large and small firms is related with the individual communication and development of leadership among the employees of the organization.
5. CONCLUSION
From the above assessment on SME and employee relations has highlighted many areas where the higher need of improvement is required. In the initial introductory part, the role of SME is clarified with that of connection with employee relations, the discussion part is an eye opener with the various information related to the nature if employee relation in SME highlighting the main issues and advantages with that of required improvements in the sector. The later part describes about the difference in SME and large organization where the importance of factors like employee culture, relations, offerings, appraisal, and work life standards has been highlighted. This has given the analysis of how the employee is been treated in larger organizations and to that of in SME’s. The challenges and recommendations put the discussion to a note where the issue resolution can be stated. It reflects that the financial stability, research and development with that of employee investment and qualification will hinder the growth if not managed in SME, it is required to overcome these challenges and established a balanced standard of work so that the financial hurdles, progressive workforce and other issues of management can be addressed.
This discussion has helped the reader to understand the importance of employee relations and the type of organization which works in the industry to enhance the domestic market operations.
REFERENCES
1. Alcalde-Heras, H., Iturrioz-Landart, C., & Aragon-Amonarriz, C. (2019). SME ambidexterity during economic recessions: the role of managerial external capabilities. Management Decision.
2. Ayyagari, M., Demirgüç-Kunt, A., & Maksimovic, V. (2017). SME finance. Available at SSRN 3070705.
3. Belsito, C. A., & Reutzel, C. R. (2019). SME employee performance appraisal formalization and trust in leadership change. International Journal of Organizational Analysis.
4. Forth, J., & Bryson, A. (2018). The impact of management practices on SME performance.
5. Marom, S., Lussier, R. N., & Sonfield, M. (2019). Entrepreneurial strategy: The relationship between firm size and levels of innovation and risk in small businesses.
Journal of Small Business Strategy, 29(3), 33-45
6. Martdianty, F., Coetzer, A., & Susomrith, P. (2020). Job embeddedness of manufacturing SME employees in Indonesia. Employee Relations: The International Journal.
7. Mirzaei, M., Ranganathan, S. V., Kearns, N., Airehrour, D., & Etemaddar, M. (2019, December). Investigating challenges to SME deployment of operational business intelligence: a case study in the New Zealand retail sector. In Proceedings of the 12th IEEE/ACM International Conference on Utility and Cloud Computing Companion (pp. 139-142).
8. Mishra, A. (2018). Identifying Convergence & Divergences in Employment RelatioPractices in the Indian SME Sector: in Search of An Integrated Model of Employment Relations. SMS Journal of Entrepreneurship & Innovation, 4(2), 13- 23.
9. Nemati, S., & Khajeheian, D. (2018). Big data for competitiveness of SMEs: Use of consumer analytic to identify niche markets. In Competitiveness in emerging markets (pp. 585-599). Springer, Cham
10. O'Brien, E., McCarthy, J., Hamburg, I., & Delaney, Y. (2019). Problem-based learning in the Irish SME workplace. Journal of workplace learning.
145 11. Pauli, U. (2020). Training professionalization and SME performance. Human
Resource Development International, 23(2), 168-187.
12. Qushem, U. B., Zeki, A. M., & Abubakar, A. (2017, August). Successful Business Intelligence System for SME: An Analytical Study in Malaysia. In IOP Conference Series: Materials Science and Engineering (Vol. 226, No. 1, p. 012090). IOP Publishing.
13. Rastogi, A., Pati, S. P., Dixit, J. K., & Kumar, P. (2018). Work disengagement among SME workers: evidence from India. Benchmarking: An International Journal
14. Viitala, R., Vesalainen, J., & Uotila, T. P. (2020). SME managers’ causal beliefs on HRM as success factor of the firm. Journal of Small Business Management, 1-25.
15. Werner, A., & Lim, M. (2017). A new living contract: cases in the implementation of the Living Wage by British SME retailers. Employee Relations.
16. Zuchowski, I., & Brelik, A. (2017). The relationship of managers with subordinates as a development enabler of enterprise in the SME sector.
