A study to determine which Human Resource Management practices add the most value for Small, Medium, and Micro Enterprises (SMMEs) in South Africa

Abstract

Small, medium, and micro enterprises (SMMEs) are a significant source of employment and important drivers of economic growth. South Africa has alarmingly high unemployment and poverty rates, and it is thus vital to encourage the success and growth of SMMEs. South African SMMEs have a high failure rate; one of the key reasons highlighted in literature is a lack of knowledge and skills about efficiently managing human resources. The primary goal of the study was to determine which human resource management (HRM) practices have the strongest relationship with the performance of SMMEs in Cape Town, South Africa. The study was qualitative in nature and made use of the interpretive paradigm. This enabled an in-depth understanding of why entrepreneurs selected certain HRM practices and not implemented others; the value that entrepreneurs attribute to different HRM practices; and their impact on business performance from the SMME entrepreneur’s perspective.