SME sector refers to small & medium-sized business enterprises that play a significant role in the economy. The structure of the business and employee management procedures of SMEs are different than other industrial business sectors which operate in a grander space with a high supply of resources. The management system also varies a lot in case of the large-sized business enterprises. The most common difference is the union-based employee relationship. In SMEs, we can see non-union employee interaction with the employers whereas, in large-sized businesses, the scenario is quite the opposite. However, employee relation has certain characteristics when it comes to small & medium-sized business entities. Let us discuss some of the prominent features of employee relation in this sector:
Recruitment and incentive
The number of employees in a single workplace defines the scale of the business. Usually, a small business enterprise has 10 to 12 employees in a single workplace. On the other hand, in a medium-sized business, the firm has less than 200 employees. The recruitment process of these firms is simple and less time-consuming because these companies have less complicated recruiting policies and they mainly focus on the efficiency of the employees. The incentive process also follows less intricacy, as the manager operates within an unionized working environment. It helps maintain the employees with less work time interpersonal conflicts. At the same time, the working environment also helps the workers improve their level of expertise.
Studies show that the size of the firm heavily influences the level of conflicts amidst the employees of a firm. Small & medium-sized firms usually have lesser number of conflicts, since the relationship with managers is better in these firms. However, conflicts are still unavoidable at some points. There are various approaches with which such conflicts can be resolved. Depending on a firm’s human resource management policies, such conflicts can be resolved. The first one is through a formal approach. This is very common in large-scale industrial firms. However, SMEs follow the informal approach for solving such conflicts. It works for SMEs because these firms have few workers who can be totally controllable. Usually, union representation of the workers appears weak in resolving problems amidst workers because of vague representation and inefficient probing of the facts.
Since SMEs have a fewer number of employees who are skilled and efficient, employers tend to involve them in the decision-making part. It is a huge encouragement for the employees which help them become positive about their responsibilities. So, the overall attitude of the employees is satisfactory in case of SMEs.
Small & medium-sized firms add a significant number of growth factors to a country’s economy. Despite their small sizes and shapes, they tend to sustain a consistent rate of growth. Their less formal attitude towards their employees helps them improve faster.