The Relationship of the Human Resource Management (HRM) Practice and Employee Performance in SMEs in Quanzhou, China

Abstract

Small and medium enterprises (SMEs) support countries’ economies in financial context and also create employment opportunities. Human resource management (HRM) practices are very important to equip employees via training & development, employees’ motivation through effective rewards policies and effective recruitment and selection process. Human resource plays a vital role to improve employee performance and create competitive advantage in this competitive era since human capital is one of major source to enhance organizational performance. A collection of 294 self-administered and well-structured questionnaires were collected among the employees of 80 SMEs in Quanzhou China. Statistical tests like correlation were applied through SPSS. The outcomes revealed that HRM practices (employee recruitment & selection, training & development, performance management and compensations) are positively associated with employee performance. The results conclude: 1) HRM practices level was regarded as high. 2) Recruitment and selection are positively associated with employee performance. 3) Training and development are positively associated with employee performance. 4) Performance management is positively associated with employee performance. 5) Compensations are positively associated with employee performance. Finally, discussions and recommendations were made on the results of this research, such as improving the compensation among employees, providing more training opportunities with the focus on clarifying their work responsibilities and improving work related skills.