Professional Documents
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family rms is addressed by providing an
empirical examination of these issues on
performance (Upton and Heck 1997).
Second, a range of human resource
functions is considered providing a rich
perspective of the relationship of HRM
practices and performance in family-
owned rms. Finally, by looking at three
different forms of incentive pay and
across four different levels of the organ-
ization, we get a broad picture of the
extent to which the use of cash incen-
tives is critical for company success.
As with all research there are also
some limitations of the current study.
First, we used single item measures of
the HRM practices which may not have
captured the many facets involved in
each of the practices. Second, the sample
is one of convenience: fast-growth SMEs.
As such, the ndings may not be gener-
alized to all family rms or all SMEs.
However, for those SMEs that hold fast
growth as a strategic goal, these ndings
may be of some benet. Third, family
rms may pursue different goals than
nonfamily rms (Greenwald and Asso-
ciates 1993/1995). However, in this
sample, all the rms are sales-growth-
oriented. These ndings may not gener-
alize to family rms that are pursing
other growth goals.
Future Research
Future research needs to focus on
determining what specic activities are
associated with the HRM areas identied
and how those specic activities impact
performance. Reid and Adams (2001)
reported that although nonfamily and
family businesses believe training and
development is their most important
challenge, family businesses spent less
on this. It would be interesting to see if
training and development expenditures
are signicantly different between high
and low performing family businesses
as previous research has found a link
between development expenditures and
performance, inuenced by ownership
structure (Hill and Snell 1989). Further,
development of higher-order variables or
clusters of human resource variables,
which may serve as discriminators
between high and low performing organ-
izations, warrant future attention.
Another avenue for future research is
to examine how high performing family
rms disburse base salary as compared
to cash incentives. We do not know if
there is a family effect going on in
which lower base salaries and higher
cash incentives are distributed. In other
words, are low performing rms paying
family members differently than high
performing rms? If so, what effect is this
having on performance?
In conclusion, human resource man-
agement is a complex set of activities
that are enacted within the organization
to support overall corporate strategies.
Our study is focused on a sample of high
and low performing family SMEs. While
we examine several HRM practices, it
may be that some are more effective than
others within certain industries or cor-
porate strategies. That said, by placing
importance on the human resource
aspect of the rm, a family-owned SME
might be able to effectively use HRM
such that it has a positive impact on
performance.
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