Instituting a Formalized HRM System in a SME

Small Medium enterprises (SMEs) in India often are guided by the vision and mission of the owners, which may affect the human resource functions and process within such organizations, leading to de-motivation, attrition and consequently, high turn-over rates in the organization. There is, therefore, a need to study such organizations in detail in order to diagnose the problem areas related to human resource issues and suggest measures which would increase the efficiency of the HR processes in these organizations. The present paper is based on a detailed study carried out in an SME involved in metal fabrication work in the city of Bangalore, India. The study underlines the importance of a well defined HR system even in a small company and the difference it can bring to the working environment as well as in the mindset of the employees which could foster greater effectiveness and efficiency in the organization.