Human Resource Management Practices and Performance of SMEs in Cape Coast Metropolis

Abstract

The link between firms' performance and HRM practices has received significant attention in studies that examine the link between large organizations from developed countries and their human capital management, leaving out studies on small and medium businesses (SMEs) and those in developing countries. The study fills a gap in the literature by looking at the relationship between human resource management practices and the performance of small and medium businesses in the Cape Coast Metropolis, Ghana, by assessing the level of HRM practices of SMEs in Cape Coast Metropolis, as well as assess the level of performance of SMEs in Cape Coast Metropolis and examine the relationship between HRM practices and performance of SMEs in the Cape Coast Metropolis. A survey design with 101 respondents of owners of SMEs was used. SPSS V2.10 was used to perform statistical tests including correlation. HRM practices (employee resourcing, employee training, reward management, and performance management) are significantly linked with SMEs' performance, according to the findings. This study supports the idea that there are significant correlations between certain HRM practices and enterprise performance. The findings of the study indicate that focusing on the improvement of certain HR practices can improve the performance of small and medium-sized enterprises. The study recommended that the Ministry of Trade and Industry and the local government agencies should work together to promote the HRM practices of small and medium-sized enterprises (SMEs) as well as the renewal and request for new licenses of businesses be based on the evidence of effective HRM practices.