Enhancing HRM practice in SMEs using the concept of relationship marketing

The proficient human resource management of employees and their contribution to small business is commonly accepted as contributing to Australia’s future prosperity (Schaper 2000). Effective recruitment, selection and retention of employees are part of the employment relationship and can enhance work performance and contribute to business success (Crompton, Morrissey and Nankervis 2002). Effective recruitment and selection has regularly been associated with positive retention and performance outcomes. However, this centre of attention has rarely focused on family owned small businesses. This paper seeks to demonstrate an increased understanding of the importance of the creation of sustainable performances through the development of enhanced employee relationships that impact on small business outcomes in Australia. A pilot study led to the development of a comprehensive survey instrument. The data from the survey was analysed and ten constructs identified, all relating to the relationships of recruitment, selection and retention. The final phase of the study focused on the confirmation of four significant constructs which were firstly pilot tested and then validated by semi-structured interviews. A series of relationships similar to that found in “relationship marketing” were identified as contributing to enhanced sustainable small business outcomes. This in turn has laid the framework for entrepreneurial activities to be improved through ongoing relationship development. The study demonstrated an approach in which the use of the characteristics of relationship marketing when applied to the recruitment, selection and retention of employees in small entrepreneurial businesses can enhance sustainable performance.