Exploring the potential of high performance work systems in SMEs

Purpose – Aims to explore aspects of employee relations in firms included within The Sunday Times list of the UK's “Best Small Companies to Work For”, focusing in particular on the use of high performance work systems (HPWS), and the way they impact upon performance in these businesses. Design/methodology/approach – The research is based upon a postal survey supplemented by detailed face‐to‐face interviews with CEOs in 60 per cent of the ranked firms. Findings – The SMEs studied are found to be highly successful in terms of sales and employment growth. Our analysis suggests that the common explanation for enhanced business performance in terms of HPWS (coherent bundles of human resource management practices that function synergistically and thus have more effect than might be expected from the sum of the parts) is a valid but partial. The bundles employed in these businesses are synergetic, but the enhanced outcomes produced need to be understood in terms of the system as a whole, not just the more concrete practices that are normally considered. Research implications/limitations – While there is a need to explore further some of the findings through larger scale qualitative research, we contend that the deeper understanding of HPWS emerging from this approach is important to the formation of effective policy in relation to the small business sector. Originality/value – It is suggested that the cultures, values and norms established within the businesses are necessarily part of the system and that they play a fundamental role in shaping, empowering and reproducing the practices used.