HRM practices and systems within South‐Asian small businesses

The aim of this paper is to highlight differences and similarities in human resource management (HRM) practices between first‐ and second‐generation South Asian entrepreneurs and the extent to which such practices support an integrated HRM system.

The paper draws its theoretical underpinning via five “generic HRM functions” and practices, i.e. selection, appraisals, reward, development, and strategy. To help understand the application of such practices from an ethnic dimension, 42 semi‐structured interviews were carried out with two ethnic groups. The two groups chosen were first‐ and second‐generation Sikh and Pakistani Muslim entrepreneurs from micro and small businesses situated within the Greater London area. In addition, nine businesses across both ethnic groups were selected to complete the multiple (comparative) case‐study stage of the research. Investigation was conducted within the phenomenological paradigm.

The paper notes that differences and similarities between the two generations are based more on sectoral location and type of business with minor instances of cultural and generational nuances. With regard to the development of an integrated HRM system, the evidence suggests that time, cost and expertise are considered constraining factors and, as such, respondents adopt an informal ad hoc approach. Interestingly, although this informality is common within the business, respondents are in fact leaving themselves exposed to breaches of employment law.

The paper supports the literature, whereby training and advice for EMBs that emphasise formal procedures may be counterproductive. Instead, direction should be given to ensure that HRM practices stress accountability, control and connectedness, help to reduce any perceived risk of litigation, and ensure that statutory requirements are met.

The paper offers unique insight into an unknown entity, namely HRM issues within ethnic small businesses.