Determinants of best HR practices in Chinese SMEs

The purpose of this paper is to examine the factors which determine the adoption of best HR practices in Chinese small- and medium-sized enterprises (SMEs).

Regression analysis was utilized to analyse survey data obtained from 345 enterprises operating across China in a wide range of industrial sectors.

Enterprises with greater resources in terms of their size, their relationships with external organizations, their cooperation with foreign partners and the human capital of their CEO were found to be more likely to adopt best HR practices. Contrary to the findings of the existing literature no relationship was found of a relationship between family ownership and the use of best HR practices.

The cross-sectional design is an obvious limitation of the study. Other limitations relate to the generalizability of the study findings outside the context in which the research was undertaken, and the use of convenience sampling.

Enterprises should consider building strategic relationships with external organizations and developing cooperation with foreign partners as a way of leveraging human resource expertise at a limited cost.

This is the first study to examine how differences in the resource endowments of Chinese SMEs influence their adoption of best HR practices.