Abstract:

This paper provides a perspective, not a definitive answer, and draws from quantitative and qualitative evidence in how individual skills and meritocratic beliefs are perceived in human resource activities of Small and Medium Sized Enterprises (SMEs). We aim to explore the ambiguity of meritocratic preferences relating to educational skills, task specific experiences and job performance when searching for skilled individuals in recruitment situations. Human resource management (HRM) is ranked as the second most important activity in organizational management, yet it remains one of the most frequently cited problem areas for SMEs. While there have been considerable research investigating human resource issues over the last decades, few have focused on SMEs. In the last decades remarkable few articles have been published in the field focusing on recruitment and personnel selection issues in small businesses. Thus there is an imperative for renewed research in this area, especially since allocation of available job opportunities are increasingly becoming contentious issues for organizations. In a free market economy, meritocracy is prima facie an ideal rule for such allocations. However, application of the practice has to be weighed against increasing concerns for equality in employment as well as the pitfalls of impersonal evaluations and higher stress on efficiency that often a purely meritocratic system entails; resulting in possible employee dissatisfaction or mismatch between a meritocratic sorting and the skills applied. The main objective of this paper is to provide an identification and review of the factors and associated problems with meritocracy. The paper also examines to what extent the management at SMEs are familiar with meritocracy, and whether a set of defined HR activities are conducted based on meritocratic practices. The formative components of meritocracy in HR practice are identified from literature. The study entails an empirical testing of theoretical suppositions, covering two separate data collection phases. First a sample of 75 manufacturing SMEs in Northern Sweden where used and secondly 17 interviews to verify and test the transferability with students, faculty and HR people in Sillicon Valley small sized design ventures. Our data confirms two principal codified factors linked to meritocracy in recruitment and evaluation of individuals in organizations, and a third non-codified subjective factor based upon the recruiter’s personal traits. The research further shows an increasing moderating effect of experience as a strong influencer past the initial recruiting phase as opposed to meritocracy within Swedish SMEs of the region.

Keywords:

Meritocracy, SMEs, HRM, Survey, Recruitment, Education, Skills