The Role of Human Resources in Performance Management of SMEs: The Case of Republic of Macedonia

In enterprises, humans are identified as the main source which provides competitive advantage, whereas human resource management (HRM) should play the leading role as "locomotive" for small and medium size enterprises (SMEs) in order to reduce the challenges and problems they face. HRM functions, practices and procedures nowadays are very important and their role is continuously increasing if we consider an economy which relies ever more on knowledge. In this way, necessarily arises the need for careful management in the allocation and use of this labor force, not only in fulfilling the vacancy, but it is even more important to achieve and ensure increased efficiency of its use in the production process of goods and services that guarantee the growth of welfare or the level of living standard of society members.

SMEs are characterized with a high heterogeneity that is expressed in several aspects, such as: the size of the company, the simple structure, low level of specialization and formalization, high level of centralization on decision making (the owner is also the manager of the enterprise) etc. Thus SMEs apply and develop policies and procedures in the scope of HRM unlike large enterprises, taking into consideration their size and structure. But, the common thing for both forms of business organization is that they have to apply and develop basic functions of HRM in order to be effective and efficient in usage of human resources and successful in market competition.

Apart from the theoretical analysis of the issues mentioned above, the doctoral thesis is further supported by the empirical analysis, in which 150 small and medium enterprises in the Republic of Macedonia are surveyed.