Start-ups can’t assume that all they need is an employee handbook; they also need a functioning HR system. In fact, small firms with effective HR practices do better than those without them. One study focused on 168 family-owned high-growth small and medium-size enterprises (SMEs).
The successful SMEs placed more emphasis on training and development, performance appraisal, recruitment packages, maintaining morale, and setting competitive compensation levels than did less successful ones. For many small firms, effective human resource management is also required for getting and keeping big customers.
