In this paper we investigate factors likely to correlate with human resource management (HRM) being perceived as a problem in smaller firms. The owner-manager and firm characteristics identified recognise that managerial ‘problems’ can result from a firm’s phase of growth, as well as the way in which an owner-manager’s capacity and characteristics affect their interpretation of such. From a survey of 1200 smaller firms in south east Melbourne (Australia), we use logistic regression on data from 428 respondents to assess organisational and individual factors correlating with perceiving HRM, broadly defined, to be a problem. The highest odds of this occurring were associated with being a larger manufacturing firm which was in a phase of growth other than diversification and which had a long-tenured manager who based the firm’s competitive success on factors other than the quality of staff. Knowing these correlates means assistance to help solve the perceived ‘problem’ with HRM can be more effectively targeted.

The aim of this paper is to determine whether Australian small and medium enterprises (SMEs) could be described as ‘bleak houses’ or whether they have developed over the last decade into ‘bright prospects’ typified by human resource innovations. This study builds on empirical work (n = 1425) from ten years ago (1998), and re-examines the prospects of SMEs through the lens of human resource management (HRM) practices. Uniquely, the 2008 cross-sectional data provides for the large-scale tracking of strategic HRM practices. Specifically, 110 HRM practices over five traditional areas across 1230 SMEs are analysed. The prevalence, change, and patterning of HRM practices used by Australian SMEs in 2008 are investigated. It was found that SMEs need less of a make-over in relation to the adoption of HR practices, compared to a decade ago. From a practitioner viewpoint, the study provides cross-sectional benchmarking against the previous time-point, 1998, as well as extending that work with an examination of a more extensive range of new and emerging HRM practices.

In critical incident interviews, 101 Chinese mainland employees each described a work-related occasion where ethical values were at stake. Case examples and structural equation analyses indicated that clearly understood ethical rules facilitated open-minded discussion of opposing views, i.e. constructive controversy, which in turn developed interactive justice, strengthened interpersonal relationships, and promoted confidence in future discussions. However, clarity about ethical rules and engagement in constructive controversy was perceived to have no substantive ethical impact. This result was interpreted as indicating that common understanding among employees about the content of the extant ethical rules combined with open-minded discussion of the rules does not necessarily lead to agreement that bringing behavior into alignment with the extant rules is necessarily the best moral solution, and as suggesting that using constructive controversy to develop ethical rules may be better than imposing them from the top.