The role of contextual factors in shaping HRM formality in SMEs

Purpose This study examines the influence of contextual factors (e.g. age and ownership type) on HRM formality (including underlying functions recruitment, selection, training development, performance appraisal compensation) in SMEs. Design/methodology/approach Data were collected through a quantitative survey 300 owners/managers services, manufacturing trade SMEs Pakistan. Findings Firm age, association with larger parent entity, existence strategic business plan presence human resource information system (HRIS) are positively related higher formality. size, family exporting characteristics had no Practical implications suggests highly influential role for shaping practices Pakistani Since lack approach towards development is directly linked to inferior Pakistan, this provides an understanding institutional setting that shapes nature practices. The findings inform both SME policy makers. Originality/value Institutional influences systems have attracted attention but organisational less often studied. Studies mostly relate Western contexts perspectives from empirical investigation highlight importance context specific research given different settings.