Are Human Resource Departments Really Important? An Empirical Study on Malaysian Small and Medium Enterprises (SMEs) in the Service Sector

Abstract

The intention of this study is to examine the significant differences in terms of employees’ job satisfaction andfirms’ performance for Malaysian SMEs that has their own Human Resource (HR) department againstorganisations who doesn’t have their own HR department. Besides that, this study provides more insight towardsMalaysia’s Human Resource Management practices based on 43 SMEs in the service sector.FindingsThe finding of the study reveals that there are significant differences between organisations with HR departmentand organisations without HR department in terms of employees’ training and development, performanceappraisal, employee relations and communication and also in terms of employees’ job satisfaction.Methodology: SPSS, Sample 43, Self-administered questionnaire.