Strategic HRM Compensation Practices in Small and Growing Firms
This paper reviews and evaluates "Strategic Human Resource Management in Small and Growing Firms: Aligning Valuable Resources" by Michael B. Hargis and Don B. Bradley (2011). The review summarizes the article's major thesis — that effective strategic compensation and reward practices are linked to higher employee performance and better overall outcomes in small businesses — and assesses its utility for human resource practitioners. Drawing on a national sample of independent small business owners, Hargis and Bradley demonstrate that compensation remains a critical tool for recruiting, retaining, and motivating talent in growing firms, and that aligning compensation with organizational goals can improve both employee morale and firm performance.
- Overview of the Article: Citation and background of the reviewed article
- Major Thesis and Key Findings: HRM compensation gaps and study findings in small firms
- Compensation as a Strategic Tool: Pay practices linked to recruitment and competitive advantage
- Utility for HR Practitioners: Practical value of findings for HR professionals
- Conclusion: Summary of article's contribution to small business HRM
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What makes this paper effective
- Clearly identifies the article's central argument and situates it within a gap in the existing literature on small business HRM.
- Uses direct quotations from the source article strategically to support summary claims without over-relying on paraphrase.
- Maintains a consistent evaluative stance, assessing both what the study contributes and what its limitations are.
Key academic technique demonstrated
The paper demonstrates the article review technique of separating descriptive summary from critical evaluation. By dedicating a section to "utility," the writer moves beyond simply restating what the authors found and explicitly addresses why the findings matter to practitioners — a useful skill in applied fields like human resource management.
Structure breakdown
The review follows a compact but well-organized structure: a citation block establishes the source, a major thesis section summarizes the article's argument and findings across three focused paragraphs, a utility section evaluates the practical value of the research, and a conclusion synthesizes the article's contribution to small business HRM. The brevity suits the article-review format while covering all expected components.
Overview of the Article
This paper reviews "Strategic Human Resource Management in Small and Growing Firms: Aligning Valuable Resources" by Michael B. Hargis and Don B. Bradley, published in the Academy of Strategic Management Journal, 10(2), 105–110, July 2011.
Major Thesis and Key Findings
According to Hargis and Bradley, there is a growing body of evidence that many of the same human resource management challenges experienced by larger corporations are no different from those encountered by smaller firms, including the need to identify optimal compensation and reward packages that will help recruit and retain talented employees. At present, however, there remains a dearth of timely and relevant research concerning the impact that human resource management practices have on the performance of small companies. To help fill this gap in the body of knowledge, Hargis and Bradley review and evaluate the types of compensation and reward practices used by independent small business owners based on a national sample.
The findings that emerged from this study confirmed a relationship between effectively administered strategic compensation plans and overall performance in the small companies reviewed. In addition, the authors conclude that, "Compensation practices are one of the most important tools an organization can use to help attract, retain, and motivate key talent in small growing firms" (Hargis & Bradley, 2011, p. 109). While there is also growing evidence that pay alone no longer represents the most important motivational factor for employees, it is equally clear that employees who feel they are not being compensated fairly will become disengaged from their jobs, and firm performance will suffer as a result (Hargis & Bradley, 2011).
Compensation as a Strategic Tool
Inadequate compensation rates will adversely affect the ability of small companies to recruit and retain the talented employees they need to achieve and sustain a competitive advantage (Hargis & Bradley, 2011). In sum, the authors suggest that the extent to which small businesses successfully identify optimal compensation and reward packages will determine their ability to recruit, retain, and reap the benefits of a highly motivated workforce — making this a useful study for human resource practitioners.
Conclusion
In their study, Hargis and Bradley cite the need for additional research concerning optimal compensation and reward practices in small and medium-sized enterprises and draw on a national sample to highlight various strategies that have proven effective — and ineffective — in helping small companies address many of the same types of problems experienced by their larger counterparts. The presentation of typical strategies currently being used by small businesses makes this a particularly useful study for practitioners interested in small to medium-sized enterprises.
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