HR Practices and Issues in MSME’s in India: A Case Study

Abstract

Developing nations like India look upon Micro, Small and Medium Enterprises (MSME) as the engines of growth which are largely owned and managed by family run businesses. But the MSME’s in India are operating in times of a highly competitive and challenging external environment. This makes the role of Human Resource (HR) extremely crucial in taking and individual unit of an MSME forward and deliver profitability. The current study uses case study method to map and analyse the HR practices and issues in a typical MSME operating in an industrial area in western India and generating profits. The purpose of this study is to assess the HR design and functioning and the methods adopted by MSME’s to cope up with the HR challenges. The results of the study conclude the most HR structures are extremely informal and ad-hoc. They lack professionalism and it could be the reason why several MSME units are not able to grow beyond a limit. Additionally, Government of India’s schemes like MGNREGS (Mahatma Gandhi National Rural Employment Guarantee Scheme) has only hindered in getting skilled and unskilled labourers and employ them in the manufacturing sector.