An overview of the field of HRM practices in family small and medium-sized enterprises: the formality and informality diemension

Literature on HRM in family SMEs is still sparse, despite the relevance of human resources for family SMEs in creating competitive advantage. Liabilities of smallness and resource constraints make it difficult for family SMEs to attract and retain skilled people and to implement formal HRM practices. On the other hand, informality helps in developing a feeling of teamwork and strong social relationships and in increasing workers’ motivation. Through a review of the existing literature, the paper intends to capture evidences in family SMEs, between the formal HRM approach and the informal one and aim to answer to the following questions: 1) In family SMEs, what are the factors that influence the choice of informal HRM practices versus the formal ones? 2) What are the contingencies that push family SMEs to formalize HRM practices?