Establishment of effective human resource department in SMEs: An application in Kibar company

In recent years the importance of Human Resource Management has increased. On the level of small and medium enterprises the adoption of HRM is considered a major source to gain advantage in the competitive environment. However the increasement of HRM based knowledge is associated with the increasement of its practice in SMEs. This practice is dependent on many factors. One of the main factorsis the fact that smaller firms have less financial resources than larger firms, while some others do not practice it because of lack of information about it. Effectiveness is a concept which refers to how well an organization reaches its objectives over a period of time and stresses the long-range, continuing nature of management. The difference between them is on standard performance. Organizational efficiency can be seen as an aspect of understanding the organizational purpose. Both effectiveness and efficiency play an important role in the organization. The purpose of this research is to investigate how Human Resource Management can be established in SMEs with an effective operation and minimal costs. The main purpose of the research is to answer whether a Human Resource Department is necessary for SME?HRM Department has been established collecting the research information. Qualitative and quantitative research methods were used in the mix. Structured questionnaires in the act of quantitative data, semi-structured interview questions have been created for qualitative. In the theoretical has been reviewed literature, and in the research part has been implemented application of interviews to participants . The most prominent part of the HR functions for HRM in SMEs are: recruitment and selection, compensation management, human resource planning, training and development.The most recognised obstacles of not impletementing Human Resource Department are: lack of communication between management and employees; lack of selection of the right employees in the right places; poor implementation of the equal pay for the equal job. Identified benefits of implementing a Human Resource Department in the company are: reduced rework and cost saving; improved job and staff quality, improved safety and productivity. Based on these findings, recommendations to assist the adoption of Human Resource Management have been suggested.