Partial fulfillment for award of the degree of Master of Business Administration

Table of Contents

Introduction
Literature Review
Research Methodology
Research Design, Data Collection and Validation

This research dissertation is a quantitative study that examined how human resource management (HRM) influences small enterprises. The study focused on the small restaurant enterprises in the central business district of Nairobi (CBD). A total of 31 small restaurant enterprises were studied. Small enterprises were defined in the study as those that employ 10 to 50 employees including the owner/manager. The study noted that management in Small and Medium Enterprises (SMEs) is unique; it is an adaptive process concerned with manipulating limited amount of resources in order to gain maximum, immediate, and short term advantage. In the small firm adapting as quickly as possible to the changing demands of the environment and devising suitable tactics for mitigating the consequences of these changes bears fruit.
The study identified one of the significant barriers to business success and growth as attracting and retaining staff and dealing with poorly trained human capital. It was hypothesized that four
HRM practices, namely; Recruitment practices, performance appraisal, compensation and benefits, and training and development, influence the performance of small enterprises. Testing the hypotheses with data collected through a questionnaire method, showed that success of SMEs restaurant firms was dependent on three of the identified four practices namely; (1) the best human resource management practices for small restaurant enterprises must include a well laid out recruitment practice (2) Performance appraisal is very important for small restaurant enterprises and owner/managers have to identify the best performance indicators, and (3) Training and development of employees influences success of small restaurant enterprises.
The study highlighted a number of areas that would benefit with further research. In order to confirm and add knowledge in this area it was recommended for a research to investigate the reasons for sickness and absenteeism that was found to be very rampant in the small restaurant enterprises. A similar study could be replicated in other sectors of the economy such as Small manufacturing firms, or small professional services firms to see if the results mirror those obtained in small restaurant firms in the CBD of Nairobi.
Key Words: SMEs, Human resource management, success, small restaurant firms, central business district of Nairobi