Module:
MGT 3000 Human Resources and Entrepreneurship

Title:
“Owner-managers of SMEs can determine the employment relationships within their own business.”
Considering both the internal and external influencing factors, draw on relevant literature to discuss this statement critically

Word Count:
2162 (excluding references)

Employment relationship is a legitimate concept commonly adopted around the globe refering to the link between employees, or workers, and employer, which employees are performing work or services under certain conditions in return for remunerations. It has been a paramount concept of a ‘industrial relations perspective ’ on contemporary employment and management over the past two decades (Trevor and Mike, 2010: 7). When considering employment relationships in small and medium-sized entreprises (SMEs), we are mentioning largely about how these firms recruit, supervise, train, reward, manage disputes with and separate from employees as well as the more extensive relationship between employers and employees (Ram, 1999: 604). Being the main vehicle that employees gain access to their employment rights and benefits associated with social security and labour law, as well as the determinant of the scope and structure of employers’ authorities towards their employees (ILO, 2011), obligations and reciprocal rights between employee and employer are constructed via employment relationships. Looking into this fast-growing economy with ever changing industries, there is no doubt that SMEs have navigated a devastating economic terrain and have been a bastion against the overwhelming consequenses of the global finiancial crisis in recent years. Despite that there are over 21.8 million of SMEs which accounted 99.8% of all businesses active in the EU28 (see figure 1), which perform the role of driving economic growth, social integration, as