IMPACT OF HUMAN RESOURCE MANAGEMENT: SME PERFORMANCE IN VIETNAM

In its transition from a centrally planned economy to a market economy, Vietnam has achieved remarkable success. During this transition, Vietnam businesses have implemented a number of HRM practices used primarily by companies in Western cultures. This study specifically investigates the impact of three HRM practices: training, performance appraisal systems and incentive pay, on firm performance to determine if results mirror those obtained in the more highly developed economies of the West. A sample of 200 Hanoi manufacturing SMEs was surveyed regarding their practices in these areas. The result provides empirical support that training, performance appraisal and incentive compensation have positive effects on Vietnamese SME performance, with incentive compensation having the greatest impact.