Editorial summary. This is our text summary of an article published by gnews-performance-management. Charts, figures, and the author’s full voice are at the original — read it there .
Editorial verdict
Credible systematic review with solid methodology. The PRISMA approach is rigorous, but the limited sample size (15 studies) and focus on MSMEs in Indonesia constrains generalizability. The findings on HRM-performance relationships are consistent with broader research.
Executive summary
This systematic literature review examines the relationship between Human Resource Management (HRM) practices and employee performance in Micro, Small, and Medium Enterprises (MSMEs), with particular focus on Indonesia. The authors argue that effective HRM practices are crucial for MSME competitiveness and sustainability, despite resource constraints these organizations typically face. Using PRISMA methodology, they analyzed 15 Scopus-indexed studies published between 2020-2025. Key evidence shows that structured recruitment, continuous training, employee recognition, and technology integration significantly enhance employee motivation, satisfaction, and productivity in MSMEs. The study finds that sustainable HRM approaches focusing on employee welfare reduce turnover rates and improve organizational commitment. The authors conclude that MSMEs can increase competitiveness by adopting adaptive HRM practices that respond to technological advancements and industrial changes, particularly in the context of Industry 4.0.
Key insights
- 1MSMEs contribute over 60% of Indonesia's GDP and represent 99% of business units, making HR quality critical for economic sustainability
- 2Effective HRM practices including recruitment, training, and recognition significantly enhance employee motivation and productivity in resource-constrained environments
- 3Sustainable HRM approaches focusing on long-term employee development reduce turnover rates and improve organizational commitment in MSMEs
Practical takeaways
- MSMEs can improve performance through structured recruitment processes, continuous training programs, and employee recognition systems despite budget constraints
- Technology integration in HRM, even simple employee management software, can improve operational efficiency in small organizations
Frameworks mentioned
PRISMA
Systematic review methodology used for identifying and analyzing literature
Systematic Literature Review (SLR)
Research methodology for comprehensively examining existing literature on a topic
References
- Wuen et al. (2020).International Journal of Asian Business and Information Management.
- Egbuta (2022).Journal of Strategic Management.
- Jotaba et al. (2022).European Journal of Innovation Management.
- Ammirato et al. (2023).Journal of Innovation & Knowledge.
- Raja et al. (2025).Cogent Business & Management.
Source & Provenance
gnews-performance-management
Not specified
January 19, 2026
Meta-Analysis/Review
Asia-Pacific
Original source metadata is preserved. AI analysis is generated separately.
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