A critical study of performance management practices in western Nigerian manufacturing SMEs

Small- and medium-sized enterprises (SMEs) are vital to the maintenance of the economic growth of any country. Globally, SMEs contribute close to 90 per cent of job creation, which improves national living standards. However, sustaining the performance of SMEs in the long run has been a substantial challenge. An OECD report suggests that, globally, 20 per cent of SMEs wound up within the first year of operation. Although this is a global problem, the challenge of long-term survival is more severe for SMEs in developing countries. To understand why this is the case, this study investigates the PMSs of SMEs in Nigeria.SMEs' performance management was chosen as the focus of this study due to the significant impact of performance management on the growth and survival of SMEs. Primarily using an HR perspective, the study investigates the contextual factors that influence the implementation of performance management in SMEs in Western Nigeria. Using an in-depth qualitative approach, data has been collected through semi-structured interviews and analysed using NVIVO. Thirty-four owner-managers of SMEs took part in the study.The study's findings show that the owner-managers had mixed views of the importance of performance management. The findings also highlight the HR challenges that influence performance management at each stage of the performance management model. To understand the reasons for the challenges, the findings demonstrate the prevailing contextual issues that influenced the owner-managers' implementation of the PMSs. The study contributes to existing SME research by highlighting the HR issues that influence the implementation of PMSs.The study also develops a robust theoretical framework that highlights the cultural issues that influence the implementation of a PMS. The study extends the performance management debate in SMEs from a business perspective to an HR perspective. The implications of the study for practitioners are also discussed; for example, HR challenges that affect each stage of the performance management model are identified. This will enable owner-managers to take appropriate actions to avoid the challenges. Examining the HR perspectives broadens the owner-managers' view of performance management. The thesis's limitations are presented, the main limitations being that the data mainly came from the male owner-managers' views and the limitations associated with the study's methodology and context.