Small scale enterprises (SMEs) represent the largest proportion of the manufacturing sector in every country. Small-scale enterprises are important for modern economy and it is widely recognized that they contribute to employment growth. Since business establishments are human organizations, people are very essential in its existence and success. In spite of the efforts being made by the Nigerian Government to improve the quality through the capacity development of human resource for effective management and instructional task performance, the quality of performance in the small and medium scale business is still relatively challenging. This study adopted survey design because it provides the opportunity to describe the variables through the collection of primary data with the use of structured questionnaire. The population of this research is 5,200 employees of national, state and unit SMEs located across Lagos State, Nigeria. The sample frame from which employees of SMEs from the five geo-political zones in Lagos State (Badagry, Mainland, Epe, Island, and Ikorodu) were selected regardless of their location in the State. This research work considered all participating SMEs in Lagos State. Senior and junior staff of participating SMEs were selected within the framework and a total of one thousand five hundred (1500) respondents were used. A self-constructed and validated instrument titled, Human Resource Management Practices and Small Medium Enterprise Questionnaire (HRMSMEQ). This was validated and a reliability test was performed, and the Cronbach’s alpha for the whole instrument is 0.79. The result showed that the questionnaire has a high level of reliability. The results of the findings revealed that human resource recruitment and selection practices have significant effects on employees’ in SMEs in Lagos State. This is further shown by F = 165740.14 and t = 122.24 with p<0.05. Also, there is a weak positive relationship between motivation, remuneration and business success commitment in the SMEs in Lagos State. The result shows that as motivation and remuneration increases so do business successes in the SMEs. The study concludes human resource development is very vital to any organisations ranging from small to large scale enterprise since it is well known that no business can exist entirely without human being. From the findings it is recommended that, SMEs business should have clearly defined recruitment policies which are consistent with the prevailing law, and there should be consistency in training activities, the owners of SMEs business should ensure that training offered to employees is relevant to their needs. For this reason, appropriate machinery should be put in place to conduct regular skills gap analysis to identify the training needs of their employees. Human resource management practices play a key role in affecting Labour productivity.
Keywords: Capacity building, Human Resource Management, SMEs business, modern economy, national standards.
