Abstract
This paper uses case study data to explore the potential of Human Resource Management (HRM) within small firms. It is argued that despite a considerable amount of evidence that emphasises the distinct human resource problems that small firms face because of their size, there is no reason to assume a priori that a formalised HRM approach cannot provide solutions to these - provided that it is sufficiently flexible. The article cautions against accepting the 'informal' approach to managing people often associated with small firms as an inevitable or unconditional 'good', demonstrating the complexities of small firm employment relations through case studies of four small firms that have adopted the Investors In People initiative. This initiative is shown to embody key principles of HRM thinking and to have provided viable answers to the human resource problems faced by the case companies. The article concludes with a discussion of the issues that will need to be faced if the management of human resources in small firms is to be opened up to new and innovative ideas in a manner that is genuinely constructive and beneficial.