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Does size matter? Gender-based equal opportunity in UK small and medium enterprises
Carol Woodhams and Ben Lupton
Human Resource and Organisational Behaviour Group, Manchester Metropolitan University Business School, Manchester, UK
Abstract
Purpose The purpose of this paper is to examine the take up of gender-based equal opportunities policies and practices in small to medium-sized enterprises (SMEs) and explores the relationship between size and take up within the SME sector. Design/methodology/approach The paper draws on detailed data generated by a European Social Fund sponsored equality audit tool (breakthrough). This is an interactive, questionnaire-based programme incorporating 60 questions on human resources policies and practices relevant to gender-based equal opportunity. The questionnaire was administered within a structured interview, which was recorded and transcribed. In the North West of England, 80 SMEs, across a range of sectors, participated. Findings The data revealed that, while there was some evidence of take up of good equality practice in SMEs, many small businesses were not active in this area and indeed a sizeable minority were perpetuating discriminatory practices. Medium-sized organisations were more likely to have, and implement, equality policies than small ones. However, in one area, around exibility to meet carer responsibilities, the small organisations performed better. Analysis of moderating variables suggests that it is factors related to size, rather than size per se, that explain the differences in take up between small- and medium-sized rms. Originality/value The paper highlights the need to nd ways to engage SME managers with the equality agenda. It explores the distinctive features of the small rms and their environment which may inhibit this at present and set out an agenda for future research which will deepen understanding in this area and inform policy. Keywords Equal opportunities, Small to medium-sized enterprises, United Kingdom, Gender Paper type Research paper

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Received May 2004 Revised October 2005 Accepted October 2005

Introduction The small to medium-sized enterprise (SME) sector accounts for over 99 per cent of businesses in the UK, employing over 55 per cent of the labour force and accounting for 52 per cent of combined business turnover (Small Business Services, 2003). Yet mainstream human resources (HR) literature takes little account of the situation of SMEs (Cassell et al., 2002; Chandler and McEvoy, 2000; Duberley and Walley, 1995; Hendry et al., 1995; Heneman et al., 2000; McElwee and Warren, 2000; Vickerstaff, 1993) and this is reected in an acute shortage of research on HR practices in SMEs (Williamson, 2001). That said, it is now increasingly acknowledged that there is a need to examine people management practices in the distinctive context of the small rm.
The authors wish to thank the European Social Fund for their nancial support of this project and the reviewers for their helpful comments on earlier drafts.

Women in Management Review Vol. 21 No. 2, 2006 pp. 143-169 q Emerald Group Publishing Limited 0964-9425 DOI 10.1108/09649420610650710

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Early studies of employment relations in the small rm (Bolton Committee Report, 1971 cited in Rainnie, 1989) painted a picture of harmonious relations characterised by an informal and exible approach to management enabled by the small scale of the enterprises and the close interpersonal relationships that developed. More recently this idea has been re-visited (Holliday, 1995; Jones, 2003a, b; Rainnie, 1989; Ram and Holliday, 1993) and a contrasting bleak-house picture of small businesses has emerged, characterised by low wages (Marlow, 2002), numerical exibility and vulnerable transient labour (Holliday, 1995), high levels of conict (Jones, 2003a). Whilst this bleak house/happy family dichotomy is likely to be a considerable oversimplication, and the reality likely to more nuanced and context specic (Wilkinson, 1999; Ram and Holliday, 1993), it is one that has interesting implications for the management of gender in SMEs. Will gender-based equal opportunity (EO) be advanced through a familial concern for maximising the abilities of all members of the rm, or will bleak houses further exploit the perceived weaknesses of women at work? This paper presents data from a recent survey of 80 SMEs on the take up of equality practices and explores the distinctions between them related to size. Equal opportunities and SMEs: theory and practice There is little thought given to the approach of SMEs within theoretical frameworks of equality management. Jewson and Mason (1986) draw no distinction between small and large organisations within their radical/liberal dichotomy, nor does Cockburns long/short agenda. Healys (1993) framework of organisational approaches to equality (further developed by Kirton and Greene, 2000), classies organisations onto a continuum, at the lower end of which those which reproduce inequality through conscious or subconscious poor practice, through to those at the best practice end and organisations that have comprehensive, proactive and business-focused diversity. However, size and size-related variables are not included in the framework and their impact remains under-theorised. In the absence of explanatory frameworks, we would argue that there are some good reasons to expect that smaller rms might provide a fertile breeding ground for EO practices, be they in relation to the needs of women or other disadvantaged groups. The close working relationships may engender greater sensitivity to difference limit the impact of more institutionalised forms of discrimination. For example, Cassell et al. (2002, p. 683) detected in small rms a greater tolerance of the difculties that might be experienced by diverse groups than in larger organisations partly because managers and employees tended to know each other personally. Second, in a sector where skills shortages are often cited as one of the main barriers to competitiveness (Carroll et al., 1999; Chittenden et al., n.d.; McEvoy, 1984) the professional recruitment and selection practices associated with EO-aware practice would be expected to offer clear advantages. Furthermore, one might expect family-friendly policies to ourish in family rms and to have a signicant impact on the culture of the organisation and the retention of key staff. However, there is also a strong case to suggest that the general reluctance to embrace with HR practices in small rms (Bacon et al., 1996; Duberley and Walley, 1995; Marlow, 1997, 2002) might bite particularly hard in the area of equality. First, the cost-benet case for the introduction for EO initiatives might be less persuasive than that for other HR interventions in a context of competing priorities. Costs of EO may be

more readily apparent than the benets and proportionally greater in small rms (Curran et al., 1997; Dex and Scheibl, 1999; Harris, 2000, 2002), particularly where margins are tight (Jones, 2003a). This may be compounded by a perception of resource poverty (following Welsh and White, 1981), which provides a backcloth to decision-making. The awareness the case for equality, and of good practice, may also be absent in an environment where formal management training and large-rm experience is not the norm (Bacon et al., 1996; Carroll et al., 1999). Second, the area of EO is increasingly subject to state regulation. Given the evidence that many SME owner-managers tend to regard the extension of the regulatory burden as being unhelpful (Kinnie et al., 1999; Carter et al., 2004), and as impinging on their desire for autonomy and control (Jones, 2003a; Wilkinson, 1999) it may be that they are unwilling to embrace the implications of EO regulation enthusiastically. A reluctance to implement formal approaches to EO (as underpinned by equality legislation) would, however, be consistent with a reported concern amongst SME owner managers to maintain exibility in employment matters. As Vinten et al. (1997) note, informality of approach and exibility of operations are often seen by small businesses as one of their sources of competitive advantage, and they may be reluctant to jeopardise these. Wilkinson (1999) has identied a discourse around employment procedures in which formal approaches are seen as inhibiting responsiveness and compromising management exibility and autonomy, and it is likely that his applies in the area of equality as in other employment matters. The limited empirical evidence on equality practices in SMEs tends to suggest that the factors militating against their adoption play more strongly than those working in their favour. Reference to EO as an overarching concern or strategy is largely absent in surveys on HRM in small businesses (with notable exceptions, c.f. Cassell et al., 2002; Lane, 1994). However, where it has been addressed the evidence has been fairly positive. Lane (1994) found that 69 per cent of SME respondents agreed that it was extremely or very important to provide equality of opportunity. Cassell et al. (2002) found that 78 per cent of SMEs had equal opportunity practices in medium or high use, more that any other HR initiative, and equality initiatives were also the most highly rated in achieving their objectives. These ndings are limited, though, as rstly they do not diagnose the approach to equal opportunity in any depth and second, they rely on managers self-reports which may be particularly affected by social desirability and political correctness on this subject. There is more information, albeit fragmented, about SMEs HR practice in EO relevant areas. In general the picture is one of a lack of sophistication, especially within smaller organisations. Figures from the latest WERS survey (Cully et al., 1999), shows that two-thirds (64 per cent) of workplaces (25 employees or more) were covered by formal written EO policies in comparison with only 19 per cent of those that employed under 25. A greater proportion of large (over 1,000 employees) organisations are using job descriptions (92 per cent compared to 69 per cent) or competency frameworks (8.2 per cent compared to 0 per cent) for some or all of their posts (IRS, 2003). Larger organisations (over 500 employees) are more likely to have completed an equal pay review (45 per cent in comparison with 31 per cent of SMEs) (EOR, 2004a). About 77 per cent of employers in large (over 200 employees) workplaces compared with only 19 per cent of those in small workplaces had developed guidelines or other support for managers relating to pregnancy in the workplace (EOR, 2004b). Research

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conducted only on SMEs has found that word of mouth recruitment remains common (Carroll et al., 1999; Deshpande and Golkar, 1994), the range of selection techniques used is narrow and the use of job analysis to support recruitment and selection decision-making was the exception rather than the rule (Carroll et al., 1999). In the eld of training and development Keogh and Stewart (2001) have noted an absence of systematic training needs analysis in SMEs. Some authors have noted that management development tends to be piecemeal and reactive (Keogh and Stewart, 2001) with a lack of attention to career development. In the area of dispute resolution, fewer than half of small rms have a formal grievance procedure (Marlow, 1997, 2002). Aims and objectives The impact of organisation size on the take up of equal opportunities practices is not addressed in existing theoretical frameworks. In the foregoing discussion we have suggested that, on balance, there are good reasons to expect that take up of EO will be related to size. We have also shown that the limited empirical evidence available tends to support this. In the remainder of the paper we present empirical evidence from a recent survey of SMEs in the UK to test the following propositions that: (1) There is limited evidence of widespread take up of gender-based equality practices in SMEs. (2) Within the SME sector, levels of take up of gender-based equality practices will be related to organisation size. This second proposition arises by extension from the rst if smallness can account for lower take up of EO across all organisations, this relationship should also apply within the SME sector, with medium-sized SMEs (50-250 employees) being more likely to adopt EO policies than small ones (, 50 employees). At the same time, it is clear from the discussion in the previous section that is unlikely that size per se can directly account for differences in gender-based EO take up. It is more likely that the size variable is merely a reductionist indicator of a number of more complex factors which may directly impact on EO take up, for example, availability of resources and ownership. We seek to examine this by testing a third proposition, as follows that: (3) Within the SME sector, the relationship between size and take up of EO practices will be moderated by a range of other variables specically, sector (pubic/private), ownership (family/non-family) and the presence/non-presence of an HR practitioner. Methods In order to test these propositions we draw on data generated by a European Social Fund-sponsored gender-based equality audit tool (Breakthrough). This tool focuses on aspects of SME people management policy, practice and procedure that potentially impact on gender equality. This reects a particular approach to the pursuit of equality; that is through objective justication, procedural fairness, transparency and bureaucratisation of decision-making (Jewson and Mason, 1986; Williams, 1962). This is not the only possible approach, but is one that authors consider to represents just practice, and it is also in line with the requirements of employment tribunals who seek evidence of objectivity through the use of standard criteria, standard lists of interview

questions, shortlisting criteria and so forth (see Healy, 1993; Kirton and Greene, 2000 for good practice guidelines). Although it is an approach which we use to measure opportunity on gender grounds, it is equally often applied in respect of any of the group characteristics associated with disadvantage in the workplace, e.g. race, disability. Breakthrough is an interactive, questionnaire-based programme of 25 questions of general company information and 60 questions on people management policies and practices relevant to equal opportunity. The content of the questions is determined by EOC best practice advice and case law from the Sex Discrimination Act and other related pieces of legislation. Breakthrough is primarily a tool of organisational development. Outcomes are intended to be mutually benecial which helps to achieve access to research data in a politically sensitive area (Danieli and Woodhams, 2005). Each interviewee is given a personalised report, which benchmarks the equal opportunity performance of their organisation against: . minimum legal standards; . EOC best practice indicators; and . other organisations in the database within the same size band. The report also gave a detailed list of specic strengths and weaknesses in relation to gender equality practices. The research was conducted on a free consultancy basis, using Breakthrough as a tool of management education and development. Although we could always be critical of the reliability of employer self-report data (as noted above), the value to the SME of the diagnostic report lay within the accuracy of their response on their employment practices. We would suggest, therefore, that in this context there is less risk of socially desirable responses. Data was collected in a six-month period until Christmas 2003. The survey was completed by the individual with the most responsibility for personnel/HR issues took between 45 minutes and 2 hours. Surveys were completed by a research team within a structured interview that was recorded and transcribed. Sample Eighty organisations that conformed to the EUs denition of an SME[1] participated in the research project. All organisations were in the North West of England. The sample was convenience-based. No claims are made as to the representativeness of the research sample. In fact, it is likely that the organisations that welcomed the Breakthrough audit process are amongst the more people-management focused, good practice-aware SMEs. Data analysis The focus of this paper is on differences in take up of EO policy and practice between small- (, 50) and medium-sized (50-250) enterprises[2]. Under this denition, of the 80 organisations that took part, 55 organisations (69 per cent) were small and the remainder were medium-sized. The analysis below, therefore, is performed on a modest (but still statistically viable) group. Tables in the ndings section illustrate the outcomes of x 2 two-tailed tests of signicance, performed on the differences between the two samples. As we found signicant associations between, rst the size of the

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organisation and the presence of an HR professional[3], second between size and sector[4], and third between size and family ownership[5]; in line with the third proposition, these three are used to control for spurious interference in the relationship linking size and good EO practice. To avoid irrelevant effort, statistics diagnosing and reporting investigations of the third proposition are only reported where the initial bivariate relationship is statistically signicant. Statistically signicant results are indicated with asterisks[6]. No signicant relationship was found between size and a broad manufacturing/service split within this sample. No further statistical analysis is, therefore, performed on this classication. Analysis of the statistical picture of EO practice in SMEs focuses on critical areas of gender-based EO policy and practice namely: . equal opportunities policy; . recruitment and selection practices; . training and development policy and practice; . reward practices; . treatment of pregnancy in SMEs; and . positive measures[7]. Within each section, we review the qualitative data from interview transcripts for explanations of the effects that emerge from the quantitative analysis. Findings Findings show that in some areas of HR practice, SMEs are conforming to recommended equality practice. Nevertheless, there are marked pockets of poor practice. Where statistical signicance is found, good practice is always (indirectly) associated with increased size. Tables I-X show that, even where the difference between samples is statistically insignicant, the trend, on all but a couple of occasions, is in the direction of good EO practice being more likely to be found in the larger SMEs in our sample. Equal opportunities policy in SMEs This opening section of the survey explored the overarching organisational approach to EO (Table I). As can be seen, medium-sized rms were more likely than small rms to have a written EO policy. This nding is in line with previous research (Cully et al., 1999)[8]. Table I also shows that medium-sized rms were statistically more likely than small rms to appoint an individual to take responsibility for EO, a written policy statements and documents to use in recruitment publicity and at induction (where they were available). Medium-sized SMEs were also more likely (although only at a less rigorous level of statistical condence), to monitor gender in their workplace and have a formal harassment policy and practice. All differences attributed to the size variable alone disappeared when controlled for interfering effects. Recruitment and selection in SMEs As can be seen from Table II, organisations in our survey were slightly more likely to have job descriptions than has previously been reported (IRS, 2003) with 88 per cent of the overall sample using them. Further investigation of our interview transcripts,

Small rms 5-49 Medium rms 50-250 Total Per Per Per Per Per Per Per Statistical Per Per Yes cent No cent N/Aa cent Yes cent No cent N/Aa cent Yes cent No cent N/Aa cent signicance (x 2)

29 21 27 22 40 32 58 1 2 13 60 10 40 0 37 46 42 49 26 47 2 4 18 72 7 28 45 56 33 41 52 2 1 38 34 62 17 68 8 32 38 47 42 53 3 1

53

26

49

20

80

20

49

61

31

39

x 2 5.38, p 0.02 *, r 20.21, p 0.43 x 2 5.39, p 0.02 *, r 20.04, p 0.76 x 2 3.08, p 0.06 ; r 20.09, p 0.45 x 2 2.55, p 0.08 ; r 20.03, p 0.79

Do you have a written equal opportunities policy? Do you have a person with nominated responsibility for EO? Do you keep records on the gender split of your workforce? Do you have a written harassment policy/procedure? If you have a written EO/diversity policy do you give new employees a copy? Do you include an equal opportunity statement in your recruitment literature? 21 38 13 24 21 38 19 76 2 8 4 16 40 50 15 19 25 31 13 24 36 66 6 11 12 48 12 48 1 4 25 31 48 60 7 9

x 2 5.39, p 0.02 *, r 0.17, p 0.24 x 2 3.94, p 0.04 *, r 0.043, p 0.74

Note: Includes not applicable, dont know and missing responses

Gender-based equal opportunity 149

Table I. Equal opportunity policy in SMEs

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Do you give your employees a written list of their job responsibilities Do you make a written list of the skills and abilities that you want candidates to have? 49 38 70 16 30 0 21 84 4 16 0 89 6 11 0 21 84 4 16 0

Note: aIncludes not applicable, dont know and missing responses

Table II. Writing job descriptions and person specications Small rms 5-49 Medium rms 50-250 Total Statistical Per Per Per Per Per Per Per signicance Per Per (x 2) Yes cent No cent N/Aa cent Yes cent No cent N/Aa cent Yes cent No cent N/Aa cent 70 59 88 75 10 20 12 25 0 0

x 2 0.41, p 0.15 x 2 1.68, p 0.15

Do you seek information on any of these points during recruitment/selection stages? Per cent 46 27 6 4 6 15 3 0 1 1 60 12 0 4 4 40 18 8 4 5 Per cent Total 25 15 3 2 3 50 22 4

Small rms 5-49

Medium rms 50-250

Per cent

Statistical signicance (x 2)

Marital status Number/age of children Plans to have children Husbands employment Living arrangements

x 2 1.46, p 0.17 x 2 2.3, p 0.11 x 2 1.42, p 0.32 x 2 0.01, p 0.68 x 2 0.08, p 0.63

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Table III. Information sought during selection

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During interviews, do you ask questions that are unrelated to the job? Do you shortlist your candidates consistently against the same criteria for the same job? After shortlisting do you record and keep reasons for rejection or success? Are interviewers trained in equal opportunities? Do you give all interviewees the same length of time? Do you standardise the questions asked at interview? Do you ask females and males different questions about their domestic arrangements? 45 82 10 18 0 16 64 9 36 0 61 76 19 40 28 18 35 44 9 16 43 78 3 6 3 12 80 11 20 0 22 88 3 22 64 20 37 0 18 72 6 24 12 88 33 35 64 2 4 10 40 15 60 0 1 0 0 51 21 38 6 11 16 64 9 36 0 4 73 12 22 3 6 21 84 4 16 0 61 44 28 53 66 12 76 55 35 67 83 15 16 30 50 26 14 65

Do you make notes, record reasons for non-appointments and keep them? 28 51 27 49 0

Note: Includes not applicable, dont know and missing responses

Table IV. Selection procedures Small rms 5-49 Medium rms 50-250 Total Per Per Per Per Per Per Per Per Per Yes cent No cent N/Aa cent Yes cent No cent N/Aa cent Yes cent No cent N/Aa cent Statistical signicance (x 2) 24 0

x 2 3.01, p 0.07 ; r 0.18, p 0.16

20 38 63 33 17 81

3 6 2

4 8

x 2 0.51, p 0.34

1 0 3 4

x 2 0.32, p 0.38 x 2 0.27, p 0.39 x 2 0.98, p 0.24 x 2 0.76, p 0.29

18

72

28

46

58

34

42

x 2 0.36, p 0.41 x 2 3.13, p 0.06 ; r 2 0.13, p 0.30

What do you base assessments on? 41 34 32 8 21 10 18 1 58 15 38 10 2 7 40 8 28 4 75 62 24 16 96 64 65 50 42 10 28 11

Small rms 5-49 Per cent

Medium rms 50-250 81 63 53 13 35 14

Per cent Total Per cent

Statistical signicance (x 2)

We tend to rely on factual evidence of past performance, behaviour and achievements We give them a trial in a work related activity

We like to see whether someones personality ts in We like to see if someones appearance/image ts in We tend to be guided by instinct

We decide if we like them or not

x 2 5.19, p 0.02 *, r 0.28, p 0.04 * x 2 0.35, p 0.52 x 2 2.28, p 0.10 ; r 20.23, p 0.07 x 2 0.67, p 0.34 x 2 0.78, p 0.27 x 2 2.91, p 0.08 ; r 20.11, p 0.38

Gender-based equal opportunity

Table V. Making selection decisions

153

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Do you have a policy providing equality training and promotion? 25 If so, does this policy offer equality to both full and part time employees? 26 Do you keep information/records on the training your staff receive? 46 Do you review your training record for potential bias against your female employees? 6 45 47 6 11 23 42 18 72 2 8 5 (2)0 28 51 2 4 16 64 8 32 1 4 41 44 84 9 16 0 24 96 1 4 0 70 11 41 75 8 14 3 12 18 72 4 72 9

Note: aIncludes not applicable, dont know and missing responses

Table VI. Training in SMEs Small rms 5-49 Medium rms 50-250 Total Per Per Per Per Per Per Per Statistical Per Per Yes cent No cent N/Aa cent Yes cent No cent N/Aa cent Yes cent No cent N/Aa cent signicance (x2) 51 55 36 8 45 10 3 28 4 35

x 2 2.52, p 0.09 ; r 0.05, p 0.72 x 2 0.72, p 0.33

88

10

12

x 2 2.40, p 0.11

11

59

74

12

15

x 2 0.03, p 0.57

Small rms 5-49 Medium rms 50-250 Total Per Per Per Per Per Per Per Statistical Per Per Yes cent No cent N/Aa cent Yes cent No cent N/Aa cent Yes cent No cent N/Aa cent signicance (x 2)

Do you ensure that salaries are equal for females and males who carry out jobs of the same or similar value? Is the allocation of overtime offered fairly between your part and full time employees? 43 78 4 7 8 15 21 84 4 16 0 64 80 8 29 54 9 17 16 29 17 68 0 8 32 46 58 9

10

10

x 2 0.93, p 0.28

11

24

31

x 2 4.8, p 0.03 *, r 0.14, p 0.35

Note: Includes not applicable, dont know and missing responses

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Table VII. Reward in SMEs

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How do you determine your rates of pay for the majority of your staff? Per cent 69 13 47 11 55 29 11 26 24 6 8 3 5 11 5 20 20 44 24 32 12 15 4 9 60 16 36 53 11 35 11 35 27 12 22 16 Per cent Total 38 7 26 6 30 16 6 14 13

In relation to their experience We pay the minimum wage In line with industry pay standards In accordance with a job evaluation scheme On the basis of the numbers of hours worked According to their performance It depends on the market demand for their skills at the time of employment Based on the traditional pay rates of the company Whatever we think is right

Table VIII. Methods for allocating a rate of pay in SMEs Small rms 5-49 Medium rms 50-250 Per cent 66 14 44 14 44 34 15 28 20 Statistical signicance (x 2)

x 2 0.64, p 0.29 x 2 0.16, p 0.47 x 2 0.88, p 0.24 x 2 1.19, p 0.22 x 2 8.33, p 0.00 * * *, r 20.26, p 0.03 * x 2 1.71, p 0.15 x 2 2.31, p 0.12 x 2 0.37, p 0.36 x 2 1.45, p 0.18

Small rms 5-49

Medium rms 50-250

Total

Statistical Per Per Per Per Per Per Per signicance Per Per Yes cent No cent N/Aa cent Yes cent No cent N/Aa cent Yes cent No cent N/Aa cent (x 2)

Have you allowed the childbearing age of a candidate to affect your decision? 7 13 45 82 3 5 1 4 24 96 0 8 10

69

86

Would you employ a woman who was already pregnant? 25 45 22 40 8 15 15 60 10 18 3

12

40

50

32

36

11

14

x 2 1.62, p 0.20 x 2 5.7, p 0.02 *, r 0.17, p 0.23

Note: Includes not applicable, dont know and missing responses

Gender-based equal opportunity

Table IX. The treatment of pregnant women in SMEs

157

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If women are under-represented in your workforce, do you seek to increase their representation? Do you reserve jobs specically for women? Do you think about targeting female applicants when you are placing your job adverts Do you provide special training opportunities for women if you see a need When placing job adverts do you mention exible employment options Do you dwell on female caring responsibilities when making changes to working hours? 10 17 31 36 66 2 4 4 16 21 84 0 21 26 57 71 18 25 45 20 36 4 16 10 40 11 44 14 17 35 43 31 2 39 3 16 29 37 67 2 4 7 28 16 64 2 8 23 28 53 66 4 5 41 52 10 18 3 6 15 60 9 36 1 4 56 71 19 24 4 5 24 44 25 45 6 11 11 44 13 52 1 4 35 44 48 47 7 9 41 10 18 39 71 6 11 9 74 6 11 8 15 16 64 36 6 13 34 52 3 3 12 12 57 19 70 24 12 52 26 65 11 9 14 11

Do you impose overtime Do you allow your employees time off to deal with domestic emergencies 52 95 0 3 6

Note: Includes not applicable, dont know and missing responses

Table X. Positive measures in SMEs Small rms 5-49 Medium rms 50-250 Total Per Per Per Per Per Per Per Per Per Statistical Yes cent No cent N/Aa cent Yes cent No cent N/Aa cent Yes cent No cent N/Aa cent signicance (x 2)

x 2 0.00, p 0.63 x 2 2.4, p 0.10 ; r 0.05, p 0.72

x 2 0.00, p 0.60 x 2 2.76, p 0.9 ; r 20.13, p 0.30

x 2 0.41, p 0.40

x 2 0.30, p 0.43 x 2 3.26, p 0.07 ; r 20.24, p 0.06 x 2 4.04, p 0.06 ; r 20.30, p 0.01 * *
20 80 0 5 20 72 90 0 8 10

however, reveals that this practice was often prompted by other requirements, i.e. ISO 9000, rather than a concern for standardisation and transparency of information. The use of person specications is also broadly in line with previous survey evidence (IRS, 2003). One organisation, small though it was, was proud of its practices:
We are at our best in terms of equal opportunities as we have, when we advertise a job we have a very denite job specication (. . .). We go through the standard procedure of making sure we ask the questions that are directly related to those individual areas of work and whether they are essential or desirable. In fact, weve recently done away with desirable and just put essential, so we just ask questions related to that (11-24 employees, not for prot sector, education).

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Table III gives data on a number of potentially discriminatory questions that might be asked during the recruitment/selection phase. Although most of them were more likely to be asked by smaller rms, differences here were not signicant. Qualitative comments across both samples revealed that SME managers regarded the responsibility of parenthood as relevant territory of for their investigations:
Interviewee: I think most of them (the questions) are relevant, certainly marital status, age of children certainly. Hopefully not pregnant because they would be too old. Interviewer: Would you consider asking it? Interviewee: Yes I would do if it was relevant (11-24 employees, private sector, manufacturer: jig-boring components).

But that this line of investigation was not always limited to women.
Well we used to at one time, and Ive only asked them one time if they were married because we had more blokes here with marital problems. Oh dear me we had a spate of them here . . . one after the other. I said oh no bloody more here thats bloody married, pain in the arse (11-24 employees, private sector, manufacturer: precision-engineering components).

Many of the respondents proposed that they were using this information not to assess suitability, but to relax candidates and establish rapport, indicating a lack of awareness of the way that this type of information is often used to form and impression of candidates that may be potentially discriminatory:
I occasionally ask, no, I wouldnt ask marital status, but may say to someone do you have family? only really to get a conversation point if anything (25-49 employees, private sector, business services).

Table IV gives details of many equal-opportunity relevant selection practices. We nd it somewhat remarkable, based on data analysed to this point that many of the sample were conforming to good practice in many areas of the selection procedure. Most, for example, claimed to be producing standard lists of questions to be asked at interviews, giving all candidates the same length of time at interview and keeping written records. One interviewee explained, on the basis of their experience, the importance of having written records:
The reason why we actually had a lady who came for an interview and she didnt get the job and she then started trying to kick up a bit of a stink saying you didnt employ me because Im a woman. So we recorded on the application form what the pros and cons were, but we

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shot her out of the water because we did employ a woman for the job (25-49 employees, private sector, manufacturer: labels and nameplates).

160

However, other aspects of recruitment and selection practice show a distinct lack of awareness or regard for good practice and the risks of potential litigation. It is remarkable, for example, that 76 per cent of the total sample admitted asking questions at interview that were unrelated to the job, in line with themes explored above; many of the total sample are not consistently shortlisting candidates against the same criteria for the same job and 15 per cent of the total sample admitted asking males and females different questions about their domestic arrangements. Most of these selection practices did not vary signicantly in line with rm size but on all occasions, medium-sized SMEs were more likely to conform to good practice. Sometimes the differences in treatment were only supercial but were indicative of ingrained attitudes:
We give them a cup of tea and let them sit down, men have to stand up. Women have to be treated differently. It works to their advantage . . . they gas a lot (11-24 employees, private sector, manufacturer: coach builders (talking about interview arrangements)).

Almost all of the organisations shied away from directly asking personal questions, but as the quote below reveals, that does not mean that they had dismissed them as a potentially relevant factor in decision-making:
I carefully got around it last time. Judith was the rst female employee, but my, if you like, the picture of the person I wanted was a mature woman. I deliberately didnt go for a younger person. And given the choice I would do again. It avoids a lot of what I would class as [gynaecological] problems. I shouldnt do really because weve all been through it (11-24 employees, private sector, manufacturer: jig-boring components).

Table V gives a number of methods of making employment-related judgements about the suitability of candidates. Table V is presented in a different formal because respondents were able to tick more than one option. The table shows that most organisations were using more than one set of criteria and many organisations, particularly the smaller ones were making subjective (and therefore, more difcult to defend and justify) judgements based on perceptions of tting in, instinct and compatibility. As shown within the quote below, it was sometimes difcult to conceive of an alternative way of assessing candidates:
Probably why its a bit more informal is because of the level as well. You know (. . .) the more you are recruiting people who are more qualied then obviously it becomes harder to choose and make a decision. But when you are recruiting like drivers, warehouse, most of the time you are getting people straight from school who dont want to go to college. I mean apart from the personality end, they want to work, then you need that sort of intuition feeling. Theres nothing more you can shortlist against (100-149 employees, private sector, wholesale and retail).

Medium rms were more likely than small ones to base decisions on factual evidence, but otherwise there were no signicant differences related to rm size. This nding is the only size related effect in this study that does not disappear when the three intervening variables are used as controls, indicating that either SMEs with more employees are, for that reason alone, more likely to rely on factual assessments for

selection, or that another intervening variable (s) that contribute to the effect were not identied as a possible control. Training and development in SMEs Table VI shows that, once again, good training policy and practice is more likely to be found in medium-sized enterprises. It also demonstrates that records are kept (this time on training) in most SMEs, but this information is not then used in any way that is reective of the principles of equality. There were no convincing size-related effects. The quote below illustrates some of the complexities inherent in working toward outcome-based equality in training and promotion opportunities:
Its not true of all ladies but they are not necessarily very good on the supervision team, so I know theres a level. And I try and I try and I try and I try and I keep on pushing them in to it but I think, what happens you get people round us who dont, they cant appreciate the difference between supervision and how you set yourself apart from one of the girls or one of the lads. Thats the biggest problem that stops them, promotion and development and stuff like that (11-24 employees, private sector, manufacturer: cardboard boxes).

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Reward in SMEs Table VII demonstrates just how prepared organisations in this sample were to reveal their EO related weaknesses within the audit interview. It is surprising, given the amount of publicity on equal pay in the business press, that a proportion of both samples had not considered equal pay issues within their workforce, thought the topic irrelevant to them, or did not know. The most transparent method of determining pay, avoiding most problems of indirect discrimination and subjectivity is to use a system of job evaluation. Table VIII shows that, although medium-sized SMEs were more likely to use this method, it was not popular in either sample, most rms preferring to reward experience, pay by the hour, or match the market rate. Problems inherent in low pay were often linked to resourcing problems:
We struggle to get people in full stop. Care work, we are nding it very hard to recruit (. . .) people start off about 5 an hour so we are not the highest payer but we feel we are offering other opportunities. But you are competing a lot, with retail and other types of jobs, so we are struggling (100-149 employees, not for prot, community service).

Pregnancy in SMEs This section (Table IX) contained some of the obviously right and wrong questions within the survey. It is surprising and reveals a great deal about the levels of respondents ignorance, their arrogance or honesty that so many answered in a way that could be deemed incorrect and potentially unlawful. Once again, medium-sized SMEs were more likely to demonstrate good practice. Further qualitative investigation revealed that managers were prepared to defend the grounds on which they were making their decisions and that often they were related to the job that was being performed. When asked if they would employ a woman who was already pregnant, they responded:
I honestly dont know what the answer to that would be. Thats a very difcult question. Because technically pregnancy isnt an illness, so . . . that would be a very difcult question to

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answer because its not, its not cut and dried question really? I mean if you are just employing secretaries or people to sit at a typewriter you could say yes or no. But because there is such a wide diversity of jobs that we do, its not a question you could automatically say yes or automatically say no to (25-49 employees, private sector, manufacturer: labels and nameplates). Id be happy for someone to take 2 weeks out of us, thats no problem because the average working year is 44 weeks, 44.8 weeks so 2 weeks out is about a 20th, about 5 per cent we can cope with someone being out for 5 per cent of the time. If someone said I need to be out for 3 months, they could I dont know, elective surgery for example or they could be having a baby. Now 13 weeks out of 43, thats 30, 35 per cent down time (11-24 employees, private sector, manufacturer: plumbing components). Wow. Now theres a question. Am I allowed to say I dont know? Because I think thats the honest answer, I dont know. Weve had some people whove been here and couple of weeks have said actually were pregnant now (100-149 employees, not for prot, community service).

162

Positive measures in SMEs Table X shows the SMEs responses across a range of measures that have the potential to positively promote the opportunities of women in the workforce including measures such as offering exible in working practices and focused training for women, considering female access to job adverts during the recruitment process, and even reserving jobs specically for women. Table X contains some of the most important ndings of EO practice related to SME size. Up to this point, medium-sized SMEs have generally been more advanced than their smaller relatives on EO-related practice. And yet, on measures of positive action (items 1, 3 and 4 above), the difference in percentage scores between the two samples is much closer than is typical. Furthermore, small SMEs achieve better practice scores on measures offering exibility (items 5-8) and are more likely to positively discriminate (item 2) in favour of females. We should remember, in interpreting this nding, that, once again, this could be a feature of SME owners in medium-sized organisations having more knowledge of the legal context and delivering socially desirable responses; but it could equally be indicative of a genuine direction that smaller SMEs are less aware of or troubled by legal compliance, are able and prepared to offer more exibility to their employees, and, as indicated in the quotation below, are more prepared to exercise management prerogative in line with what they see as their business need:
I allow part time, I do like that . . . because one thing I am, I think I said earlier Im quite keen on getting women for certain jobs, and the best women tend to be a bit more mature than the younger ones. So therefore Im happier to allow exible hours to an extent (11-24 employees, private sector, manufacturer: electric parts for trains). My biggest problem to be honest is recruiting them. I dont get enough and so when I nd females, cos (sic) they are much much better workers, whenever I nd one I probably do positive discrimination to help them, give them a better chance. Say a job application, I get far more men then women, but women are far better workers. Q: In terms of what? I: Dextrously, (sic) accuracy, doing more than one job at a time. Quality, good housekeeping, getting on with other people (11-24 employees, private sector. Manufacturer cardboard boxes).

Summary of the ndings We set out to examine three propositions. The rst was that there would be limited evidence of take up of formal equal opportunities policies in small rms. The picture that emerged here was mixed. We found many examples of good practice in the rms surveyed, notably in the area of making selection decisions and offering exibility in the face of caring responsibilities. There was also widespread composition of formal equal opportunity, harassment and training policies. Where meaningful comparisons with previous SME surveys (Cully et al., 1999; IRS, 2003) are possible, our survey demonstrates that in many instances the practices reported are more frequently aligned with good HR and EO practice. This may be attributable to the effects of sample or self-report bias, but given that other surveys are likely to suffer the same weaknesses, it may indicate some limited improvements in EO practice in SMEs over these earlier research ndings. On the other hand, there is evidence in the data that many organisations were actively perpetuating both direct and indirect discrimination. For example, when asked if they would employ a woman who was already pregnant, 50 per cent of organisations said they would not or could not be sure. Twenty per cent do not ensure that men and women who are in the same jobs (or do work of equal value) are paid the same. In determining pay rates, 20 per cent of the organisations in the sample use an unstructured approach, paying whatever we think is right. Owners admitted that men and women are frequently managed differently though recruitment, selection, training, payment and promotion processes. Twenty-nine per cent of participants do not use the same criteria for men and women when shortlisting and 44 per cent alter their interview questions depending on the gender of the candidate. The second proposition was that, within the SME category, adoption of EO good practice would be related to size. This received overwhelming support in the data. Almost without exception medium-sized SMEs in our sample were more like to have composed formal equality policies and implemented mainstream equal opportunity-aware practices. Many of these relationships were statistically signicant. The exception to this rule, of course, lies in the nal table which reverses the direction of that trend in most instances. Our nal proposition was that the relationship between size and take up of equality practices would be moderated by other variables. We tested for three such variables which we felt, on the basis of the literature reviewed in the introductory section of the paper, would be likely to be related both to size and to the take up of equality practices the presence of an HR practitioner, whether or not the organisation was family owned, and whether or not it was in the private sector. In all but two cases under testing, the statistically signicant relationships between size and take up were moderated by these three intervening variables. The implication here is that size does not act independently as a variable determining an SMEs approaches to equality, but in conjunction with other organisational features. Discussion The lack of evidence for the take up of equal opportunities good practice amongst many of the SMEs in our sample will be of concern to those seeking to promote gender equality at work. Although we should not ignore the fact that the survey revealed considerable evidence of good practice in SMEs, in the smaller rms there was

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widespread evidence of an absence of formal equality procedures, and in some cases examples of actively discriminatory practices. In interpreting the ndings, we need to add a cautionary note, returning to the point that quantitative measurement of EO relevant HR practices does not necessarily indicate either the presence or absence of actual equality of opportunity, only the presence of those interventions that are considered likely to help bring it about. It may also be the case that a procedural model of equality is not the only one that could achieve substantive outcomes. Procedural mechanisms have been criticised as key levers to bring about equality (Aitkenhead and Liff, 1991; Gibbon, 1990) and the formal equal opportunities policy approach has often been found to be an empty shell lacking in substantive content (Hoque and Noon, 2004). An approach guided by the spirit underpinning much of equality legislation as opposed to its detail might achieve similar ends through less bureaucratic means. Owners/managers might be working hard toward, and have every intention of achieving, equality for women through other more informal methods (for example, responding exibly on an ad hoc basis to requests for time-off for childcare reasons). Some of the data in Table X suggest this, and there is evidence that these interventions are framed as business initiatives rather than understood as equality initiatives. This nding corresponds with previous research conducted on family-friendly practices in SMEs (Lewis, 2003; Lewis and Dyer, 2002). It is also noted by Cully et al. (1999), who state that small business managers tend to rely on direct control; seeing themselves as having less need for formal, bureaucratic control mechanisms. Furthermore, best practice equality management assumes a normative approach, suited and practised (or assumed to be practised), in large organisations. For example, the appeal of the business case arguments for equality is contextual (Kirton and Greene, 2000) and in many SMEs the cost benet analysis may point away from action being taken (Dickens, 1997). We could argue in line with Taylor (2001, p. 140) writing about HRM more generally, that this approach may be tantamount to subjecting smaller organisations to tests as to conformity to an alien norm. Although these arguments carry some weight, we remain concerned that in many cases our research revealed that even Hoque and Noons shell of equality practice is missing. The legislation, and the formal equality procedures that it promotes, at worst provide a minimum set of standards for equal treatment for all employees in all organisations and a necessary platform for developing more proactive (for example, diversity-based) approaches. Where we found the basic procedures to be absent in the survey data, we felt is was unlikely that this was because they had been rejected in favour of a deliberate strategy to adopt more informal approaches to tackle equality matters, rather it was because minimum good practice (and in some cases legal requirements) was being ignored a point borne out strongly in the qualitative data. We suggested at the outset of the paper that we expected take up of formal equality initiatives in the SME sector to be less than comprehensive, and our results bear this out. A number of contributory factors were cited; the preference for informality and exibility in employment matters (Vinten et al., 1997), the desire to preserve owner-manager autonomy and control (Jones, 2003a; Wilkinson, 1999), a reluctance to engage with regulation (Harris, 2000, 2002), lack of specialist expertise (Carroll et al., 1999) and lack of awareness of the potential benets arising from equality policies and practices. However, there is a danger here in drawing crude stereotypes of SMEs which

fail to recognise the heterogeneity of the sector and of the different contexts in which different SMEs are operating. It is clear from our data that many SMEs do engage proactively with the equality agenda and do implement formal equality procedures. Our second main nding is that small organisations are less likely to adopt equality policies and practices than medium-sized ones. This emerged strikingly and consistently in the data across a range of measures. We have no direct evidence in the data which explains this, but it does follow from, and lend weight to, our general line of argument that there may be factors associated with smallness which impact negatively on the propensity to practise equality of opportunity. For example, we would suggest the smaller SMEs are more likely than larger ones to lack managers with specialist HR expertise, to be more comfortable operating without formal policies and to be less likely to be able to afford the investment in developing and operating them. The evidence so far indicates that organisation size is an important variable to consider in understanding the level of take up of equality policy and practice. However, it will also be clear, as Wilkinson (1999) noted in relation to small rm employee relations generally, that size is not the only explanatory variable and that it does not operate independently. Our ndings in relation to our third proposition indicated that size ceases to explain the differences in take up when other factors are considered. It seems reasonable to conclude that size impacts on the take up of equality factors because smallness is associated with other features, for example, the lack of an HR practitioner (Woodhams and Lupton, 2005), a feature that would be expected to be associated with greater awareness of, and take up of, equality initiatives. It is also interesting that family ownership is a moderating variable in the relationship between size and take up of equality policies and practices. It may be that family owned rms are less inclined to rely on formal, bureaucratic procedures, less likely to draw on specialist expertise and more likely to guard owner manager autonomy and prerogative. To conclude, this study has shown a mixed picture of take up of formal equality policies and practices in the SME sector. There are some encouraging signs, but also evidence of widespread failure to adopt basic procedures and, in some cases, comply with minimum legislative requirements. The study also indicated that better practice is more common in medium-sized organisations than it is in small ones. Further research is needed in two areas. First, to see with these ndings are replicated in a larger sample and second, to investigate in more detail, through further qualitative work, how size and its interaction with other contextual factors impacts on the take up of equality policies and practices in SMEs.
Notes 1. Organisations with under 250 employees, have an annual turnover of under 50 m es or an annual balance sheet total of less than 43 m es (http://europa.eu.int/comm/enterprise/ enterprise_policy/sme_denition/index_en.htm) 24 March 2005. 2. More details of the size distribution of the sample can be gained from the full report (Woodhams et al., 2004). Although there is no analysis related to the following independent variables in the tables, 75 per cent of organisations had a male CEO/owner, the majority of organisations had been established less than 16 years, 80 per cent were in the private sector

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3. 4.

166

5. 6.

7. 8.

and the majority (88 per cent) were in prot. Of the 12 industrial sectors given, the largest proportion (38 per cent) was manufacturing enterprises. Larger organisations (between 49 and 250 employees) in the sample were more likely to employ an HR specialist (x 2 15.47, p . 0.000 * * *) (Woodhams and Lupton, 2005). Larger organisations in the sample were more likely to be in the public sector (x 2 12.4, p . 0.002 * *); well known for having a more comprehensive equal opportunity stance. Smaller organisations in the sample were more likely to be family owned (x 2 3.38, p 0.05 *). Where *indicates a signicant result at the p , 0.05 level, * *indicates signicance at p , 0.01, * * *indicates signicance at p , 0.001. Levels of signicance have been rounded to two decimal places. A symbol indicates a nding that is signicant at the 10 per cent condence level. These ndings represent a summary of the full project ndings which are reported in Woodhams et al. (2004). Although, in this paper our data is split between organisations that employ above 50 and those that employ below 50, manipulation of our data to correspond with the size bandings in the WERS survey (Cully et al., 1999) gives gures of 67 per cent for those organisations above 25 employees and 35 per cent for those below.

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Further reading CIPD (2005), Employment and the law: burden or benet?, Survey report, June. Matlay, H. (2002), Training and HRD strategies in family and non-family owned small businesses: a comparative approach, Education Training, Vol. 44 Nos 8/9, pp. 357-69. Reid, R., Morrow, T., Kelly, B. and McCartan, P. (2002), People management in SMEs: an analysis of human resource strategies in family and non-family business, Journal of Small Business & Enterprise Development, Vol. 9 No. 3, pp. 245-59. Stokes, D. (2002), Small Business Management, 4th ed., Continuum, London. About the authors Carol Woodhams is a Senior Lecturer in Human Resource Management. She has taught and researched at the University since 1993 after a successful career in international hospitality management. She has published widely in issues of equality and diversity, specically focusing on gender and disability equality. Publications include articles in the International Journal of Social Research Methodology, Journal of Social Policy and Personnel Review. She teaches across a wide range of programmes at all levels and leads the equality elective on the MA in Human Resource Management. She is a Chartered Fellow of the CIPD. Carol Woodhams is the corresponding author and can be contacted at: C.Woodhams@mmu.ac.uk Ben Lupton is a Principal Lecturer in HRM at Manchester Metropolitan University Business School. He has responsibility for a range of Postgraduate Programmes in HRM and Management. Before joining MMU, Ben was an HR practitioner in the National Health Service. Ben teaches employee resourcing, selection testing and assessment, and research methodology. His research interests are in the areas of equal opportunities, gender and occupations and the careers of HR professionals. He is a chartered fellow of the CIPD.

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