ENHANCING EMPLOYEE ENGAGEMENT IN SMALL AND MEDIUM ENTERPRISES (SMES) THROUGH LEADERSHIP, COMPENSATION AND APPRAISALS

Small and Medium Enterprises (SMEs) are pivotal to the financial growth of any country, functioning as labour-intensive units whose success relies heavily on employee productivity. Consequently, employee engagement is a critical determinant of success for SMEs, where each employee's contribution is important. This empirical study aims to enhance employee engagement by examining HRM Practices such as leadership, pay practices, performance appraisal, and training and development in Indian SMEs. It investigates the relationships and impacts of these HRM Practices on employee engagement within SMEs. By analysing these practices, the study seeks to uncover the essential elements that influence strategic decisions related to employee engagement. The research employs statistical analyses, including factor analysis, correlation, and regression and adopts an exploratory survey method. It included 300 participants from SMEs, with 230 successfully submitting fully completed surveys both offline and online. Notably, the study investigation produced encouraging results by fulfilling the KMO and Barlett's Test criteria, correlation coefficients, and standardised coefficients (Beta), among other indicators. The findings show that leadership, performance appraisal, and training and development all have a beneficial impact on employee engagement in SMEs. However, pay policies have no meaningful impact. The findings offer valuable insights into effective strategies for SMEs to cultivate a motivated, committed, and high-performing workforce, providing actionable recommendations to enhance organisational performance and competitiveness.