Human resource management (HRM) practices play an important role in improving productivity,
performance and survival of the organization. By adopting the practices of human resources, it will
enable the organization to attract, retain and motivate employees to support the mission, objective and
organizational strategy towards an enhancement of organizational performance. However, most studies
on human resource practices are discussed in the large organization and are less completely covered in
small organizations. Therefore, this article will discuss the importance of human resource management
practices to Malaysian SMEs in view of SMEs also need such practices to survive and sustain a
competitive, which in turn to improve organizational performance.