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This paper aims to provide an original picture of a selection of human resource management (HRM) activities in the micro, small and medium sized enterprises (SMEs) in Hungary and to explore the extent to which these activities can be related to variations in firm size and variations in firm performance.

The study measures the presence or absence of a selection of HRM activities through a questionnaire survey of a large sample of 678 Hungarian SMEs.

Hungarian SMEs, in their working relationships, are closer to the “happy family” model of the SME than the “bleak house” model. Employee morale was perceived as high and only one in ten SMEs felt their employees were opposed to change. Owners were reluctant to seek advice from those outside the firm. They also showed reluctance to discuss future plans with their employees although they did tend to consult employees who would be affected directly by any change. Communication within SMEs was predominantly informal. Surprisingly, given the skills shortages highlighted by SMEs in other economies, very few of the Hungarian SMEs identified skills shortages as a problem and formal training programmes were reported only rarely. Variations between micro, small and medium sized firms are highlighted to emphasize the heterogeneous nature of the Hungarian SME sector.

The HRM activities considered provide a picture of only a small number of HRM activities in Hungarian SMEs but the findings imply the relationships examined here are deserving of further exploration both in Hungary and other transition economies.

The paper provides a detailed picture of selected aspects of HRM in smaller businesses within a transition economy.

The purpose of this paper is to introduce the employment relations context in South Eastern Europe from a variety of capitalism perspectives. Particular attention is accorded to the uneven nature of change at both the levels of institutions and practice. This is followed by a review of the individual papers that make up this special issue.

This paper is primarily a theoretical one, providing a review of the papers that make up this special issue and giving an overview of the foundation being provided.

While the term “transitional” has often been deployed to describe employment relations across the region, the process has been an extremely protracted one. There is little doubt that the nature and form of employment relations in the countries encompassed in this review is still coalescing, with further ruptures likely as a result of the 2009 depression. At the same time, the papers in this special issue point to long‐standing continuities with employment.

While the papers that make up this special issue may present the most recent research in the region, they also point to future areas for research. First, there is particularly little research that has been undertaken on peripheral areas of a generally peripheral region. Not only do we know very little about, say, Albanian employment relations, but we know little about employment relations in peripheral areas of large countries such as Turkey. Second, the 2009 depression is likely to accelerate trends to downsizing and insecure work, in the short term at least. Finally, there is a growing consensus that a sustainable economic recovery from the current crisis will depend, at least in part, on new social compromises both globally and regionally.

Employment relations in the region are undergoing an extended transition. In the short term, the most likely trend will be towards a further weakening of the bargaining position of employees, and towards more insecure working. However, a sustained recovery is likely to see a reversal of this, with employers being more likely to be forced to contemplate new social compromises.

This study applies the comparative capitalism literature to the South Eastern European region context. It also introduces some of the most recent applied research in the region.