Existing research on HRM in SMEs which has moved beyond size to consider sectoral influences has focused primarily on manufacturing, largely via quantitative analysis. Such approaches, reflecting the many tensions in the area, have prioritised the existence of HR policy over its depth or coverage, thereby offering a picture of intended rather than actual HR practice. Furthermore, a normative view of HRM arising from larger firm settings provides limited insight into the ’why’ of HR in SMEs. By contrast, this research adopts a single sector, in-depth qualitative approach focusing on hospitality. Examining HR issues in this context provides potential for significant insight due to the critical role of people in service delivery. Specifically, utilising a multiple case methodology, including managerial and employee respondents, the research explores the nature, determinants and outcomes of HR practices across five differently star-rated smaller hotels. In so doing it illuminates the reality of how HRM actually operates, accommodating informality, employment dynamics and the tensions of a negotiated order in a real world service context. Key findings include the impact of the market segment focus of the hotel over and above the star-quality rating of the hotel. This exposes the limits of generic definitions of strategy and broad categorisation of sectoral influence. A second key finding concerns the significant and imprinting role of various owner-manager styles and ownership arrangements and how these are manifest in varying expectations about work and ways people are managed. Finally, a notable emergent finding relates to the use of technology and social media as a means of socialisation, to reinforce customer voice and/or as a basis of managerial control. Overall, this thesis contributes to the existing research on SMEs by addressing an identified gap in our understanding of how HR practices operate within service-sector SMEs through a consideration of relevant contextual factors. Moreover, it does so by bringing in a much needed employee perspective, while also highlighting the imperative of incorporating customer influence, in order to achieve a more holistic understanding of the reality of HR practices in a smaller firm, hospitality context.