This study will compare line managers' and HR managers' assessments of the effectiveness of the HR function in terms of service delivery, roles and contributions to the business in SMEs d Australia.Small and medium-sized enterprises (SMEs) have been identified as one of the growth engines for many countries around the world. Studies have shown that SMEs represent more than 90 percent of the economy of these countries, for example the United States, 99.7 percent (Heneman, Tansky and Camp, 2000), China, 99 percent ( Cunningham and Rowley, 2008), Europe. , 99 percent (Rauch & Frese, 2000), the Philippines, 95 percent and Taiwan, 96.5 percent (Lin, 1998) as well as Australia, 99.2 percent (Australia Small Business, 2012). In Australia, SMEs accounted for 70% of employment opportunities in June 2011 and this number is increasing (Australia Small Business, 2012). The above figures show that SMEs play a vital role in contributing to the economy as well as employment opportunities. In order to maintain their competitive advantage, Australian SMEs have increasingly recognized and emphasized the importance of HRM in achieving their business objectives. Studies have shown that HR effectiveness in their roles, services and contributions to the business leads to increased organizational effectiveness (Huselid, 1995, Becker, Huselid, Pickus and Spratt 1997, Teo, 2002). With the changing expectations of HR roles in an organization, a clear evolution of HR roles in Australia can be seen, moving from a previously administrative approach to a more strategic business orientation (Teo, 1998). Additionally, HR is moving from an approach focused on employee advocacy to more strategic business management (Brown et al., 2000). Cascio (1998) identified different phases in the recent transformation of the HR sector...... middle of paper ......e carried out.2. This department is very responsive in meeting customer needs (front-line managers and employees).3. This service provides me with useful and timely information regarding HR matters.4. This department has helped improve the competitive position of the company.5. This department makes value-added contributions to the company's financial results.6. This department contributes to building and/or maintaining the firm's core competencies.7. This department helps develop the company's human capital (employees/managers) as a source of competitive advantage.8. Policies, practices, and procedures originating from the HR department assist front-line business partners in their work.9. The human resources department has developed a well-coordinated set of policies, practices and procedures.10. HR policies, practices and procedures help support the company's business plan..