Purpose This article seeks to examine the challenges and prospects of human resource management (HRM) in a developing‐country context. It focuses on contextual factors and employee involvement in analysing HRM to provide theoretical insights. Design/methodology/approach To explore the above theme, on‐site interviews were carried out with general managers, human resource professionals, line managers and union leaders in eight firms. Furthermore, a sample of 252 employees was included, thereby contributing to the generalisability of the findings. Findings This article provides substantial and current information on HRM knowledge and practices in Eritrea. The paper argues that some contextual variables impose certain challenges to HRM practices. However, evidence also reveals that the concept and knowledge of HRM practices, such as training, recruitment, compensation, employee participation, performance appraisal and reward systems, are in place with some indicators of local influence. Research limitations/implications In light of the above findings, the article informs multinational companies that transferring managerial expertise to Africa may not necessarily be required, as the knowledge already exists there. A major limitation may derive from the use of convenience sampling in selecting the firms, but extreme caution is taken to get a faithful representation. Originality/value Contrary to the dominant view that African management is characterised by authoritarianism, this study shows the participative style of managers. Moreover, it incorporates the attitudes and perceptions of employees, a generally neglected part of HRM studies.
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