Organizational Self-Management Practices and Employee Happiness in SMEs: A PLS-SEM Study from Peru

Employee happiness has become a central concern for the social dimension of sustainability, particularly within small and medium-sized enterprises (SMEs) operating in emerging economies. This study examines the relationship between organizational self-management practices and employee happiness in Peruvian SMEs, adopting a predictive approach based on Partial Least Squares Structural Equation Modeling (PLS-SEM). Organizational Self-Management Practices (OSMP) are modeled as a high-er-order construct integrating holacracy-inspired practices and organizational self-management practices. Data were collected from 383 SME employees through a structured questionnaire. The results indicate that OSMP has a positive and statistically significant influence on employee happiness (β = 0.461, p < 0.001), explaining 46.6% of the variance in the endogenous construct (R² = 0.466). These findings highlight the relevance of advanced self-management practices for promoting employee well-being and con-tribute to the literature on social sustainability by providing empirical evidence from an underexplored emerging economy context.