Okay let (P,k) be a parameterized problem which admits a fixed-parameter algorithm with respect to k. That means you have an algorithm which runs in f(k)n time, where n is the input size and f is a function only depending on k (for example (2^k)*n). Hence, if your real-world instances have always a small k then you can solve arbitrary large instances. Note that one problem can have a lot of different parameters and not all admitting such an algorithm (unless the world is very different than we believe). Now let (P’,h) be another parameterized problem and you have a polynomial time reduction from P’ to P. Then, this reduction gives you a fixed-parameter algorithm for P’ with respect to h if the value of k in the reductions depends only on h and nothing else.