Entrepreneurship

Building the New Venture’s Human Resources: Recruiting, Motivating, and

Retaining High-Performance Employees

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“Surround yourself with the best people you can find, delegate authority, and don’t interfere.”

--Ronald Reagan, 1986

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Ultimate Success

Success for new ventures…• derives from a smooth and orderly

shift…• to a state in which the entrepreneur

has assembled a first-rate team of employees…

• to whom she or he can delegate many of the growing venture’s key processes.

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Attracting, Motivating, and Retaining Employees

Why are these topics important?• In the early stages, you perform

them.• You can place your personal

“stamp” on these processes.• When it’s time to delegate, you’ll

choose the best people for the job.

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Recruiting and Selection

The search for high-performance employees begins with two questions:

• Where should you search for high-quality employees?

• What specific techniques should you use to identify the best among them?

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Knowing What You Need

• Job analysis—what knowledge, skills, and abilities are required?

• Job description—an overview of what the job involves

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Beginning the Search

• Social networks

• Trade journals, newspapers, etc.

• College and university employment centers

• Internet sites

• Current customers

• Headhunters

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Selection

Selection tools and techniques must be

• Reliable

• Valid

• Legal

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Employment Interviews

This selection technique is low in validity because:

• Interviews are largely unstructured

• Interviewers may ask different questions of applicants

• Interviewers may be biased

• Assessing others is more difficult than most people realize

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Improving Interviews

The validity of interviews can be improved with

• Structured interviews

• Biodata

• Reference checks

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Motivation

Behavior that is energized by, and directed toward, reaching some desired target or objective

Arousal Direction Persistence GOAL

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The Role of Goals in Motivation

Goals must be

• Challenging

• Attainable

• Specific

• Accepted

• Reinforced with feedback

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Expectancy Theory

People will be motivated when they believe that

• Expending effort will improve performance

• Good performance will be rewarded

• The rewards offered are the ones they really value

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Maintaining Motivation

• Provide the training and resources necessary to ensure that effort leads to good performance

• Recognize and reward good performance

• Provide the rewards employees really value

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Fairness and Motivation

• Unfairness leads to a strong drop in motivation.

• Unfairness is perceived when there’s an imbalance between contributions and outcomes relative to those of other persons.

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It’s Not Fair

• Distributive justice

• Procedural justice

• Interactional justice

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Playing Fair

• Link rewards closely to performance

• Establish fair procedures for employee evaluations and rewards

• Treat employees with courtesy and respect

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Making Jobs Motivating

Job design—structuring jobs so they increase people’s interest

• Job enlargement

• Job enrichment

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Retention Strategies

• Developing excellent reward systems

• Building a high level of commitment and loyalty among employees

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Pay for Performance

• Merit pay plans

• Bonuses, awards, and stock options

• Team-based incentives

• Profit sharing

• Employee stock ownership plans

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Organizational Commitment

The extent to which an individual identifies and is involved with his or her organization and is, therefore, unwilling to leave it

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Types of Commitment

• Continuance commitment

• Affective commitment

• Normative commitment

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Phases of Company Growth

• Conception/existence

• Survival

• Profitability and stabilization

• Profitability and growth

• Take-off

• Maturity

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The Control Barrier

PhaseOne

PhaseTwo

PhaseThree

PhaseFour

PhaseFive

PhaseSix

Entrepreneurs skills and abilities and essential to success

CONTROLBARRIER

Delegation, recruiting, motivation, and retention are crucial factors