Entrepreneurship Lecturer 12

8/11/2019 Entrepreneurship Lecturer 12

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Copyright © 2008 by Nelson, a division of Thomson Canada Limited

ENTREPRENEURSHIP

A PROCESS PERSPECTIVERobert A. BaronScott A. Shane

A. Rebecca Reuber

Slides Prepared by:

Sandra Malach, University of Calgary



Copyright © 2008 by Nelson, a division of Thomson Canada Limited.

12BUILDING THE NEW

VENTURE’S

HUMAN RESOURCES

1




LEARNING OBJECTIVES1. Explain why information about recruiting,

motivating, and retaining high-quality employees isuseful to entrepreneurs.

2. Describe the relationship of number of employees tonew venture success.

3. Describe the role of social networks in new ventures’efforts to hire additional employees.

4. Define “job analysis” and “job description” andexplain why they are important initial steps in thesearch for new employees.




LEARNING OBJECTIVES5. Define “reliability” and “validity” and explain why all

techniques used for selection must be high on both.Describe structured interviews and explain why they

are higher in validity than traditional employmentinterviews.

6. Describe the requirements for setting effective goals,and why it is so important to tie rewards to

performance.7. Describe the role of fairness in motivating employees.

8. Define “job enlargement” and “job enrichment” andwhy they are important in motivating employees.




LEARNING OBJECTIVES9. List the relative advantages and disadvantages of

temporary and permanent employees.

10. Describe various means for relating pay and otherrewards to performance.

11. Define “continuance commitment,” “affectivecommitment,” and “normative commitment” and explaintheir role in the retention of high-quality employees.

12. Define the “control barrier” and explain why it is soimportant for entrepreneurs to learn how to delegateauthority to others.




“Genius begins great things; labouralone finishes them.”

Joseph Joubert, 1974-1824




ULTIMATE SUCCESSSuccess 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.




HUMAN RESOURCES AND

SUCCESS Larger founding teams with more varied

experience will:

increase the likelihood of success and

have faster rates of growth

The more employees the larger the earnings and

profits. The more employees the greater the number

and size of projects can be undertaken.




ATTRACTING, MOTIVATING,

AND RETAINING EMPLOYEESWhy 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’llchoose the best people for the job.




SOCIAL NETWORKS New firms often use social networks to

hire as they do not have the legitimacy

or security of established firms. Advantages of using social networks:

Quick and inexpensive to hire

Easier to convince individuals about thevalue of the opportunity

Lack clearly established rules or culture




RECRUITING AND SELECTIONThe search for high-performanceemployees begins with two questions:

Where should you search for high-quality employees?

What specific techniques should you

use to identify the best among them?




KNOWING WHAT YOU NEED Job analysis —what

knowledge, skills, and

abilities are required? Job description —an

overview of what the jobinvolves




BEGINNING THE SEARCH:

ADVERTISING THE POSITION Social networks

Trade journals, newspapers, etc.

College and university employmentcentres

Internet sites

Current customers

Headhunters




SELECTIONSelection tools and techniques must be

Reliable Consistent measurements across time

Valid Measurements reflect underlying

dimensions

Legal Human Rights Legislation




UNSTRUCTURED

EMPLOYMENT INTERVIEWSThis selection technique is low in validitybecause:

Interviews are largely unstructured

Interviewers may ask different questions ofapplicants

Interviewers may be biased

Assessing others is more difficult than mostpeople realize




IMPROVING INTERVIEWS

The validity of interviews can beimproved with

Structured interviews

Common questions & time allotment

Biodata

Information from application forms

Reference checks




MOTIVATION

The processes that arouse, direct, andmaintain human behaviour toward

attaining some goal.

Arousal Direction Persistence GOAL




GOALS & MOTIVATION

Goals must be

Challenging Attainable

Specific

Accepted

Reinforced with feedback




EXPECTANCY THEORY

People will be motivated when theybelieve that:

1. Expending effort will improvetheir performance

2. Good performance will be rewarded

3. The rewards offered are the ones theyreally want or value




MAINTAINING MOTIVATION

Provide the training and resourcesnecessary to ensure that effort leads to

good performance Recognize and reward good

performance

Provide the rewards employees reallyvalue




FAIRNESS AND MOTIVATION

Unfairness leads to a strongdrop in motivation.

Unfairness is perceived whenthere’s an imbalance betweencontributions and outcomesrelative to those of other

persons.




IT’S NOT FAIR

We seek Distributive Justice

Rewards are divided fairly

Procedural justice

Process for reward division

Interactional justice

Reward distributors must explaindecisions adequately




FAIRNESS & MOTIVATION

1. Link rewards closely to performance

2. Establish fair procedures for employee

evaluations and rewards

3. Treat employees with courtesy andrespect




MAKING JOBS MOTIVATING

Job design —structuring jobs so theyincrease people’s interest

Job enlargement

Wider variety of tasks

Job enrichment

Tasks that require a higher level of skill &responsibility




TEMPORARY vs. PERMANENTEMPLOYEES

Temporary Employees are beneficial:

Flexibility

Speed of acquiring new sets of knowledge& expertise

Permanent Employees

Employee commitment & retention




RETENTION STRATEGIES

Developing excellent rewardsystems

Building a high level ofcommitment & loyalty.




PAY FOR PERFORMANCE

Merit pay plans

Bonuses, awards, and stock options

Employee equity plans result in fastergrowth

Team-based incentives

Profit sharing

Employee stock ownership plans




ORGANIZATIONAL COMMITMENT

The extent to which an individualidentifies with and is involved with his

or her organization and is, therefore,unwilling to leave it




TYPES OF COMMITMENT

Continuance commitment

High cost of leaving

Affective commitment

Positive feelings toward the organization

Normative commitment

Feeling of obligation to others who

would be adversely affected by departure




PHASES OF COMPANY GROWTH

1. Conception/existence

2. Survival

3. Profitability and stabilization

4. Profitability and growth

5. Take-off6. Maturity




The Control Barrier

Phase

One

Phase

Two

Phase

Three

Phase

Four

Phase

Five

Phase

Six

Entrepreneurs’ skills

and abilities are

essential to success CONTROLBARRIER

Delegation, recruiting,

motivation, and

retention are crucial

factors



Copyright © 2008 by Nelson a division of Thomson Canada Limited

FINAL LESSON

At some point founders must truly

“let go.”

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Entrepreneurship Lecturer 12