What is Entrepreneurship?

: An entrepreneur is an individual who owns a firm, business, or

venture, and is responsible for its development. Entrepreneurship is the practice of starting a
new business or reviving an existing business, in order to capitalize on new found
opportunities.

Generally, entrepreneurship is a tough proposition as a good number of the new businesses

fail to take off. Entrepreneurial activities differ based on the type of business they are involved
in. It is also true that entrepreneurial ventures create a number of new job opportunities. A
large number of entrepreneurial projects look for venture capital or angel funding for their
startup firms in order to finance their capital requirements. Besides, government agencies and
some NGOs also finance entrepreneurial ventures.

Entrepreneurship is often associated with uncertainty, particularly when it involves creating

something new for which there is no existing market. Even if there is a market, it may not
translate into a huge business opportunity for the entrepreneur. A major aspect in
entrepreneurship is that entrepreneurs embrace opportunities irrespective of the resources
they have access to.

Entrepreneurship involves being resourceful and finding ways to obtain the resources
required to achieve the set objectives. Capital is one such resource. Entrepreneurs need to
think out-of-the-box to improve their chances of obtaining what they need to succeed.
According to management experts, vast majority of entrepreneurs desire to be in control of
their own life and they can’t find this beyond entrepreneurship. Studies have demonstrated
that people derive great satisfaction from their entrepreneurial work.

A number of entrepreneurs are of the opinion that managing their own business offers far
greater security than being an employee elsewhere. They feel entrepreneurship enables them
to acquire wealth quickly and cushion themselves against financial insecurity. Additionally, an
entrepreneur’s future is not at peril owing to the faulty decisions of a finicky employer. So,
while some people feel that being employed is less risky, entrepreneurs feel that they are
better off starting a business of their own.

Today, there is the increasing awareness about entrepreneurship. People aren’t confining
themselves to one business. They are following one business with another. Such entrepreneurs
are referred to as “serial entrepreneurs.” Sometimes these entrepreneurs become angel
investors and invest their money in startup companies. As a person gains greater insight into
business and entrepreneurship, his chances of succeeding in business improve
 HR
Introduction
As human resources (HR) takes its seat at the table and affects strategic
direction, organizations are beginning to recognize that human capital can be
utilized as a competitive advantage. HR guru Dr. John Sullivan continually
attributes an organization’s success to the productivity of its employees,
therefore defining the ultimate goal of human resource management (HRM)
as maximizing workforce productivity.i
i

HRM are necessary to maximize the achievement of organizational goals. Total rewards –
including compensation; benefits; work-life balance; performance and recognition; and
development and career opportunities are one crucial aspect of attracting, retaining,
satisfying, and getting the most out of employees. To be effective, a total rewards
s
package must tie together the organizational strategy, workforce strategy, and HR
strategy. Total rewards should align each employee with the organizational objectives.

Research repeatedly shows that cash is not the leading driver for employees. In fact,
R
once an individual reaches a level of comfortable living, satisfaction is not likely to
iimprove. Employees require a combination of intrinsic and extrinsic rewards that, above
all else, recognize the contributions they make and the value they add to the
organization.
o

In recent history, rewards (once termed compensation and benefits) was limited to
monetary pay, basic health care, and employee retirement plans. The current workforce
and changing work environment has caused compensation and benefits to give way to a
total rewards system.
The New Employment Relationship
A new work environment and accompanying change in employee’s expectations have
been driven by fundamental changes in the employment relationship. Recent public
corporate scandals have created a new need for organizations to defend their integrity in
order to establish pride in work. As a result, organizations must review the words printed
in their annual reports, and reward employees for demonstrating corporate values.

Theoretical Foundations
Total rewards should be distributed as a means to motivate employees to perform in
ways that result in meeting the organization’s strategic goals. Therefore it is important
to consider the underlying motivation theories. Understanding why rewards are effective
and how best to use rewards as a means to meet the needs of both the organization and
employees will help strategic business leaders design a successful total rewards system.

Expectancy Theory
Victor Vroom developed the Expectancy Theory. He argued that people tend to rationalize work
behaviors and exhibit those that will lead to their most valued rewards and outcomes. The
important components to consider in this theory as related to total rewards are the performance-
reward relationship and the rewards-personal growth relationship. The performance-reward
relationship refers to the degree to which the individial believes that performing at a particular
level will result in a desired outcome

Reinforcement Theory
The Expectancy Theory is related to the Reinforcement Theory, which takes a behaviorist
approach – that reinforcement conditions behavior. This suggests that a rewards system
is paramount in creating the desired behavior.

Goal-Setting Theory
In contrast, the Goal-Setting Theory developed by Edwin Locke takes a cognitive
approach – conveying that developing specific and difficult goals, along with constructive
feedback, yields higher results. This suggests that it is important to establish goals and
provide feedback to employees in accordance with the goals of the organization.
Management by objective programs is based on this theory.

Self-Efficacy Theory
Albert Bandura developed the Self-Efficacy Theory, which compliments the Goal-Setting Theory.
This theory states that people are motivated, or de-motivated as a result of their personal belief
about their ability to perform a task.

Herzberg’s Two-Factor Theory

In his Two-Factor Theory, Herzberg presented the concept that people are motivated in a
work setting by the extent to which a job is intrinsically challenging and the extent to
which it presents opportunities for recognition. This theory teaches that the need to
motivate through recognition and the need for work to be personally fulfilling must
coincide with meeting economic needs.

McClelland’s Need-Based Theory

A final applicable motivation theory is McClelland’s Need-Based Theory. This theory is built on the
understanding that people have three needs: the need for achievement, affiliation, and power.
Though employees at all levels of theorganizationl hierarchy demonstrate varying degrees of the
need for affiliation, front-line workers and middle managers tend to demonstrate an especially
high need for achievement. Upper-level managers tend to demonstrate an especially high need
for power

Strategic Elements
There are five strategic elements necessary to implement a successful total rewards
system – compensation; benefits; work-life balance; performance and recognition; and
development and career opportunities (see Figure 2). Each of these elements must be
carefully considered and strategically designed in order to ensure success.
Compensation
When asked to name a reward, compensation is often the first thing mentioned by
employees. Because it is the most visible strategic element, an organization’s
compensation package must be designed to meet the overal goals and strategies of the
organization while aligning with the HR strategy. Compensation should influence
employees to make personal decisions that are harmonious with the organization’s
needs. It is one of the key motivations for people to join and stay with the organization.

When deciding how much to pay employees, several things must be taken into
consideration. Most importantly, the organization’s strategic goals and HR initiatives
must be in alignment with the pay structure. When determining how its pay structure will
relate to the market, an organization can follow one of four approaches. It can lag the
market, meet the market, lead the market, or opt for a mixed market strategy.

Benefits
In the traditional HR department, the administration of benefits is limited to contracting
with health care providers and developing pension plans. When builiding a benefits
program to support strategic HR programs, the goal is to attract strong employee
candidates in addition to recognizing and fulfilling the needs of current employees in an
attempt to retain them. In order to do so, organizations must provide a benefits package
that sets it apart from others in the industry.

Phase 3: Execution
Once the project team has designed a total rewards system, it moves into the execution
phase – putting the new system in place within the organization. Implementing a total
rewards system is an organizational intervention. The project team must determine who
is eligible, and should consider including all people to avoid perceptions of unfairness and
potential lawsuits. To ensure buy-in, top managers must show visible support. This
means participating in the system in addition to verbally advocating it.

A wide range of issues must be considered when executing a total rewards plan. There
are two different avenues a team can take when making the new total reward system
fully operational – a lead system or a lag system. A lead system requires you to believe
that putting the right rewards in place will encourage your workforce to accomplish key
strategic goals. For example, you would make the plan operational before launching a
new business strategy – showing that the organization is committed to change. A lag
system is the opposite, making the plan operational after employees have helped carry
out the company’s new business strategy.

Conclusion
After recognizing that human capital can be utilized as a competitive
advantage, and defining the goal of HRM as maximizing productivity, the
organization must commit to aligning all aspects of both the organization
and HRM in an effort to achieve ultimate strategic goals. At this time, the
organization is ready to develop and implement a strategic total rewards
system. Keeping the performance-reward link, a cost-value balance, and
the organization’s goals in the forefront throughout the process are the
keys to success. It is important to note that there is no single best practice.
Each organization must identify its specific needs and goals. A total
rewards system must be designed to fit the organization’s culture with the
intention of motivating employees to maximize performance.