Reward Policies That Support Entrepreneurship

Abstract

The successful entrepreneurship depends on highly motivated employees who think and behave as risk takers and innovators. In such firms reward policies must motivate employees to think and behave as entrepreneurs. Reward policies that pay employees for behaviors that are effective in bureaucratic organizations may actually hamper appropriate performance in an entrepreneurship. For example, a seniority-based pay structure may be effective in a unionized manufacturing plant, but such a pay structure would send the wrong message to employees in an entrepreneurship. In this article we plan to identify reward policies that systematically encourage the traits vital to the success of the entrepreneurship.