Entrepreneurial performance and Rewards

Entrepreneurial performance may refer to measure (s) of business success and the rewards may refer to the recompense- financial or psychic accruing to the entrepreneur. The convergence is attained when and where the success of the venture itself is perceived as a personal reward.

ENTREPRENEURIAL PERFORMANCE

The various measures of business performance include, longevity of survival or more popularly ‘age of the enterprise,’ sales growth, growth in market share, growth in market scope (local, national or international), growth in investment (in the same unit), additional units created via acquisition & diversification growth in number of employees, profits and so on. Most of these are physical growth and financial growth parameters and have been the traditional measures of entrepreneurial performance. Of late, other measures of performance such as customers’ satisfaction, employee satisfaction, image, credit rating, etc. are also becoming increasingly relevant. These measures are typically referred to as ‘stakeholder-based’ parameters. As the small firms grow into acquiring corporate identities, ‘market’ based parameters such as stock price, EPS etc. may also be the relevant measures of entrepreneurial performance. Figure 3.1 provides a look into the classification of the measures of entrepreneurial performance.

Measures of Entrepreneurial Performance

Measures of Entrepreneurial Performance may relates to the following-

1.     Market Based

2.     Physical

3.     Financial

4.     Stakeholders based

Linking the entrepreneurial performance to entrepreneurial behavior and the rewards, one may posit that because the entrepreneur is interested in feedback on the performance, one is always trying to compare how one is doing in relation to others. Of course, if there is no one to compete, the entrepreneur seeks to improve upon his previous record! It is in this context that the entrepreneurial performance becomes a source of personal reward.

ENTREPRENEURIAL REWARDS

The personal rewards of entrepreneurship extend beyond business performance. Do the rewards inhere in the outcomes of the activity or the activity itself? Often one draws a distinction between extrinsic rewards and intrinsic rewards.

·         Intrinsic Rewards: As the names would suggest, intrinsic rewards vest in the activity itself- ask a musician the joy of making music, the craftsman or the artist the joy of creative work or a cricketer the joy of playing the game! Likewise, the entrepreneur enjoys the creativity and innovativeness that he brings to his venture. This aspect of entrepreneurship may be so dear to the entrepreneur, that he may happily forgo other commonly perceived physical and financial parameters of performance. Many entrepreneurs, even as they welcome the prosperity and flourish of business miss “those momentous” days of bringing their dream project alive. Such rewards inhere also in the pleasure that one is creating an organization/institution that would outlive one’s lifespan. Every business is a source of livelihood to many employees and their families. Thus, the entrepreneurs derive immense satisfaction in their ability to ‘touch’ other’s lives. This they can do also by introducing products and services that bring about improvement in others’ lives, be it a pharmaceutical formulation, daycare, home entertainment, leisure and so on. Even the entire business concept may be based on the intrinsic aspects of personal satisfaction. For example, there are many entrepreneurs who are operating, in their own words, “laboratories” where they design and develop solutions! There is an entrepreneur in cast cutlery that mobilized wandering iron smiths (Gypsies) into manufacturing the products that grace almost every world-class hotel/ restaurant. There are businesses that encourage woman employment. There is, of late, talk of all ‘Dalit’ business.

·         Extrinsic Rewards: One reason an individual may desire to be on one’s own could be that one is looking for the profit pie rather than mere a share in it! The logic is simple-the payoff to the employer is greater than the salary to the highest paid employee! Apart from income and wealth that business ownership may bring forth, it may also be source of career continuity for family members. Small entrepreneurs may have regretted the hike in executive compensation in the post liberalization India and the squeeze on the margins owing to increasing competition; yet extrinsic awards are far from a passé, never before we celebrated wealth so much. The euphoria surrounding the ‘billionaires’ is a testimony to our increasing acceptance of entrepreneurship and prosperity. Even you would aspire to become another Narayanamurthy, Aziz Premji, Aditya Birla, Sunil Mittal, Kiron Mozumdar Shaw, Shehnaz Hussian, Vijay Mallaya, won’t you?

What we have provided is a brief recount of various intrinsic and extrinsic rewards perceived by the entrepreneurs. They say that the taste of the pudding lies in its eating. So venture out. The road may not be easy. It is when the going becomes tough that the tough get going!