Fire in the belly? Employee motives and innovative performance in start-ups versus established firms
Strategic Entrepreneurship Journal · 2018 · Volume 12 · Issue 4
Abstract
Research Summary:We examine whether start-ups attract employees with different pecuniary and non-pecuniary motives than small or large established firms. We then explore whether such differences in employee motives may lead to differences in innovative performance across firm types. Using data on more than 10,000 U.S. R&D employees, we find that start-up employees (“joiners”) place lower importance on job security and salary but greater importance on independence and responsibility. Start-up employees have higher patent output than employees in small and large established firms, and this difference is partly mediated by employee motives—especially joiners’ greater willingness to bear risk. We discuss implications for research as well as for managers and policy makers concerned with the supply of human capital to entrepreneurship and innovation. Managerial Summary:Start-ups and established firms play different roles in the economy and differ with respect to their organizational features. Recent research has started to also explore differences in their human capital. While prior work focuses on employees’ skills and experience, we broaden the notion of human capital to include motivational characteristics. We find that start-up employees differ from those working in established firms with respect to their motives, most notably a weaker concern with job security. Moreover, such differences can partly explain higher innovative performance in start-ups. Our findings suggest that founders may derive significant benefits from hiring “joiners” with entrepreneurial motives. Our findings also have implications for corporate managers who seek to acquire start-ups or who consider creating entrepreneurial units that replicate features of young and small organizations.
Keywords
entrepreneurial firms, human capital, innovative performance, motives, start-up joiners
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