What are the motivational HR practices that are most effective in ensuring the survival of startup
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Summary
8 papers analyzed
These studies suggest that motivation-enhancing HR practices, including health benefits, flexible schedules, career autonomy, ongoing training, and fostering an entrepreneurial mindset, are most effective in ensuring the survival of startups.
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Introduction
The survival of startups is a critical issue in the entrepreneurial ecosystem, with many new ventures failing within their first few years. Understanding the motivational human resource (HR) practices that can enhance the survival rates of startups is essential for founders, investors, and policymakers. This synthesis aims to identify the most effective motivational HR practices that contribute to the longevity and success of startups.
Key Insights
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Motivation-Enhancing HR Practices:
- Implementing motivation-enhancing HR practices can mediate the effects of initial resources and human capital on firm survival, with their positive effects becoming stronger over time .
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High Performance Work Systems:
- Establishing high performance work systems, which include a bundle of HR practices such as attracting, selecting, and training employees, can significantly enhance organizational performance and ensure long-term survival.
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Employee Benefits:
- Offering specific employee benefits like health insurance, flexible work schedules, paid vacation, and paid sick leave increases the odds of survival for new ventures. However, benefits like employee stock ownership plans or tuition reimbursement do not significantly influence survival odds.
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HR Practices for SMEs:
- HR practices that focus on enhancing skills, motivation, and empowerment are correlated with better performance in small and medium-sized enterprises (SMEs), especially in young firms and those in high-tech industries or rigid labor regulation contexts.
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Best Practices in HR Management:
- Providing job security, job rotations, ongoing training, developmental performance appraisals, sharing information, career opportunities, fostering employee participation, and performance-based incentives are effective HR practices that drive high performance and survival.
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Internal Factors for Survival:
- Internal factors such as career autonomy, identifying and utilizing allies, and a rigorous understanding of the margin of safety (MOS) are crucial for the long-term sustainability of startups.
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Resilience in Crisis:
- Building a culture of resilience, promoting open communication, prioritizing employee wellbeing, and implementing robust risk management strategies are essential for startups to adapt, survive, and thrive during crises.
Conclusion
Effective motivational HR practices are vital for the survival and success of startups. Key practices include implementing motivation-enhancing HR systems, offering specific employee benefits, focusing on skill and empowerment enhancement, and adopting best HR management practices. Additionally, fostering internal factors like career autonomy and resilience strategies can significantly improve the odds of long-term sustainability. By integrating these practices, startups can enhance their performance and increase their chances of survival in a competitive and often volatile business environment.
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