The entrepreneur must be highly professional and competent in handling a business, in order to accomplish their goals. Discovery and development of new products and production processes, and handling risk require some level of professional qualifications, which can be developed through further business related education. One major area that calls for leadership from entrepreneurs is developing human resources to gain a competitive advantage.

The importance of employees in service delivery cannot be overemphasized. The entrepreneur has to show leadership to increase efficiency in the role of human resource management, and also work to ensure employee satisfaction if they are to gain a competitive advantage over rival businesses in the same industry. The role of the leader in human resource management includes the recruitment, development, and motivation of employees. Let’s examine the traits applicable to school leadership.

Employee Recruitment and Development

Entrepreneurs need to observe and interpret labor market changes to position their enterprises as players in the market. For smaller enterprises, certain problems may arise. First, entrepreneurs have to assess the qualification needs, then set clear standards for qualification, to maintain and develop a unique market position. Second, before employees are hired, job design and cautious decision-making in the business have to be determined.

Communication, Motivation, and Control of Human Resources

Information and communication strategies within the business firm are important determining factors of service quality and the company culture. Small business leaders have to carefully create and implement practical channels of communication to achieve meaningful results. Again, the small market enterprises (SME’s) periodically face problems associated with favoritism and information/communication imbalances .

Employee Development and Empowerment

Research shows that, in the business world, employee satisfaction leads to increased customer satisfaction. This is why leadership tasks should include workplace design, and carrying out of a reward and incentive scheme that is geared toward improving employees’ service. Entrepreneurial leaders can choose the best basis for designing the service delivery process, according to the customer/employees’ needs, or employee judgment.

Many employees in SME’s have left their jobs for various reasons, including bad manners in the company, not being appreciated, noncompliance with agreements, harassment by superiors, or an unproductive working atmosphere. Job satisfaction is strongly influenced by the level of freedom in the job, as well as satisfaction with the leadership style in the enterprise.

So, we can assume that there are certain basic requirements that must be achieved for successful entrepreneurship. These include an appropriate wage system, team building, and a satisfactory internal communication system. Interestingly, the issue of wages can a factor of satisfaction, but not necessarily of motivation. Fair wages may not always be expected, thus an increase in employee earnings does not always lead to higher job satisfaction.

Most, if not all of personal motivators are basically highly important performance factors. Entrepreneurs in SME’s should realize the importance of long-term human resource tools such as career planning, training, education, and job diversification. They should also communicate to their employees to show that they are concerned about these issues.

In addition, the entrepreneur has a huge influence over the motivation of employees through the practice of fairness, freedom, and employee empowerment. Entrepreneurs can be divided into two groups: those considered “employee friendly” and those considered “employee distant’ by their employees. The former are seen as more creative in designing the right motivational and communication structure in the business. They offer empathy and fairness, providing higher motivation and job satisfaction for employees than the “employee distant” leader.

There is little evidence that an authoritarian leadership style and low educational achievement by entrepreneurs has a damaging effect on employee motivation. We can assume that higher fluctuation rates may be caused by inefficient human resource management, and the actions of leaders. There is no single effective leadership style: it all depends on the decision-making structures or cultural settings involved. Entrepreneurs should be aware that employees are motivated by a leader’s high sense of fairness and empathy, and should act accordingly to achieve success.