Hiring Dilemmas: Relationships, Roles, Rewards, Retention

Right people. Right place. Right time.

There are several dilemmas founders can face when hiring. In “The Founder’s Dilemmas”, Wasserman discusses that these dilemmas fall into the “Three Rs framework”. Relationships (whom to hire), roles (what positions to create or upgrade, when to do so, and the types of people to hire into those positions), and rewards (the compensation and equity that is used to attract and keep people).


Founders can take advantage of social capital and seek out hires from this pool that is already familiar to them, which comes with some benefits and of course some risks. Founders who hire close friends or family members may find that they run into the issue of avoidance when it comes to discussing the more difficult topics or the pain that comes when things do not go as planned within the company. I plan to hire some friends and family into my entrepreneurial venture but not without making certain that they have the necessary skills and drive, and with the understanding that personal is personal and business is business.


As a company grows, founders will find that the business has new needs. I have worked for the same company for four years and new positions are created often and some positions are removed. It’s the ebb and flow of things. Not only will positions need to be created but some positions will need to evolve and change with added responsibilities. One of the harder decisions a found may have to make is to let someone go, maybe they are underperforming or maybe their position is no longer necessary, and of course this will come with a “what now”. Firing or turnover is often followed by hiring a replacement, though sometimes the question may be whether the position even need to be refilled. There is plenty to weigh when deciding which roles need to be filled and whom to hire to fill them.


Once a founder has established the needs of the business in terms of workforce, they must then decide how they will reward their employees. Salary, compensation, benefits, and bonuses come to mind. According to Harvard Business Review, rewards only influence temporary compliance. I beg to differ, at least a little. I believe that the success of rewards relies heavily on the individual and should not be the sole motivator or incentive. A company with a poor management team and terrible culture could give hefty bonuses regularly, but it does not mean that they will see productivity or morale shoot off the charts. It may be hard for founders, especially ones in fresh startups to find the balance, but the main idea that founders need understand is that some level of rewarding the A-players is important and that they must be certain to avoid rewarding those individuals that under-perform. This takes us to…we’ll call it the fourth R.


Once a founder gets the most skilled, hardworking, dedicated employees, it is important to keep them. People leave managers, not companies. Employees want to work in an environment with strong leaders who respect and appreciate them. The A-players want to work with other A-players and they want to see their hard work mean something and matter somehow. A-players need to be coached, encouraged, and appreciated. Roles need to be defined, goals need to be set, responsibilities need to be established, results need to be measured, and a value needs to be placed on roles. Founders need to put time in effort in hiring and keeping employees to reduce pitfalls and dilemmas.

Recruitment, hiring, engagement, and retention are crucial to a success in a business. Employees are assets. Done correctly, it can create huge a competitive advantage. “Leaders who create great companies never do it alone. They always create a team of A-players.”

Herrenkohl, E. (2010). How to hire A-players: finding the top people for your team–even if you don’t have a recruiting department. Hoboken, NJ: Wiley.

Kohn, A. (2014, August 01). Why Incentive Plans Cannot Work. Retrieved from https://hbr.org/1993/09/why-incentive-plans-cannot-work

Wasserman, N. (2012). The Founder’s Dilemmas. Princeton, NJ: Princeton University Press.


Leave a Reply

3 Comment threads
0 Thread replies
Most reacted comment
Hottest comment thread
3 Comment authors
Jill ThompsonRakibAshley Martin Recent comment authors
newest oldest most voted
Notify of
Ashley Martin

Natalie, I’m happy to know that I’m not the only one who will be hiring family and friends in my business. I agree on making sure that they possess the skills I need for them to acquire the position. I don’t plan on hiring family or friends just to help them out with job just because of our relationship. Maybe contingency plans would be a good idea. I know at some company’s, you cannot have any direct reports that are within your immediate family. I love that you said “people leave managers, not companies.” That is so true! I’ve seen… Read more »


It’s a good idea to hire friends and family in business, but I believe in self-investment. I like your writing style.

Jill Thompson


I really like your blog and how you outlined the importance of recruitment, hiring, engagement, and retention and that all can be challenging, but are equally important in ensuring that you have a well rounded team. Jill