Labor receives wages, salaries, and commissions. Entrepreneurship or management receives any residual amount left over after paying for the other factors of production. This residual amount, if any, is referred to as profit.
Successful managers are rewarded with profits, unsuccessful managers end up with losses.
If losses are too great, a manager will relinquish the resources that he has control of to be reallocated to managers that will use the resources efficiently and earn profits.