The Family Employment Policy

In any family business, conflicts and disagreements can erupt between family members for any number of reasons, or for no reason at all.  One of the most predictable reasons for conflict can come from the termination of a family member.

Many family business advisers spend their career helping families patch up their differences.  This reactive approach is needed unless family business leaders are able to place more emphasis on prevention.  Prevention tactics will not eliminate all conflict, as people will always disagrees and terminations can be hard on everyone, but it can help to keep the “family factor” more in check.

Creating and having a “Family Employment Policy” is one major step in the direction of conflict prevention.  The original reaction of many heads of a family business is say that the family employment policy is the same for all employees.  However, it is important to have a separate policy for family members because many times the only qualification someone has is a blood or marriage relation.  These employees can be unproductive, sometimes overcompensated, and bad for the company.  By having previously set conditions for family members, similar issues can be avoided from the start.

A written family employment policy lays out specific employment conditions for family members such as recruiting, hiring, promotion, qualifications, prior experience, compensation, and termination.  Not having a written document for family employment often leads to exception making and different interpretations of how family situations should be handled.  If it is stated in a previously agreed upon document exactly why a family member is being terminated, it can help avoid some of the tensions and conflict.

What goes into the development of a good family employment policy?  Number one, the input of family members.  People will tend to support what they helped create.  Also, creating a family employment policy can be a way to communicate to all the family the values and philosophies of the business.  For example, it may mandate that in order to remain at the company, family employees must maintain positive and respectful relationships will all other co-workers.  One important thing to communicate is that being a member 0f the business is a privilege, not a birth (or marriage) right.