Ask the consultant: How do I manage family members who work for me?

  • Updated: February 3, 2013 - 11:44 AM

Question

I have hired family members for my small business and find myself not holding them to the same requirements as non-family employees. I do think they are more loyal than my other employees but also realize they are not always as productive. Do you have some advice on how I can manage this difficult situation?

SANDY ARONS, MBA, ARONS & ASSOCIATES DIVORCE PLANNING

BRENTWOOD, TN

Answer

Some small businesses are "lifestyle" businesses that often have a small customer base. Owners of these businesses like what they do, hire family members and friends with whom they enjoy working and govern behavior by emphasizing common values, norms and expectations -- such as honesty and hard work. To promote desired behaviors, these owners repeatedly emphasize that family members need to be models of business values, norms and expectations.

Other small business owners want to grow the business. They seek consistent delivery of a product or service to a broad customer base. So in addition to emphasizing core business values, these owners promote the same professional norms for family and nonfamily employees. Here are some things these owners do:

• Before hiring a family member, clarify job qualifications and ensure the family member meets those qualifications.

• Make it clear that family members will not receive preferential treatment. Hire family members for an entry-level position and for a probationary time period. Then, assess their performance and determine whether to retain them. If retained, place them in positions consistent with their skills and abilities.

• Establish an owner-employee relationship. If possible, have a trusted nonfamily member supervise, train and provide feedback about the performance of family members, as they would other employees.

• Many owners require family members to obtain an education and work for a nonfamily employer for five years before being considered for permanent employment.

• If owners do the above and still find that a family member is not a good fit, they may have to let him/her go. Family relations may be strained but will likely heal as owners separate business from family and seek to retain positive family relationships.

RITCH SORENSON, PH.D.

PROFESSOR

ENTREPRENEURSHIP

DEPARTMENT

UNIVERSITY OF ST. THOMAS

OPUS COLLEGE OF BUSINESS

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