managing family employees

Employing Family

by Tom Gray | on Jan 01, 2012 |  Comments

Small business owners often resort to employing family members because they are available, known, and trusted. But workplace problems are more difficult to solve when they involve family members, requiring special attention to management tools and techniques.

Relationship Issues

The word “family” is positive. It conjures up images of teamwork that are wholesome, loyal, friendly, etc. Many employers talk about their workforce as family. But anyone who is actually in a family – that would be most of us! – has felt family discomfort too. All the relationship issues in real families crop up in workplace families as well: sibling rivalry, feeling unappreciated, expecting forgiveness for repeated trespasses.

When the workplace family has some real family relationships as well, there are some rewards, but the risks resulting from dysfunction can be many times more serious. This risk is multiplied again where there are only a few employees – when the teapot is smaller, the tempest brews more quickly and explosively. And who does the most family hiring? You guessed it – the companies with the fewest employees: small business.

The Best Person for the Job

Why hire family? As Willie Nelson sang, “I’ve got a long list of real good reasons…” Some are trust; the devil you know; loyalty (he needed a job); tax benefits; and the expectation that family will be committed and willing to sacrifice from time to time when the business needs it.

Unfortunately, one does not often hear that the family member was the most competent candidate: “I needed a marketer, and my son Bill is the best marketing guy I’ve ever met.” Small businesses live on the edge. They are the businesses who can least afford mediocre employees. Small businesses need committed multi-talented people.

What Can Go Wrong?

The reasons to avoid hiring family are mostly about what can go wrong. The employee might feel exploited, and let that dissatisfaction show, poisoning the workplace atmosphere. Managing a family employee is only easy when it is not needed!Correcting and coaching a family member is a touchy area that can spark issues outside the office on the home front.

Family employees may have issues from home (arguments, rivalries, jealousies) that they cannot ignore when they work with the same people. Non-family employees feel out of the loop and less influential when they must compete with family members for the boss’s ear. They may also perceive unfair treatment compared to a family member, in terms of privileges or pay compared to competence and/or effort.

What should a small business do? Should it take advantage of the obvious benefits of depending on a trusted family member, especially when there are some tax benefits involved? Or should it avoid family employees to avoid the extra-difficult morale and relationship issues that result when all is not rosy? Are there some tools that a smart small business can use to employ family yet minimize the downside risk?

Yes, some techniques are available. The next two articles explain them.

What do you think? Do some tools and techniques for managing family employees work especially well for you?

Tom Gray helps owners save and grow their companies. He is a management consultant focused on small business and telecom, a Certified Turnaround Professional (CTP), and a SCORE Mentor. He can be reached at 630-512-0406 or tgray@tom-gray.com. For information on the scope of Tom’s activities, see www.tom-gray.com. For more on SCORE services, see www.scorefoxvalley.org.

Management Techniques for Family Employees

by Tom Gray | on Jan 01, 2012 |  Comments

Family employees can be a problem as well as a blessing. See Small Business — Employing Family and Small Business: Employing Family – Techniques That Work. Establishing policies makes sense even for a small business. Address the problem once, write down the answer as a policy, and move on. Aside from job descriptions and a market-based compensation plan, other useful techniques include objectives, accountability, shared values, and even a major project approval process.

Agree On Objectives

Imagine you employ your spouse, and he or she does the finances. You want him or her to produce the end-of-month reports by the fifth business day, not the fifteenth. When you ask for that, the response is a litany of how he or she spends their time.

What is missing here is a list of goals to be accomplished, agreed to by both parties at the beginning of the year. Your finance person needs to deliver the reports when you need them.

They have to figure out how to do that, rather than telling you their problems and, by implication, asking you to manage their time. This is their problem to solve, not yours. You care about the deliverable, not how they manage their time.

The tool is agreed goals. Without them, there is no basis for the subordinate’s accountability.

Write Down the Company Values

The same idea can take the form of behavior expectations, commonly called “values”. These are “the way we do things around here.” Examples: we value teamwork; our integrity is never compromised; we deliver what we promise, to each other as well as to customers and suppliers; our behavior makes our colleagues proud.

It may seem silly to write down behavioral expectations, but it is most important when you employ family. Why? Because family members have a history of behavior outside the workplace, and they may expect to behave the same way at work – after all, you know them.

They may also believe there are no consequences for inappropriate workplace behavior if one is family, setting up a double standard when non-family employees are considered. The best way to handle this is a set of standards communicated (hence, in writing) before any problems arise. Like goals, these provide a basis for accountability and consequences.

Major Project Approval Policy

One other “policy” could serve small business well: a “major project approval policy.” A major project is usually a large investment, such as a marketing program or a new machine or moving the business. By thinking in advance about what would justify taking such a risk, you improve communications with any co-owner or family member who may be affected by the decision.

Prior definition of decision criteria can also help you as the decision-maker, bringing a degree of dispassionate logic to what may be an emotional issue, with hope warring against fear, or courage facing down prudence.

Problems with Policies

For a small business owner, the unfamiliar behavior here is thinking about potential business problems before they arise, and writing down a framework of expectations, or solution criteria. These owners normally don’t feel they have enough time to handle immediate problems, let alone anticipating issues that might come up in the future!

Also, they are not comfortable committing to written policies, because they know the future brings change and they will need flexibility. They might see policies as an obstacle to managing their future, rather than a tool for organizing their chaotic lives.

Managing employees is not easy, and family employees redouble the stress involved. Establishing and enforcing policies is the key to success: qualifications, job descriptions, shared values, objectives, accountability, market-based compensation, and a major project approval process.

Tom Gray helps owners save and grow their companies. He is a management consultant focused on small business and telecom, a Certified Turnaround Professional (CTP), and a SCORE Mentor. He can be reached at 630-512-0406 or tgray@tom-gray.com. For information on the scope of Tom’s activities, see www.tom-gray.com. For more on SCORE services, see www.scorefoxvalley.org.