Family Employment Policies – Part I

I can hardly count the number of times I have been called in to help a family business encumbered with family member employees whose only qualification for the job is a connection to the company by blood or marriage. These employees are often unproductive, sometimes over-compensated and not infrequently serious drags on company morale and profitability.

Removing these destructive individuals from the organization they are damaging is often difficult and sometimes impossible. It is much more preferable if, having been hired, they had been matched with a job to which they were then suited and their abilities were carefully developed for future promotions. Even calling for the involuntary termination of these family member employees is greatly simplified if there is a pre-established process.

There is a single tool that can provide all these solutions: It’s a written family employment policy that spells out the specific terms for family members covering such areas as recruiting, hiring, promotion, compensation and in a worst case scenario, termination. When you don’t have a written document that makes clear the privileges and responsibilities for family members in the business, the business as well as any given family employee may well hold vastly different interpretations.

So, what goes into a good family employment policy? An ideal family employment policy outlines several major areas. It should explain the purpose of the policy and the philosophy of family employment that underlies it. It should describe the manner in which family members will apply for and be considered for positions. It should cover the general conditions of employment, including compensation and supervisions, and the approach that will be taken to developing and promoting family business member…

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