How to Be a Fair Manager in a Family-Owned Business

For many years, families ran small businesses, with some owners passing their companies on to the next generation. Today, many entrepreneurs often start businesses without involving relatives at all.  But, as the business grows, it can be tempting to enlist children, spouses, and other family members to help.

When that happens, it brings additional complications, especially for companies operating as a hybrid of family members and unrelated hires. If workers sense nepotism, it can put a serious dent in morale. Here are a few tips to keep things fair when managing both family members and outside staff in your business.

Have Written Policies

The best way to demonstrate your commitment to enforcing policies equally is to provide them in writing.

Create a thorough manual that documents your policies on everything from hiring to vacation time to termination. Include a description of the criteria necessary to qualify for promotions.  Finally, make sure you hold all employees to the same criteria, regardless of their relation to owners or managers. All employees should also sign a written job plan that outlines their day-to-day duties.  You should compare the plans against each other to ensure fairness.

Conduct Regular Evaluations

You should have each employee receive a regular performance evaluation that includes a written document and a consultation. Employees should sign the document to certify that they received it. This process will help you if you ever find that you’re charged with favoritism for terminating one employee instead of another. A documented history that you’ve discussed an issue with a worker will be exactly what you need if litigation is involved. It’s imperative that supervisors exhibit fairness at all times during this process, evaluating relatives by the same objective criteria that they use for rest of the team.

Hire Non-Family Managers

As your business grows, make sure your leadership team includes a substantial number of non-family members. Any relatives on staff should report to non-family members when possible. This will have the added benefit of placing distance between you and your relatives, which will make it easier to separate business from your personal relationship. When a supervisor comes to you to explain performance issues with your relative, advise them as you would if it were any other employee, taking care to resist the temptation to protect your loved one.

Take Accusations Seriously

If one of your employees levels a charge of favoritism at you or one of your team members, take that accusation seriously. Dismissing it will only alienate that employee, as well as others on your staff. Let the accuser know you will fully investigate the matter and take measures to correct any problems. If you’ve made the mistake of unfairly promoting a family member, you may have to reverse the promotion until every interested employee has had the chance to interview for the opportunity. This type of claim may be a sign that it’s time to take a serious look at your operations. You need to identify areas where you may be favoring your family members over the employees who aren’t related to you.

Running a family-owned business can be tricky but by having standards in place, you’ll create a foundation that will help you fairly manage your employees. You’ll likely need to take extra steps to make sure you don’t show favoritism. If you have others on your management team, though, they can sometimes let you know if you’re crossing the line.

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