Should owners be entitled to work in the family enterprise? – my weekly blog

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Should owners be entitled to work in the family enterprise? I have purposely used the word “entitled”. In my value system, a person just by being born into the right family should not necessarily be entitled to all that they would want. You have to consider what your value system is? Some family enterprises believe that all family members have the right to work in the family enterprise.

This really begs two questions:

Role in the family enterprise
– How much does a family member get paid

The role that a family member plays can be twofold. First they are an employee and have a role. In my experience, a family member has to work doubly hard to prove that they can do the work of an equivalent non-family member. Second, non-family employees may view a family member as a “special” employee, and well they should. Indirectly that family member would be the boss of the business and they may say things or make edicts that may not be in keeping with the enterprise’s strategy. One must be careful.

Compensation can be a tricky and troublesome matter, especially if a family member is overpaid for the contribution and role of that family member. Best practice is to compensate a family member based on an objective measure (often an outside salary consultant is engaged) of the employee’s contribution and role.

How can you avoid potential issues from family employees:

– Have discussions about expectations for family members
– Ensure that chain of command is respected
– Understand and communicate the role and responsibilities of non-family employees so their authority is not usurped, either accidentally or purposefully.

This takes some sensitivity training.

Learn, think, apply!