If you’re running a business with your family, you know that one of the largest, most overarching difficulties is in balancing the (physical, emotional, spiritual, communal) health of your family unit and family members with the (financial, economic) health of your business. We’ve spoken at length before about how easy it is to fall prey to naïve thinking when it comes to running a family business: you know these people inside and out, you love and care for them, you understand their unique strengths; who better to work with on a day-to-day basis? However, almost every family business has a moment where reality sets in: A family member’s job performance simply isn’t up to standard. Between standard anxieties about reviewing job performance and the added difficulty of unique family dynamics, you have a tough situation that needs to be addressed with compassion, love, honesty, and integrity.
Preventative Maintenance
Like any business, the best way to avoid having to have these difficult discussions is by creating a Family Participation Plan. A Family Participation Plan sets the ground rules for how the family business is managed and what the expectations of each family member are in order to run a successful business. While a formal interview process may not be required, Family Participation Planning is imperative to establish clear expectations and guidelines for any family member entering the business. Your plan should include a discussion of the specific job roles of each family member/employee, how performance will be measured, the compensation plan and bonuses, and the leadership plan. The interested family member should also have a chance to openly discuss all of the above before taking the position. Once they accept the role, they should be given clear and consistent performance expectations. If there are any exceptional circumstances due to their status as family (for example, if a less-experienced family member is being given a position as a chance to grow and learn), these need to be communicated as well. It’s easy to think that because you’re family, you’ll always be on the same wavelength—but in fact, it’s more important than ever to make sure everything about the job is clearly defined and communicated to ensure that future job performance isn’t complicated by familial emotions. More clarity on the front end will cause less problems on the back end.
Discussing Poor Performance with a Family Member
No matter how much work you put into setting your business up for success, at some point you will need to address performance issues with your employees. In a family business, those employees will be related to you. It will not be fun, but with the right attitude on both sides of the table, these discussions can be fruitful without disrupting the bond you share as family.
When discussing performance issues, start with an honest list of their strengths and what they’re doing well. Always try to find something right in what they are doing, and compliment them on it to reinforce what they are doing right. Once you have identified their strengths, discuss opportunities for them to improve their performance. If you have identified shortcomings, relate them to the expectations you laid out in the Family Participation Plan. From here, utilize what makes a family business special: your personal connection. As family, you and your employee are in a unique position to understand more about each other than almost anyone else. You understand each other’s emotions, goals, talents, weaknesses, and habits. However, do not lose sight of the problem you need to address. With your family member/employee, turn a performance review into a two-way conversation. Identify what they want out of the job, how this job fits into their life goals, and how they are utilizing their talents. If you feel they can improve at their current position, help lay the groundwork for them to reach their goals. If they would be better suited for another position, discuss how that may better fit into their life path. And if, worse comes to worst, the business is simply not the right fit for this family member, reaffirm your love and commitment to their wellbeing while offering your unique insight into where else they can best use their talents.
These discussions—whether they involve performance review, retraining, or even dismissal—are always difficult even for purely professional relationships, but for family businesses they can be uniquely stressful on several different levels. For advice on opening up these discussions or setting up Family Participation Planning session, contact Hubler for Business Families today to set up a free orientation meeting with Thomas Hubler, the expert on family business planning.
When discussing performance issues, start with an honest list of their strengths and what they’re doing well. Always try to find something right in what they are doing, and compliment them on it to reinforce what they are doing right. Once you have identified their strengths, discuss opportunities for them to improve their performance. If you have identified shortcomings, relate them to the expectations you laid out in the Family Participation Plan. From here, utilize what makes a family business special: your personal connection. As family, you and your employee are in a unique position to understand more about each other than almost anyone else. You understand each other’s emotions, goals, talents, weaknesses, and habits. However, do not lose sight of the problem you need to address. With your family member/employee, turn a performance review into a two-way conversation. Identify what they want out of the job, how this job fits into their life goals, and how they are utilizing their talents. If you feel they can improve at their current position, help lay the groundwork for them to reach their goals. If they would be better suited for another position, discuss how that may better fit into their life path. And if, worse comes to worst, the business is simply not the right fit for this family member, reaffirm your love and commitment to their wellbeing while offering your unique insight into where else they can best use their talents.
These discussions—whether they involve performance review, retraining, or even dismissal—are always difficult even for purely professional relationships, but for family businesses they can be uniquely stressful on several different levels. For advice on opening up these discussions or setting up Family Participation Planning session, contact Hubler for Business Families today to set up a free orientation meeting with Thomas Hubler, the expert on family business planning.
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