If owners are fair, nepotism won’t ruin work

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Dear Joan:
I work for a large (1000 employee) privately held, family owned business. Key positions are often filled by family members (sons, sons-in-law) whose competency varies. Other good jobs are given to clan members who are just plain inept. One male offspring has a hard time getting out of bed each morning and finding the office.

It's been this way for decades.

I am concerned about the future of our company whose principals make decisions based on what's good for family members rather than what's good for business.

Any thoughts?

Answer:
It's no wonder you're concerned. Nepotism this thick has killed many companies. No doubt tougher competition and customer demands for better quality and service are increasing in your business and this could leave you unable to respond. I've seen it play out before and the sad thing is that the family members are usually too close to the problem to see what it's doing to the company and to their employees. The owner usually wants to keep the business in the family and provide opportunities for the people they love. Unfortunately, in the process they can kill the goose that lays the golden eggs.

Any company, big or small, has personality differences, power plays performance problems and communications problems. But when you add family relationships to the mix, the soup really gets thick. It's tough enough confronting a problem with an employee--a relative stranger. But when you have to tell your sister or son they're not performing, you're family relationships are at stake.

The problem often lies in the way they are given the jobs in the first place. While everyone else has to earn them or be qualified for them, some businesses allow family members to get a job simply because they were born or married into the right family. This removes the opportunity for growth for the rest of the employees who might have wanted a shot at the job, and it's particularly deadly for good employees who have to report to an incompetent family member.

Although it may seem like the perfect situation for the lucky family member, it can be quite the opposite. If the person knows he or she isn't qualified or competent their self-esteem and ego are at risk. Some talented family members say they never know if their advancement in the company is due to their results or their relationship...it's hard to know if they really measure up. And some family members really aren't happy in the business. They aren't interested in it or suited for it but they've never gone off to fulfill their own dreams.
Does this mean owners should never hire family? Of course not. But it does suggest that a wise owner will put some safeguards in place that will create a work environment with integrity.

·        Insist that family members earn their place in the hierarchy. Develop qualifications and requirements for positions that must be met by any candidate who gets the job.

·        Establish performance expectations and use them consistently whether the employee is family or not.

·        Avoid having family members report to each other.

·        Openly encourage respectful disagreement at all levels. Praise employees for stepping forward with a different opinion--especially when it's a different opinion than a family member holds.

·        Consider a policy where sons and daughters of the owner must get some experience at another company before they are allowed to work in the family business. Not only does this build their skills and confidence, it brings new ideas into the organization and earns them respect among their co-workers.

·        Before you do something special for a family member, ask yourself if you'd be willing to do the same thing for other employees. If it's that good why not treat all your employees like family? If you can't do it for other employees what will it do to the dynamics of the workplace?

·        Use an outside board of directors to provide fresh ideas and challenge management practices.

If you're thinking, "I'm the owner and these are my kids and I can do anything I want." Beware. You are underestimating the negative impact on the organization and on the family members themselves.

Family-run businesses can be rewarding and motivating places to work for all employees. The key is using a healthy dose of wisdom to set up an environment in which everyone has an equal chance at success.

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