If we wish to involve family members as employees in the business, it should be more on the basis of merit than as a matter of right.
If the new members willing to join the company are members of the owner family and are going to inherit their share of ownership eventually, their inclusion in the business as an employee should not be automatic, but it should be based on their qualification, experience and suitability to the job.
Before a new family member joins the company as an employee, following things must be clarified:
- Does the business need the involvement of this new family member as an employee?
- Can the business afford the expense of compensation of this employee?
- Will it create any confusion, insecurity or misunderstanding among the family members working in the company?
- Will it create any confusion, insecurity or misunderstanding among the non-family member employees working in the company?
- Is the person qualified and experienced to take the job?
- If suppose the person is not a member of the owner family, can he still be selected on merit alone?
If the family member is a fresher, it is advisable to include them in the business as a trainee first. This will give them a first-hand experience of the job and also of their own company as an employer and its good or bad traits as an employer.
During their training period, they should go through the process of working in the company as an ordinary employee. They should be treated just like any other employee and should follow all the applicable rules. They should also be compensated in the same manner.
After the training period, if the business owner(s) feel that the new person is competent and suitable enough to take up some leadership responsibility on his own, then only they should be given an appropriate leadership position in the company. This decision should be taken completely objectively and collectively by all the stakeholders or partners.
If the new family member is not suitable to lead the company, but they can be employed as a regular employee, they should be given some kind of non-leadership position in the company on the basis of merit alone. Here, too, they must undergo the usual evaluation process and they must follow all the rules applicable to other ordinary employees.
Many times, it is seen that some incompetent or unsuitable family members are given a position in a company which they can’t do any justice to and they cause a lot of damage to the company by their ignorance, immaturity or other limitations.
A business is not a family and incompetence of any family member should not be allowed to affect it adversely. Such family members should be kept away from the business. The business owner(s) may also decide to give compensation to such unsuitable family members for “staying away from the company”. Such compensation will prove to be much cheaper than the consequences of the damage caused by their inappropriate actions.
If we let mediocre people to run our business, we will create a mediocre business. That is a higher price to pay than paying some nominal amount to keep mediocrity away. Yes, it is bitter and tough, but it is right to do so in the interest of the business. The business owner(s) must possess and exercise this maturity to ensure that the business does not crumble by poor leadership after they are gone.
If such people can’t be kept out of the business because of any reasons, they should be given some ornamental position and work which does not affect the working of the company.
Remember, these family members will remain the owners / shareholder of the company and by that right, they will always get their share of the profit of the company, but their inclusion in the business as an employee should be based on merit alone.
Only those family members should be taken in who can add value to the company. Liabilities should be taken care of appropriately.
All the family members working in the company must put in equal amount of effort in their work. Ideally, being owner(s) family, they should put in more efforts.
They should come and go on time as per the company rules.
If their timings or leaves are treated differently, it will cause demotivation among the other, non-family employees.
The family members working in the company should not be given any undue favor in terms of compensation or privileges which is not given to other equally or more deserving non-family employees.
If more than one family members work in the company, their compensation should be as per their work profile and position. Giving the same compensation to all family members working in a company may discourage the more effective ones while overpaying the incompetent.
Number of hours or days spent at the business should not be the only criteria to decide the compensation. The quality of results produced and true performance should be the only benchmark to decide the compensation package of the family members working as employees.
The same applies to their positions and designations in the company.
If a family member working in the company violates any rule or needs to be punished or removed, she should be treated at par with the other employees. Such an impartial approach is necessary to establish the merit based culture in the company.