Tips for when your employees are family members
Working with family can be a pleasure. It can also be a pain, especially if you have to terminate a family member’s employment. Here are tips to help you ease the strain of mixing your family and employee relationships:
Hire for the right reasons. Make your hiring and firing decisions based on the skill sets needed to keep your business operating effectively. Hiring your son because he’s struggling to find a job or employing your niece so she’ll be nearby are not good business reasons for bringing staff on board. On the other hand, you may know more firsthand about a family member’s talents than you would a stranger’s. Working with them may help bring out the best in both them and your business.
Set clear expectations. Communicate the job’s performance requirements to your family member right from the start. Clearly define company policies for promotion, compensation and termination. Make it plain that unethical conduct will not be tolerated and that every employee will be held to the same standard of behavior.
Avoid nepotism. Nepotism is our human habit of treating family members more favorably than others. Keep in mind that your non-family employees will be hypersensitive to any favoritism you show to relatives. If someone is a poor performer and doesn’t get called out on it because they’re listed in your family tree, you’ll make their poor performance contagious. The rest of your company will likely start suffering from poor morale and your credibility as a boss will take a hit.
Document performance. Throughout your family member’s tenure, maintain a detailed personnel file that tracks behavior resulting in disciplinary actions. In the unfortunate case of a necessary firing, a well-documented file will provide a narrative record that lays out your reasons and clearly communicates the evidence leading to your decision.
If you have to fire, keep it professional. Set a formal termination meeting. You may want to involve a direct supervisor or a human resources professional to ensure that your company is appropriately represented and to prevent the conversation from lapsing into emotional arguments. Focus the meeting on your family member’s job performance and provide them an opportunity for them to give feedback. Listen to the feedback politely without interrupting or getting drawn into an argument. Use the end of the meeting to suggest resources and contacts to help them transition to a new career. And give them the option to resign rather than be terminated.
The bottom line: Adhere to formal business standards and communicate in a professional, businesslike manner with your related employees. This will help you cultivate a great working relationship with family members, and keep relationships intact even if the job situation doesn’t pan out.
Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in McLean and Tysons Corner, VA. Gilliland & Associates is known for our superior knowledge and aggressive interpretation and application of tax laws. We help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+, LinkedIn, Facebook, and Twitter.