FAMILY MATTERS: THE IMPORTANCE OF FOLLOWING BASIC HR PRINCIPLES
By The Canadian Tourism Human Resource Council
Monday, December 21, 2009
Running a family business is a delicate balance of managerial skills and personal relationships. Too much focus on either area can result in lost profits or strained familial relations. While it may seem difficult to keep emotions in check when business and family are inextricably linked, a strong focus on human resource issues will help balance these two components and greatly improve chances for long-term success. Plus, having solid HR policies and tools is the best way to ensure all staff feel treated fairly and respectfully – feelings that will increase moral and productivity.
To get started, create an employee manual or guidebook so all HR policies are in one clear document. This should include such things as wages, hours of work, benefits, vacation and leave policies, performance reviews, employee relations, workplace conduct and professional development. Customize the manual as necessary and revise it as the business grows and changes. Make sure all employees have access to the document and review it with new hires. Most importantly, follow the guidelines set; bending the rules will lessen the manual’s importance and lead to confusion and conflict.
One of the major decisions operators will face will be who to hire. Whether the business is just starting out or expanding, hiring family members may seem like the most logical step; after all, they will work hard because they have a vested interest in ensuring the business succeeds. This may well be the case but consider the individual and the position from a professional standpoint before coming to any conclusions. Not hiring the correct person to fulfill the business’ needs will only breed frustration and take a toll on productivity and morale.
The first step is to create a job description. Sum up the major responsibilities and tasks of the position. If it requires any degree of expertise or talent then conduct the hiring process as it would be done with an outsider. Have the family member apply and go through the interview process. Then, enforce a probation period to ensure the person is indeed the right fit for the job. With this professional approach other employees will respect their new coworker and the new employee will feel he/she was selected based on merit.
Compensation is another area that must be handled professionally. While it might be tempting to pay each staff member the same salary, this will not mitigate accusations of unfairness and favouritism. Paying the same wage for differing levels of responsibility and experience will only succeed in reducing the incentive for everyone – hard workers will realize they won’t be rewarded for their efforts and the not so hardworking employees will know they will be compensated regardless of their level of effort, resulting in lessened productivity from both groups. The best thing to do is to look at the job description created when hiring the individual and base the wage on the approximate market value of the position. A pay scale that reflects the responsibilities of each level of employment will make it clear that salaries are based on measurable tasks and performance rather than family ties.
Performance evaluations are a necessary part of every business but with the added emotional component of family these are a very touchy subject and need to be handled with finesse. Having a standard evaluation process will ease the way, ensuring everyone is evaluated in the same, fair manner. First, create clearly defined performance standards that are aligned with the job description and employee’s tasks. Then, schedule a mutually convenient time for management and the employee to conduct the performance review and find a private location to avoid being disturbed. Focus on constructive criticism rather than pointing out weaknesses or failures. By praising areas of strength and then suggesting small, manageable areas for improvement, the staff member will feel their work is appreciated and be willing to try harder to maintain this approval. Above all, communicate feedback throughout the year so there are no surprises at evaluation time. Ongoing feedback will ensure any problems are dealt with in a timely manner instead of once a year when damage may already have been done. Performance evaluations will also assist when it comes time to promote, discipline or even fire employees, providing solid evidence of a job well done or done poorly making the process transparent and objective.
Family relationships can be tenuous enough without the addition of salaries, performance evaluations and promotions. Open, regular communication will ensure any perceived injustices are immediately recognized and discussed, nipping potential conflicts in the bud. Hold regular meetings where employees are able to provide input and are involved in the decision-making process. Don’t assume decisions or information from meetings will be passed on to everyone; those who are left out of the loop will become mistrustful and resentful. Fostering discussion will reduce the potential for conflict and ensure everyone is able to contribute their thoughts and ideas thereby feeling like they are a part of the team.
For businesses that employ both family and non-family members, the balancing act is complicated even further. Non-family employees may feel they are passed over for promotion in favour of family members, asked to worker harder for less money or not able to provide input into either daily operations or long-term goals of the business. Yet if clear policies are in place, non-family employees should feel they are being equitably treated. Market-driven salaries, standard evaluation and promotional practices and open communication will encourage a team environment. Should there be a high turnover rate among non-family staff members, exit interviews will allow an operator to source if there is a common thread and act upon it.
Do not hesitate to seek professional assistance if the balancing act is turning out to be a tough one. There are many resources available to guide management through human resource planning, allowing operators to keep both their family and business moving forward.
