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Working with family may be a necessary move for most small businesses.  It could also be very challenging especially when non-family employees resent their favored status.  How then should you deal with family members in a business?  The Globe and Mail quotes Peter Jaskiewicz, who teaches a course on advising family enterprise at the University of Alberta.  “When you interview family firms that have been around for many generations, they have very clear rules and prescribed roles for family members.”  Dr. Jaskiewicz continues, “Family businesses that do quite well clearly communicate their values and stick to them.  That might mean saying no to a family member if it’s for the best.”  You have to be fair and maintain good relationship with non-family staff.

Working with family is often a necessity at small operations, but it also comes with challenges. Business owners must build strong relationships with staff who need to see their own possibilities for promotion within the firm. Non-family staff might also resent family members who are given unearned perks and positions.

Entrepreneurs often struggle over whether they should hire family members, says Peter Jaskiewicz, who, as an assistant professor in strategic management and organization at the University of Alberta’s Alberta School of Business, teaches a course on advising family enterprise.

“When you interview family firms that have been around for many generations, they have very clear rules and proscribed roles for family members,” Dr. Jaskiewicz says. “They say family members are very welcome but they have to be at least as good as non-family members or better, because their name is at stake.”

It’s quite common for companies to hire family members whether or not they’re qualified, Dr. Jaskiewicz observes. When that happens, he says research shows those companies underperform.

One solution, popular in Europe and Asia, is for the family firm to outsource the hiring of any family members to avoid bias. Dr. Jaskiewicz sees many successful examples of family members who finish their university degrees and then prove their worth by working for a competitor for four or five years before being hired into the family firm.

Above all, companies need to demonstrate fairness to keep their top talent.

“Key employees will be the first ones to leave if they start to resent family policies,” Dr. Jaskiewicz says. “Family businesses who do quite well clearly communicate their values and stick to them. That might mean saying no to a family member if it’s for the best.”

Good relationships with non-family staff are critical to any family-run business.

It’s helpful to have trusted advisers available, such as an accountant or a professional that they’ve known for a long time, experts say …

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