Running a family business can be rewarding all around, but you must balance personal commitment to relatives with the company's needs. Otherwise, you run the risk of damaging the bottom line and staff morale.

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You might feel pressured by blood ties to hire family members, and in some instances there is a good fit. In a best case scenario, the relative handles assignments and responsibilities flawlessly.

But what happens if you hire a relative who doesn't have the skills the company needs? Or perhaps a relative loafs on the job or feels entitled to special privileges. Although these situations aren't good for business and can demoralize the rest of your staff, family ties keep you from firing the culprit.

Here are a few steps you can take to help turn things around:

Train and counsel. Cultivate a talent that will contribute to the business. Let's say the relative is in management and has poor people skills but is a whiz at numbers. Offer some accounting training and move the employee into that end of the business.

Assign projects. Let the family member undertake tasks that can benefit the company, reduce negative contact with other staff members and provide an opportunity to develop skills you need.

Mentor. To gain skills, arrange for the relative to work with a non-family member who is a top producer.

The key is to transform an unenthusiastic or minimally skilled relative into a productive employee as quickly as possible. The sooner this is accomplished, the less likely you are to lose key employees and managers.

Nevertheless, you may still be plagued by a sense of nepotism among your non-family staff members. These employees are likely to leave if most promotions go to relatives. If you are experiencing high turnover, exit interviews can help determine if the root cause is a real or perceived feeling that your company's policies differ for relatives and outsiders.

A non-family member may never rise to the highest ranks in the company, but you can structure career paths that are attractive to outsiders and provide your business with the top-level staff you need.

Here are a few more proactive suggestions:

Examine your needs for executive and management talent. There may be several areas best filled by non-family members. Consider whether expansion would help you take advantage of family and non-family talent.

Make sure that salaries, benefits and incentives reflect the value of your top performers, regardless of blood ties.

Surveys show that compensation isn't the major issue when employees quit. More important are opportunities for advancement, that the person is making a contribution, involvement in management decisions and consistency of those decisions.

If you keep these ideas in mind, you increase the chances that both family and non-family staff will stay content and productive, leading to continued success for your business.