HR Policies for Family Employees

Stopping The Exodus

Certain policies and processes, established before anyone has thought of leaving, are helpful in stemming an exodus.

Family employment policies that establish developmental plans for kids: Milestone checkpoints need to be established so that both generations have a clear understanding of what the kids have done and what still needs to be learned or accomplished before moving on to the next step or taking over the leadership reins. Objective standards help defuse frustration, and developmental plans provide a road map for granting greater authority and decision-making responsibilities. If children derive personal satisfaction from their work and contribute positively to the family business, the possibility that they'll leave is less likely.

Family forums: These are also a good way to defuse frustration--especially when the topics discussed are sticky, such as plans for the older generation's retirement and the next generation's advancement and succession.

Leave-of-absence policies: These allow time off for members who are uncertain about their future goals to assess their roles in the family business. "People often don't want to leave for good; they simply need a break from family, from conflict," says Fredda Herz Brown, founder and managing partner of The Metropolitan Group, a family business consulting firm in Leonia, New Jersey. "Sometimes they want to go back to school; seriously pursue a hobby, passion or talent; or simply try out something different. Leave-of-absence policies might allow them to hold their stock in abeyance and might assure them of a position within the company if they're back within a certain period of time." Most important, these policies give the breakaway family member opportunity for a change of heart and provide a way back into the family business without losing face.

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This article was originally published in the August 1997 print edition of Entrepreneur with the headline: Flying The Coop.

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