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Don't Get Personal

Taking the personal out of personnel isn't easy when you're talking about family.
January 1, 2000
URL: http://www.entrepreneur.com/article/18852

Most people in family businesses have more trouble separating personal from personnel issues than they have figuring out how each of the words is spelled. Lots more.

And with good reason: It's not entirely possible--nor desirable. "The personal relationship you have with a relative may be the very reason you're working together," says Paul Storfer, 44, president of HR Technologies Inc., a human resources software developer in Purchase, New York.

Storfer should know. He could have stayed in his executive position in the high-tech industry, but he chose instead to go to work for his father in Herb Storfer's executive search firm for three years. Then he and his dad founded HR Technologies in 1995. He wouldn't have joined forces with Herb (who had also worked for his father) if he hadn't valued the personal as well as the business relationship.

Personal relationships are also essential to the family members and friends who compose the 12 full-time and 30 contract employees of The Virtual Marketing Group (VMG), a full service technology-focused marketing communications firm in Atlanta. "By working together, we have the benefit of seeing each other every day," says president and CEO John DeWitt, who, with his wife, COO Lisa Paterno, heads the group.

While most people in family firms agree that you don't want to lose the best of what a family company has to offer, there's also an acknowledgement that the personal relationship can be abused. One way to counter that is to make sure everyone knows the rules of operation and what is expected of them. "Families don't need written guidelines to operate, but family businesses do," says Dr. David Gage, clinical psychologist and founder of Business Mediation Associates in Washington, DC.

It isn't viable for a firm of, say, 10 people to have a human resources department, of course. But it should have formal personnel policies. And Gage urges the family to think through the details of each policy, noting that's where the problems usually arise. Here's how to get started:

"Sometimes people think just because they're family, they can take advantage of the rules," says Leon Eastmond, president of A.L. Eastmond & Sons Inc., a second-generation, family-run boiler/tank manufacturing and repair company in New York City. "But I won't tolerate such foolishness. Business is business, and I tell them that I don't dictate the terms of their behavior; the business does. If they don't act properly on the job, they'll be on a slippery banana with this company--even if they're members of the family."

Among other strictly family business what-ifs: Should a family member who isn't carrying his or her weight in the organization be treated differently from other employees? What happens if someone in the family wants to borrow money from the business--something other employees can't do? Will a family member have to be on the job for a year before being eligible for vacation time, as might be the case with other employees? The list goes on and on.

Standard personnel policies are important to the running of any business, but they're even more essential in a family business. Don't avoid or neglect developing them. They serve to deflect any entitlement attitude family members might have, provide nonfamily employees with a sense that the business is being fairly operated, and take away some of the fractious issues that can crop up when family members work together.


Patricia Schiff Estess writes family business histories and is the author of two books: Managing Alternative Work Arrangements (Crisp Publishing) and Money Advice for Your Successful Remarriage (Betterway Press).

Contact SourcesBusiness Mediation Associates, (888) 922-1262, BusMed@aol.com

HR Technologies, (914) 251-4940, pstorfer@hrcompass.com

The Virtual Marketing Group Inc., (404) 705-4570, ext. 18, lscaun@v-m-g.com