If you're the head of a family firm, you've heard it over and over again: Regular performance reviews of all employees--both family and others--are important if a family business wants to grow and professionalize its operation.
So what makes Ron Ernst, president of Leadership Horizons, an executive coaching firm in Carmel, Indiana, blurt out "No, no, no!" to the suggestion of a family CEO doing a performance review on a brother or sister who has a subordinate position?
Sibling rivalry, of course. "Even though it's not as prominent in families where parents have been supportive of their children's unique strengths and have not pitted the kids against one another, it still exists," says Joe Jurkowski, a senior partner of The Armstrong Group, a management consulting firm in Fairfax, Virginia.
"Performance reviews are a dreaded part of the management process even in firms with no family involvement," observes Ernst. "If few people like to give or receive them, consider what goes on when you face the possibility of having one sibling evaluate another." It's so disturbing to both of them that they generally don't deal with the issue.
Jurkowski sums it up: "The CEO just expects that the brother or sister will automatically do the right thing without appraisals or assessments."
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).
Good Attitude
In many cases, the brother or sister who adopts that attitude is right. Take the case of Krusinski Construction Co. in Oak Brook, Illinois. When Joe Krusinski started the company 27 years ago, he didn't think it would necessarily be a family firm. But it became one in 1985 when his youngest brother (15 years his junior), Jerry, joined him as vice president of industrial construction. "Jerry isn't reviewed in any formal way," says Joe, who notes that performance reviews are conducted for everyone else in the company.
"Basically Jerry and I operate as partners, although I own the majority of the stock," Joe continues. "We critique the work we do in a very informal way--maybe even second-guess each other once in while--but we rarely have disagreements, even on the small things, because our objectives are so similar. And we're even more clearly on the same course since we completed an extensive strategic planning process about two years ago and developed our mission statement."
Could all family firms forgo performance reviews of siblings? Probably, but it wouldn't bode well for the company's future not to apply standards to one or more of its employees simply because they're siblings of the owner. That opens the door to abuse of position, poor performance and low morale, characteristics no business can tolerate for long. Then how can the performance appraisals of siblings be set up so they won't wreak havoc on the personal relationships of brothers and sisters? How can you infuse the review process with objectivity and a sense of security for everyone involved? Here are some ideas for you to consider when deciding whether to begin the process:
- Think about reviewing a sibling's performance only if you have a long history of mutual respect, have a big age span between you, are both mature and well-grounded, and have both been trained to give and receive feedback effectively. Even then it might be a good idea to have the sibling perform a self-review and then discuss it with you.
- If you decide to proceed with the challenge of a sibling review, think through the process far in advance. For it to work, says Ernst, "The siblings have to be the best people for the job in the company, performance criteria for the job has to be established far in advance of the performance review, and there has to be a stated consequence for non-performance."
- Another option is to forget about formal performance reviews entirely; instead, provide constant review and feedback. This is the approach Ernst favors.
- Depersonalize the process by having the review done by another manager. Surely, if the sibling doesn't report directly to his or her brother or sister, this makes sense. At Krusinski Construction, for example, another brother, John, who joined the firm a few years ago as a project superintendent, is reviewed by the field operations manager.
- Develop a group of advisors that all family members feel comfortable with. Ernst recommends a board of outside directors. "They don't do the performance reviews or act as surrogate managers," he explains, but they can provide the sibling who heads the company with objective feedback if he or she is concerned about the performance of a family member. Family business consultants and coaches are also helpful when problems with the work performance of a family member arises. They can help both you and the sibling who reports to you reframe the issues in such a way as to take the personal sting out of them. "The focus shifts from bad intent to bad practices--a much more business-like approach," says Jurkowski.
Whether you take on the daunting task of reviewing the performance of your brother or sister depends, of course, on the history of the relationship, your maturity, and that of your brother or sister, and where the business is in its development. But as head of a family firm, you have a responsibility to develop an environment that supports and appreciates the personal growth and accomplishment of each family member. And you want to channel competitiveness (which is present in most siblings) in the direction of accomplishing the company's clearly defined and stated objectives. Says Jurkowski, "That's part of what leadership in a family business is all about."
Contact Sources
The Armstrong Group, (703) 352-0660, http://www.877tagline.com
Krusinski Construction Co., 2107 Swift Dr., Oak Brook, IL 60523, (630) 573-3300
Leadership Horizons, (317) 844-5587, ron@leadershiphorizons.com
This story appears in the February 2000 issue of Entrepreneur. Subscribe »
