Common Causes of Family Business Conflict & What to Do About Them.
Family Business Mediator Video No 28. Expectations & Entitlements.
By Jon Kenfield. Solutionist.
• Family membership may create unjustified and unsupportable expectations of rewards or benefits from the business – cars, phones, credit cards for personal expenses etc. These are sometimes caused by parental generosity that becomes unsupportable on an economic basis.
• Family employment raises obvious Performance & Remuneration issues.
• Popular myth that family members must put in 120% effort by employees. Rarely achieved, except in founding generation.
• Sense of entitlement is a common problem:
o Protected species.
o Rewards / high pay for family name – not for effort, contribution, or ability.
o Job security without objective accountability, resentment amongst hard working family members and staff.
• Parental promises are often taken into the business, without disclosure. Usually creates clash with other staff, managers and supervisors, and HR policy in general.
• Parental obligations taken into the business create problems between parents when rose-tinted expectations are deflated by work realities.
• Solution: establish objective employment, performance measurement and reward criteria in the business (HR task) and ensure its congruence with family rules.
• Satisfy family expectations that are not proper business considerations out of family funds, transferred out of the business. There you can apply whatever family criteria seem good to you, without reference to commercial commonsense.
• Make objective employment criteria a family requirement in a Family Policy or Family Constitution document – then it isn’t personal, when the issue comes up. Ensure that the policy is congruent with business HR policies and procedures.