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A Family Employment Policy Answers Questions

Hal Jackson’s goals in life are pretty straightforward. All he wants is a successful business and a happy family. Fortunately, his parents gave him a good start toward both. A second generation CEO, he and his sister (Karyn, Vice President-Operations) inherited ownership control and run the business day-to-day. Seven members of the third generation are between 6 and 18 years old. As his oldest child prepares to go off to college, Hal worries about how the business might affect the family and how the family might impact the business. With 29 employees, seven kids would be a lot to absorb, especially in top, high-paying positions. Will my sister and I agree on our offsprings’ abilities and qualifications? Can we give honest and constructive performance appraisal to our own children? Can we be objective and fair? What will happen to the family when someone is disappointed by his or her position, supervision, compensation, advancement or treatment on the job?

Hal once asked his late father about his thinking when his kids had joined the business. “You were born vice-presidents,” he’d say with a laugh. “It all just happened very naturally.” Things are no longer that simple.

Unable to find answers, Hal began to write down questions. Should we recruit our kids or let them take the first step? Should we make it tough to join the business or easy? What about the kids’ spouses – should they be allowed or encouraged to join the business too? Would non-family employees work for us if a horde of family members were taking top jobs? What about compensation? What if we had to fire one them?

“Maybe we should sell the business,” Hal thought, “that would be less complicated and risky....but think of all our kids would lose by inheriting money instead of the opportunity to build on their grandfather’s legacy.”

“I need to talk with Karyn about all of this before I drive myself crazy.”

Hal and Karyn spent the morning talking over the list of questions they’d developed, and in a few hours, they had developed a family employment policy “as a guide to ourselves, our children, our employees, our directors and whomever else might benefit from understanding our intentions.” Here is the statement they developed:

Jackson Ventures, Inc.

Family Employment Policy

  1. We hope that all members of our family will always recognize the responsibilities of ownership; our attitude must be that we have to take care of our business, not just that our business will take care of us.
  2. We are committed to our children’s success as they seek to find happiness, meaning, fulfillment and usefulness in their lives, and urge them to seek the course that serves those ends.
  3. Should any of our children desire employment or careers within Jackson Ventures, we anticipate that the company will provide job opportunities and ultimately, the possibility of leading the organization. Indeed, we hope our family will continue to provide leadership for our business for generations to come. However, our children’s advancement in the company will be determined by their ability and commitment, as well as by the needs of the business itself.
  4. Any of our lineal descendants are eligible to work at Jackson Ventures. Their spouses are also eligible to work at the company, but only one of any couple is permitted to work for the business at any given time.
  5. We consider summer work experience to be valuable to our children’s development and will make summer jobs available to any interested family member who is at least 16 years of age. Jobs will be based on the needs of the business and will be appropriate to the individual’s skills and level of experience. Pay will be consistent with responsibilities. The job performance of all family members will be evaluated by appropriate non-family supervisors at appropriate times in the course of employment.
  6. For a full-time position, a bachelor’s degree is required plus a minimum of two-to- three years of full-time employment outside of the family business. We believe that these experiences help to demonstrate an individual’s maturity, sense of responsibility, and ability to contribute to Jackson Ventures in a meaningful way. Ultimately, the characteristics of maturity, responsibility and the ability to contribute will determine whether any family member will join and advance in our business.
  7. All family members employed at Jackson Ventures are expected to recognize that they serve as role models for all other employees. Their performance should be consistent with all rules, regulations and policies of the company.
  8. Compensation to family members employed by Jackson Ventures will be at market rates. The benefits of family membership and returns on capital invested in the family business are distinct from the rewards which can be earned by working at Jackson Ventures.

Hal and Karyn shared their policy with their board and key managers. At a family meeting, they shared it with their mother and their children. Most of the kids were too young to make much of the document, but the oldest, just months from college, recognized the care and thoughtfulness motivating the effort. As part of the meeting, the 18-year-old was also given her first share of company stock. A family rite of passage was established to reinforce family values and unity. “The future cannot be known,” Hal told his assembled family,”but now, as a family, we are better prepared to deal with whatever comes.”

That night, Hal had the best night of sleep he’d had in weeks.

 

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