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Nepotism as HR Policy

Stew Leonard's, the New York-area family-owned specialty grocery chain that is a legend in retailing, takes nepotism very seriously. Second generation Leonards who now lead the business pride themselves not only on the huge success of their stores, but also on the unique culture and work environment of their enterprise. The business is regularly included in Fortune's 100 Best Places to Work.

The July/August issue of Stew's News, the company's outstanding employee news magazine produced by Editor Jill Leonard Tavelo, pictures seventeen families that have multiple members employed by Stew Leonard's with an article explaining the benefits of nepotism hiring members of the same family. The article shows how family dynamics can positively impact a business whether the families involved are owners, employees or both.

Thanks to the Leonard family for allowing us to share their insights with readers of the Family Business Advisor.

Nepotism: Families That Hire Together Aspire Together

The first challenge every company faces is finding and hiring the best people. The best way to find good people, it turns out is to ask your best employees. And the best bet is that your best employees have family members who are just as good as they are. Family members know better than anyone else who'd make a good employee.

Families that earn together learn together

The second-biggest challenge company's face is training them. Teaching how to deliver exceptional service and then reminding them on a regular basis. Here again, the family provides a ready-made solution. Family members act as built-in mentors for new hires. They're someone they can talk to, ask how we do things and find out how they're doing. It also helps that family members who recruit other family members tend to feel responsible for the new hires measuring up. Higher expectations, rather than favoritism, tend to be the rule.

Families that get paid together tend to stay together

After hiring and training, the third biggest problem confronting companies is keeping good people. Nepotism, it turns out, improves retention. If you keep a whole family group happy, they're all more likely to stay.

But what really seems to make nepotism work is the fact that, unlike the old by-the-book rules, it actually gives people the benefit of the doubt. Nepotism is a bad word for a good idea. In fact, nepotism as its practiced today is a very optimistic business practice. It assumes that people from the same family might actually want to work together and build a business together. It says that, given a chance, people from the same family will work hard and treat others fairly and with respect. And it says that, in this new economy where people really are a company's most important asset, work like life is a family affair.

Around here, success is relative. The closer the relative, the greater the success.

Reprinted with permission from Stew's News July/August 2004.





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