In our last blog post, we looked at the first two steps for correcting nepotism in a family business: identifying and acknowledging the problem. In this post, we are going to look at steps 3 and 4.
Step 3: Remedy the problem.
After you have identified the problem and gotten it out in the open, it is time to turn to remedying the problem. The remedy may look different depending on the situation, so below are some example situations and possible solutions.
The situation: Family members are getting paid more than non-family employees for the same job.
Consider giving family members more work to make up the difference in compensation. If family members don’t want to increase their workload, offer to reduce their pay and decrease their workload. Alternatively, raise the compensation of employees to match family member’s compensation.
The situation: A family member is in a position they do not have the skills or training for.
You may want to train the family member to fit the role, especially if this is an area the family member is passionate about and wants to keep growing and working in. If they are not a fit for their current role, you might also think about shifting the family member’s role and responsibility to something more manageable. If it is clear that the family member can’t have a full-time role in the business, find someone else who will be able to and provide the family member with an “off-ramp” such as a sabbatical process, part-time, or remote assignments.
The situation: A family member is underperforming in a role they are capable of.
Hold all family members to the same standards and review process as employees. Make sure you keep a good written record of what is going on. Have a conversation with the family member, let him or her know what the standards are, and allow them to correct themselves.
If the underperforming family member is being managed by another family member, consider reassigning them to a strong, capable non-family leader. The point is not to “offload” the family member onto someone else but rather to provide accountability that family members may not be able to. If you do this, the non-family leader needs to understand that they have the total support of senior leadership, including family members.
If the poor performance persists and the family member needs to be let go from the company, consider offering an alternative to firing, such as allowing the family member to resign. Remember that letting a family member go from the company does not mean firing them from the family, so take time to make sure they know that you still value and care about them, even if they won’t be working in the company anymore.
Step 4: Restore trust by taking consistent measures against nepotism going forward.
If trust has been broken with employees as a result of nepotism, it is important to be consistent in the measures you take against nepotism afterward. Part of restoring trust means being willing to do things that are difficult or inconvenient to show the other party that you are dedicated to making things right. Consistency will help send the message to employees that you are serious about fixing the problem.
Create formal guidelines and standards for how the company will handle nepotism in the future. This might include things such as creating an anti-nepotism policy or implementing more transparent hiring practices.
It is a good idea to develop a concrete internal promotional structure, with specific job requirements and descriptions. Involving a neutral third party in decision-making might be very helpful in avoiding biased decisions. Also consider creating communication channels so all employees, both family and non-family, have a safe space to express disagreement. These might include things such as surveys or 1:1 meetings to check in and see how things are going. Return to the first post in this series here.
Chew On This
What is another step that someone could take to restore their employee’s trust?
