Family businesses are a large employer in Australia and make up the majority of small – medium sized businesses. No matter the size of the business, there are a six Human Resource management (HRM) essentials to get right.
Articulate the Mission / Vision / Values
Family businesses are established and operate under the guidance of a founder who has a clear mission, vision and set of business values.
When the business is young, the founder will be sharing these on a regular basis with employees and clients.
However when the company grows, the founders availability to personally share the mission, vision and values decreases. As a result, we start to see employee behaviour slipping away from these guiding principals.
While it would be great to start the business with Mission, Vision and Value statements, sometimes, it takes some time for these to form. However, as soon as possible, it is important for the business to define the mission, vision and values.
Once the Mission, Vision and Values are set, it is essential that they are disseminated and clear to all in the business.
A good communication plan will ensure all employees, clients, customers and suppliers know and understand the company philosophy.
The added benefit for a family business, is that family and non-family members will be equally clear on what the company stands for.
Prepare and maintain an Employee Handbook
An employee handbook sets out what’s important for all employees. For a family business, it establishes a standard that applies to all employees, both ‘family’ members and non-family members.
Included in the Employee Handbook should be;
- Company history, background and culture.
- Mission, Vision and Values
- Organisational charts
- Code of conduct and Standards of Behaviour
- Disciplinary Policy and Procedures
- Health and Safety Policy
- Emergency procedures
- Workplace Procedures and Policy
- Grievance Procedures
- Bullying and Harassment Policy and Procedures
- Equal Opportunity Policy
- Hours of Work, Shift Arrangements
- Compensation & Benefits, Rewards & Recognition policy
- Financial delegation and reimbursement policy
- Leave processes and procedures
- Parental leave procedures
- Performance standard and performance management processes
- Internet, social media and email policies.
- Confidential information and privacy policy.
- Use of company property and policies.
- Training & Professional Development
- Termination of Employment
An employee handbook should establish a standard that applies to all employees, not matter whether they come from inside or outside the family.
Recruit the best talent for the job
Often one of the family business’s objectives is to provide employment opportunities for family members, and ways for the family to maintain its wealth.
While the business might act as a ‘job maker’ scheme for family members, it should not be at the expense of the business as a whole.
It is important to ensure when staffing the business that recruitment and staffing standards are set and maintained. If family members are not qualified or capable of meeting the requirement of a position, it is important to look externally for talent to do the job.
If necessary, strategies to develop the capacity and capabilities of family members should be established, instead of putting them into a role and hoping they grow into it.
The objective is to make sure that the positions are staffed effectively.
Conduct performance reviews
Performance reviews in a family business are probably some of the toughest, but they should be completed for all employees consistently.
It is becoming common to have a number of reviews throughout the year. These are opportunities to assess how things have gone, recognise achievements and also identify areas for improvement.
Setting goals, standards and expectations at the beginning of a work period and reviewing against these standards can make the process as objective as possible, no matter who is being reviewed.
With family members, some consideration might need to be made with regards to who conducts the reviews.
Sound record keeping and documentation of reviews will ensure that the process is as transparent as possible.
Keep excellent HR records
Not only is it necessary for compliance requirements to keep good HR records, but the value to the leadership team of a family business is not to be discounted.
To remain compliant with FairWork, Professional bodies and Health and Safety requirements, good record keeping is essential.
From a management perspective, no matter whether it is a family business or just a small business, good HR record keeping provides a basis for all reward and recognition programs, compensation and benefits, grievance processes, training, induction and performance review processes.
For a family business, such record keeping will ensure both compliance, equity and transperancy for both family and non-family members working in the business.
While it can be onerous, it is good practice for a manager to write up all job performance discussions they have with their team members. Brief notes on matters covered, agreed next steps (for the manager and employee), goals and objectives, can be productive and ensure all future discussion are working from a common base.
For a family business, this becomes much more important as it goes to establish standards from where discussions to family members about business related performance can be objective without impacting family based relationships.
Have a succession plan
Something common to family businesses is the desire of the founder to pass the business on to their children.
Where the founder wants the business to be passed on to family members, developing a succession plan is essential.
A successful succession plan is based on a strong talent management plan to provide possible successors to lead the business. When it is decided a family member must take over the business, a specific development plan can be crafted.
A general talent development plan will allow family members and/or non-family members to be developed, trained and mentored to take on leading roles in the business.
With a pool of talent, the founder of the business can appoint successors and the management team.
Conclusion
For a family business, good Human Resource policies and procedures provide clarity and certainty for all employees. In addition they provide the management team with the tools necessary to run the business.