As family business advisors there are a number of questions frequently asked. To assist you in understanding the work we do, I will be publishing a series of frequently asked questions.
My business partner just employed his daughter and is paying her more than others at the same level. What can I do?
Issues like this can be perceived as unfair, creating disharmony amongst your staff and problems for you. Having established policies and procedures regarding employing family members can prevent these problems arising. Proactive practice ensures:
- a position is available, and not simply created for a family member
- the family member is qualified and has experience equivalent to a non-family member applying for the same role
- the best person for the job is chosen so your business is successful and profitable
- remuneration is benchmarked and equivalent to a non-family employee for the same role.
There are also other ways to benefit family employees, if that is the intention of your business partner; for example, through dividends or distributions.
It would be valuable for the family to discuss entry rules and remuneration of family members in order to reach agreement on a common approach, which would also prevent such issues from arising again. A family charter or constitution is recommended here: it represents the family guidelines or rules of engagement in relation to family members in the business.
If you would like to learn more or you have a question you would like answered, please do not hesitate to contact me on ktaylormartin@gmail.com