In all social structures, policies provide a process for aligning an organization’s values with its actions. In family enterprises, where there is an overlap of family, business management, and ownership, a family-employment policy is one of more important policies a family can develop.

It can be difficult for family business owners to be objective about hiring—and firing—family members. The family-employment policy helps by providing an established process and procedure for hiring family members. It outlines the factors necessary for employment, and when applied consistently, helps family members understand their relationship to the business.

“The policy is intended to avoid conflict, and should focus on what is best for the company and should stay consistent for family and non-family members[1].” It sends a message that employment with the company is not a birthright–it must be earned.

For instance, the policy may specify that a family member must have gained experience and earned a promotion in an outside firm; achieved a certain educational level; be a good fit within the company, and have skills commensurate with the current market salary for a legitimate job opening.

The policy may also include a statement of philosophy such as: “We are a family committed to our members and descendants being responsible, productive, well-educated citizens who practice the work ethic and make constructive contributions in the local community and the world at large”[2], thereby reinforcing family values.

While all families are different, it’s clear that development of a family employment policy is dependent upon good communication among family members and between generations.

[1] Family Business Wiki. http://www.familybusinesswiki.org/Family+business+Policies

[2] Bork, David. 1991. https://www.aspenfamilybusiness.com/PDF/Sample_docs/Employment_Policy_Form.pdf