It seems the key word in “family-owned business” is family, and for good reason. Being part of a family and a part of the same business really ties those employees and owners who are in the family in virtually every possible way, in most or all aspects of their lives. Being a devoted employee or manager in a family-owned business when you are not related by blood or marriage can pose special challenges. There are questions that may pop into the heads of these employees, such as “Will I receive the credit for that last big client win?” or “Why was the owner’s son promoted to the job I’ve worked to get for 20 years?” or “Who do I need to marry for job security?”
Being cynical is different from being practical, however. A non-family employee can offer objectivity, a different set of skills and background, fresh insight, and loads of experience in the business world. It would behoove a family-owned business to attract and retain the best non-family employees possible, to avoid division among the employees and management, to foster open communication across all levels, and to earn the loyalty that can be just as valuable as that of a family member. This can be seen as the level of commitment of the non-family employee. I got started thinking about this topic when I ran across Meyer and Allen’s three component model of organizational commitment (J. P. Meyer & N. J. Allen, 1991). The model puts forth that there are three “mind sets” which characterize an employee’s commitment to the firm, as follows:
- Effective Commitment – This is essentially the employee’s positive emotional attachment to the business. This involves the employee “wanting” to be there, based on agreed upon company philosophy and goals. The family-owned business whose goals focus primarily on the benefit of family members only, and that exclude ideas and input from non-family employees, is likely to elicit a low effective commitment from the non-family members.·
- Continuance Commitment – This type of commitment is based more on “have to” than “want to.” The employee is hesitant to leave (or “not continue”) the firm, because they may lose out on their economic and/or social costs such as pension accruals or friendship ties with co-workers. The family-owned business would need to be mindful of how non-family employees are compensated, and how the family members interact with the non-family members. If the non-family employee is aware of receiving less compensation and benefits due to not being in the family, or is not friendly with the family members, they have less to lose by leaving.
- Normative Commitment – Feelings of loyalty and obligation define this type of commitment. Perhaps the employee received a lot of training at the beginning of the job, or their moral mindset involves an innate loyalty to their company. This may actually be why a family member stays with the family-owned business more than the non-family employee, out of loyalty to the family itself, and pressure from the family as well.
Do your non-family employees feel committed to your family-owned business? Which type(s) of commitment do they have? If you have any additional questions or would like further information, contact us.
Posted in DCFBA Blog, Management |