How Do You Deal with Underperforming Family Members in the Family Owned Business?

Business Leader Post, September 5, 2012

Thomas D. Davidow, Ed.D.

The first step is to back up and assess the situation. Look at it as objectively and get as much information as possible, including answers to the following questions:

Why and how did that person enter the business?

How long has he/she been underperforming?

Have you dealt with the individual directly and given him/her your impressions on his/her performance?

Does the individual agree that he/she could do better?

Is it a matter of that person not performing up to capacity or is the individual over his/her head?

Have you talked to other people (family or non-family members) to get their impressions?

Secondly, look for or create a set of performance criteria and have the individual fill it out. (You can also fill it out and create a dialogue about the differences.)

Google “360 evaluation”, a process which includes self-evaluation as well as feedback from those who work with the individual. Although most business families shy away from formal evaluation because of the fear that it will stir up family issues, I suggest that not having honest candid conversations guarantee that you will have family issues with the non-performer. The situation will not get better by itself.