I’ve been thinking a lot lately about how my experience has been different from my sons, both of whom work for larger companies. My son Brad is a manager for a national office supply retail chain, the other, Jeff, for a large locally based national carrier. My son Jeff has recently changed jobs and it has been very interesting for me to watch this process from afar. I am somewhat familiar with the circumstances surrounding the family that owns the company he recently left and the family that owns the company where he is headed.

As I watched this process unfold, I was dumbfounded at how arrogant Jeff’s former company behaved. They acted as though they were his only option. Even though he had learned quickly and progressed as far as he could within the local office (unless he was made branch manager) in just 7 ½ months, they thought no one else would have him. He was made to feel that, “Thank goodness for us (the proud and ponderous corporation) or you would be, homeless, starving in the streets!”

This company began what they called a “Boot Camp.” A corporate Vice-President flew in from out of town and, amid much pageantry and pomp, arrogantly proclaimed that, “Anyone who wants to stick with the company had better be ready to work harder than they have at any other time in their lives.” This Boot Camp turned out to be nothing more than an excuse for upper management to work the employees relentlessly for 4 months. Jeff and the others in his office were subjected to 6:30am to 5:00pm workdays, forced to work many weekends, and be available for phone calls 24-7—as salaried employees. He and the others in his office were so busy that they often missed lunch and didn’t take more than 5-minute breaks to run to the vending machines for a treat a couple times a day.

The end game played out with 7 of the 9 employees in that particular office leaving the company for different jobs before the Boot Camp was over, my son among them. He found a job a mile away in the same industry, equal salary, a genuine 40 hour work week, and, most important to him, a bonus program that will allow him to add 30% to his compensation through excellence performance.

This reminded me of a conversation (shouting match) my father and I had years ago about the employees at his company. It seems to me that many founders of family businesses feel that, because the business is their “baby,” that everyone else in the world should think it is cute and wonderful and without weakness or room for improvement. The thinking is, “They should be thankful to just have a job at a company like ours.”

The problem with this line of reasoning is that when employees hear and feel this smugness, they tend to be insulted. It is an indirect slap at another’s ability and integrity, a blow at their very humanity. It insinuates that, if it were not for the brilliant, magnanimous, and hard working founder of the present enterprise, they would be starving and perhaps living in the streets. My father would say often that his employees should, “just be grateful to have a job because no one else would put up with them,” which is just not the truth in most cases.

In addition, if you are compensating employees for their time at less than industry standard, they will probably leave the company. It really is not hard to figure this out. However, it seems difficult for many company founders to understand, especially if the employee has any history with the company. My father often felt that working for him should be motivation and reward enough to do a great job. It is perfectly logical to be proud of what one accomplishes; however, one should not expect the world to throw them a parade because they have found a way to do something really well. Much more about this later…

Family Business Rule : Employees work at your company because they are happy with the compensation they receive. Usually NOT because they feel they owe you anything.

The wise always remember that compensation takes many forms. It goes further than the dollar amount on a paycheck. It has to do with benefits as well as how one feels they are treated. Employees stay places where they are fairly compensated, respected, and have something worthwhile to do. It is important for you to provide ways for your employees to contribute – whether it is important tasks, researching trends and tendencies of your market, being included in planning and implementation of important projects, or simply being asked their opinion about things. You’ll be surprised what you’ll learn if you can provide a non-threatening atmosphere where those who work with you feel appreciated enough to offer an objective opinion without fear of reprisal.

I understand that there is a lot more to this particular dynamic and we’ll touch on that later. Bottom line is, do not assume that your employees have nowhere else to go, especially your good ones. Work hard at fairly compensating your good employees, assigning them something of consequence to accomplish, and involving them with important decisions. In addition, at minimum, listen to your marginal employees. You just might learn something critical to the health of your business…

All material COPYRIGHT© 2010, Russell R. Bethers, Offpoint, Inc., USA
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