Things to Know Before Putting Your Kids on the Payroll

Kevin P. Dincher

Americans like the idea of starting a family business. According to the US Small Business Administration, 90% of the 21 million small businesses in the US are family owned—and 62% of employed Americans work for family owned companies. The success rate of family owned small businesses, however, is amazingly low: 7 out of 10 of family owned businesses fail before the second generation gets a chance to take over.

There are many complex reasons behind the family business’ low success rate—and so there is no simple (the-one-thing-to-do) solution. One of the common traps that family businesses fall into, however, is thinking of themselves as, well, as family businesses and ignoring the importance of hiring the right people—and not hanging on to the wrong ones.

The Wrong Help is Worse than no Help

You need a top-notch team to do your best work, and so the most important thing you decide is who to hire and who to fire. Making good decisions about who is and who is not on the payroll is critical to your company’s success—and your own success. The wrong help is worse than no help—and hiring the wrong person is costly. You need to take time to really think about each and every hire you make and not settle for a warm body—not even if it is a family member. In hiring any employee, whether family or not, the goal is the same: a high performing employee who meets your needs and is a good fit for your company and team.

Family First?

Some parents make their children feel obligated to join the company and then automatically put their offspring in important positions even though they have no interest in being there. Some children and siblings feel entitled to a position in the company—and to a position at a level that reflects their status as family members—regardless of their experience, skills and abilities. Sometimes a position in the family business is a fallback solution for family members who have failed in other business ventures or who have spent their 20s and 30s as aspiring athletes or musicians before settling into the family business as unprepared 40-somethings.  Because of their family connections, these family members often rise to leadership positions despite their lack of interest, experience or skill. A crop of managers and decision-makers who are either not interested in (much less enthusiastic about) the success of your company or who lack the ability to succeed in leadership positions only increases the chances of your company failing.

Neither an Obligation nor an Entitlement

In a family business it is normal to want family members to join. But a job in the family company should be neither a requirement nor an entitlement. It is a good idea to expose young family members to the company at an early age so that they can make their own decisions about whether or not to pursue a career there—but then those who do want to join your company should receive no special accommodations.

  •  Identify your need. Don’t create a position around your desire to bring a family member into the company or because a family member wants to join the company. Bring family members into the company based upon their ability to meet your company’s needs, not on the basis of familial relationship.
  • Put it in writing. Once you identify your needs, write a job description with desired qualifications with as much detail as possible. A family member who wants to work in your company should meet the same requirements for education, experience and skills as a non-family member applying for that position.
  • Standardize you application process. Family members should follow the same process of applying for open positions as non-family applicants—and in competition with non-family applicants. And if a non-family member proves to be the better candidate? Hire the non-family member.
  • Develop a formal and rigorous employee development process. And implement it—for everyone—family and non-family—at all levels in the company. No matter how big or small your company is, one of your critical tasks (and biggest challenges) as a leader is to nurture and grow talent within your company. But let’s face it: even when we have a formal development process in place we tend to avoid doing it. And we certainly don’t like doing it with family members. But your family members are no different from other people in the company. They have talents that need to be developed and gaps in their skills and experience that need to be filled. You do them and your company a disservice when you ignore that.

Never lose sight of the ultimate goal: a high performing employee who meets your needs and is a good fit for your company and team. Don’t ignore the importance of hiring the right people (and not hanging on to the wrong ones).  Not even when it involves family members.


Kevin Dincher is an organization development consultant, professional development coach and educator with 30 years of experience that includes not only OD consulting but also work in adult education,  counseling psychology and crisis management, program and operations management, and human resources.

LinkedIn: Kevin Dincher

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Good Managers Hire Slow and Fire Fast—Not Vice-versa (Part 2)

Kevin P. Dincher

The most important thing a manager does is decide who to hire and fire.  Making good decisions about who is and who is not on the payroll is critical to your company’s success—and to your own success.  That’s why it is important not to hire too fast (Good Managers Hire Slow and Fire Fast—Part 1).  Unfortunately, no matter how hard you try you can never really be certain you hired the right people until after they’ve been hired.  When a hiring decision doesn’t work out as expected, acknowledge it and move on quickly.

Don’t Fire too Slowly

If firing people ever feels to easy, then it is time to get out of business.  You’ve been doing it too long.  Firing people who aren’t working out and doing it quickly, however, is the best thing for the company, for your team and for the person who needs to be let go.  In fact, the speed with which you fire may be more critical than the speed with which you hire.

Bad Help is Worse than No Help.

Replacing an employee is expensive; it can run you up to 150% of that person’s annual starting salary in recruiting costs, lost productivity and other costs.  But the cost of hiring the wrong people and not firing them right away is immeasurable.

There is the obvious cost of the new hire’s low productivity—but having a new hire who doesn’t work out as expected has other costs.  When the wrong person is hired the ability of teammates and coworkers to produce high quality work is affected—potentially affecting customers and clients and damaging your brand.  If someone is damaging the organization and the environment that you are trying to build, that creates trust issues, and you may lose good employees.

Trying to Make Good on a Bad Decision

You should have a good onboarding and development program for all new hires that helps them fit in quickly and gives you the opportunity to pass on the culture you are trying to build.  However, when you realize you made a bad hiring decision, your first thought is probably not to fire the person.  Your first thought is probably “how can I make this work?”  Then you spend countless hours coaching, correcting, directing, pushing—and countless more hours creating work-arounds.  Then you end up either performing the work yourself or tasking others to do it.  None of this solves the problem but merely perpetuates it.  It’s like my grandmother used to say:  you can’t make a silk purse our of a sow’s ear.  None of these efforts solves the problem of a bad hiring decision.  They only perpetuate it.

Good Managers Remove Obstacles

When you fire fast, it has a positive effect on productivity and morale.  When you take too long to fire someone, it is like a virus that spreads quickly and hurts productivity, morale and the bottom line.  When it becomes clear that an employee is not going to perform at least satisfactorily, accept it and cut your losses.  The second most important thing that a manager does is remove obstacles so that employees can do the work they were hired to do to the best of their abilities (Good Managers Remove Obstacles—but How?).  When that obstacle is a bad hiring decision, removing that obstacle quickly is only fair to all the stakeholders—even the person being fired.

Never lose sight of the ultimate hiring goal: a high performing employee who meets your needs and is a good fit for your company and team


Kevin Dincher is an organization development consultant, professional development coach and educator with 30 years of experience that includes not only OD consulting but also work in adult education,  counseling psychology and crisis management, program and operations management, and human resources.

LinkedIn: Kevin Dincher

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Good Managers Hire Slow and Fire Fast—Not Vice-versa (Part 1)

Kevin P. Dincher

I’ve never watched The Apprentice, the TV series that turns getting fired into a game show, because I don’t find firing people particularly entertaining. 25 years ago as a new and inexperienced manager, I fired an employee for the first time. She already had a lengthy history of poor quality work, low productivity, bad judgment, negativity and troublesome work relationships when I inherited her; nevertheless, firing her was a drawn-out and excruciating experience. As a result, however, I learned early on the importance of hiring the right people—and not hanging on to the wrong ones. You need a top-notch team to do your best work, and so the most important thing a manager does is decide who to hire and fire. Making good decisions about who is—and who is not—on the payroll is critical to your company’s success—and your own success.

Don’t Hire too Quickly—but not too Slowly Either

Because the pressure to fill vacant positions is enormous, the tendency is to rush. The wrong help, however, is worse than no help—and hiring the wrong person is costly. You need to take time to really think about each and every hire you make and not settle for a warm body. Never lose sight of the ultimate goal: a high performing employee who meets your needs and is a good fit for your company and team.

Identify What You Need. 

Before you start recruiting, whether filling an old position or creating a new one, figure out what your real need is. If your business is growing, identifying the need can be especially difficult but also incredibly important because you need to be forward thinking and hire for where you want your company to go, not where it has been. But every hiring manager needs to remember: you are hiring to fill a need, not a slot. And don’t forget the intangibles; how important are collegiality, commitment, passion, confidence, communication skills, patience, high energy, and the like? Identifying these intangibles is just as critical to making good hiring decisions as identifying technical skills.

Put It in Writing

After you have identified your needs, create a job description with as much detail as possible. You want candidates and new hires to be clear about responsibilities from the start so there are no confused expectations. Additionally, be sure to have your company policies and procedures for employees in writing. That will save you big headaches later if someone doesn’t work out.

Don’t “Wing It” at the Interview

I am always amazed when managers tell me they don’t prepare their interview questions ahead of time. There isn’t enough space here to go into all the reasons why this is a bad idea—and how that contributes to hiring the wrong person. Prepare your interview questions before you start scheduling interviews. Yes, a good interviewer is flexible because a good interviewer is a good listener and knows when to follow-up on something unexpected, unusual or unique. But remember your ultimate goal:  a high performing employee who meets your needs and is a good fit for your company and team. In order to achieve this goal, you need to come away from the interview with the right information. If the interview process ends without your having obtained that information, then the interview was a failure. Forbes has a list of some good standard interview questions—but be sure to include some company specific questions and to ask questions that give you a sense of the candidate’s personality.

By the way, never be the only person to interview candidates; have other managers and team members do interviews. They provide important perspectives and make sure that the new employee fits with the existing culture.

Finding someone you like, your team likes and fits your needs and company can take time. Don’t rush it.

But Don’t Take Too Long Either.

Hiring too slowly can create its problems. It is possible to over-process a hire. I have seen teams who think “just to be sure” they should interview 3 more candidate—and then just 3 more, and then just 3 more. I recently spoke with an HR Director at a company that had recently filled a large number of new senior level positions. Candidates went through 15 rounds of interviews! 15! The best candidates withdrew from consideration before finishing the process. When you take too long, you actually risk losing the best hire.

When you are too slow to hire, you also risk your team members becoming overwhelmed and falling behind as they try to fill in or work doesn’t get done. Your organization goes into firefighting mode, and acting strategically becomes increasingly difficult. It becomes harder to solve the hiring problem; the more behind you are due to everyone being so busy, the less time you have to devote to finding and interviewing candidates. In the end, hiring too slowly then flips into hiring too fast as companies over-correct. “Just hire someone so we can move on!”

You need to find a balance so that you are hiring slowly, but not too slowly

Fire Fast … continued


Kevin Dincher is an organization development consultant, professional development coach and educator with 30 years of experience that includes not only OD consulting but also work in adult education,  counseling psychology and crisis management, program and operations management, and human resources.

LinkedIn: Kevin Dincher

Posted in Leadership, Management, Organization Development (OD). Tags: , , , , , . Comments Off on Good Managers Hire Slow and Fire Fast—Not Vice-versa (Part 1)
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