Do non-family employees feel like “outsiders” in your farm operation? If so, it's a sure bet that their lower morale and simmering resentments are having a negative effect on your operation and sapping your profits. It makes sense, then, to take action that will make outsiders feel right at home.

How? Workplace psychologists suggest taking two steps. First, foster a business environment that communicates respect for all players. Second, make a point of uncovering festering issues before they escalate into serious morale-busting crises.

Both steps, to a large extent, require a continuing improvement in communications techniques.

“Facilitating open communications can be even more important at family-run operations than at other kinds of businesses,” says Jerry Kleiman, cofounder of Optimal Resolutions, a Manhasset, NY-based firm that helps family businesses resolve relationship problems. “There are so many additional issues involved that you really need to be mindful about identifying and dealing with problems before they become critical.”

Here are some great ways to keep non-family employees happy:

  1. SET THE GROUND RULES

    Right from square one, non-family employees need to be told the ground rules in terms of their prospects.

    “During the hiring process the applicants should be informed as to whether they will be essentially place holders, or whether there will be some potential for promotion,” says Susan Lazar, a Minneapolis-based family business consultant. “It is important that expectations be clear.” To what level of authority and decision-making may they aspire?

    Is your family operation one of the many in which there is no possibility that a non-family member will be able to gain ownership? That's not necessarily a problem, says Lazar, as long as the non-family employees realize the restriction and are comfortable with it.

  2. TREAT PEOPLE FAIRLY

    “Non-family employees realize they will not be treated in a manner equal to family members,” says Aron Pervin, president of Pervin & Company, a family advisory in Toronto, Canada. “But they do expect to be treated fairly.” This means family members must not take advantage of their positions in ways that cause irritation or resentment.

    This means avoiding any appearance that family members are benefiting unfairly from the sacrifice of others. Suppose you pull up in a new luxury vehicle, and then tell everyone you can't absorb more of their health insurance premium increases. That's something that is very hard for people to take.

  3. CONFRONT FAMILY ISSUES

    “Family discord directly affects morale and creates a culture that isn't attractive to aspiring and ambitious talent,” warns Pervin.

    When family members are arguing with one another, or simply giving one another the cold shoulder, profitability is threatened because business strategy necessarily becomes somewhat ad hoc and subject to the whims of the family member holding the most power. The insecure nature of such power dynamics can spark paranoia about outsiders: “High performance by a non-family employee may actually be viewed poorly as it undermines owner-manager control.”

    The solution to this problem, says Pervin, is for family members to make a commitment to open communication. Disagreements and personality conflicts must be discussed, not swept under the rug.

  4. WORK HARD

    Non-family employees will especially resent privileged gold bricks. Any family member who receives a paycheck has to work as hard as non-family employees.

    On the matter of performance, problems often arise when it appears family employees are not being assessed by the same standards as non-family employees. In the real world, though, it sometimes occurs that underperforming family members have to be retained in the business.

    “There are cases when a family member may be just not capable or competent, but the family feels a responsibility to provide the individual with a means of financial support,” points out Lazar.

    What to do? Lazar suggests creating a position tailored for the skills of the family member. “Your challenge here is to allow the person to feel they are achieving something. In this case they will gain the respect of the other employees even if the person is not performing to the level of the other family members.”

  5. SHOW APPRECIATION

    Family operations can help non-family employees feel valued in a variety of productive ways. Share the fruits of success in terms of bonuses, benefits packages and retirements plans. And provide less ambitious but still highly prized extra such as:

    • Food baskets at Christmas

    • Summer picnics

    • Company luncheons or dinners to award individuals for length of service

    • Willingness to provide advice and guidance to individuals on problems encountered outside of the business.

    It's in these little areas that family organizations can really shine. Bigger companies often just don't have the time.

  6. OPEN THE DOOR

    Open-door policies are often a hallmark of family run operations. Family members in supervisory positions should be approachable, either when they are working alongside others or when they are in their offices.

    The bottom line is to encourage a climate of clear communications among family and non-family employees. Dealing with issues through explicit policies and open communications can obviate the building up of dissatisfaction that impacts performance.

    “Problems arise at family businesses when there is a weak intersection of expectations and reality,” says Paul Karofsky, principal of Transition Consulting Group, Weston, MA. “This can lead to frustration, hostility, terminations and even lawsuits. This stuff can get nasty. Left unchecked it can kill morale and destroy profitability.”