Guide to Firing a Family Member

Be objective

Approach this situation empirically to reduce emotions. If you have not already employed objective standards of performance measurement, it’s time to bring them in.

I recommend: Find resources for evaluating performance at Job Results Management Institute or ZigonPerf.com, and be as detailed as possible in showing what has led you to the decision to fire your employee and relative.  

Create a structure for support

If you have policies that govern all eventualities, there is less emphasis on your personal role when the time comes to swing the firing axe on a relative. Develop a clear set of policies and consider including a separate code of conduct for family members.

I recommend: Purchase and download pre-written HR policies that you can customize at PolicyTech.com.

Involve your board

An outside board of directors or advisory board can help take the heat off you by making the decision to fire a family member a group decision rather than your decision.

I recommend: Download corporate bylaws forms from TheEasyForms.com and revise them so you can create an outside board of directors who can offer objective advice. Go to ManagementHelp.org to order a free complete toolkit for boards.

Bring in experts

To make sure you handle the firing in the best possible way, consider consulting with a family business organization. Based on years of working with family businesses, they may have some insight into how to soften the blow and repair any resulting rifts.

I recommend: Contact the Family Business Institute, the Family Business Consulting Group, or the Family Firm Institute.  

Make it legal

Family members who feel they are being fired unfairly may be upset about more than losing their job. They may also feel that they are being cut out of future proceeds from the family business’s success. And they may seek to remedy that with a lawsuit.

I recommend: To help avoid potential lawsuits, make sure you are firing your relative for the right reasons. Consult the Wrongful Termination Checklist from FairMeasures.com prior to taking action.

Pull the trigger

When it comes time to show your relative the door, follow the best practices for firing any employee. Document your reasons and give the employee the option of resigning.

I recommend: Make it clear and quick. Don’t engage in small talk or apologize or bring up any family relationship issues. 

Hold a post-firing family meeting

It’s important to let other family members in the company know about the firing. Hold a meeting and use this time to reiterate company policies and to remind your relatives that they must meet performance goals like non-family employees. Keep the tone positive and productive rather than bashing the fired relative.

I recommend: Check out the resources for conducting family business meetings in Family Meetings: How to Build a Stronger Family and a Stronger Business.