Compensation In Family Owned Business

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Family owned business is a definition to describe a company that is owned by a certain family and the ownership and management of this company handed down from generation to another within the same family. Regularly the founder of these companies is the Head of the business, while other family members usually fill the high level positions and the rest of jobs may be filled by non family members. Business may face some problems due to the possibility of conflict between family members perspectives. In order to sustain this type of business, founder must prepare next generation to take over the family business, this can be done by encouraging them to complete their studies, work as part time employee in the business different departments to…show more content…
Family members compensation should be based on their actual job performance, not the family relation. Compensation can be through salary, stocks, pension, insurance and profit percentage sharing.

Qualifications and guidance for family member who hoping to participate in business

In the case of Our Town America Plummer Sr. didn’t have a clear policy to deal with hiring friends or family members that doesn’t have the necessary skills or talents to add something to the business.

As a result of Plummer actions in hiring and compensating employees, the business

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“An entrepreneur acts as an innovator, initiating changes and generating new opportunities that in the long run cause economic growth.”( Tiit Elenurm, Ruth Alas, 2009) A successful entrepreneur can be identified if he have the following characteristics: desire and seek independence and get rid of others control, enjoy a strong sense of initiative, motivated by both personal and family consideration, always excepting a quick and solid outcome from their investment, got the ability to react and respond to changes quickly, dedicate itself for the business and enter the business as much by chance as by design. Plummer Jr. (did he consider successful
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and his family owned business, I advise Mr. Plummer to note and implement some policies and techniques in order to make his business survive in the market. “Employees need to be treated like employees, not family members. Similarly, family members need to be treated the same way at work as any other employee. There should be a set structure regarding pay, authority, benefits and hierarchy not varying according to family relationship. If family members--or even non-family members--express reluctance to evaluate a family member 's performance, consider bringing in an outside resource.” (Hutcheson, James Olan,

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