Here's what readers are saying so far.
In our latest Real Deal scenario, Chuck Alders, owner of Alders Jewelers, has a dilemma.
His longtime general manager, Mike Wolfe, has hired his wife, Cindy, and his son 21-year-old son Jonah to work in the store.
Jonah and Cindy prove to be valuable assets on the sales floor through the holiday season, but it doesn't take long after that before the chatter starts among the rest of the team. Cindy is bossy and difficult, Jonah is rude and disrespectful to his parents and everyone else, and Mike clearly favors his family members over the rest of the team. Several of the senior associates voice their concerns to Chuck.
Chuck feels an obligation to his long-term employees, but he also believes that if he presses Mike to replace Cindy and Jonah, Mike will issue an "all or nothing" ultimatum. Losing Mike would mean major changes for the business.
The situation raises some important questions:
Did Mike step out of line when he hired his own family members as part of the Alders family business or did he act within the scope of his authority?
Is it good policy to prohibit hiring members of the same family as employees — even in a family-run business?
Can Chuck stand up and reassert control after being a "detached" owner and giving Mike ultimate authority for so many years?
Should Chuck risk losing Mike by insisting that he fire his wife and son?
We'd love to hear what you think. Check out the full scenario and send us your own response here.
Below is a selection of the responses we've received so far.
Mike should have run that by Chuck. If it's not your business, common sense says hiring family is a line you don't cross without permission. It's OK to hire family, but they must be a good fit with the rest of the staff and perform as well or better. Yes, risk losing Mike; anybody can be replaced. It is still Chuck's store and Mike works for him. The bossy wife can stay but realize she's not in charge; others have been there longer and know more about the business than she does. The rude son has to go. He is bad for business and will not change. Mike needs to do his job and fire the son.
Chuck is part to blame by turning over a large part of the operation to Mike. That said, nepotism isn't the best thing, but the damage of Mike's hiring of Cindy and Jonah is done. By Chuck's own admission, Mike has done a terrific job over the years, and Chuck can't just clean house. I would sit Mike for a talk. Remind him that everyone has to work nicely with everyone else to keep the business growing. If Mike is as good as he seems to be, he will get the message over to his wife and son.
As someone who grew up in a family business, I have no problem with hiring family if they are qualified, but they must understand they have to play by tighter rules than the other employees. While Mike does all the hiring, he has an obligation to talk to Chuck before those decisions are made. By Mike not doing this it seems to be somewhat deceptive and sneaky. Chuck has every right to be upset and can absolutely use his authority to request a change be made by Mike. If Mike does not comply then Chuck will have a decision to make but in my opinion it would be an easy one. While Chuck would hate to lose Mike, he would have no choice but to let him go along with his family. If Mike doesn't agree then he's not the professional that Chuck thought he was.
Ethically, although Mike had been running the store and making hiring decisions, he probably should have conferred with Chuck before hiring his family. I've been in a family business before (not jewelry-related), and the adult children did act entitled and did not abide by company policies. Management was afraid to discipline them for fear of their own jobs. In the end, the company was sold to the manager but only after lots of strife and hard feelings.
Chuck's father established a "family" business; it was his family that invested the sweat and financial equity to build the company. It was not Mike's family business.
Chuck could offer the company to Mike for purchase and Mike could manage it however he sees fit. If Mike thinks his management style is flawless, then it would be a win-win for Mike and Chuck.
This situation is likely not unusual in small, family-owned businesses. Chuck may be in a position where he could lose control of the jewelry business if he does not take some of his attention from his other interests. If the jewelry store is still important to him, he could hire an outside professional manager, give him authority over the store (subject to Chuck's final approval on specified matters), and stand back. (Or he could actually take control himself.) In either event, policies should be in writing, as part of an employee contract, signed, respectively, by each employee, and by Chuck.
Are Mike's new "employees" pushing him in a dangerous direction? Time will tell. Agreement to, and compliance with, the new written policies must become a condition of employment. Various members' "understandings" about their authority can no longer control. These "understandings" will create misunderstandings which will flow down to the perceived treatment of customers and really cost the store in lost business.
Time to decide, Chuck: "Who is the boss?"
Wow, too much drama. Mike is the man running the show. If his wife is qualified then so be it. The Alders hired family for years then made a good choice and brought in new blood that helped grow the business and allowed Chuck to pursue more interesting opportunities than the store. Bottom line, is the store making money? At the end of the day that is what matters.
In general, I'm not opposed to hiring family members, but this does pose some unique problems. If one is not happy, you risk losing all, which may adversely affect your business. If one goes for vacation, your whole team goes for vacation, leaving your store short-handed, which may be challenging to the rest of the staff. Here you have a good manager who took advantage by hiring his wife and son without first discussing this. My first thought is that they are planning on opening their own store and using this as a training ground. Everything that I've read says too many cooks (bosses) ruin the stew. Dissension among the rest of the staff needs to be addressed immediately prior to a wholesale mutiny. Both the wife and son need to be given proper expectations and job descriptions, and given a finite period of time to accept and improve or out they go. Now is the time to start planning for the inevitable.
Although he acted within his authority, it was also pushing just a little too far and asking first to avoid appearance of impropriety would have been best route.
I think setting ground rules for hiring family on a case-by-case basis [would be best], since knowing the person you might better understand the potential pitfalls.
Certainly Mike can regain control, but telling the manager what he has decided for the best of the company is all he needs. Done in a thoughtful way of course.
Yes, he should risk losing Chuck as it still is his company and needs to be able to make ultimate decisions.
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The Wilkerson Way
See how one jeweler's inventory sale turned unsold merchandise into cold, hard cash.