Motivating and retaining non-family employees in the absence of fair policies and procedures: a family firm perspective

Abstract

We propose a theoretically-driven conceptual model describing relationships that impact the formation of nonfamily employees’ distributive justice judgements within family-run small and medium sized enterprises (family-run SMEs). This model is important because family-run SMEs usually struggle to retain quality nonfamily employees and negative distributive justice judgements have been shown to affect voluntary turnover. Of particular interest, a new construct termed market-driven learning opportunities (MLOs) is argued to offset the detrimental impact compensation inequity judgments have on nonfamily employees’ distributive justice assessments. This mitigating effect occurs because MLOs have the potential to increase nonfamily employees’ skills that are valuable to the firm and in the marketplace. Thus, a paradox exists where providing MLOs encourages nonfamily employees to stay to take advantage of these opportunities, while simultaneously encouraging them to leave to reap the rewards from possessing these skills.

RÉSUMÉ

Nous proposons un modèle conceptuel théorique décrivant les relations qui ont un impact sur la formation des jugements de justice distributive des employés non familiaux au sein des petites et moyennes entreprises familiales (PME familiales). Ce modèle est important car les PME familiales ont du mal à retenir les employés non familiaux de qualité, et il a été démontré que les jugements de justice distributive ont une incidence sur le roulement volontaire. Présentant un intérêt particulier, une nouvelle construction appelée « opportunités d’apprentissage axées sur le marché » (MLO) est censée compenser l’impact négatif des jugements sur l’iniquité de la rémunération sur les évaluations de la justice distributive des employés non familiaux. Cet effet d’atténuation se produit parce que les MLO ont le potentiel d’accroître les compétences des employés non familiaux qui sont précieuses pour l’entreprise et sur le marché. Il existe donc un paradoxe: proposer des MLO encourage les employés non familiaux à rester pour profiter de ces opportunités, tout en les incitant à partir pour récolter les fruits de la possession de ces compétences.

Keywords:

• Family-controlled firms
• nonfamily employees
• retention
• motivation

MOTS-CLÉS:

• Entreprises familiales
• employés non familiaux
• rétention
• motivation

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 We would like to thank an anonymous reviewer for suggesting research concerning the tipping point at which a nonfamily employee would begin to seek outside employment opportunities.

Additional information

Notes on contributors

Jeffrey J. Haynie

Jeffrey J. Haynie, PhD, is an Assistant Professor of Management at Louisiana Tech University. He obtained his PhD in Management from Auburn University. His primary research interests consist of organizational justice, trust, job engagement.

Ana M. Franco-Watkins

Ana M. Franco-Watkins is a Full Professor and Department Chair in the Department of Psychology at Auburn University. She obtained her Ph.D. in Psychology from the University of Maryland at College Park. Her research interests focus on decision making including attention, stress, health, self-control, and ethical decision making.

J. Kirk Ring

J. Kirk Ring, PhD, is the Bank of Ruston Associate Professor of Management and Management Department Chair at Louisiana Tech University. He obtained his PhD in Strategic Management with an emphasis in Entrepreneurship at Mississippi State University. His primary research interests include entrepreneurial startups, family business, and knowledge transfer within firms.