Rewarding nonfamily employees – Offer “alternative” compensation and benefits
Abstract: Family business owners understand the need to reward their nonfamily workers. After all, in many cases, these employees make up the lion’s share of a company’s workforce. But it can be difficult to keep the “lions” motivated when family employees are also owners and nonfamily employees aren’t. To avoid giving ownership interests to nonfamily members, consider instead offering them “alternative” compensation and benefits. These may include matching contributions for a retirement plan or, for executive employees, participation in a nonqualified deferred compensation plan. Phantom stock and fringe benefits are also possibilities.