Family perks: Benefit or boondoggle?

f,\vnN rN GooD ECoNoMrc rrMES, IJperks can be a sensitive issue, raising the eyebrows of employees who feel equally committed to the success of the business.

In challenging economic times, and in an era of cost-cutting and employee reductions, perks can create great bitterness among employees who see family members as abusing their positions within the business. Clearly, a healthy dialogue among family owners and/or managers can help the family think through the impact of these perks and determine if their current policy needs a revamp.

Examples of normal perks include cars tbr family employees, club mem- berships, and use of company credit cards. Most families are quiet about perks not afforded to non-family employees. In the current economic environment, when hardworking employees see family employees using corporate dollars for what appear to be personal expenses, they often feel a sense of injustice.

A thoughtful client recently stated that when thinking about perks, the primary question should be, "How will this impact the business?" So often, families are focused internally on the subject of perks, exploring whether perks are distributed fairly throughout the family. In light of the challenges involved with motivating an employee workforce during a time of cutbacks. families would do well to consider not only the broader impact that their perks have on the organization, but also the trust level between employees and the owning family. While there are many instances in which certain perks are legal, families are cautioned from letting feelings of entitlement blur their sensitivity to the detrimental effects on employees' morale and their trust in family management if those practices are seen as abusive and unfair.

Examining the Perks Policy

Here are signals to the family that the perks policy may need attention:

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. There is tension befween family members over the business perks given to family employees who work in the business. Frequently, those who do not work in the business will be sensitive to a lack of fairness, particularly when a family member in the business receives a perk that is not given to other employees. This implies that the perk is based only on the person's family status.

If it is determined that family status is the primary motivator, then it is a clear message to those family members not in the business that they are not of the same status, and this causes tension for the family. When this issue surfaces, it is a good time to review the purposes and motivations behind the perks.

Non-family employees are verbal' izing frustration about certain family perks that may be taken.ln our experience, this discontent is frequently voiced about a specific person who may not be performing well within the business. Rather than disregard the concern as being an inappropriate statement on the part of the employee, care should be taken to make sure there is a sound basis for the perk being taken.

' A family perk is justified because of the low compensation paid to family members working in the business. Nothing stirs up more distress than family employees being paid at a discount rate because they are family. Our experience shows that paying market rates is generally seen as the most fair and appropriate compensation practice, and doing so often makes it unnecessary for certain perks to be used as a balancing mechanism.

. You have not checked to make sure that the perk is legally solid, according to your CPA. Many families take perks as an ownership or management benefit without an awareness of the legal implications of the practice. Ask your CPA if there are any concerns about the perks that family members receive. If the answer is yes, the matter should be addressed immediately.

Keeping a Healthy Dialogue

Perks are tricky issues, and the family business unit needs to consider many scenarios. ls it appropriate to have company employees, vendors or suppliers do work on a shareholder's personal home? What are the expectations for payment for those services?

Is there a discount? Is it free?

Credit cards and gas cards for family employees are common perks. Does the person's position require that he or she hold a credit card or a gas card in order to perform their job, and does the business have a clear policy on whether personal expenses need to be reimbursed? It is important to give care and attention to these and other situations that might exist within your perks policy.

Perks are a source of conflict and tension, not only among family groups but also between different stakeholders in the business. A healthy dialogue among owners about appropriate perks and the policies that govern them can help reduce and avoid conflict in the family enterprise. It might also motivate your employees to a greater sense of commitment knowing that you care about the health of the business as much as they do.

- Christopher Eckrich is a principal of the Family Business Consulting Group, Marietta, Ga.; (800) 551-0633. He can be reached at eckrich@ efamilybusiness .com.

Reprinted with permission from The Family Business Advisor, a copyrightetl publication of FamiLy Enterprise Publishers. No portion of this article may be reproduced without permission of Family Enterprise Publishers.

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NORTHEASTERN RETAIL Lumber Association returned to Boston, Ma., Feb.3-5, for its annualLBM Expo. [1]Mike Karpinski, MichaelBabcock. [2] Bob Porter, Gearoid Hogan. [3] Tony LoPiccolo, Dennis Rossi, Henry Croteau. [4] Randy Haas, Ned Lawrence. [5] Justin Gregory, Dave Kenworthy, Joe Marchionni. [6] Heather Hand, Michael Waldner, Lauren O'Keefe. [7] April Choquette, Tom Jones. [8] Bob Cini. [9] Mark Ritz, Jerry Ritz. [10] Rob Enders, Steve Hudson. [11] Bob Flute, Leon

Desrocher. [12] John Maiuri, John LaFave. [13] Stuart Seavey, Debbie Busick, Chris John son. [14] Kevin O'Connor, Pat Hefferman, Jerry McNamara, [15] Nick Georgelis, Jim Robbins. [16]Terry Davies [17] Bill Blanchette, Mike Mussen, Vinnie Colonna. [18] Matt Gilchrist, Brett Kelley, Matt Gieseking, Jonathan LaPointe. [19] Beth Howder, Eric Churchill. [20] Kevin Slozak, Dan Kukol, Russ Howe. [21]Alden Robbins, Tonia Tibbetts. [22] Louise Hudon, Francois D'Amours, Julie Boucher. (More photos on next page.)

BOSTON'S Seaoort World Trade Center was the site of the recent NRLA Expo (continued from previous page).l1l Bill Christou, Vincent Micale, Mark Hildebrand. [2] Robert Sanford, Clint Darnell. [3] John Bumby, Bruce Faut. [4] Jeff Easterling, Mason Shives. [5] Bill Cooke, Ryan Gagne, Bob Burnham, Scott Clifford. [6] Tom Alves, Scott Martel. [7] Gene Cormier, Rob Mitchell. [8] George Hewitt, Rick Mullen, Bob Maurer. [9] Prisco DiPrizio, David Hicks, Peter Horne. [10] Don Collins, &.rildiryiPrcdudscom

Paul Tarca. [11] Doug Helmacy, Ed O'Neill, Joe Peluso, Josh Barney. l12lLarry Bodge, Paul "Lou" Murphy. [13] John Smith, Craig Myers. [14] Tom Payne, Bill O'Berry, Tom Coxe. [15] John Prizio, Kris Hanson, Rich Severance. [16] David Dally, Rick Bickford. [17] Walter Hodor, Nell Flowers, Scott Dewsbury. [18] Sylvio Clermont, Francois Germain. [19]

Joshua Kaye, Michael Mellor. [20] GilAdams, Scott Lewis.

SOUTHERN BUILDING Material Association's annual building products show was Feb. 3-4 in High Point, N.C. [1] David Beck, Freddy Siewers, Richie Siewers, Jim Enter. [2] Houston Crumpler, Mac & Patty Lawton. [3] Bruce Palmer, Ben Reeves. [4] Steve Garza, Gordon Blanchard, Andrew Ward. [5] Robin Morales, Cheyney Nicholson, Edward Nicholson. [6] Craig Young, Jim Schmidt. [7] Dave Cappellari, Ryan Cappellari, Bruce Shelton, Kate Weissmann. [8] Joe Sellers, John Morgan, Steve Dawson, Jeff Jones. [9] Jon Stier, Greg Gregory, Danin

Rob Taylor, Rudy Viverette, Jim King. [11] Mary Beth Foltz, Jim Brueggemann, Jan Russell. [12] Tony Winstead, Mark Holloman, Pete Petrochuk, Eric Cashen, Brock Farmer, Mark Ryhanyeh. [13] Nonvood Monison, Norma Jean & Bruce Edwards, David Brandenburg. [14] Don Emery, Eddie Cox. [15] Chris Moon, Dennis Sullivan. [16] Tim Brown, Marty Twiford. [17] Stephanie Hogg, Kathy Wooley. [18] Yvonna Carter, Joe Allen.

(More photos on next two pages)

SBMA EVENT brought members to High Point, N.C. (continued from previous page).l1l Stan Pittman, Don Hunter, Bill Davies. [2] John Ramsey, Everette & Ginny Greene. [3] June Hrubik, Bryan Strickland, James Hobbs. [4] Alan Thompson, Tony Combs, Buford Arning. [5] Tim CraMord, Neal Grubbs, Jim Kilpatrick. [6] Ray Grice, Larry Williams. [7] Drew Sehasny, Bryan Kirit, Rick Renshaw, Bob Allen. [8] Tommy Mayhew, Wayne Neass. [9] David Moore, David Calloway. [10] Don

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SBMA buying show (continued from previous pages). [1] Patricia Jones, Rick Kinney. [2] Ronnie Simpson, Sean Samples, David Nelson, Mark Fisher. [3] Scott Griffin, Jeff Womack. [4] Phil Osborne, Ted Smith, Mike Trantham, Ron White, Stan Simmons, Dennis Ramey. [5] Ross Lampe, Sam Murray. [6] Charlie Trible, Joanne Wheeler. [7] Steve Smith, John Monison, Philip Dooly, Hugh Morrison. [8] Sid Greene, Josh Heubaum. [9] Craig

Doehner, Brad Treece. [10] Mary & Lou Hutchings, Craig Doehner. [11] Ken Sexton, Scott Delapp, Billy Haire. [12] Kurt Bergland, Gary Franklin. [13] Bo Sink, Curtis Smith, Gary Bunn, Robin Parker, Dwight Strickland. [14] Ron Talley, Phil McCaul, Alex Hicks. [15] Danny Langston, Bruce Ayres. [16] Ashley Huneycutt, Frank Hyatt. llTlZac Thick, Michael Bowers. [18] Larry Adams, Craig Webb.

Illinois Lumber & Material Dealers Association presented anniversary awards at last month's annual convention-50 years for EB Buildings, Princeville, and Schaaf Window Co., Tinley Park; 70 years, Effingham Builders Supply, Effingham; 75 years, Crafty Beaver Home Centers, Skokie; 90 years, Sublette Farmers Elevator, Sublette; 100 years, Brownstown Lumber, Brownstown; 105 years, Spahn & Rose Lumber, Stockton, Pearl City and Warren, and 140 years, Doug White Lumber, Marissa.

The convention was overseen by ILMDA's new officers, including president Terry Holm, Holm Financial, Chicago; v.p. Arthur Mize, Associated Lumber Industries, Carbondale; secretary Tom Hodgson, Alexander Lumber, Aurora, and treasurer Kurt Kirchner, Kirchner Building Centers, Kansas, Il.

May 6 is Legislative Day at the Capitol in Springfield. The Foundation golf outing is May 19 at Edgewood Golf Course, Auburn.

Lumbermen's Association of Texas & Louisiana will "Nurture the Roots" at its l24th annual convention April 8-10 at the Henry B. Gonzalez Convention Center, San Antonio, Tx.

Speakers include consultant Chris Rader, NLBMDA chairman Dan Fesler, building science advisor Kathy Howard, and financial analyst Danielle DiMartino.

Mid South Building Material Dealers Association installed new president David Huntington, Huntington Lumber, Hazlehurst, Ms., at its recent annual convention.

New lst v.p. is Jim Smith, Home Hardware Centers, Natchez, Ms.; 2nd v.p. Tommy Chauvin, Chauvin Lumber, Chauvin, La.; treasurer Douglas Boykin, Rex Lumber, Doswell, Va., and ladies auxillary president Susan Hernbloom.

Lifetime memberships were awarded to Lamar Buffington and Sonny Magee.

Kentucky Building Material Association holds its 105th annual convention Aprll 2l-23 at Hilton Lexington Downtown, Lexington, Ky. University of Kentucky head coaches Joseph "Joker" Phillips Jr. and John Calipari will speak.

Mississippi Lumber Manufacturers Association recently installed Pat Thomasson, Thomasson Lumber, Philadelphia, Ms., as its new president. Her father, Hugh Thomasson, served as MLMA president in 1969.

Southern Building Material Dealers Association handed out awards to exhibitors at its annual building show in High Point, N.C. ECMD, Wilkesboro, N.C., won as Supplier of the Year; Smith-Phillips Building Supply, Winston-Salem,

N.C., Dealer of the Year; Boone Lumber/Flardin Creek Timber. Boone, N.C., most original booth display; Snavely Forest Products, Liberty, N.C., most professional display; Clark Hall Doors, Charlotte, N.C., most dramatic presentation; Epperson Specialty Woods, Statesville, N.C., best new product; Sun Windows, Owensboro, Ky., best green product presentation, and Turnkey Programming, Arden, N.C., best single booth display.

Northeastern Lumber Manufacturers Association won a court victory on behalf of IPPC ISPM l5-certified wood packaging facilities. The association's stamp certifications were jeopardized by a non-authorized New York facility that knowingly violated federal rules by creating and implementing counterfeit NELMA stamps and other false desisnations.

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Building Material Association will celebrate its 90th anniversary during its annual convention and trade show in late September.

Poker and golf tournaments are scheduled April l-2 at Golden Hills Golf & Turf Club, Ocala, and May 1314 at Deer Creek Golf & Country Club, Deerfield Beach.

Aprll22 is a regional networking meeting at Jeld-Wen, Tampa.

National Hardwood Lumber

Association will offer three-day lumber grading courses March 29-April I in Sidney, Mi., and May 3-5 in Warren, Pa. A four-day grading course is April 12-15 in Connellsville, Pa.

A two-part leadership, management, and development program offered every three years will be April 11-14 in Memphis, Tn., and May 10l3 in Washington. D.C.

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