The Human Aspect of Family Business

Human resources are paramount to family firms and to families in business because they are essential for achieving human flourishing and building family businesses that last for generations. Despite the increasing focus on HR in recent years, the drivers, processes, and outcomes of family firm HR practices is still in its infancy. As a result, the development of useful theory has opportunity to grow.

The knowledge, skills, networks and energies of people and, underpinning them, their physical and emotional health, intellectual capabilities, personalities and motivations and human resources management are critically important for family business.

Despite increasing attention, the family business domain still has some way to go, both in exploring and deepening a wider variety of HR topics and in generating actionable theory. Especially in times of increasing uncertainty and disruption, as the recent COVID-19 pandemic continues to demonstrate, the importance of understanding, maintaining, and enhancing human potential and flourishing cannot be overstated. This also immediately highlights and underlines the practical relevance of HR for family firms: How, when, and why can family influence help (or hamper) to attract, retain and develop talent; what family business characteristics are conducive toward developing and nurturing long-term and mutually beneficial relationships with (both family and nonfamily) employees; how can family businesses help their associates live more fulfilling lives, both at work and in their own families, are some of the questions that occupy many family business decision-makers.

The main goal is to explore and highlight the importance of the mutual gains perspective on Human Resource Management ( HRM ) in family businesses .The mutual gains perspective originates from the HRM field where it is witnessing a significant. At the heart of the perspective is the concept of positive reciprocity, “such that if the employer prioritizes HR practices that promote well-being then this will trigger enhanced employee performance.


The mutual gains perspective is once again at the core of contemporary strategic HRM research. Within the latter, the following question is key: How can HRM achieve (a process of) reciprocity and mutual gains for all key stakeholders, including employees, as opposed to HRM that is solely focused on improving returns for employer-owners. Based on an integration of insights from a diversity of literatures there exist three conditions for achieving mutual gains through quality employer-employee relationships: (a) a capability match —the fit between the employer’s need for competent employees and the employees’ need for a stimulating work environment that promotes the use and development of their competencies, (b) a commitment match —the fit between the employer’s need for committed and flexible employees and the employees’ need for security, fair treatment and community, and (c) a contribution match —the degree to which the employer and employees feel that their respective needs are being met, or in other words, feel that their return on investment is rewarding.


(All factual and statistical information presented in this blog has been obtained from an extract of an article from the ) Follow us on our Facebook page and Family Business Office website at

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