For years, I’ve heard leaders describe their companies as families. Sadly, the vast majority of the time, the people at the bottom of the hierarchy don’t agree with that description. And even in the rare cases where they do, it’s a problematic metaphor.
A family is usually defined by unconditional love. In the U.S., a company is legally bound only to at-will employment. Parents don't fire their kids for low performance or furlough them in hard times. But no matter how much you love your company, your company isn’t likely to love you as much back.
Some leaders of small businesses have said this isn’t an issue for them. They know everyone well enough to have genuine affection for each person on their team. I think they’re onto something—there’s plenty of evidence that big organizations tend to be particularly unhealthy places for humans. But in workplaces of all sizes, calling a company a family still carries three risks.
One risk is that in a family, people start to get evaluated on the relationships they build instead of the results they generate. It becomes a catch-22. If you don’t feel the love but you want a promote, you have to create a façade of conformity and pretend to be passionate. And if you do feel the love, you might be subject to a passion tax. Psychologists find that if you’re passionate about your work, people are more willing to ask you to do extra tasks unpaid—even if they’re demeaning and not part of your role—and to sacrifice sleep and family time. The irony is that if you love your company like a family, your actual family might suffer.
Of course, many leaders don’t call their companies families in the hopes of exploiting employees or wreaking havoc on their health and home lives. I think they’re trying to create a different kind of contract with people. Outside the formal contracts that employees sign with employers, research reveals that we all have psychological contracts—the unwritten agreements between people and organizations. If you’re like most people, you define your psychological contract as trading effort in return for one of three primary assets: a paycheck, a cause, or a community.
Since expectations around a paycheck can be quantified, they’re relatively easy to fulfill. A cause is squishier, but I’ve found in my research that if people can connect the dots between their individual contributions and a meaningful collective mission, you’ve delivered on that promise. A community is doable too. It’s a place where people bond around shared values, feel valued as human beings, and have a voice in decisions that affect them. I’m all in for that vision of a community of common principles and uncommon respect. But when you call that community a family, you open up a second risk.
Having a family at work sets an extraordinarily high bar. The moment it isn’t met, people feel that leaders are hypocrites and their contracts have been breached. You can’t guarantee that everyone will walk the talk. One manager whose abusive behavior goes unchecked is enough to leave everyone feeling violated—which reduces their satisfaction and performance and increases the odds that they leave.
And then there’s a third risk: people bring their emotional baggage to work. Families are dysfunctional! Research shows that in family firms, people often see their work as a reflection of their identities and their decisions as defining their legacies. Yes, this can fuel high levels of motivation, but it also drives nepotism and selfishness and irrational risk-taking. Have you watched Succession?
If you call your company a family, I hope I’ve given you some reasons to think again. If you think I’m the one who needs to think again, show us your data—and make your case for why you need the family metaphor. Until then, I'd rather work in a community.