Having a formal evaluation process in place at your family business is critical to bridging the expectation gap between the parents running the business, their adult children, and other employees. One of the biggest challenges of — and a true key to success in — a family business is communication. It’s important to manage the family dynamics so they don’t manage the family business. Implementing a formal evaluation process can open the lines of communication to talk about where you are as a company and where you want to be. They also create a clear expectation regarding both short-term and long-term performance.

Family businesses can complicate relationships as the dynamic changes from that between a parent and child to one between a boss and employee. And while a parent has years of experience telling a child what to do, in a business environment, that direction must be handled in a professional, respectful way that creates a path for two-way communication.

Creating a formal evaluation process allows the business owner to rate performance, both the plusses and minuses, and put the employee/child on a path to improve the areas he or she needs to work on. But this communication is a two-way street; the adult child/employee has to be open to listening to the parent as the boss and not become defensive that “mom is picking on me.” However, separating that relationship can be a challenge. When doing formal evaluations, both for your adult children and for other employees, it’s important that it be a conversation, not a discourse. Both parties should have the opportunity to speak, and both should commit to listening to what the other has to say.

As part of the formal evaluation process, it’s very important to have the adult child — and other employees — complete a self-evaluation to determine where there may be gaps in perception. On a scale of 1 to 5, an employee may rate herself a 5, only to find the boss thinks she’s performing at a 2. Or the opposite may occur, in which the employee feels she is underperforming, while the boss sees little room for improvement.

To succeed and grow your business, with the goal of handing it off to the next generation, it is critical that you have good business practices in place. You don’t run your equipment until it breaks down; you do frequent maintenance. And the same care is required with your relationships.

The best way to communicate, be it informal weekly meetings, formalized groups or another method, depends on your company’s culture. But no matter the organization, it is critical that you have a formal evaluation process in place to bridge the expectation gap and ensure everyone is performing at top capacity.