Copyright © 2016 The Authors. Published by VGTU Press. This is an open-access article distributed under the terms of the Creative Commons Attribution-NonCommercial 4.0 (CC BY-NC 4.0) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. The material cannot be used for commercial purposes. EXPlOrING EMPlOYEE MOTIVATION IN POlISH FAMIlY FIrMS. CASE OF rETAIl SECTOr Iwona KUBICA1, Marek SZArUCKI2 Cracow University of Economics, Rakowicka str. 27, 31–510 Krakow, Poland E-mails: 1kubicai@uek.krakow.pl; 2saruckim@uek.krakow.pl (corresponding author) Received 11 November 2016; accepted 06 December 2016 Abstract. This article focuses on the construct employee motivation in family businesses. Its main aim is to examine employee motivation in family firms on the example of selected companies from the retail sector in Poland. First, selected theoretical aspects of family business functioning have been discussed. Second, the special character of employee motivation in family firms has been presented, in the light of literature. As methods of research literature review and a semi- structured questionnaire were applied. The empirical part presents the results of the analysis of the employee motivation in the selected firms. Finally, some in- sights and recommendations for future research were proposed. Keywords: employee motivation, family firms, retail sector, Poland. JEl Classification: M10, M12, M19, M52. 1. Introduction The phenomenon of family in business is a topic undertaken for a relatively short time. As a matter of fact, research on family firms began in the second half of the 1970s, and as a new subdiscipline – family firm science – it was separated at the end of the 20th century. Depending on the adopted definition, it is estimated that family firms constitute from one third to more than 70 per cent of all entities operating on the market, generat- ing between 20 and 70 per cent of the GDP and employing from 27 to 70 per cent of all employees (Kowalewska 2009). Running a family business has its pros and cons affecting durability and development of a family firm. Family and limited size of the entity and its resources are the most characteristic traits of family firms in the world and they substantially affect the way they are managed. Research on employee motivation in family firms is scarce. Therefore, the aim of this article is to examine employee motivation in a family firm using the example of selected companies from the retail sector in Poland. At the beginning, selected theoreti- cal aspects of family firm functioning have been discussed. Then, the special character of employee motivation in family firms has been presented in the light of literature. The empirical part consists of the analysis of the examined issues in the selected firms. Finaly, conclusions and future research objectives have been formulated. B u s i n e s s, Ma n ag e M e n t a n d e d u c at i o n ISSN 2029-7491 / eISSN 2029-6169 2016, 14(2): 194–209 doi:10.3846/bme.2016.333 doi:10.3846/bme.2016.333 195 Business, Management and Education, 2016, 14(2): 194–209 2. Theoretical foundations of family firms Nearly one century ago, “business” stood for “family business”, and as a result the adjective “family” was unnecessary. Currently, scholars exploring “family businesses” feel obliged adding the adjective “family”, even though they observe that more of 90 per cent of all businesses possessed by households are family firms (Heck, Trent 1999). Thus, there is still no agreement as to what defines a family firm (Neubauer, Lank 1998; Chua et al. 1999; Miller et al. 2007; Harms 2014; Dieguez-Soto et al. 2015). Family business as a specific domain of research is relatively young – present for about two decades in Europe and 40 years in the United States. Moreover, this ambiguity is a matter of existence of different approaches to define family firms (Litz 1995; Chrisman et al. 2005) as well as different research sources (Neubauer, Lank 1998). Looking into the past and taking into account approaches first mentioned by Litz (1995), two of them could be distinguished: a structure-based and an intention-based. The first one characterizes the family firm by their ownership and management, while the second one is based on the values and preferences of the family firm’s members towards family-based relatedness. Nowadays researchers refer to them accordingly as components- of-involvement and an essence approach to define family business. The components-of-in- volvement approach describes family firms operationally by the components of a family’s engagement in the business: management, ownership, supervision, and succession within the family (Chrisman et al. 2005). Consequently, the criteria used to define family firms contain, for instance, the percentage of ownership, involvement of multiple generations or active management by family members (for more criteria see Table 1). Basically, the components of involvement approach admit that the family’s participation in the business is an ample condition for regarding a business to be a family firm. On the other hand, according to Chrisman et al. (2005) essence approach is based on the conviction that “family involvement is only a necessary condition; family involve- ment must be directed toward behaviours that produce certain distinctiveness before it can be considered a family firm”. Therefore, two firms with the same level of family involvement may not both be family businesses when either misses the intention, vi- sion, familiness, or behaviour that comprise the essence of a family business. Moreover, Lindow et al. (2010) as the sufficient condition, mention ownership of one or several crucial features, such as: family influence over the strategic direction of a firm, intention of the family to keep control, family firm behaviour, or unique, inseparable, synergistic resources and capabilities arising from family involvement and interactions. Contrary to the two mentioned above approaches, which appear to be converging, Neubauer and Lank (1998) list four research sources while investigating the theory related to family firms, namely: entrepreneurship, small and medium-sized enterprises, owner-managed business and family business. Similarly, it could be observed that the family firm owner perceives the business and what happens within it from three overlap- ping perspectives (Ward, Antonoff 1993): 1) family, 2) ownership and 3) management (Fig. 1). 196 I. Kubica, M. Szarucki. Exploring employee motivation in Polish family firms. Case of retail sector Family Management Ownership Fig. 1. Three overlapping perspectives on family business (source: Hatten 2003: 189) Table 1. Criteria for family business definition (source: own elaboration based on Drucker 1995: 45; Gersick et al. 1997: 27; Westhead, Storey 1997: 197; Fletcher 2000: 156–157; Chrisman et al. 2003: 467; Arosa et al. 2010: 88) Author Year Criteria Ward (1987) Passing on the firm for the family’s next generation; Family control; Family management. Litz (1995) Involving family members in ownership and management of the company; Non-family ownership with family managers involved in management; Family business that has gone public but family members are still in senior management positions. Shanker and Astrachan (1996) Percentage of ownership; Voting control; Power over strategic decisions; Involvement of multiple generations; and Active management of family members. Gersick et al. (1997) Position of the company in terms of family; Position of the company in terms of ownership; Position of the company in terms of business life-cycles. Westhead and Storey (1997) Undergoing inter-generation transition; Having more than 50% of shareholding owned by family group; More than 50% of family members are involved in management. Chrisman et al. (2003) Intention to maintain family control; Unique, inseparable, and synergistic resources and capabilities arising from family involvement and interactions; A vision for trans generational value creation; Pursuance of such a vision. Arosa et al. (2010) Large body of common stock is held by the founder or family members; Participation of family members in monitoring the firm. 197 Business, Management and Education, 2016, 14(2): 194–209 From the first perspective, a family member needs a job and it would be an oppor- tunity to help one of the relatives from the family perspective. Second, the effect of a new hire on profits would be taken into account. Third, from a management perspective, the concern would be about how this situation will affect non-family employees (Hatten 2003). On one hand, the overlapping perspectives are useful organizational behaviour models for unfolding the multifaceted individual and organizational phenomena, con- nected with the overlapping subsystems and for identifying the stakeholder perspec- tives, roles, and responsibilities. On the other hand, the overlapping circles model has limitations for identifying performance outcomes and explaining how these interactions materially influence firm level outcomes (Chua et al. 1999). Nevertheless, due to the purposes of our study we use this model to access functioning of family firms from the management perspective, namely issues related to employee motivations within this type of business. The common perception of family-owned businesses is that they are subject to stagnation, exclusiveness, discrimination and rash leadership (Miller, Le Breton-Miller 2005). In spite of the fact that family firms have both advantages and disadvantages related to their founding and managing (Szarucki, Brzozowski 2010), many family based companies are big and very often successful ones. According to Cromie and O’Donoghue (1992) family business is common within the hospitality industry (e.g. hotels, restaurants and public houses). However, among the top ten biggest family com- panies in the world, there are companies active in the automotive industry, banking sector, energy and telecommunications, retail and steel industry. The leader is in retail industry, which is a discount retail chain Wal-Mart Stores Inc. established in the USA in 1962. Thus business activity of family firms is not limited to specific cluster, but rather they are present in almost all sectors of the economy. 3. Employee motivation in family firms The ability to motivate group members is one of the most important factors determining efficiency of a manager’s work, and the use of the integrated model of motivation to work supports decision-making, planning and control processes (Staehle 1991: 117). In family firms, where we are dealing with two groups of employees – family members and “outsiders”, understanding the mechanisms of exerting impact on people seems to be even more significant. The notion of motivation is understood as a process of de- liberate and intentional impact on behaviour of people in the work process by creating conditions allowing them to satisfy the needs as an effect of their contribution to imple- mentation of specified organizational goals. All elements – conditions and motivational factors are interrelated and affect motivation of people to work in a certain way. Moti- vation covers such elements of working environment as: firm location, economic situ- ation, image of the firm on the market, organizational structure, content and conditions of work and work organization, technical level, social relations, compulsion measures 198 I. Kubica, M. Szarucki. Exploring employee motivation in Polish family firms. Case of retail sector (commands, bans etc.), measures of persuasion (informing, consulting or criticism), as well as incentives – financial and non-financial incentives (Pocztowski 2008; Azourya et al. 2013). The latter are very often considered to be one of the most important motiva- tors, encouraging employees to work more effectively, as they have the greatest effect on human behaviour due to a measurable sense of effectiveness and one’s effort. Finan- cial incentives provide an employee with economic benefits as well as the possibility of pursuing his or her goals and needs, and therefore improve material conditions of his or her life. On the other hand, non-financial incentives give the employee the possibility to feel respect, dignity, appreciation, and also satisfy the social and self-fulfilment needs. As it has been already mentioned, motivation in a family firm applies to two groups of internal employees: family members and employees from outside the family. Use of certain organizational practices may have a motivating impact only on one group, and, at the same time, a demotivating impact on the another (Sułkowski 2006). Usually, family members are more motivated to work, more loyal and committed. However, preferential treatment (more favourable treatment of some people, on better terms than those offered to others) of family members, frequent in family firms, has a demotivating effect on the employees from outside the family. Fair treatment of employees is always motivating (Sułkowski 2006), and the detailed specification of factors motivating all employees of family firms has been presented in the table below (Table 2). As we can see, the main factor motivating to work in a typical family firm is, apart from the obvious needs for “working”, a sense of responsibility for family assets in- vested in the company. In all firms, an unquestionable value is also right to property, acquired as early as at the time of birth and the need for maintaining this property in the hands of the family at any cost. It involves the “implicit” right of employment in the company that is granted to every family member, and resulting only from the fact of birth and affiliation to a given family (Winnicka-Popczyk, Popczyk 2004). Table 2. Motivational factors in family firms (source: own elaboration based on Sułkowski 2006: 73–74) Family member Employee from outside the family Motivational factors Responsibility for family assets Right to property Need for working Need for preserving the good reputation High and certain remuneration Training courses Fixed remuneration Education possibility Closer contact with the superiors A particularly interesting aspect with regard to motivating employees of family firms is the issue of remuneration. In the literature, we can encounter information that most managers in family firms strive to use uniform principles of remuneration for employees both from the family and from the outside. The research conducted by Lansberg (1983) shows that the remuneration of family members working in a firm is often lower than 199 Business, Management and Education, 2016, 14(2): 194–209 the remuneration of outsiders who have similar experience and competences. However, according to Sułkowski (2006) this thesis is not confirmed in Polish family firms, what was proved by interviews conducted with entrepreneurs running family firms. At a deeper analysis it turns out that employees from the family are, however, better remu- nerated, though this phenomenon often assumes rather concealed forms, e.g. additional contracts of mandate or commissioning contracts for performance of “alleged” projects (Sułkowski 2006). Such preferential treatment of “their people” has an undoubtedly negative impact on other employees, therefore the safest way is fair treatment and pur- suit of uniform principles of remuneration for all employees. An important factor motivating family members working in a firm is also the need for preserving the good reputation of the family and often even raising its significance. It explains an almost “obsessive” pursuit of quality and care towards the employees. It can be seen in joint work on the assigned activities with employees not belonging to the family, as well as possession of extensive knowledge about families of these em- ployees. The majority of family firms pay also great attention to their reputation among customers and suppliers (e.g. personally dealing with key customers and suppliers in order to initiate close cooperation) or the local community (among others, by means of sponsoring local events or participation in charity campaigns). Good opinion about family members who jointly run business, provides family firms advantage over com- petitors with regard to promotion of the quality of their products or provided services. This contributes to better quotations of a family firm on the stock exchange, beyond the reach of non-family firms (Winnicka-Popczyk, Popczyk 2004). Education, training and career development are, for the employees, a form of im- provement and enrichment of the content of work, which leads to entrusting them with more and more serious obligations, and thereby – affects the level of their motivation and satisfaction with work. Like in the case of remuneration, also in the aspect of de- velopment, an important factor is development of similar conditions for employees both from the family and from the outside. Preferential treatment of family members does not create conditions and opportunities for development for other employees, just like investment in development of employees from immediate family that brings no benefits to the firm itself (Sułkowski 2006). As it has been already mentioned, the issue of family firms in Poland is not yet sufficiently examined, and in the available literature there are not many studies in this field. What is interesting, the subject matter of succession was intentionally ignored for many years in scientific analyses, which was caused by the fact that in Polish reality, a vast majority of family firms are relatively “young” firms, the so-called first generation firms, established as the result of system transformations in the 1990s (Surdej, Wach 2010). Succession is a long and multi-stage process and only now it starts to gain im- portance, since many companies have faced or will face in the near future the problem of passing the power and property on to another generation. A very interesting thing are thus observations concerning the person of a potential successor of the manager, 200 I. Kubica, M. Szarucki. Exploring employee motivation in Polish family firms. Case of retail sector being most often a family member. If such a person works with commitment and has no power exceeding his or her competences, such a situation is usually assessed posi- tively by most employees. However, there are always some employees who will be less happy and will perceive themselves as potential candidates to firm management, which they will never achieve in a family company. Nonetheless, the majority of employees usually acknowledge that preparation of a successor as a good promise when it comes to firm development (Sułkowski 2006). It is also worth mentioning that due to different reasons succession planning in family businesses is perceived as a wicked problem that must be solved (Eddleston et al. 2013; Devins, Jones 2016). In addition, research on motivation in family firms (McConaughy 2000) shows that the chief executive officers (being members of the founder’s/founders’ family) have different motivation than executives from outside the family (e.g. contractual manager), i.e. they feel less urge to receive additional incentives for increased effort for the firm’s performance. Furthermore – families that control their management by means of the so-called “normative control” (Raz 2002), that is thanks to common values, usually bear lower costs than the owners who must apply increased financial motivation. As we can see, the specific character of family firms requires people managing them not only to have knowledge in the scope of running business but, above all, to understand mechanisms of impact on people by a system of incentives (rewards) and to structuralize the conditions on which employees may gain both external and internal rewards. Managers of family firms, in order to effectively shape behaviour of their em- ployees – being both members of their own family and unrelated people, must know even better the effects of their behaviour being a rewarding value for employees and have an authority to use these effects (Mączyński 1994). Some authors provide valu- able insights on building an efficient motivation system for small and medium-sized enterprises that could be utilised within family businesses belonging to this category of enterprises (Dzieńdziora et al. 2014: 100). Practical implications of the discussed issues will be covered further below based on business practice of the selected Polish family firms from the retail sector. 4. Analysis and evaluation of employee motivation in the selected family firms 4.1. research methodology Invitation to participate in the research was addressed to 3 family firms, running their business on the territory of Poland (one from the Silesian region and two from Małopolska) since approx. 25 years and employing from 6 to 50 employees. All of the surveyed organizations wanted to remain anonymous, and consequently, for the purpose of the paper, they have been called Firm A, Firm B and Firm C. All of them are retail firms, specializing in sales of non-alcoholic beverages, garden machines, as well as production and sale of kitchen furniture. 201 Business, Management and Education, 2016, 14(2): 194–209 The main research technique applied when analysing the level of motivation at work and factors motivating employees in the examined family firms was a survey. It con- tained 21 cafeteria questions concerning financial and non-financial motivation tools, the degree of satisfaction with the aforementioned tools and professional development opportunities in the examined organizations. The survey was supplemented by inter- views with the owners of examined organisations, which enabled better understanding of functioning of the aforementioned organisations. Based on the literature review, we formulated a hypothesis H1: Personal features influence the opinions of the respondents on factors motivating to work at family firms. Moreover, we assume that these opinions will differ among the analysed firms. In total, the study involved 70 people (including 12 women) – 6 from Firm A (100 per cent of employees), 25 people from Firm B (70 per cent of employees) and 39 from Firm C (90 per cent of employees). In the surveyed companies employees aged below 24 were 14 per cent of the surveyed, 1/5 are employees aged 25–29, nearly half (49 per cent) are people aged 30–44, and the remaining 9 per cent are people aged 45–65. The level of education of the surveyed was included in the table (Table 3). Due to the pilot study the research sample is small and the results cannot be generalised on the whole population. Nevertheless they show some interdependencies in the analysed sample and can be used as good ground for further research. From among the examined firms, employees with the highest formal qualifications are present in Firm B where 33 per cent of the respondents have at least incomplete higher education, and a half has secondary education. Other employees have voca- tional or incomplete secondary education. A similar situation takes place in Firm C where nearly half (47 per cent) of the respondents has secondary education, and 23 per cent at least have incomplete higher education. The remaining 1/3 of employees has incomplete secondary education. On the other hand, in Firm A only one person has incomplete higher education, while others – vocational education. Such structure of the employment explicitly indicates the special character of established job posi- tions – in most cases these are operational jobs (e.g. driver, salesperson or mechanic) that do not require special qualifications. Other positions are, above all, commercial ones – shop assistants and sales representatives with at least secondary education. The persons with the highest qualifications occupy strategic positions (President, Director, Regional Manager or Chief Accountant) and usually are members of a family to which the firm belongs. The examined firms have been active on the Polish market for nearly 25 years, and the dynamics of development is strongly related to the economic situation on the market and is reflected in the work experience of the employees (Table 4). The most dynamic growth in the last 4 years was recorded in Firm C, which – due to territorial expansion, opened new branches and was forced to hire new employees (64 per cent of the surveyed have been working for less than 2 years). An opposite situation 202 I. Kubica, M. Szarucki. Exploring employee motivation in Polish family firms. Case of retail sector takes place in Firm A where 2/3 of employees have been working for above 6 years. The length of employment in Firm B also refers to changes in business strategy – almost 1/3 of employees has been related to it from the very beginning, 38 per cent for the period from 3 to 5 years (market stabilization period), and 29 per cent joined the company over the past 2 years, when the firm increased its turnover by almost 40 per cent as compared to the first decade of the 21st century. As we can see – a feature common for family firms is stability and length of employment, which will be also mentioned further in the article. This is typical for companies characterized by the dominance of clan culture over other types of organizational cultures. It has its implications in perception of satisfaction from work performed1. Thus, in Firm A and B all respondents declared that they were satisfied with work performed by them. On the other hand, in Firm C such a declaration was expressed by 72 per cent of the respondents. Atmosphere at work, the feeling of influence or responsibility for the work performed (as well as durability and success of the firm in the case of family firms), are also reflected in the level of motivation of their employees. In the case of Firms A and B, all employees feel motivated, in Firm C, on 1 According to the concept of organizational cultures by Cameron and Quinn, an organization with a clan culture, is a friendly workplace. People interact perfectly, and the firm resembles a big family. Consistency of organization is provided by loyalty and attachment to tradition. Much emphasis is put on long-term benefit, good atmosphere within organization and care for people. Organization rewards teamwork, participation and consensus (Cameron, Quinn 2003). Table 3. Education structure (source: own study) Education Firm A (n = 6) Firm B (n = 25) Firm C (n = 39) Total % Total % Total % higher 0 0 6 25 6 17 incomplete higher 1 17 2 8 2 6 secondary 0 0 12 50 17 47 incomplete secondary 0 0 1 4 3 8 vocational 5 83 3 13 7 19 primary 0 0 0 0 1 3 Table 4. Job seniority (source: own study) Work experience Firm A (n = 6) Firm B (n = 25) Firm C (n = 39) Total % Total % Total % less than one year 0 0 2 8 10 40 1–2 years 1 17 5 21 6 24 3–5 years 1 17 9 38 2 8 6–7 years 2 33 1 4 3 12 Above 8 years 2 33 7 29 4 16 203 Business, Management and Education, 2016, 14(2): 194–209 the other hand, 35 per cent are not ready to call themselves motivated – most likely these are the same people that are not satisfied with the work performed by them. Analysis of answers to questions concerning financial and non-financial motivation as well as personal feelings concerning their impact on motivation to work will make it possible to identify the aforementioned phenomenon in the examined family firms. The results of the analysis will be discussed in the section below. 4.2. results and discussion The respondents, when asked about factors which have the greatest effect on growth in their motivation, almost unanimously pointed out remuneration (Firm A – 100 per cent, Firm B – 80 per cent, Firm C – 67 per cent), atmosphere at work (Firm A – 83 per cent, Firm B – 52 per cent, Firm C – 44 per cent), as well as the sense of self-fulfilment and development (respectively 33, 28 and 26 per cent). Other determinants differed depend- ing on the firm. Fear of losing job was a factor motivating 67 per cent of employees (Firm A). In none of other companies was this fear such an important determinant (Firm B – 8 per cent, Firm C – 23 per cent). It is surprising, because family firms are often perceived as firms where stable and long-term employment is one of the assumptions of the organizational culture. In Firm B, of most importance are mainly elements related to the possibility of using one’s own skills (44 per cent), achieving a bonus (40 per cent), as well as independence and sense of accomplishments (20 per cent). In the last of the examined firms, a factor important from the point of view of motivation was bonus (59 per cent) and independ- ence (44 per cent). Other factors were definitely less important. What is interesting, promotion prospects did not gain, in any of the examined firms, more than 16 per cent of answers2, which may indicate a flat organizational structure and/or – due to the pro- file of a family firm, taking up posts by owners-family members (“natural” succession of generations and subsequent descendants of owners/founders of family organizations joining the firm, which has been mentioned in the first part of this article). In the first two examined firms, an important issue was also the opinion of the superior about the work performed (respectively 33 per cent and 28 per cent, while in Firm C – only 13 per cent). What may be puzzling – in Firms A (67 per cent), as well as C (36 per cent) also fair treatment of all employees was reported as a motivating factor. This can indicate that – due to family ties, “outsiders” can feel that they are treated worse/differently and might feel more motivated, if these differences were not so visible. It can be seen also in perception by employees of the efforts of their superiors in motivating to work, e.g. by pep talks. And so, in Firm A all employees stated that the superior tried to increase their 2 A confirmation of this thesis can be found in the question concerning the demotivating factors, where lack of re- muneration increase, development and promotion demotivates in Firm A and C, nearly half of employees (50 per cent and 44 per cent of the respondents). In Firm B this phenomenon applies to 1/5 of the respondents. 204 I. Kubica, M. Szarucki. Exploring employee motivation in Polish family firms. Case of retail sector motivation to work, while in Firms B and C nearly 1/3 of the respondents (respectively 28 and 30 per cent) did not notice signs of such efforts from their superiors. Interesting conclusions about functioning of the examined organisations can also be drawn when analysing the factors demotivating the respondents. In Firm A bad atmos- phere (100 per cent of the selected answers), lack of organization (only 1 person did not indicate this answer) and bad communication (67 per cent) are indicated as factors mostly demotivating for employees. Other answers, such as lack of interest of superiors or penalties for failure to achieve goals, do not occur at all. Such a distribution of answers indicates organizational difficulties regarding work organization and internal communi- cation, which is reflected in deterioration of relations at work and decrease in employee commitment. In turn, in Firm B bad communication as a demotivating factor was indi- cated by 44 per cent of respondents, and lack of organization and bad atmosphere – by 32 per cent. These were the highest indications from all the possible answers. Therefore, it can be assumed that employees in this company do not feel dissatisfaction with work and it is difficult for them to identify elements that would cause their demotivation in this particular firm. Lack of organization is also one of the snags in Firm C (51 per cent of the selected answers). It is also the only company, in which the level of remuneration causes demotivation of its employees (41 per cent)3. The respondents also drew attention to the lack of promotion prospects (44 per cent), bad atmosphere (28 per cent), as well as penal- ties for failure to achieve goals (26 per cent) as factors demotivating them. Furthermore, 21 per cent of the surveyed employees complain about lack of interest from superiors and – what is interesting, this is the same organization, in which only 13 per cent of the respondents believe that management opinion about their work is motivating. When jux- taposing motivational factors and demotivators of the aforementioned organizations, it is possible to notice difficulties in the personnel management process caused by significant chaos in work organization, lack of clear legal procedures (among others, information flow, principles of granting penalties and rewards/bonuses for accomplishment of objec- tives) and unsatisfactory level of remuneration. According to the owners of the analysed firms, they were surprised by the dynamics of the firm development and – since they were not prepared for it, they had to learn how to manage a firm “in a real time mode”. They are also aware of competence shortages in human resource management and the need to prepare procedures stabilizing the firm’s activity. From the point of view of motivation systems, it is not sufficient to identify only motivational and demotivational factors, it is also necessary to discover the degree of their importance for employees to respond to their needs and adequately construct the system of payment and non-payment motivation. A specification of such factors and the degree of their importance for the respondents is presented in the table below (Table 5). 3 For comparison, in Firm A nobody indicated remuneration as a demotivating factor, and in Firm B – it was indi- cated by only 12 per cent. 205 Business, Management and Education, 2016, 14(2): 194–209 Table 5. Significance of financial and non-financial motivation factors (source: own study) To what extent do the following factors motivate you to work? Firm A (n = 6) Firm B (n = 25) Firm C (n = 17) Median (1 – the lowest; 5 – the highest) good relationship with the superior 5 4 5 possibility to use trainings 1.5 4 2 good reputation of the firm 4 5 4.5 attractive compensation package 3 4 3 pay 5 5 4.5 possibility of independent decision-making 5 4 3 good atmosphere at work 5 5 5 interesting work 5 4.5 4 professional development prospects 4 4 4 employment stability 5 5 5 promotion prospects 2 3 1.5 wage raise 5 5 4.5 Bearing in mind that in Firm C as much as 35 per cent of employees do not feel motivated to work, it should not be surprising that in this organization majority of the listed factors have average significance for the motivation process4. In Firm A, as the most important motivation factor, the respondents indicated employment stability. It is associated with the fact that almost all employees are related to the firm owner and any economic difficulties of the firm threaten the financial security of the whole family. The willingness to survive and provide support for family seemed to be a “sufficient” source of motivation and commitment to work. Nevertheless, in two other companies where the share of the family members in the structure of employment is lower, stability of employment also plays an important role. Taking into account the role of financial and non-financial factors shaping the mo- tivation of employees there are some interesting observations (Table 5). Looking at non-financial motivators, it is observed that in all three examined firms issues related to participation in training or promotion prospects play the least important role. On the other hand good atmosphere at work and employment stability turned to be the most valued factors in the analysed firms. A slightly different picture arises when taking 4 A puzzling fact is also that only 17 from among 39 respondents evaluated particular motivational factors. Others made no efforts to assess the importance of the aforementioned factors to them. This situation alone may tell a lot about the level of employee motivation/commitment in an examined organization. 206 I. Kubica, M. Szarucki. Exploring employee motivation in Polish family firms. Case of retail sector into account financial factors of employees’ motivation. Factors related to employees’ remuneration were regarded of higher importance (e.g. pay, wage raise) than other (e.g. compensation package). Considering the results of the analysed firms separately, the respondents’ opinions slightly differed from each other. The opinions in the analysed firms do vary from each other what was confirmed by the Kruskal-Wallis (possibility to use trainings: H (2, 69) = 6.83, p = 0.033; promotion prospects: H (2, 64) = 11.64, p = 0.003). Opinions on the motivational system within the studied family firms depend on the individual features of the respondents. This dependence has been confirmed in case of age (Chi square = 35.55; p = 0.017; V-Cramer = 0.49) and gender (Chi square = 9.72; p = 0.045; V-Cramer = 0.46). These results partly confirm the hypothesis H1. In other cases the dependence was not confirmed statistically. Moreover, such dependence was confirmed in case of age and possibility of development and promotion (Chi square = 36.64; p = 0.002; V-Cramer = 0.38), level of education and perception of the remunera- tion level (Chi square = 35.44; p = 0.017; V-Cramer = 0.37). 5. Conclusions The conducted research on employee motivation in the selected family firms indicates a number of interesting observations. Firstly, the very of owners of the examined firms see that the success achieved by the firm was the reason for the greatest difficulties with regard to human resources management – in particular with regard to employee moti- vation and rewards of the hired employees, for which (as management) they were not prepared properly. Secondly, a person becomes an employee of a family company most often not due to the education level or competences, but the mere fact of being born in a given family. This often results in division into “their people” vs. “outsiders” and af- fects the level of motivation: commitment, loyalty, sense of responsibility and influence, as well as financial expectations of both of these groups. Thirdly, in a family company friendly atmosphere, partner relations between co-workers and significant care for the reputation outside the company are expected. A consequence of the aforementioned regularities is job seniority longer than in non-family firms. To conclude, it is worth mentioning the most frequently observed errors in the mo- tivation process, which undoubtedly include: making popular decisions, preferential treatment of selected people (in this case, family members), closeness to some quite, disloyalty or unjust exercise of discipline (Pocztowski 2008). All these dysfunctions or pathologies are particularly visible in practices of family firms, which was also reflected in the results of the conducted research such as e.g. signalling unequal treatment of employees within the structures of a given firm. Summing up, the obtained research results should not be treated uncritically, due to the small research sample from the retail trade sector. Nevertheless, they may encourage further research in this field based on a greater research sample – both in Poland and abroad. In addition, an interesting thing seems to be finding the answer to the ques- 207 Business, Management and Education, 2016, 14(2): 194–209 tion of whether the sector of operation of family firms affects the employee motivation system, the level and structure of employee remuneration, as well as the differences in perception between family and non-family employees. 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Westhead, P.; Storey, D. J. 1997. Financial constraints on the growth of high technology small firms in the United Kingdom, Applied Financial Economics 7(2): 197–201. https://doi.org/10.1080/096031097333763 Winnicka-Popczyk, A.; Popczyk, W. 2004. Firma rodzinna w gospodarce rynkowej, in J. Jeżak, W. Po- pczyk, A. Winnicka-Popczyk (Eds). Przedsiębiorstwo rodzinne. Funkcjonowanie i rozwój. Warszawa: Difin, 31–32. Iwona KUBICA. MA, Teaching Assistant in the Department of Human Capital Management at the Cracow University of Economics. She gained her professional experience in HR Department and sub- sequently in training and consulting companies working as a co-trainer and consultant. Her research interests concentrate on diversity and adaptation processes in multicultural organizations. She is an author and co-author of several scientific papers and book chapters as well as a participant of interna- tional research projects. Marek SZArUCKI. PhD, Assistant Professor in the Department of Strategic Analysis at the Cracow University of Economics (CUE). His scientific interests concentrate on the methodology of manage- ment science, strategic management, innovation management and entrepreneurship. He is the author and co-author of numerous scientific papers and book chapters that have been published in refereed journals and books. He holds a PhD in Economics with major in management sciences from the CUE. https://doi.org/10.1080/096031097333763