THE EFFECT OF HUMAN RESOURCE MANAGEMENT PRACTICES ON THE LOYALTY OF NON-FAMILY EMPLOYEES IN FAMILY BUSINESSES

Abstract

Family businesses play a crucial role in the global economy, yet one of the significant challenges they face is maintaining the loyalty of non-family employees. This study aims to explore the impact of Human Resource Management (HRM) practices on the loyalty of non-family employees in family businesses. Using the Systematic Literature Review (SLR) methodology, this research analyzes 7 selected studies out of 25 identified articles through Publish or Perish, which accesses Google Scholar databases. The findings reveal that transparent and fair HRM practices, such as equal compensation, objective performance evaluations, and career development opportunities, significantly enhance non-family employee loyalty. Furthermore, family-friendly HRM practices, like work-life balance initiatives, and meaningful leadership, were found to strengthen the emotional attachment of non-family employees to the organization. This study contributes to understanding how equitable HRM practices can reduce favoritism challenges in family businesses and promote long-term sustainability. The results suggest that the implementation of inclusive and sustainable HRM practices is essential to fostering non-family employee loyalty, ensuring the continuity of family businesses.