When issues arise between family employees, or between family and non-family employees which are brought to your attention, either directly or via Human Resources, it is necessary to deal with them quickly and objectively. How you deal with such conflicts will obviously depend on the individuals and the situation, but it is important not to let familial relationships affect your decisions.
Garner as many facts as you can from all parties involved, as well as sourcing statements from employees not involved in the situation to obtain impartial perspectives. Try to remain unemotional when forming your opinions and determining a course of action, so that your decisions will be fair to all parties.
If you do not feel that you can make a decision unclouded by emotion, or if you feel that your objectivity may be called into question by any of the parties involved, it can be a good idea to involve an outside party to mediate; think about non-family managers, particularly those not involved in daily interaction with the involved parties, or an external consultant who specialises in mediation.
To try and avoid internal conflicts whenever possible, it is important that staff rewards, bonuses, incentives, etc. are awarded based on skill and productivity, and that such schemes are seen by all staff members to be based on professional criteria alone. This will help to avoid ill-feeling among your staff over such issues and help to reduce conflict within the work environment and lower staff turnover among all employees.