Avoiding nepotism requires a joint leadership approach to ensure that employee hires, promotions, and favorable projects are fairly distributed within the company.
Nepotism can destroy workplace culture and often places employees in roles that they are ill equipped to handle. Nepotism often occurs when there are poor policies and improperly trained leadership in place, preventing qualified candidates from being hired without just cause. Whether you run a small family business or a large corporation, fair hiring and promotion practices are essential to your company's long-term growth and dynamic culture development.
What is nepotism?
In its simplest form, nepotism in the workplace is favoring family and friends over others for opportunities within the workplace. These can include hiring, promotions, desirable project assignments, preferred shifts or any other openly available opportunity in the workplace. While not illegal, nepotism is one of the more destructive practices managers can imbue in their workplaces.
Not only is this practice an inequitable way to promote employees, but it also limits opportunities for the employer. Nepotism cuts off a company's ability to build teams authentically, promote top talent, develop organizational collaboration, expand shared knowledge and retain employees overall.
The corrosive act of nepotism often places the wrong people in leadership or subject-matter expert positions. Further, it prevents more qualified employees or candidates from developing their careers and collaborating to produce the best services, products, and policies. This eventually waters down the leadership quality and key roles within the organization, as top talent often abandons a company when they feel there is no hope for future opportunities.
How to avoid nepotism in the workplace
Setting clear expectations through policy, practice, and culture is the only way to show all your employees that nepotism is not part of your company or its identity. Here are some recommendations to help you identify nepotism and avoid the practice within your business altogether.
1. Develop an active anti-nepotism policy.
This should be in the employee handbook and part of your leadership training. Strong anti-nepotism policies prohibit related individuals from working in the same department or company, or, more specifically, one family member reporting to another.
2. Maintain detailed job descriptions.
The template that sets up these other safeguards for success is the job description. Maintaining an accurate and detailed job description for each role is one of the best ways to keep team expectations grounded, leadership in check, and an open, communicative platform for all to see. Job descriptions should detail the skills, experience, and attributes employees need to qualify for any given position within the company.
3. Conduct manager (or leadership) training.
More than any other step, leadership training directly addresses the concerns of nepotism. A direct callout of the practice should include a clear definition of favoritism, a description of what it looks like in the workplace, and a statement that all managers are responsible for not only avoiding the practice but speaking up when they notice it.
4. Create a transparent, communicative hiring and promotional culture.
If the process for how new hires are selected and how employees are promoted is openly visible to all, it improves the chance of unity and trust-building within the organization. It is essential that the hiring and promotional processes are not mysterious at all, as that will increase the questioning and anxiety around actual or perceived favoritism.
5. Develop an HR or senior management approval process for hires and promotions.
To fortify the phalanx against nepotism, your human resources department should be involved before you or your managers make any final hiring or promotion-related decisions. Hopefully, your HR staff has the neutrality and authority to help govern these employment actions. Senior managerial approval is another good step in the hiring process for certain positions and promotions.
Types of nepotism
Generally speaking, there are two types of nepotism: reciprocal nepotism and entitlement nepotism. Although they are both unjust, they serve different purposes, and the motives behind them are slightly different.
According to Indeed, reciprocal nepotism is when a family member accepts a position because of financial considerations, loyalty issues, a desire for a better family relationship, or cultural norms (i.e., nepotism has been allowed previously).
Entitlement nepotism is when someone feels a sense of entitlement for a certain job or promotion only because their family member works at a company. This occurs most often within family-owned businesses.
Examples of nepotism (or favoritism) in the workplace
There are plenty of more subtle acts of nepotism in the workplace that many would simply refer to as "favoritism." These scenarios can also occur when family-related nepotism is not present. Poor management styles and bad practices by anyone in the company can lead to the same undesirable outcomes. These are some examples:
- Workload distribution. The employer or manager does not spread out the workload equally; some employees have heavier or less desirable workloads than others.
- Critical feedback channels. Important work-related information is only shared with certain employees.
- Rapid upward mobility. Similar to promotion, there is also a practice of moving an undeserving employee through each level of the organization. This makes it appear as though they have "worked their way up," but it is essentially a fast track to their desired role in the company.
- Manager-employee closeness. The boss hangs out with the same people or person day after day and does not spend time with others. Though this is not technically against the rules in most cases, other team members get the message that they are not equally valued.
- Bad habits overlooked. A certain employee arrives late to work each day or repeatedly makes mistakes without correction, while others are reprimanded when they do the same.
- Project selection. Certain employees have input on their project or work selection when others do not. This is common with desirable work shifts or hours. [Read related article: How to Run a Family Business Smoothly]
How nepotism affects the workplace
Nepotism, or even perceived favoritism of a family member or any other employee, can cause anger, frustration and dissatisfaction among other team members. It will eventually lower employee morale. Employees will have less incentive to perform their responsibilities diligently and to the best of their abilities if they feel that the path to promotion – or any future opportunity – is undermined by nepotism.
Although nepotism can have countless negative effects on the workplace, these are some of the most severe consequences:
- It leads to claims of discrimination. While the act of nepotism itself is usually not illegal, the practice can result in illegal behavior or outcomes. For example, if you only hire from a small pool, you will eventually cut off qualified candidates who may have grounds to claim discrimination.
- It reduces the internal talent pool. When you commonly hire people who fit within your favored class, you shrink your pool of resources (i.e., truly qualified candidates or employees). In doing so, you weaken the future of your organization by losing out on top talent, damaging the culture, and eroding employees' trust in the company leadership.
- It seriously impedes talent retention. Research shows that 87% of millennials are looking for development and career advancement opportunities. Thus, the practice of even occasional nepotism is a great way to lose these employees. Your top talent will eventually leave your organization in favor of companies that can offer them advancement and skill development.
- It corrodes company culture. This goes without saying, but companies that dabble in nepotism can never build a dynamic and healthy work culture. You cannot build trust in your company when management is unfairly advancing certain employees and ignoring more qualified ones.
- It lowers productivity, creativity and quality of work. Ultimately, the act of nepotism or any unjust favoritism will end high productivity, rich creativity and quality output in a company. When leadership and other key positions in the organization are filled with anyone other than your top talent, the results will eventually show.