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Updated Nov 06, 2023

How to Prevent Nepotism in the Workplace

Create a joint leadership approach to ensure employee hires, promotions,and favorable projects are fairly distributed.

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Patrick Proctor, Senior Writer & Expert on Business Operations
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If you’ve ever worked at a job where a double standard was clear — that is, some people got opportunities that weren’t available to you — you know how frustrating and demoralizing it can be. After all, if you do a great job and work hard, you should be able to get ahead. 

However, some companies harbor inner corruption that makes the playing field uneven and the promotion process unfair. It’s called nepotism, and if your company suffers from it, your business will end up losing highly motivated employees and having lower workplace morale and productivity. 

What is nepotism?

Nepotism in the workplace means favoring family and friends over others for opportunities, including hiring, promotions, desirable project assignments, preferred shifts, merit pay increases or any openly available opportunity. While not illegal, nepotism is one of the more destructive practices managers can introduce in a workplace.

Nepotism is harmful for many reasons, including the following; 

  • Nepotism limits an employer’s opportunities. It cuts off a company’s ability to build teams authentically, promote top talent, develop workplace collaboration, expand shared knowledge, and retain employees overall.
  • Nepotism destroys organizational leadership. The corrosive act of nepotism often places the wrong people in leadership or subject-matter-expert positions. Poor leadership can hurt your company’s reputation, lead to destructive decision-making, and spark turnover contagion. 
  • Nepotism hurts excellent employees. Nepotism prevents qualified employees or candidates from pursuing professional growth and mapping their career paths properly. They can’t collaborate to produce the best services, products and policies for their organization. 
TipBottom line
To develop great employees, offer opportunities for professional growth, encourage autonomy, and implement policies that support employees' mental health and well-being.

How can you prevent nepotism in the workplace?

Setting clear expectations through policy, practice and a strong company 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.

1. Develop an active anti-nepotism policy.

Create an anti-nepotism policy, add it to the employee handbook, and make it 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 to guard against nepotism.

A job description, including the job title, can support anti-nepotism policies and practices. 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 and communicative platform for all to see. Job descriptions should detail the hard and soft skills, experience and attributes employees need to qualify for any given position within the company.

3. Conduct manager (or leadership) training to avoid nepotism.

Leadership training addresses the concerns of nepotism more than any other step. 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 avoiding the practice and speaking up when they notice it.

FYIDid you know
If you plan to promote from within the company, avoid favoritism toward applicants. Use objective data and skills assessments to reveal which in-house candidate is best for the job.

4. Create a transparent, communicative hiring and promotional culture.

If the hiring process and promotional selection system are openly visible to all, it improves the chance of unity and trust-building within the organization. It’s essential that the company’s hiring and promotional processes are not mysterious. Murky practices 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 HR department should be involved before you or any managers make 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 specific positions and promotions.

TipBottom line
You can have a family business and still avoid nepotism. Ensure your new hire onboarding process is identical for all — even family members. Start everyone at the bottom and evaluate them objectively.

What are the 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.

  • Reciprocal nepotism. 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. Entitlement nepotism is when someone feels a sense of entitlement for a certain job or promotion because their family member works at a company. This occurs most often within family-owned businesses.
Did You Know?Did you know
It's crucial to address issues with "nepo babies" or any toxic employees immediately. Give your team a chance to speak openly and address their complaints head-on.

What are examples of nepotism (or favoritism) in the workplace?

There are many subtle acts of nepotism in the workplace that some would see as blatant favoritism. These scenarios can also occur when family-related nepotism is not present. Poor leadership styles and destructive practices by anyone in the company can lead to the same undesirable outcomes. 

Here are some examples of nepotism in the workplace:

  • Nepotism and workload distribution. The employer or manager does not distribute the workload equally; some employees have heavier or less desirable workloads than others.
  • Nepotism and critical feedback channels. Important work-related information is only shared with particular employees.
  • Nepotism and rapid upward mobility. Nepotism may involve moving an undeserving employee through each level of the organization. This makes it appear they have worked their way up fairly, but in reality they’re on a fast track to their desired role in the company.
  • Nepotism and 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, team members often get the message that they’re not equally valued.
  • Nepotism and bad habits overlooked. A particular employee arrives late to work each day, has a high rate of workplace absenteeism, or repeatedly makes mistakes without correction. However, others are reprimanded when they exhibit the same behavior.
  • Nepotism and project selection. Specific employees have input on their projects or work selection when others do not. This is common with desirable work shifts or hours.
TipBottom line
One situation that frequently leads to nepotism is when a manager dates a subordinate. Ensure your HR decisions include developing the right guidelines about office romances for your organization.

How nepotism affects the workplace

Nepotism — or even perceived favoritism of a family member or other employee — can cause anger, frustration and dissatisfaction among other team members. It will eventually lower employee morale. Employees will have less incentive to reach performance goals and diligently handle their responsibilities if they feel the path to promotion — or any future opportunity — is undermined by nepotism.=

Although nepotism can have countless adverse effects on the workplace, these are some of the most severe consequences:

  • Nepotism reduces diversity. While nepotism is not technically illegal, the practice can result in illegal behavior or outcomes. The beneficiaries of nepotism tend to come from the same background as the offending manager. This undermines your team’s diversity, equity and inclusion efforts and causes your business to miss out on varying perspectives. You may also run afoul of anti-discrimination laws and leave your company vulnerable to lawsuits.
  • Nepotism reduces the internal talent pool. When a conscious or unconscious bias leads you to hire only people who fit within a favored class, you shrink your resource pool (i.e., genuinely qualified candidates or employees). In doing so, you weaken your organization’s future by losing out on top talent, damaging the culture, and eroding employees’ trust in company leadership.
  • Nepotism impedes talent retention. Good employees want to develop their careers and advance in the workplace. For this reason, even occasional nepotism can cost you top talent. If your best employees don’t get the recognition they deserve, they will eventually leave your organization in favor of companies that can offer them advancement and skill development.
  • Nepotism corrodes company culture. Companies that dabble in nepotism won’t develop an ethical business culture. You can’t build trust in your company when management unfairly advances specific employees and ignores more qualified ones.
  • Nepotism lowers productivity, creativity and work quality. Ultimately, nepotism or unjust favoritism will corrode business productivity, creativity and quality output. When leadership and other key positions are filled with anyone other than your top talent, the results will eventually show.
  • Nepotism creates discord among employees. When a particular employee is treated differently, other team members notice and feel angry. They may take this anger out on the individual verbally, refuse to collaborate with them, or even try to sabotage their work.
  • Nepotism erodes trust in management. When managers act unfairly, they lose credibility with their team. They’re more likely to get pushback or lackluster performances when trying to delegate responsibilities.

Jennifer Dublino contributed to this article.

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Patrick Proctor, Senior Writer & Expert on Business Operations
Patrick Proctor is a human resources and people operations expert with SHRM-SCP certification and an MBA in business management. He has spent nearly 20 years leading HR for organizations of varying sizes, some international. He advises on regulatory compliance, workforce management, aligning strategic business objectives with human capital initiatives and more. Proctor is passionate about helping businesses establish employee-centric workplace cultures that increase team member satisfaction while also maintaining cost efficiency and improving ROI. He also enjoys integrating distributed teams and developing the next generation of leadership. He has written about workplace issues for publications like Entrepreneur and sits on the boards of advisors for people management company ChangeEngine and UC Santa Barbara's Professional and Continuing Education program.
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