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Nepotism in the Workplace: An Organizational Advantage or an Impediment to a Healthy Workplace Culture

Most employees have heard of the term, “Nepotism” but unless they have worked in an organization where it created a problem, they may not comprehend the significance of having an organizational policy for it. Nepotism refers to giving deserved or undeserved benefits such as a job or a promotion to a friend or relative, instead of another applicant or employee. It is also used in reference to a lack of discipline or leniency in oversight given to a friend or a relative due to a personal relationship in the workplace. The word, “nepotism” is often considered synonymous with the phrases “non-fraternization” and “personal relationships in the workplace” and more often than not, it is thought of in a negative connotation when an employee believes that he deserves an honor that was given to a friend or relative of the boss or when an employee believes that the friend or relative isn’t being disciplined for poor performance or bad behavior. Take, for example, a husband and wife who work together. Joe, the husband, is the president of the company and his wife, Veronica, is the sales director. She is a “rock star” in the sales department and quickly moved into the management position because she had the highest volume of sales in the history of the company.  Although Joe sees very few reasons to discipline Veronica, he admits that he has dismissed some issues because he did not want to disrupt the company growth that is directly attributed to the sales department. What Joe doesn’t see is that the sales representatives under Veronica have been bullied relentlessly. Joe has noticed the high turn-over but he doesn’t realize it is because employees figure it is easier to resign rather than approach Joe with concerns about his wife, even though the company has an open-door policy. 

Some employers believe that the positive aspects of hiring or promoting a friend or relative outweigh the negative aspects. After all, an employer already knows the personality, work ethic, and strengths and weaknesses of their friend or relative. There may also be other tangible perks such as saving gas money when two people who live together are able to drive to work together. The question may be asked, though, could the friend or relative actually turn out to be a poor employee? Consider the example of Sam, who hired his newly college-graduated son, Michael, for a corporate job. He hired Michael over Tom, a trusted employee who had proven himself many times through the years, and he justified his decision because Tom didn’t have a college degree. Due to the organizational structure of the company, Michael ended up being Tom’s direct supervisor. Unfortunately, Michael was inexperienced enough not to understand how to supervise an older, more experienced employee and no one realized the extent of Michael’s issues with entitlement and insecurity which led him to believe that Tom was a viable threat to his job. The company suffered a great loss when Tom resigned.

Overcoming the Challenges of Nepotism

There are several tangible challenges that should be considered before hiring or promoting a friend or relative. These include a possible deficiency in skills that place a burden on co-workers, blurred lines between personal lives and work lives, and entitlement issues where a friend or relative may think they have special privileges, may try to take advantage of the situation, or even offer inappropriate advice on subjects that don’t relate to them.  Beyond these, there are two serious challenges that are much harder to recognize because they are far less tangible in nature. However, if they are not recognized and addressed, these challenges are likely to create an unhealthy culture and deeply erode the trust of other employees.

Challenge 1: The Blind Spot.  A person who is driving a vehicle understands that there is a certain angle in which their view is obstructed. To not recognize this when changing lanes on a highway could lead to disaster. Similarly, those in a nepotism workplace relationship may have a blind spot for which they are unaware. It takes a lot of trust to confide in a supervisor when there are issues arising from a nepotism workplace relationship as the supervisor could respond defensively or even take the complaint as a personal attack.  Instead of being willing to take the risk, many employees remain silent. This silence is expensive in terms of employee productivity and a healthy workplace culture.

Challenge 2: Negative Perceptions. One of the most common phrases in today’s society is, “Perception is reality”. Perception often creates challenges in the workplace. While one employee feels their boss is a bully, another likes being challenged. While one employee wants mandatory overtime, another dislikes it. While one employee likes manager input on their tasks, another considers it micro-managing. Therefore, it’s natural to assume that perception may create challenges in a nepotism workplace relationship. While one employee may consider the hire or promotion of a friend or relative a good move on the part of their supervisor, another employee may feel threatened by it. In order to minimize negative perceptions, an employer should consider the following points when determining whether or not to hire or promote a friend or relative:

  • Ensure there is a detailed job posting that outlines the essential duties and responsibilities of the job and consider whether the friend or relative has the skills, talents, experience, and/or training that are necessary to succeed in the job. Is there another applicant or employee who is better qualified?
  • Determine whether the person being hired or promoted has entitlement tendencies that could lead to their taking advantage of the friend or relative relationship. Will they expect to leave early on Fridays or come in late on Mondays?  At the same time, would there be more pressure put on the friend or relative than any other employee when a project needs to be completed quickly?
  • Consider how the personalities involved handle conflict.  When issues arise (because they will), will those in the nepotism workplace relationship be able to professionally work through the issue? How will these conflicts affect other employees?
  • Determine who will supervise the friend or relative.  Potential complications in nepotism occur less often if there is no direct reporting relationship. If possible, put the friend or relative under another manager. Then, let that manager supervise – even if there is a need for discipline or termination.
  • Continually monitor and re-evaluate the nepotism workplace relationship and the verbal and nonverbal reactions of employees, and be willing to address challenges as they arise.

Providing Clarity through Policies

Nepotism in the workplace is not illegal and there are organizations who have had no problems, especially when clear parameters are set in a consistently applied nepotism policy. This policy should include a purpose or objective, a clear definition of the types of relationships, e.g. marriage or dating, that this policy addresses, and a statement that the leadership has the right to review each situation on a case-by-case basis for final decision-making purposes. The policy should also clearly answer the following questions:

  • Does this policy prevent one employee in a friend or relative relationship from being in a supervisory position over the other? Can they work in a non-supervisory relationship in the same department?
  • What happens when a working relationship develops into a personal relationship?
  • What happens to the friend or relative relationship that began prior to the development of a policy?
  • What needs to be reported or disclosed to management and when?  
  • What action, e.g. reassignment, termination, etc., will be taken if a relationship is not reported?

In addition to a nepotism policy, a solid problem resolution policy that provides a safe reporting structure for concerns to be voiced is a benefit when there are nepotism relationships in the workplace.

For additional information on how to create and implement a nepotism policy, please contact New Focus HR, LLC at www.newfocushr.com.

Written by: Kathi Walker, SHRM-SCP, PHR

                     Sr. HR Consultant





New Focus HR is a human resources consulting and training company that services all organizations. Our expert team collaborates with businesses to attract, motivate, retrain and retain their biggest assets, employees. While engaged with an organization, our focus is to find solutions that improve the company’s internal HR-related practices while increasing results at the same time! Our focus. Your results.