Understanding nepotism in the

workplace

Favoritism pervades many parts of society — the teacher who treats one student
better than the rest, the hostess who seats the couple who arrived after you or the
policeman’s aunt who always speeds but never gets a ticket. The workplace is no
exception; when favoritism occurs at work, it is called nepotism. Nepotism in the
workplace can lead to dissatisfied employees and opens employers up to
accusations of unethical conduct. Every employer should understand what
nepotism is, its impact on workplace culture and how to identify and correct it.

What is nepotism?

Nepotism is a type of favoritism shown toward family members, specifically.

Merriam-Webster dictionary identifies the Latin root of the word as nepos,
meaning nephew. Nepotism can involve any relative, though, including those related
by marriage. Nepotism occurs when those with the power to hire or promote within
a company ignore more qualified candidates to hire or advance a family member
instead. Nepotism at the workplace also occurs when employers treat the related
employee better than other employees. Some examples of this are:

• Ignoring the family member’s habitual lateness

• Assigning less work to the related employee than other employees
• Promoting a family member over other more deserving employees
• Not addressing the relative’s poor work performance

Other examples exist, but their prevailing theme is preferential treatment of family
members over other employees.

Source: https://www.indeed.com/recruitment/c/info/nepotism-in-the-workplace
Types of nepotism

Defining nepotism is straightforward, but not its application. Sometimes where it

occurs changes others’ perception of it. For instance, a practical difference exists
between nepotism in a small business versus in a large corporation.

A small business employing family members is often expected, even considered

standard. For instance, the owners of the typical mom-and-pop restaurant may hire
their children as part of the staff even if they’re not fully qualified. The parents
intend to teach the children the business for the day they eventually inherit it. This
is nepotism, but it makes sense that parents would want the children to learn the
business by working in it.

Even so, if the parents/owners promote relatives unfairly, other employees

recognize the injustice. Small business owners can avoid accusations of impropriety
if relatives work their way up instead. For example, if someone owns a family
restaurant, a son might start as a waiter, move on to become the host and from
there the manager and ultimately the owner. This not only helps the children know
the business from the ground up but also diminishes the appearance of nepotism.

Nepotism within a larger organization seems less tolerable. When those in

managerial positions hire unqualified family members, there’s no ownership to pass
on to the relative, unlike in a family business. Employees recognize favoritism as the
main reason for the hire. Employees want to feel as if they have the merit-based
opportunity to move up in the company. If they sense favoritism toward a relative,
they would rightly accuse the manager of unfairness.

How to spot nepotism in the workplace

If your manager hires a family member, is that always a problem? Not necessarily.
It depends on whether the manager has favored the relative unfairly. Be attuned to
these examples of nepotism:

Source: https://www.indeed.com/recruitment/c/info/nepotism-in-the-workplace
The related employee is under-qualified

If company officials hire family members who are clearly unqualified for a position,
this could signify nepotism. In such cases, speak with the supervisor to learn more
about the reasons for hiring the family member despite the lack of qualifications.
For instance, you may learn that the supervisor believes the family member qualifies
because of transferable skills and certain personal characteristics. A conversation
will help employers determine if the reasons are valid or unethical.

The relative demonstrates unprofessional behaviors

A supervisor’s relative may behave unprofessionally at work. Maybe they’re rude to

other employees or customers, or they’re insubordinate because they know the
company won’t fire them. This shows that the employee doesn’t fear losing the job,
which may signify nepotism.

Family member evades punishment

If managers aren’t reprimanding employees for those unprofessional behaviors,

that is evidence of nepotism. This is particularly egregious if the manager points out
such behavior in other employees.

Again, communication is important: Speak with your managers. Doing so will

uncover any unethical behavior as well as alert them that such favoritism is
unacceptable.

Other employees have complained to you or HR

Lastly, if your employees address their concerns about nepotism directly to you or
HR, this is an obvious sign of nepotism that you must address. Meet with those
employees to learn more about their observations. Let them know they are heard
and valued.

Source: https://www.indeed.com/recruitment/c/info/nepotism-in-the-workplace
Keep a record of these events before making assumptions or taking preemptive
actions. If the behaviors continue, speak with the employee and the person who
hired them to determine the appropriate next step.

Negative effects of nepotism in the workplace

Nepotism doesn’t occur in a vacuum. It can hurt employers, employees and the
entire company. A few of the negative effects of hiring unqualified family members
are that it:

Creates an unhealthy work environment

Employees may feel undervalued if they notice family favoritism at work. Imagine a
loyal employee who regularly arrives to work early, performs the job well and gets
along with coworkers. Now imagine that employee’s reaction when an expected
promotion goes to the manager’s undistinguished niece instead.

Such behavior fosters resentment and hostility. The ripple effect of nepotism can
turn a once healthy workplace toxic.

Reduces employee morale

Nepotism reduces employee morale by making employees feel the deck is stacked
against them. Employees may wonder why they should try to do their best if being
the boss’ relative is the main criterion for promotion. Their belief in the company’s
mission fades. This leads to employees giving the bare minimum rather than their
best effort.

Increases employee turnover rates

Poor morale caused by nepotism has consequences. You may lose valuable
members of your workforce. Talented employees who notice nepotism may leave
the company to go somewhere they feel will treat them more fairly.

Source: https://www.indeed.com/recruitment/c/info/nepotism-in-the-workplace
Replacing good employees isn’t cheap: Hiring expenses — e.g., recruitment, job
board fees, background checks, etc. — and training new employees can be costly.

Contributes to decreased productivity

Qualifications matter. Unqualified employees cause productivity to suffer. When

managers hire or promote ill-equipped relatives, they’ll likely make more mistakes
than other employees that someone else has to correct. Both slow productivity.

Putting a number to the cost of lost productivity is difficult, but common sense
shows that an unqualified employee’s salary is just one part of the wasted money
from nepotism.

Decreases employee respect for leadership

Respect for managers is important for employee engagement. When those with
hiring and promotion power make poor decisions, such as hiring unqualified
relatives, they risk losing employees’ respect. Recent data shows that nepotism
causes employees to view leaders negatively. Bitterness, insubordination and less
dedication to the job are just a few consequences of lowered respect for company
leaders.

Frequently asked questions about nepotism in the

workplace
What is the difference between nepotism and cronyism?

Both nepotism and cronyism are about unfairly favoring someone in the workplace.
Nepotism refers to favoring a family member, whereas cronyism is favoring a friend
or acquaintance.

Is nepotism always wrong?

Technically, nepotism is always wrong, but “nepotism” and “hiring family members”
are not synonymous.
Source: https://www.indeed.com/recruitment/c/info/nepotism-in-the-workplace
Merriam-Webster defines nepotism as “favoritism (as in appointment to a job)
based on kinship.” Per that definition, then, nepotism is wrong because it is based
on choosing someone for reasons other than merit.

However, the hiring of family members in and of itself is not always wrong. For
instance, if a company hires a husband and wife, that isn’t wrong as long as no overt
conflict of interest exists (e.g., one is in a position of power over the other). Even in
that situation, though, negative effects of nepotism can manifest if the employee is
overtly unqualified for the position.

Is nepotism illegal?

In some instances, nepotism is illegal. For example, certain government jobs

have laws prohibiting nepotism.

Also, nepotism can open a company up to lawsuits if it appears discriminatory. Title

VII of the Equal Employment Opportunity laws prohibits discrimination based on
race, religion, color, national origin or sex. If employees perceive that an employer
hired relatives in an attempt to discriminate against one of those groups, they could
sue that employer.

Other than those instances, though, nepotism in the private market is not illegal.
Some corporations have policies against it, though.

What are some best practices for dealing with nepotism in the
workplace?

Get ahead of potential problems associated with nepotism by having an official

policy in place within the employee handbook. Consider these factors as you craft
the policy:

• Include a code of ethics that specifically addresses nepotism.

• Add whistleblower protections and anonymous reporting channels for
employees who want to report nepotism.

Source: https://www.indeed.com/recruitment/c/info/nepotism-in-the-workplace
 • Rather than banning the hiring of family members outright, establish
parameters and guidelines for those circumstances. For instance, it may be
fine for two relatives to work within the same company as long as one doesn’t
directly report to the other.

Source: https://www.indeed.com/recruitment/c/info/nepotism-in-the-workplace