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Nepotism and Its Dangers in the Workplace

Workers who are the most innovative or productive or those who possess visionary leadership are inevitably propelled to the top. That’s the image many of us have of the workplace. In reality, the practice of favoring and promoting relatives or paramours, more commonly known as nepotism, is widely practiced in companies large and small across the country.

The dangers of nepotism to your company shouldn’t be overlooked. It’s not only wise to promote antinepotism policies but also to regularly monitor your staff to ensure that such relationships haven’t developed. Read on to learn about some of the risks that nepotism can create for your company.

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Disruption of the workforce
One of the chief complaints in a company that operates through nepotism is the patent lack of fairness. Perceived favoritism of a relative can cause dissatisfaction among workers and lower morale. Employees may have less incentive to perform their responsibilities diligently and proficiently if they feel that the path to promotion is undermined by nepotism. Indeed, a company employing such tactics may find its more valuable employees seeking new employment where their talent is better recognized. At a minimum, workers will likely complain and become embittered and less productive in the face of blatant nepotism.

Gill Corkindale, a writer for Harvard Business Online, described a typical workplace scenario involving nepotism at a newspaper for which she used to work. A young, inexperienced colleague was hired in her department, and she actually spent several months helping him adjust to his role at the paper. Soon after, the individual was promoted to become her boss. Only then did she discover that he was actually an editor’s nephew. Given the nephew’s effortless and unwarranted promotion, Corkindale ended up leaving the paper.

Download Corkindale’s discussion of nepotism with NPR

Increased risk of lawsuits
Very few laws regulate nepotism at either the state or federal level. In fact, some states have no laws prohibiting the practice. Nevertheless, the consequences of nepotism may increase your risk of being sued for discrimination or hostile work environment. For instance, personal relationships and fraternization between coworkers often lead to tempestuous breakups and emotional trauma at the office. One of the parties may accuse the other of sexual harassment or of creating a hostile work environment — especially if one of the parties is a supervisor.

Ultimately, you may be dragged into the conflict if one of the aggrieved individuals decides to file a lawsuit against the company. And of course, even if the conflict never escalates to legal action, the lover’s quarrel may permanently disrupt the work environment for those involved as well as their coworkers. Those kinds of situations can easily lead to the termination of one or both of the quarreling individuals.

Loss of productivity
Nepotism usually leads to an inferior work product. Employees who are rewarded and promoted because of their relationships with management are likely to be underqualified for the positions they are expected to fill. That can lead to an erosion of leadership skills at the senior level of the corporation and also contribute to the demoralization of more deserving candidates.

Antinepotism policies
Many companies include antinepotism and antifraternization policies in their employee handbook. Some policies prohibit the hiring of an employee’s relatives under any circumstances, while others only prohibit it if there would be a direct or indirect reporting relationship between the two related individuals. These precautionary policies are sensible and should be used by your company in some form.

Another useful strategy is to require employees to fill out an annual conflict-of-interest form that discloses whether they have initiated or participated in any decisions providing a direct benefit to a relative or person with whom they have a personal relationship.

Evaluate your workplace policies and procedures with the Employment Practices Self-Audit Manual

Bottom line
Don’t let nepotism interfere with your company’s operations and possibly create an environment that is demoralizing to your employees. Whatever approach you take, it’s best to consult with an attorney to develop appropriate antinepotism and antifraternization policies. Given the multitude of problems that nepotism can create, it’s wise to steer clear of any type of favoritism.

15 thoughts on “Nepotism and Its Dangers in the Workplace”

  1. I was fired from a non-profit company without notice; my boss said it was because of budget cuts. I found out an hour later it was so he could hire his friend’s son and promote his niece (the promotion came with a 30% raise and benefits). I live in Michigan, is there any precedent that would let me take legal action?

  2. I was fired about 3 weeks after the owners daughter told her father and the other owners I was going to sue the company if anything happened to me. Shen then told them I was hanging up on people. I had worked there for 6 years. Never missed a day and late only once in 6 years. I booked the most orders. She was a sexualy deviant, alcoholic, that has been banned from company events, for fighting and passing out drunk or sleeping with workers.
    They made sure to fire me 1 day before my 5 year dinner as a good joke on me!

  3. I’m sorry to hear that Medlia. Hopefully you will find a better paying job where you can be happy. My current work environment is like high school. I just ignore everyone and focus on the customers. In the end, if I get fired for not being part of the in clich, I will move on to the next job.

  4. I see nepotism daily where less abled family members are hired while i am still providing support for at least 3 departments i am aware of. It is incredibly disheartening and i am seriously considering finding work elsewhere. the only problem is that this is a good employer with excellent benefits the only benefit i dont have is permanency so should i stick it out and accept i may never have a long term contract or leave and go to another company that may be not as good employer.

  5. If an employee hires on not being related to a current employee, but then marries in to the first employee’s family, is this grounds for the last hired employee’s dismissal? They work in completely different aspects of the business & at extremely different levels.

  6. Where I work less qualified people with less seniority have been moved up because they have an outside relationship with the boss. Those of us who maintain professional relationships are passed over. I am looking for another job after 4 years as it has happened again, and a less competent person ( who is also renting a house from the boss) with less seniority, experience etc. is now my supervisor.

  7. I work for a District Attorneys office , and recently the mother and daughter are doing the same task. the mother who also works in the same unit she just got promoted to the deputy of the unit. everyone morale is down. is it legal for the mother and daughter to work in the same office.

  8. The company I work at only hires family members or people that attend a certain church. Have tried to go for full time position and am to the point of leaving the area to look for a better opportunity. I have been beat out of four positions because I am not related to anyone that works for the company.

  9. I see everyone has a claim of hiring a relative is bad. How about my situation where I have a grandson I can’t hire although he finished #1 on all the test (I did not participate) has being doing the job for 12 months as a temporary with a good work and attendance record has two supervisors between him and me and it has been allowed numerous times in other departments. The other applicants have very limited experience basically one area out of multiple functions of the job

  10. I work for a school district in a small town. I kid you not, this district is known for being “family owned and operated”!!! They create supervisor positions to fulfill social and family obligations, full pay and benefits, send them to “manager school” a week long crash course, and then they are “qualified” but people who busted their behinds getting credentialed, and bachelors and masters degrees and are new teachers get fired because of budget cuts!! They hire family, family friends, and church members and it’s a madhouse working there!!

  11. There is a manager and his wife who ae both employed at the same place as me.

    The wife is in my group & the manager is over a different group.

    When I needed help on a project, the wife made all the excuses of why she couldn’t help and then was excused from the project because of this relationship.

    Therefore, this lady is exempt from doing any work on our team and my manager is letting this behavior go unchecked because he was warned (previously) by the site manager to just let this behavior go unchecked.

  12. I have worked for a company for 16 years and the last 5 years, after the company was built up to its current mega company, the owner decided to hand over all the credit and management to his son, daughter, son in law, daughter in law,and then sell it 2 a buyer who now thinks all these people built this company and they are the greatest but in reality they absolutely do we have to watch this company go down hill into the dump.

  13. The problem with nepotism in the workplace becomes ten-fold when the HR manager (also the CEO secretary) preaches “family first” in the work place frequently. His relatives fill the place. Not just his family. There are many! Promotions happen unbelievable fast for family, while the rest of us just stand around in shock… Who are we supposed to talk to then? The people in our building are tired of it. We watch it happen all around us and having no one to talk to about it… The place is depressing. No one can be trusted there…

  14. I work with a colleague who is the sister-in-law of the Owner/Director and who regularly gets away with harsh behaviour including yelling, belittling and a general attitude of contempt towards any employees she doesn’t like personally. The Owner/Director is very aware of this and has said to other’s in my presence, “X can be very rude to Tim sometimes.” I am not the only person to experience the “wrath” of this person in our small company. What to do?

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