Nepotism in the Workplace: Things to Look Out For

To provide employees with just and equal opportunities in your business, understand the potential for unethical workplace behaviors and how to overcome them as a leader. Nepotism is one unethical behavior to be aware of within the workplace. Read further to learn more about nepotism, how it impacts the health of your workplace, how to identify instances of nepotism and additional topics of importance.


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What is nepotism?

Nepotism is the process by which those within managerial or executive positions, use their power or influence within an organization to hire unqualified family members rather than promoting talented employees, or hiring external, qualified candidates. Nepotism also occurs when employed family members receive special treatment or little-to-no punishment compared to other employees.


Types of nepotism

Someone in a position of power could hire their family member for a variety of reasons. Likewise, the family member can accept the position for a variety of reasons as well. Here are two key types of nepotism you might encounter, according to


Reciprocal nepotism

Reciprocal nepotism is a type of nepotism where someone hires a family member and that family member accepts the position, based on the following factors:

  • Interdependence (financial dependency)
  • Extent of exchanges (salary, workplace loyalty, better family relationship)
  • Cultural norms (Instances where nepotism has been allowed in the past)


Entitlement nepotism

Entitlement nepotism is a type of nepotism where the family member hired feels a sense of entitlement for a position, simply because their family member works at a company.


Negative effects nepotism can have in the workplace

Here are some examples of negative effects that nepotism can potentially have in the workplace according to Roubler:


Creates an unhealthy work environment

Instances of nepotism create an unhealthy work environment wherein employees feel undervalued. This can occur when someone in a managerial position hires a family member to a position and provides them with perks or responsibilities that their other employees do not receive. This can create feelings of resentment toward the family member and the manager.


Reduces employee morale

If nepotism occurs in the workplace, this could affect your employees’ job satisfaction and opinions about the company. If one person begins exhibiting low morale, other employees can also take on this approach. The result is a lack of loyalty and dedication to the job at hand.


Contributes to decreased productivity

Further, nepotism can lead to decreased productivity in the workplace for a variety of reasons. First, decreased productivity can occur because the manager allows their unqualified family member to participate in a job position that they don’t have experience in. This can lead to errors and a slow-paced work environment. 


Second, when those in positions of power give promotional opportunities to family members without having a history at the company, this can create a sense of hopelessness in employees who worked hard to get to a promotional position. This can cause them to decrease their work ethic because they feel like their work isn’t noticed or appreciated.


Increases employee turnover rates

If a company allows nepotism to occur, talented employees might look for employment opportunities elsewhere. Specifically, with companies that value skill and dedication over family relationships. This can be problematic for your company as it limits the ability to retain good, hardworking employees to help your business succeed. 


Signs to watch for and how to spot nepotism

Hiring a family member is not always a bad thing. It becomes nepotism when they exhibit unethical behaviors and the family member responsible for overseeing them refrains from giving out punishment. Here are some signs to watch for to help you spot nepotism in the workplace:


They are under-qualified

If one of your managers or company officials hires a family member who is clearly unqualified for a position, this could be a sign of nepotism. Make sure you talk with them to learn more about their reasoning for hiring an unqualified family member. It may be because they truly believe in their professional capabilities, but it could also be due to less benevolent factors. 


They evade punishment

If you continually notice that a manager’s family member is not being reprimanded for showing up late for work, missing deadlines or not abiding by the dress code, this is a sign of nepotism. This is because the employee in the position of power is demonstrating favoritism towards their family member, in not holding them to the same standards as other employees within the department.


They demonstrate unprofessional behaviors

If an employee’s family member consistently demonstrates unprofessional behaviors including being rude to other employees, using profane language or talking back to their manager and family member, this can be a sign of nepotism. This is because the family member/person with the power to put an end to this unprofessional behavior chooses not to out of favor for their family member. 


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 should not go unnoticed. You should meet with those employees to learn more about what they have observed and further, to let them know they are heard and valued.

Be sure to keep a record of these events before making assumptions or taking preemptive actions. If the behaviors continue, talk with the employee and the individual who hired them to determine the appropriate next step.


Frequently asked questions about nepotism 


What is the difference between nepotism and cronyism?

The difference between nepotism and cronyism is that nepotism refers to someone favoring a family member within the workplace, whereas cronyism refers to someone favoring a friend or acquaintance in the workplace.


Is nepotism in government illegal?

Yes, nepotism is considered illegal within the government. Although there are several laws and discrimination policies that aim to prohibit this type of behavior, there are three areas at which nepotism is prohibited as mentioned by the Federal Civil Service:

  1. Criminal statute (18 U.S. Code – 208)
  2. Administrative statutes (5 U.S. Code – 2302(b)(7) and 3110)
  3. Regulations for ethical conduct by Federal employees (5 Code of Federal Regulations (C.F.R) – 2635.502)


How do you deal with nepotism in the workplace?

According to peoplegoal, you can potentially deal with nepotism in the workplace by implementing one or more of the following into your company’s practices:

  • Create anti-nepotism policies and procedures to be a part of the company’s code of ethics
  • Provide anonymous channels through which employees can voice their concern for nepotism in the workplace
  • Work with HR to come up with a nepotism-reporting system 
  • Establish a "friends and family" employment program that assesses the skills and qualifications of each, before deciding whether they are a good fit for the company, and at which job grade they would perform well


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