The dangers of nepotism: what to watch out for, and how to make it work

In our culture, nepotism in the workplace is generally viewed negatively, often with good reason. Hiring a friend or relative is fraught with pitfalls that can affect many important aspects of your business. But can it ever work?

Tread lightly

Let’s begin by exploring some serious consequences that can arise when your company hires a new employee to work with a personal connection to someone in a position of influence.

• Morale: We live in a meritocracy where most of us expect hard work, loyalty, and talent to be rewarded. So it’s no surprise that there is resentment and a decline in productivity when it’s perceived someone got ahead without paying their dues.

• Unqualified leaders: Important positions may well be held by someone who isn’t ready to lead. This will ultimately become a barrier to success. It also affects your ability to attract top talent, retain your best people, and have a diversity of perspectives.

• Drama: Nepotism can be just plain messy. The difficulties that happen outside the office can make their way into workplace dynamics. And if someone is underperforming, firing them will become awkward, to say the least. At worst, this can lead to discrimination and sexual harassment lawsuits.

What to do?

Sometimes nepotism is unavoidable, and even a positive, as is the case in towns where specific skills are at a premium. Smaller, family-owned businesses demonstrate how shared knowledge among likeminded individuals can help a business thrive. But how can you minimize its negative impact?

• Observe: Monitor workplace dynamics, and make sure all personal relationships are disclosed for transparency’s sake.  Some companies ask employees to fill out an annual conflict-of-interest report to disclose all personal relationships and how they may have benefited.

• Accountability: Encourage those with the personal relationship to hold each other accountable. If he or she fails, it reflects poorly on both parties. As a result, often the beneficiary will work harder than anyone to prove themselves.

• Be prepared: From a Human Resources standpoint, make sure your company has an official policy on nepotism. Ask your HR specialists to keep up on all state and federal laws relating to the matter, and have a detailed plan of action to any potential problems.

Do what’s best

Nepotism isn’t a black-and-white issue. Perhaps it’s not the best idea, but common sense can make sure you don’t need to forbid it outright. In the end, the best policy is hiring the most qualified person for the job.