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.

Performance evaluations: How to get real insights into your performance as a boss.

As leaders, we’ve all been asked to give honest feedback on others’ performance. Great leaders strive to inspire others to achieve their best.  Performance evaluations are a time where you can provide valuable advice to help a team member improve. It is best to have regular meetings with your team to discuss these areas outside of the formal process, but nonetheless, feedback is always valuable.

However, when it comes to hearing feedback on your own performance, does your team have the same motivation to help you succeed or are they afraid of saying something negative because you’re their boss? How can you be sure you’re getting honest feedback? How can you take the reviews you are given and dive deeper into concrete advice?

Begin with a self-evaluation and objectively analyze your own achievements and mistakes. You are your hardest critic so identifying areas you know you want to improve can be a starting point when reading evaluations.

Strive to find peers to evaluate you. While it’s important to hear from those you manage, they might not always be honest for fear of losing their job. Look to your board of directors and managers of other departments. While your work with them might be less intensive, they understand the type of feedback required of someone at your level.

If there is no other executive peer to help you receive feedback, ask clients or other TEC members to weigh in on the professional qualities that they have seen in you. They may have advice on whom to go to within your organization for help.

What is the most important piece of feedback you’ve ever received? In your experience, does your personal feedback get more descriptive or more vague as you move up in leadership?

Independent Contractors vs. Full Time Employees: Things to consider

Whether you are growing a small business or downsizing a large firm, the decision to hire an independent contractor over a full time employee can sometimes be a tough decision. Each case has its pluses and minuses, but you can help serve your immediate goals, as well as your long term ones, by weighing these considerations.

Loyalty

There's a lot to be said for the commitment you can get from a full time employee. By bringing someone on board full time, you're getting a dedicated player on your team only. Would you trust a freelancer with your secret recipe? Probably not, but you might hire one to do the cooking. Independent contractors rarely work for just one company, so there are always levels of confidentiality to be considered. 

Flexibility

If you are looking for someone to fill a role within a limited timeframe, an independent contractor can be ideal. At the same time, a contractor may come with some constraints of their own, especially in regards to their hours and availability. What about flexibility in skill set? Since contractors are by name contracted to perform a specialized skill, they may not be able to jump in and multi-task in other departments as readily as your long term employees. But in many cases, that is not a deal-breaker.

Responsibility

Clearly, any new hire can be an expensive undertaking. The pros you can get from a permanent team member are often counterbalanced by the cons: the cost of benefits and overhead. In many ways, hiring a full time employee feels like a partnership, whereas your relationship with a contractor is more of a business agreement. You may feel more sense of responsibility towards an employee as a provider. In turn, they may feel more responsible for the success of your company. The importance you place on an employee’s sense of personal investment in your company may be key in helping you decide.

Whether you are looking for a way to cut costs or are merely in need of temporary resources, knowing when to hire an independent contractor over an employee can streamline your operations. Sometimes the line between the two can be gray, so be sure to know the difference in these classifications when you hire, as interest and tax penalties apply.

What are the questions you ask yourself when deciding between an independent contractors and a permanent employee?

Market research, the backbone of all business decisions

Last week we discussed that with the shift in color on the leaves comes the time to address how to overcome resistance to change in your organization. Our most recent TEC Senior Managers’ Program lent insight into just that by understanding how to lead your employees through organizational changes.

How do organizations decide what changes are necessary in the first place? Just like with any decision we make in our daily lives, the process begins with gathering all relevant information, weighing the pros and cons and analyzing where opportunities and risks lie. Once that is complete, an educated decision can be made.

When making decisions on behalf of an organization, the variables and stakes are greater. So how do you begin to gather and stay current with all the pertinent information when it involves an entire organization or industry? Market research. Conducting regular, and specific, market research is vital to the growth and success of your business.

As stated in an article on The Business Plan website, without market research, it’s like packing for a trip without checking the weather conditions at your destination. The article also shares specific decisions that market research helps, including:

-    Whether or not to enter a market
-    Whether or not to launch a new product
-    Whether to continue with a service based on customer satisfaction
-    Compare the sales performance of your product to your competitors

For the full list, click here.

How have you used market research to make a critical business decision? Do you put more weight on some aspects of market research than others?

Turn with the leaves, Reflect on change this fall

Photo:http://flic.kr/p/443iPE

Fall is a time where your senses are on overload -- the leaves begin to turn, the air becomes brisk, and the afternoon sun disappears more quickly. With your surroundings rapidly changing, your mind is forced to reflect on other revolving aspects of your life. Whether it’s how fast time has flown this summer or planning for company changes ahead, fall is a time to reflect on change.

However, oftentimes change overwhelms your employees. We learned from Dr. Jerry Jellison at the TEC Senior Managers’ Program how to effectively approach resistance to change, both at the individual and organizational level by using activation tools instead of persuasion. Tools to utilize include establishing open communication about change, tapping into your team’s creative skills to accelerate change, and establishing accountability to follow through on initiatives to complete change.

To begin the change implementation process and help your team overcome obstacles, reflect on a time when change was out of your control. Maybe it was moving somewhere new for school or work. Perhaps it was witnessing your company complete a merger or acquisition. Resistance to change is an emotional cliff. Taking time to think about what emotions are or will be present when change is on the horizon, will help you avoid the many ways leaders inadvertently create resistance to change. Taking a step back will also help build the trust of your team while you all go through a major transition.

How do you help your team overcome resistance to change? In your experience, what strategies work the best to facilitate seamless transitions?