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Before You Hire The Whole Family, Beware of Nepotism in the Workplace

By Irelis Arias on 7/29/2014

While it is beneficial to know the character of employees, there is a distinct difference between screening a candidate based on references and playing favorites. Nepotism is the practice of appointing relatives to jobs based on favoritism. Hiring cousin Cindy or uncle Edward may be the nice thing to do, but if there are candidates who are better qualified to fill the position, the job should go to one of them.

The lack of fairness associated with nepotism can lead to a host of issues in the workplace:

Less incentive for other employees to perform their tasks diligently because they feel that nepotism compromises their chance of recognition or promotion.
Increased risk of lawsuits in the name of discrimination or a hostile work environment due to unfair treatment of employees.
Productivity taking a hit if unqualified workers are promoted. When weaker performers are in charge, the quality of the product will take a hit and overall morale in the office will dip.

Nepotism is not an uncommon occurrence. Financial services giant, JP Morgan, came under fire when it began hiring the children of China’s elite in order to boost its business prospects. Other companies such as Tyson and Daimler AG were scrutinized for hiring relatives of foreign officials. Such practices violate the Foreign Corrupt Practices Act, which prohibits the payment of bribes to foreign officials to assist in obtaining or retaining business – nepotism on an international scale.

It isn’t always clear what nepotism is and which hiring decisions are actually based on merit. The wealthy and well connected often have access to top-tier education and broad experience. Significant relatives of powerful people, such as Jeb Bush and Chelsea Clinton, have landed leading roles at Lehman Brothers and IAC/InterActive Corp respectively. But that doesn’t mean they were not qualified for the positions.

On the other hand, don’t remove a candidate from the running just because of a family relationship. If a candidate is truly the best person for the job, explore the person’s potential without fear of nepotism. Be prepared to defend all the reasons why that individual earned the position. It’s also a smart practice to include an anti-nepotism policy in the employee handbook. Some companies choose to prohibit hiring relatives under any circumstances, while others prohibit hiring where one relative would directly report to another. Further still, some companies may require a conflict-of-interest form to disclose personal relationships within the office. Determine the practices that are best for your business and, if appropriate, broaden your pool of candidates to include well-qualified family members.

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