When former US president Donald Trump was elected, it became clear that he planned to run the government the same way he had his business. Two of his earliest White House appointments were his son-in-law Jared Kushner and his daughter Ivanka Trump in advisory roles. The White House was soon flooded with Trump loyalists. Critics point out that Trump exploited [1] loopholes [2] in US nepotism laws for public officials.
Nepotism in the workplace, both in the public and private sectors, happens when people in positions of power hire or promote their friends or family members over better-qualified or more competent candidates. This preferentialtreatmentcan occur in more subtle ways, when certain people’s work products are more favored or when they are selected for desirable projects not based on merit but on connections.
In business, nepotism can have many negative connotations. A tenuous [3] tie between merit and reward can undermine [4] employee morale and affect productivity, ultimately creating severe consequences for the organization. It also creates a closed-off system, preventing new and much-needed opinions from reaching management.
However, not all types of nepotism are criticized. For small, family-run businesses, say, a mom-and-pop donut shop that has specialized in strawberry jelly donuts for generations, nepotism is part of their brand and charm. In these instances, nepotism is not viewed as corruption; we assume that essential skills are acquired through close ties to people in leadership positions.
Moreover, referrals may play an essential role in hiring decisions and promotions, leading friends and family members to fill up important positions, but this consequence is not inherently detrimental [5]. Nepotism occurs only when the final decision is made based on personal connections, not the merits of a candidate.
While different countries have different frameworks regarding nepotism in the workplace, in the US, there can be a crossover between nepotism and discrimination, opening up the possibility of lawsuits against nepotism practices. But putting aside legal risks, practicing nepotism can undermine an organization in many other ways, as mentioned above. If you see nepotism deeply entrenched [6] in your organization’s work culture, know the implications of this and adjust your expectations.