Nepotism In The Workplace: Types, How To Spot It, Pros and Cons

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Nepotism in the workplace is a debatable topic as many businesses are involved in this issue. When unskilled or underqualified family members are hired or get unfair benefits due to personal power or influence, this is known as nepotism. However, nepotism is related to favouritism, and it has its pros and cons depending on one’s perspective. 

Wondering about nepotism or what are the signs of nepotism? No worries. In this article, you’ll get to know detailed information about this hot topic. Read on to learn more. 

Table of Contents

What is nepotism?

Nepotism in the workplace is a form of bias that means offering favours to friends and family for opportunities within the workplace. In nepotism, the person in authority appoints, promotes, assigns desirable projects, or gives any other opportunity to their family or friends over others. In simple terms, it is about increasing employment opportunities for acquaintances or friends. Likewise, it is a hiring and promotional mechanism in some firms, where the authorized person prefers his relatives for the employment and continues this chain of family involvement across generations.

Moreover, nepotism is an unethical and destructive act that produces negative connotations in the workplace environment and creates unwanted chaos. Also, it is considered a sensitive issue and a common practice in businesses. On the other hand, nepotism has some benefits and positive impacts on society under limited circumstances. 

Types of nepotism in the workplace

Apart from the business workplace, nepotism occurs in various other fields like politics, entertainment, sports, and small businesses. Additionally, if we talk about types of nepotism, it can be segregated into three main types. Here are the types:

1. Reciprocal nepotism 

Reciprocal nepotism is a type of nepotism in which the person in power or authority hires family members and they accept the job based on three factors, such as financial dependency on the authorized person, cultural norms, and extent of exchanges (salary, loyalty, or healthy family relationship).

2. Entitlement nepotism

On the other hand, it is a different type of nepotism. Entitlement nepotism occurs when a relative or friend accepts the job because he feels entitled to it. However, this kind of nepotism has more negative consequences than the above one because the hired person agrees with the job due to a relationship with a higher authority, not on the basis of family ties. 

3. Cronyism nepotism

However, cronyism is similar to nepotism. It is the act of favouring and giving undue advantages such as hiring or promoting to friends or colleagues rather than relatives. 

How to spot nepotism in the workplace?

How To Spot Nepotism In The Workplace?

After learning about nepotism and its types, you must know how to spot nepotism in the workplace. Below is the list of the signs that show favouritism in the work environment. 

1. They are under-qualified and have no relevant skills

2. They show unprofessional Behavior

3. Manager-employee closeness

4. Acquainted people are earning more, even with under qualification and less experience

5. Denial of appraisal or growth to other hard-working employees

6. Ignoring responsibilities without facing consequences

7. They evade punishment like for missing deadlines or showing up late for work 

Negative effects of hiring family members

Here are the negative consequences of nepotism in the workplace. 

1. Leads to toxic work environment

First and foremost, with nepotism, the workplace environment becomes toxic, which can lead to increased stress among employees and can be detrimental to the company’s success. When the hired family members are not treated like the rest of the employees, these actions create a toxic environment. Also, it is difficult for other employees to work in this culture, and they feel uncomfortable. 

2. Poor productivity and decrease employee’s morale

Managers or bosses appreciate those employees that are well-known to them despite their poor performance and bad work ethics. This situation leads to poor employee productivity and lower employee morale and insecurity issues

3. Organizational incompetency/ damages organization’s reputation

Nepotism means hiring and promoting people based on their relationships, not actual skills and qualifications. Therefore, it can harm an organization’s reputation and competency. 

4. Resentment among employees

One of the cons of nepotism in the workplace is resentment among employees. When the employees know that the system is unfair and employees are promoted based on kinship, those employees are not respected by others. Thus, it causes resentment among them, and they show negative attitudes.

5. Personality conflicts and poor personal relationships

Last but not least, personal issues or family issues cause difficulties in work or business. If the hired family member is not going as expected or planned and the person in power has decided to fire him, it will hurt the person or family relationship with him.  

Positive benefits of hiring family members

A Meeting In The Workplace

Let’s look at some positive benefits of nepotism in the workplace.

1. Building a family legacy

Private organizations prefer hiring family members to build a family legacy. Furthermore, in the family business, nepotism is considered a good thing to hand the company to the next generation.

2. Reduced hiring costs and increased retention time

One of the positive benefits of nepotism in the workplace is that it reduces the cost and time of hiring and retention because you’re aware of their information, background, weaknesses, and strengths. 

3. Loyal and caring about your business

In most cases, blood relatives or friends show a high level of loyalty. They’re trustworthy to continue your legacy after you. Likewise, they offer care and are interested in your business and its success.

4. Cooperation and lower turnover

Lastly, friends and relatives are dedicated and cooperative, and studies have found that employee turnover has significantly been reduced by hiring acquaintances. They cooperate amazingly, which can generate positive outcomes in the business.

Also Read: 9 Ways To Earn Respect At Work To Develop Your Career

The bottom line

So, there is detailed information about nepotism in the workplace about showing favouritism to friends & relatives. If we pay attention to its causes, nepotism can lower employee morale, and the company could be at risk of legal action and risk of family feuds. 

Therefore, it’s imperative to deal with it by developing an active anti-nepotism policy, creating transparent hiring and promotional culture, conducting manager training, and generating a senior management or human resources team for hiring and promotion in your organization. Implement these strategies to generate an employee-friendly, productive, and engaging workplace. 

Do you have any other information related to nepotism in the workplace and want to share it? Feel free to share your thoughts and ideas to deal with nepotism via the comment section below. We’d love to know about your views to prevent this toxicity in the work environment.

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Picture of Vivien Roggero - Elite Transformation and Executive Coach
Vivien Roggero - Elite Transformation and Executive Coach
Vivien Roggero, an Elite Transformation and Executive Coach, specializes in high-performance coaching and personal transformation, guiding professionals to peak success and fulfillment. With decades of experience, Vivien empowers high achievers, executives, and entrepreneurs through mindset shifts and strategic development.
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