Nepotism is powerful. It can take a thriving business and send it into a tailspin. Nepotism crushes employee morale and ruins a company’s reputation — just like that.

While it may seem simple to spot and even easier to avoid, those showing favouritism may not even realize they’re doing it—or view their actions as nepotistic.

This piece provides valuable insight on how to spot and stop workplace nepotism before it has a chance to undo everything your organization has worked so hard to achieve.

Examples of Nepotism

Awareness of the two types of nepotism is an excellent way to detect any aspects that may be lurking in the workplace.

Let’s take a look at each:

Reciprocal Nepotism

Just like it sounds, reciprocal nepotism occurs when influential decision-makers use their power and personal connections to benefit each other, each leveraging their influence to help each other out.

Entitlement Nepotism

This type of nepotism occurs when a close friend, in-law, or other family member feels entitled to and expects preferential treatment simply because of their relationship with the person in the position of power.

How to Spot Nepotism

The first thing you need to do to suss out nepotism is pay attention.

It’s helpful to have an understanding of various job descriptions across all levels of the organization — including the qualifications and experience necessary in order for a promotion to even be considered.

If something isn’t clear, it’s okay to ask for an explanation.

With this in mind, here are some of the easiest ways to spot nepotism:

Unfair Hiring Practices

Hiring decisions that seem to be based on popularity, cronyism, or any personal relationship the manager has with the subordinate (or their family) is a huge red flag. This is especially true when there are a slew of better, more qualified candidates to choose from.

If the relationship the promoted or hired party has with leadership was not disclosed immediately, there’s a high probability nepotism was at play.

Lack of Accountability

Nothing damages morale more than unfair treatment.

When some employees receive negative consequences and are severely reprimanded for a specific behavior (For example, getting written up for arriving late to work while others don’t), this is an indication nepotism could be at play.

To hone in on whether it’s nepotism or not, seek to uncover if there are any personal relationships or potential conflicts of interest that result in unfair treatment.

Unequal Compensation

This is an inequality women and other minority groups have had to bear for way too long. Despite holding the same position (which includes the same number of responsibilities!) and having equal experience as their counterparts, there are still instances where they are paid less.

This could be an example of nepotism, or it could be outdated, biased views that — for whatever reason — still exist within the organization.

Either way, anyone who finds an example of this in the workplace should address it. Unequal compensation between similarly qualified individuals is unacceptable and inexcusable.

Lack of Diversity Within the Workplace

A homogenous work environment — especially around upper-level management — can indicate nepotism or bias within the hiring process, both of which should be addressed.

Lack of employee diversity within every level of business has a negative impact. It ultimately offers a one-dimensional perspective in an ever-changing dynamic field; most industries today require a wealth of culture and experience within the organization to succeed.

“Good Old Boys” Club

Similar to high school where you’ll likely still find that “in” group of people, this coalition is typically composed of white men with the same backgrounds and beliefs.

Those who don’t share those characteristics are not promoted or invited to participate in any way and are left out of key decisions and other influential roles.

It goes without saying that any example of this leads to a toxic workplace culture, and thus, such groups and any exclusive behavior should be disbanded and discouraged.

Rapid Career Advancement With No Justification

If someone gets selected for a position without any performance indicators justifying the promotion, it’s worth investigating for nepotism. This is especially important when there were better, more qualified candidates to choose from.

Unexplained Decisions

When the only rationale behind a decision is that it was made exclusively to benefit someone, that could be precisely what happened.

Though nepotism can be somewhat clandestine and hard to prove at times, it must be called out whenever it’s identified.

Mutually beneficial agreements have no place within an organization. Promoting someone who has not earned the right to be in the position or does not have the necessary experience is likely to backfire.

How to Stop Nepotism

Tightening up protocols and creating a work environment where nepotistic practices cannot sneak in is an excellent practice, regardless of whether you’ve identified possible nepotism in the workplace.

Here, we’ll cover the top methods of keeping nepotism from appearing within your organization.

Establish Clear Anti-Nepotism Policies

Use the examples in the last section to establish policies that prohibit and eliminate any possibility of nepotism.

See to it that your HR department is well-versed in nepotism and can spot any indicators that it may be at play. The entire company needs to completely understand how damaging this practice can be.

Use Predetermined Interview Questions

Use a template or formula for employee evaluations and a predetermined structured format to ensure everyone is held to the same standards when considered for advancements.

The job description should be clearly defined, including the required education level and experience. It should also be as detailed as possible.

Expand and Diversify Recruitment Efforts

Branching out and trying to reach a wider audience when recruiting and hiring is an excellent strategy that opposes nepotism and increases diversity.

At this point, it’s common knowledge that diversity is one of the main ways to turbo-charge innovation and creativity, and ultimately increase the bottom line.

Always keep a finger on the pulse of ways to reach a wider audience.

Adopt Blind Hiring Practices

Implementing blind hiring practices is an excellent way to eliminate any chance of nepotism or bias sneaking in. Since blind hiring practices redact any identifiers, the focus is strictly on qualifications and other aspects relevant to the job.

Provide DEI Training

Incorporating DEI practices and regular DEI training is an excellent means of keeping the big picture in mind—building a solid team of highly qualified individuals from all walks of life.

When the emphasis is on creating a company that’s serious about growth, both innovation and longevity require diversity in order to achieve that goal. When the focus is on that, there is usually less room for nepotism.

See also: 8 Reasons Why DEI is Essential for Your Business

Encourage Anonymous Reporting

This is especially useful for larger multi-level organizations with many different departments. Creating a means for anyone to report nepotism anonymously is an excellent way to learn what may not be readily apparent.

It also sets a zero-tolerance precedent, letting everyone know that nepotism will not be tolerated.

Conduct Regular Audits

Some businesses use third parties to audit various aspects of their operations. This ensures they are maximizing their potential and not becoming ensnared with bias, nepotism, or anything else that could pose a potential pitfall.

Clearly Define Job Descriptions and Required Qualifications

Specifically outline the roles and responsibilities that accompany each job title, including:

• Experience
• Education
• Skills

This, along with blind hiring practices, guarantees that only candidates with the necessary qualifications are considered and chosen to fulfill the role.

Discourage Romantic Involvement Between Employees

Separate family members from supervising other family members directly and discourage romantic relationships between employees.

No matter how professional people claim, they’ll be, mixing business and personal life is challenging.

If a family member or romantic partner gets promoted (even if they were the most qualified applicant), people will still have questions and may point to nepotism as the reason.

How Nepotism Hurts the Bottom Line

Nepotism is especially damaging because it affects businesses from all angles. Employees are less inclined to give it their all if they see unfair treatment in the work environment.

Nepotism lowers morale, which in turn decreases employee engagement and productivity. This results in low employee retention rates, which can severely drain resources over time.

Additionally, it decreases motivation and well-being and leads to a toxic work environment — why do any hard work at all when a select group is being given special treatment instead?

Externally, when customers catch wind of nepotism or other types of unequal treatment, it can gravely damage the business’s reputation and lead them to spend their money elsewhere.

In some cases, flagrant examples of nepotism can even lead to discrimination-related lawsuits. Take California: there, any example of nepotism is illegal for state workers.

Nepotism and Small Businesses

One of the areas where nepotism still exists is in the private sector, especially when it comes to small, family-owned businesses. There, you’ll see promotions given to family members in hopes that the next generation will continue to keep the company alive.

While there are no laws prohibiting this, it is not always the wisest decision. Family members bestowed with an unearned responsibility to manage or lead an organization may not have the knowledge, drive, or passion to see it through.

Conclusion

Running a business is tricky, and there are a ton of variables at play.

Those who are successful know that there are things you can control (such as policies and procedures) and things you can influence (like reputation and employee morale).

By paying attention to what you can control and cultivating an environment that’s conducive to the work at hand, it makes it much easier to thrive in a sometimes unpredictable and unforgiving market.

No matter what, operating on principles of fairness and equality are best practices and tend to yield the greatest results.

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