Nepotism is defined as “the practice among those with power or influence of favoring relatives or friends”. It is a behavior that one might consider a logical extension of human nature, the desire to build familial legacies and craft dynasties that extend through multiple generations. In theory, it may even sound like a positive thing, everyone’s dream is for their children to take over their businesses but when this results in nepotistic practices as opposed to a meritocracy, it can have dire consequences for a business and the individuals involved in it.
Nepotism is often displayed in popular culture, though it is generally portrayed in more extreme ways than it tends to exist. In the movie “Horrible Bosses” one of the antagonists (one of the “horrible” bosses), is shown as what the audience expects nepotistic practices to be produce. The spoilt, cocaine addicted, irrational, rude son running the business into the ground, a business his late father worked so hard to establish. Though the movie and the characters are pretty funny, such a demonized view on nepotism can be harmful, especially in recognizing how it effects one in the real world. Such a portrayal serves the purpose of the film, (spoiler alert) make a character so horrible that his murder is almost justified. It however suggests that this is the face of nepotism when in reality anything even remotely close to this is extreme. Hence, the reality of the problem of nepotism is diluted and people tend to see this as what nepotism really is when it actually is a much more subtle problem that is kept under wraps, but is one that affects many in the modern workplacee.
The Census Bureau found that by the time they’re 30, about 22% of sons will be working for the same employer at the same time as their fathers. Hence the trope of the useless son shown in pop culture may actually take away from recognizing real nepotism in the workplace. Bloated salaries for menial work, increased leniency for mistakes and rapid progressions are the real hall marks of modern day nepotism and they must be recognized. It is a much bigger problem than the one “horrible” boss but rather a culture that allows nepotism to not only exist but to flourish and the people that suffer the most from it are “outsiders”, the people that do not have the connections, a group which the vast majority of people belong to.
Nepotism definitely has contexts to it, the two most prevalent are gender and culture. It is generally accepted that nepotism in the workplace has a higher level of acceptance in developing countries. Gender is also a key determinant when it comes to nepotism, only 13% of daughters will be working for the same organization as their father, a huge drop from the 22% amongst sons.
The idea behind nepotism is not one that is inherently evil. The idea of passing on what one has built, building a legacy and leaving it for future generations to expand on is one that can be observed throughout history. From the royal dynasties of ancient times to the modern workplace, handing down accumulated power, influence and wealth is a constant theme. It is still seen throughout society in government, business, sports allegiances and everything in between. Thus it can be said that the feelings behind these practices are not entirely malicious in their intent. This phenomenon is not something that will disappear overnight and recognizing the motivations and nuances as opposed to outright condemnation is necessary. Though the intentions of nepotistic practices may just be safeguarding one’s family and friends, the effects are often severe.
Nepotism is also allowed to exist because of the culture that surrounds it. There is a great deal of tolerance extended towards it and often a feeling of inevitability. For example, some employees may think it is inevitable for the boss’s child to take over and hence make an effort to ingratiate themselves towards these heirs. They are given special treatment and their mistakes and behavior are tolerated much more than others. This stems from a feeling of being locked in and employees often think that this is the most pragmatic approach to job security and maintaining their standing in the organization. It is an easy trap to fall in to but employees must understand the position of power that they hold. Without good employees the business will suffer. This fact must also be understood by those who put these practices into place. Business owners and executives must recognize that they are dependent on employees for good firm performance, and with the wide gap in power the onus is on them to institute policies that minimize nepotistic practices in the work place. Though, employees can act they often do so at their own peril and risk harming their own careers. Therefore, it is essential for business owners to recognize these issues, understand the harm they can have and stop them before they cause serious damage to their employees and their companies. If owner’s persist in wanting to “keep it in the family” they must do it the right way with salaries, promotions and positions based on merit rather than kinship. They must not give the scions of their enterprises any special treatment and in turn if their offsprings do eventually rise up to take control, they can be sure that it has been done the right way and such a model also guarantees the competence that is often lacking from the heirs of businesses.
Nepotistic practices manifest in the workplace in a number of ways. It may be hiring under-qualified candidates for certain roles, rapid progressions that are not based on merit and bloated salaries for employees whose compensation far exceeds their contributions. Then there is always the classic example of the incompetent heir taking over. Severe negative consequences have been observed in organizations where such practices run rampant. One of the main effects they have is high employee disillusionment and turnover. Seeing themselves as ‘outsiders’ employees often leave these companies or do not work as hard as they know that ultimately they will not get the promotion they want, since someone less qualified has already taken it. Many leave, and for those that do stay there is not much incentive to do good work and as a result the entire company suffers. Those that replace them have also been found to be of lower quality as attracting good employees to an inherently unfair company is something that can not be achieved. Inexperienced leaders, who get their positions based on their connections rather than their work also have a demonstrated negative effect on firm performance. This practice, in particular, almost guarantees incompetence and it is most dangerous when it presents itself in higher echelons of any organization.
With the inherent injustices and incompetence that these practices often result in, the logical next question is to understand how to stop such practices from ever existing. A major solution to this is implementing strong governance practices that solidify rules for promotions, compensation and hiring. By establishing a set of rules and making sure they are abided by, an organization can protect itself, in broad terms, from falling victim to these practices. Such structures can include a host of policies, including compensation rules and prerequisites to promotions as well as for joining the firm. Owner’s must put their egos aside and trust the data. They might feel that their children or their family is the exception but the data is clear in demonstrating the negative impacts of nepotism. There is an old adage about nepotism that is often thrown around in these discussions, “shirtsleeves to shirtsleeves in three generations”, and this saying is born from the truths about nepotism and its consequences.
As a culture it is important to recognize and combat the issue of nepotism. It is not an idea that exists in a vacuum. It is allowed to exist and is seen all over the world. It is imperative for all, both the purveyors of it and the victims of it to their part in putting an end to it. Owners must recognize the damage it can do and do their part in mitigating that damage and employees must realize that they can make a difference to it as their firms are dependent on them as opposed to it being the other way around. There has to be a shift in the narrative and all stakeholders must come together to combat this issue, otherwise if it is allowed to persist it is often a lose/lose situation for everyone involved in the firm.
