Consequences of Nepotism

In the workplace, nepotism is defined as individuals showing favoritism to the family members and friends by providing them with jobs or giving them promotions based on their relationships, not competence. Many employees regard nepotism as an unfair workplace practice. Since so many individuals have a negative opinion of nepotism, business owners and managers who support it come face-to-face with a variety of consequences.

Companies who practice nepotism could be at risk of getting sued by employees. Nepotism could result in a lawsuit if an employee or potential employee has proof that a company is using unfair hiring practices. Also, there could be a legal risk if an employer or manager shows favoritism when it comes to salary, benefits and promotions towards their family members and friends, neglecting the needs of their other employees.

Low employee morale can mean loss of profits for companies and can cause employees to focus less on customers and more on complaining. When nepotism has a negative effect on a workplace, employee morale decreases, which affect how smoothly the company operates and whether employees are productive. Employees may feel unappreciated, and as a result, they may lose their motivation to achieve their goals and accomplish their day-to-day tasks.

When a manager or business owner has a pre-existing relationship with an employee, they often get accused of favoritism. For example, managers and business owners may be more lax when it comes to company rules and regulations or they may promote employees because of relationship, instead of merit. Even in instances were business owners and managers are not showing favoritism, employees may still feel like they are not being equal.

When family members and close friends work for the same company, issues from their personal lives can easily turn into problems within the workplace. These feuds can cause major workplace disruptions, which can reduce overall productivity and negatively impact employee morale.

When employees are hired at a company because of nepotism, other employees may question whether the family members or friends have the necessary knowledge, skills and attitudes to perform their jobs. If employees question their abilities to do their jobs, they may show them less respect, ignore their ideas and instructions or comment to the employees that they were only hired because of their relationships with management or the business owner. Getting shown little-to-no respect can cause conflicts between employees hired because of nepotism and their co-workers.