Nepotism in the Workplace
... it true, for success, it still requires significant talent. But for the sake of this paper, nepotism will focus on business. A survey of family businesses conducted by Dean Fowler, a certified management consultant with more than 18 years experience, noted that one of the most difficult issues in a family business is the balance between family loyalties and business responsibilities. He is quoted as saying: “The trend in the business structure is where the mother is often the Chief Emotional Officer (CEO) and the father is the Chief Executive Officer (CEO).” If an organization’s management can not conduct business ethically then problems arise. When is Nepotism unethical? It's not all always one happy family at work. According to The Family Firm Institute, an international professional membership organization dedicated to providing interdisciplinary education for family business, family firms comprise 80% to 90% of all business enterprises in North America. Of this percentage, more than 30% survive into the second generation, 12% survive into the third generation, and only 3% of all family businesses operate at the fourth-generation level and beyond. Part of this downfall can be attributed to unethical and impractical policies dictated by management. In many family businesses, only family members are allowed into top management positions. This can leave several negative results: It limits the available pool of potential leaders to draw from and it can create moral issues of employees knowing they can only progress to a certain level. An example of where this has gone too far is again referenced with the Catholic Church. Pope Callixtus III made two of his nephews Cardinals. One of those later became Pope Alexander VI, one of the most corrupt Popes in Church history. He, in-turn elevated his mistress’s brother to Cardinal and eventually became Pope Paul III. Pope Paul III appointed two nephews (age 14 and 16) to Cardinals. Recognizing that preferential treatment affected the entire religion, this form of nepotism was abolished in 1962 when Pope Innocent XII prohibited future Popes from bestowing any office to their relatives (with the exception of a one time bestowment of Cardinal to a qualified candidate). (Answers.com) There are no laws against nepotism but if not properly addressed, there can be negative impacts. Recently claims have been filed by people who lost their jobs due to the promotion of the CEO’s relative. But these employees file under sex, race, or age discrimination. For instance a black male worker who loses his job to the boss’s white male son files racial discrimination charges. Proving this case in a court of law is difficult at best because it was not the race that caused job termination, it was the desire to promote a relative. In an effort to conduct hiring or promotion selection ethically, many companies have established anti-nepotism policies. The military is known for having generations of family members join the service. In order to prevent any conflicts of interest, the Department of Defense established anti-nepotism policies preventing supervision of family members by a relative. Where situations arise, those affected can be reassigned to a different location or job so they can continue to be promotion eligible without the perceived or real impact of favoritism. But, before a business adopts a pro or anti-nepotism policy, management should consider whether the policy will have the effect of denying employment opportunities to a protected class of individuals. The policy also should be drafted carefully and clearly so employees understand when and to whom it will apply. When is Nepotism Acceptable? Too often family employment issues are not addressed until problems and crises emerge. Before hiring and promoting relatives, Chief Executive Officers and even small business owners need to carefully weigh the advantages of nepotism against the greater needs of the company and its employees. According to self-proclaimed management expert Margaret Padgett, nepotism is the bedrock of social existence. Although employees often view hiring or promotion of family members less favorably than merit, this is only perception and not always fact. For example, Gen Michael Ryan, Chief of Staff, Air Force was the son of Gen John Ryan, Chief of Staff, Air Force. Had nepotism been illegal where the son could not be in the same business (branch of military service), the Air Force would have found the most qualified applicant ineligible to assume command of the troops. Some employers promote the hiring of family members of current employees. It is not uncommon for three and four generations to have worked for the same employer. If a business decides to remain family operated, one approach to dealing with nepotism issues is to hold a family meeting where they discuss whether the business will be based on family or business principles. According to management authors Aronoff, McClure, and Ward, succession of responsibil...