My first professional "brush" with employee favoritism and nepotism was through my first job after graduate school. I was naive. I had dreamed of becoming a commodity trader for years. When I received a good job offer, my wife and I packed our bags and optimistically moved west.
My first assignment was in a small trading office of four traders including the manager. I quickly learned the office politics. The manager had managed that office for 10 years and was accomplished. I had heard stories about his strategic shrewdness and creativity. What I had not heard about was how he played favorites. 
After a day or two, I quickly realized the number one trader (under the manager) really was not particularly bright. He was actually not bright at all. His performance on a good day was perhaps average. I was puzzled as to why he was treated so well by the manager and held in such high regard. Within a couple of weeks, I had it figured out. The number one trader's family had a vineyard and thousands of acres of land AND he went to the same college as the manager. The manager and the number one trader also both happened to be huge lovers of wine, partying, and golf. At the time I was not. I was not in the club. I did not want to be a part of the club. I wanted to do my job and go home.
The "who mattered more than the what".
What happened? In a word... Stress. I wanted to advance my career but was hindered until I created a marketing plan that caught the eye of the regional VP. Then I was in the club - not my manager's but the regional VP's club.
I had to perform at a level that overcame the favoritism (a form of nepotism) in the office.
The result... I quickly lost respect for this manager. I was there in body - but not in spirit. I did not care about the manager personally and did nothing to help him professionally. I did everything to help the regional VP look good strategically and was promoted as a result of my performance.
Do you have a similar story? How did you feel? What did you do? Drop me a line...
Over the years I have seen a "business cancer" that seriously erodes the competitive position of a company or at worst - literally destroys the potential of companies. That "business cancer" is, without a doubt, nepotism and favoritism.
Wikipedia describes nepotism as:
Nepotism is the showing of favoritism toward relatives and friends, based upon that relationship, rather than on an objective evaluation of ability, meritocracy, or suitability.
The shocker... I have seen nepotism work - in a couple of instances. I actually have a long-term Client who makes nepotism work by holding relatives to a much higher standard then the rest of the team. This is far from the norm! The result for this particular organization is higher performance - but this example is an exception. This Client is a leadership accountability example of excellence that I wish I could transfer to others. This manager demands performance from everyone! The relatives on the team all know that they must meet and rise above the standard set for all team members. I can honestly say that it takes a while for new hires to realize that there are relatives on the team. In effect... Nepotism does not exist on this high accountability leader's team.
To be clear... Every organization has some form of nepotism. The reality is that nepotism goes far beyond the hiring and favoritism of family members. There are other forms of nepotism that are just as debilitating (if not more so) as the traditional "relative nepotism".
The obvious forms of nepotism follow:
- Relative Nepotism - This one is obvious. Relative nepotism is one of the most insideous forms. After all - fire a relative and Thanksgiving will be a major pain.
- Friend Nepotism - This one is relatively obvious. The boss is good friends with some employees and not-so-good friends with others. This type of nepotism is a real morale killer because it is so blatantly unfair to the "not-so-good friends" of the boss.
I am not as concerned about family members working in the same organization as I am about managers playing favorites. Why? Most organizations have anti-family nepotism policy. Therefore relative nepotism is not nearly as frequent an occurance as playing favorites. "Playing favorites" is simply the act of providing preferred attention, incentive, opportunity, and assignments that is out of alignment with employee performance. In other words, the nepotism I see in "playing favorites" is simply the act of giving someone who is "in the club" better treatment and consideration that is in excess of their performance.
In all of my years of advising Clients on how to Maximize Performance, I have seen nepotism destroy more value than one can ever possibly imagine. I have seen managers play favorites without regard to who the real performers are and the negative impact emotionally their politics are destroying.
The key to countering the negative effects of nepotism is accountability. Unfortunately... Personal and employee accountability is a rare animal these days.
When one thinks of nepotism, the natural obvious thought process is the hiring of friends and relatives into key positions. I want to further "expand" the definition of nepotism to include other forms that are less commonly thought of, yet just as dangerous - if not more so.
The hidden or "less obvious" but quite dangerous forms of nepotism (including favoritism) include:
- Connection Nepotism - By virtue of a shared experience such as attending the same high school (not necessarily at the same time), the "connection nepotism" turns a blind eye to poor Job Fit and Low Employee Performance. The connection may be by virtue of being from the same community, attended the same high school, members of the same fraternity/sorority, interest in the same sports team, and/or served in the same branch of the armed forces. A really powerful example of Connection Nepotism is where a manager of a team told everyone who was listening (and they were) that a particular team member received preferred treatment because that team member and the manager began their employment at about the same time. They were "connected". Needless to say, employee morale on this team is not particularly good.
- Contribution Nepotism - Perhaps you have seen this form of nepotism. A good example is a sales person who three years ago, landed a big account that made the organization much more successful as well as a big commission for the sales person. Three things happen... One - The sales person lives off of the big commission for life. Two - Management feels a sense of gratitude and obligation to the sales person and therefore does not punish current or future poor performance because of past "contributions". Three - Management promotes the sales person to a higher position as a "reward" - creating the Peter Principle.
- Referral Nepotism - What might you do when you are short-staffed and trying to plug your talent "holes"? That is right... Ask your high performers if they know someone looking for a job. This is a natural employee hiring strategy. After all... Birds-of-a-feather-flock-together. Right? Not necessarily! The problem is that what makes your high performer a high performer may be the exact missing "ingredient" that their best friend needs most. Hire the low performer who is attached to a high performer through friendship. Then try to terminate the low performer friend at the peril of upsetting your high performer. Fun...
- "They were with us through thick and thin" Nepotism - This form of nepotism is particularly perverse. A team member who has been with the company since it started 15 years ago can wreak a lot of havoc if they are poor performers. The havoc comes from new performers who realize the "lifer" is "special" and is not being held to the same employee accountability standard that they are. The next question new hires has is, "Why am I not special." The downward spiral begins - employee morale goes into the tank.
- "Credential Nepotism" - This form of nepotism is often hidden but dangerous. Ever seen someone get more credit than they deserve because they have a certification? I have. When people are given more credit because they attended a class and passed it but cannot apply what they learned - we call that "Credential Nepotism". Caution... Acronyms flying around! Examples... B.S., B.A., Phd, PHR, SPHR, MA, MS, and many more...
- Favoritism - All of the above forms of nepotism result in a hideous employee morale killer called "favoritism". Like drugs - just do not do it. Say, "no", to favoritism.
One may think the recipient of preferential treatment would be quite happy. Actually - not always... Go into any organization and ask a team member if the boss has a favorite team member who does not perform like a star. Everyone knows who the favorites are. Those "favorite" people are "branded" (nepotism branding) as beneficiaries of nepotism. This is particularly the case where high performers identify that performance does not get you to the top but instead, being "in the club". Nepotism Branding is the effect that results from everyone recognizing the favored team member is in such good stead that is "too good to be true". The end result is lost credibility for the manager and the nepotism team member alike as others on the team nod knowingly that the nepotism team member has special privileges and really is not "one of us" in terms of performance standards and expectations.
The negative "benefits" of employee favoritism and nepotism are many and potentially include a combination of the following:
- Low Personal Accountability - Why perform if your performance will get you nowhere?
- Low Employee Accountability - Why do what it takes if others will not?
- Low Productivity - Why put in the effort if it will not be recognized?
- Poor Employee Morale - Why is life unfair around here?
- Low Trust Relationships - Why trust the boss if they are not impartial and play favorites?
- Diminished Customer Experiences - Disengaged employees create disengaged Customers.
- High Performer Turnover - High performers bail for greener pastures of fairness.
Five things you can do to diminsh the potential for favoritism and nepotism in your workplace.
- Create and strictly adhere to a "No Nepotism" policy.
- Create employee scorecards with an objective scoring mechanism and hold all team members accountable.
- Consciously consider and root out the potential for the "less obvious" forms of nepotism in your team and organization.
- As part of a periodic employee engagement survey, ask the nepotism question - "Do you feel that nepotism is a problem in our work place?" Be sure to share the forms I listed above. Address the concerned areas proactively - not reactively.
- As a manager, go out of your way to not play favorites. If you have managers under you, make sure they are not playing favorites.
If you want to improve employee morale and improve productivity in your workplace, reduce employee favoritism and nepotism.
