Nepotism

What is nepotism?

Nepotism is favouring relatives or close friends in hiring, promotion, bonuses or other workplace decisions, where the personal relationship matters more than qualifications and results. When the favoured people are friends or associates rather than family, it is usually called cronyism.

The word comes from the Latin nepos, meaning nephew or grandson. In the Middle Ages it described popes appointing their nephews as cardinals and giving family members church posts.

Types of nepotism

Examples of nepotism at work

• A vacancy goes to the director's son, even though stronger candidates were interviewed.
• A manager's relative gets a promotion ahead of colleagues with better results.
• A manager's partner reports directly to them, and the manager rates their performance.
• A supplier is chosen because the owner's friend runs it, without comparing offers.

Why nepotism is harmful

• Demotivated teams: when careers depend on connections, engagement drops and turnover rises.
• Weaker decisions: key roles are filled by people who are not the best fit.
• Loss of trust: employees stop believing reviews and promotions are fair.
• Less diversity: teams are drawn from one social circle, against the principles of DEI.
• Reputational and legal risk: especially in the public sector and regulated industries.

Nepotism vs employee referrals

Hiring people you know is not always nepotism. An employee referral programme also uses personal networks, but referred candidates go through the same selection as everyone else. Nepotism starts where the relationship replaces assessment. In a family business, relatives working together is normal as long as the same requirements and procedures apply to them.

How to prevent nepotism

1. Write a relatives policy. Require employees, through the code of conduct, to declare family relationships with colleagues and candidates.
2. No direct reporting lines. Close relatives should not manage one another.
3. Recusal. Nobody takes part in hiring, review or pay decisions about a relative.
4. Structured selection. Use a structured interview and the same criteria for every candidate.
5. Transparent promotion rules. Clear requirements for each level and decisions made by a panel, not one person.
6. A safe reporting channel. Let employees raise conflicts of interest anonymously through whistleblowing.

Is nepotism illegal?

In most countries, nepotism in private companies is not illegal in itself, but it can lead to discrimination claims if it systematically excludes people with protected characteristics. Public sector rules are stricter: in the US, for example, federal law bars officials from appointing or promoting relatives in agencies they control. In the UK, the Civil Service recruitment principles require selection on merit through fair and open competition.

PeopleForce helps make people decisions transparent. In Recruit, every interviewer completes an interview scorecard against the same criteria, so hiring decisions rest on comparable ratings. The org chart in Core HR shows who reports to whom, and anonymous reporting in Desk gives employees a safe channel to raise conflicts of interest.