The consequences of nepotism in the work environment

Capitalism is predicated on the notion of hard work and meritocracy. The country was founded on this notion as a means of unlocking human potential in the context of a productive society. A meritocracy provides economic and social rewards based on merit. Here, if an individual works hard and provides a quality service, they should be rewarded with promotions or outsized economic gains relative to the individual who does not provide these services. Through a meritocracy, society benefits as the best performers are rewarded while the worst performers are shunned or ostracized. We see this concept in both the business environment and in the labor force. The combination of capitalism and a meritocracy is what has allowed America to flourish for over years. These two concepts have incentivized various innovations that span the gamut of automobiles to social networking. As a condition of providing these services, many individuals have become extremely wealthy for taking the risks of providing these services. Unfortunately, there are occasions where nepotism can abate the influences of a meritocracy. The idea of nepotism essentially undermines the concepts presented above by rewarded individuals not based on skill or qualification, but based instead on social relationships. The most common form of nepotism occurs when an individual provides favoritism to a relative who is not qualified to perform the task. In fact, Nepotism has occurred and been criticized by thought leaders over many centuries. These thought leaders several philosophers, such as Aristotle, Valluvar, and Confucius. Unfortunately, even these though leaders could do little to prevent the overall perversion the occurs through the use of Nepotism in a competitive environment. It undermines the hard work and performance of qualitied candidates. It also contributes to culture that does not reward hard work, but instead rewards social interactions. This, if allowed to continue over generations, could potentially ruin a business as the high caliber talents leaves for other fields of endeavor (Aronoff, 1993).

As noted in the introduction, Nepotism is not a new phenomenon. Instead, it has been a relevant factor in human civilization since human evolved from hunter-gathers and become forming communities. The idea was originally adopted in the middle ages due to religions reasons. Here, Catholic popes and bishops who took vows of chastity as part of their faith were unable to have children. As a result, these individuals have no offspring for which to transfer assets or history to. As a result, they would provide their nephews positions of power and influence within the church. During the middle ages, these were esteemed position due primarily to the overall dominance and wealth of the church. As a result, nephews often obtain large amounts of influence with little to no training, skills, or achievements. Several popes for example, would elevate nephews and other relatives to the cardinalate. Often, such appointments were a means of continuing a papal "dynasty" with the family. Ironically these decisions were not faith based at all. Instead they were based on preserving power within a particular family and maintaining it over many generations. Other families, who were often much more devout and honest stewards of the message of God, did not receive such benefits. Once such example of nepotism was Pope Callixtus III, head of the Borgia family who made two of his nephew’s cardinals; one of them, Rodrigo, later used his position as a cardinal as a stepping stone to the papacy, becoming Pope Alexander VI. Alexander then elevated Alessandro Farnese, his mistress's brother, to cardinal. Farnese would later go on to become Pope Paul III. Unfortunately, Paul III also engaged in nepotism by then appointing his two nephews as cardinals. It wouldn’t be until 1692 Pope Innocent XII issued would limit the practice of Nepotism in the church. Here, the Pope instituted what is now called the bull Romano decet Pontificem. This religions law limited the ability of popes to bestowing money, assets and estates to relatives. As such the meaning of Nepotism is a Latin word to mean nephew. This term originated due to the occurrences outlines above of bestowing wealth, power and influence to the nephews of powerful religious officials (Bellow, 1994).

As we fast forward to today, the history of nepotism is still very relevant. Not only do we still see instances of nepotism in all major forms of endeavor in society, but it appears to becoming much more utilized within the business community. Thankfully there are strong negative attributes associated with nepotism within the work environment. As stated earlier the most influence that can mitigate the spread of nepotism is financial loss. This loss comes in the form of legal action and can also come in the form of lower employee productivity.

As it relates to legal action, nepotism can now result in legal action due to unfair hiring practices. In addition, employers can also be sued if they show favoritism in the from of higher salary, benefits, and promotions to family members at the expense of other employees. This has become particularly pertinent due to the racial tensions currently underway in America. In many firms all aspects of unfair practices as it relates to employment are being examined. As such, the negative consequence of nepotism can be exacerbated by the overall political and racial climate of society today. This discrimination, whether it is due to nepotism or other motivations has thus become an issue companies are now looking to avoid. Another element of nepotism pertains to blatant disregard for illegal activities within the workplace. In this instance, family members commit unethical and illegal acts but avoid reprimand due to their status within the organization. These activities can include misappropriation of funds, outright theft, and other illegal activities. In these circumstances, family members in position of power may elect to avoid or disregard the activity of the family member. This could cause further disruption depending on the industry in which the family member operates. For example, illegal activity in a financial services company could have not only negative consequences from a legal standpoint by from a reputation standpoint as well. This could lower consumer confidence, and those profits within the enterprise. Harassment is another issue that tends to be avoided due to nepotism. As the laws state, if an employee engages in sexual harassment, or racial harassment or some other illegal behavior in the workplace, and the employer lets it go without taking action because the harasser is family, the employer’s tolerance of that harassment is illegal (Aronoff, 1992).

Nepotism also has dramatic implications for society at large. As noted in the introduction, the foundation of America is predicated on each individual pursuing their self-interests. These self-interests are themselves initiated by freedom. As such, individuals within American society has the freedom to pursue their own self interests. These interests typically manifest themselves through economic incentives. Many economic incentives are rewarded based on the value provided by society. A new invention or a new service can command premium prices based primarily on how well is serves the needs of consumers. A market economy ultimately helps dictate these financial incentives. An employee at McDonalds for instance commands much lower economic incentives than would a lawyer. This disparity is due primarily to the value of the service rendered. Nepotism perverts these incentives and undermines the foundation by which economic incentives are rewarded. It does this be circumventing the overall meritocracy that undermines economic development. America has become so successful by allocating capital, resources and human potential within a market system. Elon Musk can garner large investments due to his uncanny talent’s ability and vision. The same applies to Steve Jobs. Society provided ample resources to these visionaries to allow their dreams to become true. Society was rewarded through goods and services that are consumed almost every day. Nepotism circumvents that market system by position people in power that should not other wise by there. As a result, capital and resources flow these individuals in the same manner they did for Elon Musk and Steve Jobs. However, the outcome is completely different as the ill prepared individual squanders the resources of society. Here the individual provides inferior services, goods and products. The primarily difference being that the individual retains his position of power as his family is also in power. This ultimately lowers employee morale and motivation while also increasing employee turnover (Ferrazzi, 2006).