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Family business and how to avoid nepotism in the workplace

Feb 9, 2012, 8:14 a.m.

It's in our nature to think highly of your relatives simply for the fact that they come from the same gene pool as we do. For this reason, it can be difficult to harness the natural instinct to play favorites in professional settings like the workplace, where they may interfere with performance efficacy. Nepotism is not only viewed unfavorably from other non-related employees in the business, but can also inhibit an owner's ability to make sound business decisions that will contribute to the progression of the company. If you're looking for ways to reduce nepotism in your family business, consider the following tips.

Put it on Paper

It's easy to play favorites when the facts aren't staring you in the face, which is why it's important to weigh your options on paper before coming to conclusions. For example, if you're deciding between granting a promotion to a relative or an unrelated employee, write down the credentials and merits of each to make an informed decision of who the promotion should rightly go to. Try to be truly fair when examining the qualities of each party and acquire the opinion of an outside source if possible.

Set Boundaries with Relatives

Traditionally, nepotism is attributed to an older relative making a few phone calls to get a younger relative the job. However, recent trends in nepotism tend to display the exact opposite: younger relatives are the ones who are taking the initiative and exploiting their family ties as a means of advancing in the workplace. If this trend applies to your family business, it's important to set boundaries with relatives to avoid nepotism and ensure equal treatment for every employee. This might mean promoting an unrelated employee over your own son, but it's important to indicate that you have built your business standards around fairness to all.

Apply Rewards and Consequences Equally

It's much easier to withhold promotions and other business rewards from undeserving relatives than it is to apply negative consequences for poor performance. As a family business owner, the best way you can avoid nepotism is by enforcing the rules by applying the same consequences to all poorly performing employees. This may even put you in an especially uncomfortable situation if the act warrants termination from the company. The question you have to ask yourself in situations like this is: Would I act the same way toward anyone else given the circumstances?

Start Relatives at a Lower Level

By hiring relatives at a lower level in the company, you give them the opportunity to gain experience in multiple aspects of the company and work their way up the corporate ladder just like everyone else. It's more difficult to argue that nepotism is at play in the workplace when the relative has invested a substantial amount of time and effort in various positions within the company. This experience also gives other members of the workforce the opportunity to get to know the person and see his or her merits for themselves.

Separate Business Life From Personal Life

Although you can certainly be friendly and respectful to a family member while in the workplace, you should keep all personal matters separate from business affairs. Even seemingly innocent comments in the break room-- like "So, are you going to the family reunion next week?"-- can subconsciously intertwine your business and personal relationship with that person. Try to keep all business matters completely separate from personal matters. Think of it this way: at home this person is my family, but at work they are my colleague.

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