Nepotism is defined as “the practice among those with power or influence of favoring relatives or friends, esp. by giving them jobs.” It usually starts with good intentions.
Sometimes it works well. Paul Orfalea, the founder of Kinko’s, brought in many of his relatives and friends to help grow his business. This worked because they were required to perform just like everyone else. If they didn’t, their status had little additional currency.
But I saw another instance where nepotism brought a company to its knees. In this case, a sibling’s failures caused poor work and a mass exodus of key employees. When he was finally fired, standards improved and the employees came back. But the damage he caused took two years to undo.
In another instance, there was an informal “club” based on outside social activities. Members were not generally known to the other employees, but were grossly overpaid and effectively immune to conventional standards of behavior. The result was mediocrity and stagnation.
Why is nepotism so hard to break? It is because it directly affects our closest and most valued relationships. When the CEO of the second company finally fired his sibling, he felt the wrath of his extended family for years.
Should you engage in nepotism? If you have already, hopefully it’s working. If it’s not, your business and credibility will be better off if you make appropriate adjustments. Nepotism is indeed a slippery slope.