Nepotism Rules: How to Make Hiring Family Members Work

By Barbara Mitchell
HR Expert and Co-Author
The Essential HR Handbook

I spent most of my human resources/business career with Marriott International. Bill Marriott, at that time, was president and CEO. He used to start many speeches by saying, “Nepotism’s been very good to me!”

And he certainly made a good point. Following your father and mother in a family business can be a great career path.

However, hiring relatives can create less positive situations for managers.

I remember a very difficult day at Marriott after we had hired a lot of people from the same family (and I don’t mean from the Marriott family!) to work in a kitchen on the same shift.

One day the manager came in to find his kitchen virtually empty. A relative of that family had died, and the employees all took off to go to the funeral, which left us in a bit of a messy situation. It was then that I began to appreciate the value of having a policy on nepotism.

I know of another organization that employed five people from the same family in a variety of positions throughout its small business. All was well until one of the employees had performance issues and was ultimately fired.

This created ramifications for the other family members. The firm’s management wanted to keep the remaining members happy and went to great lengths to explain why the one employee was terminated. These other family members intellectually knew that the fired person wasn’t performing up to standards, but they still felt bad for their family member.

The company learned a valuable lesson and now has a policy regarding employing people from the same family.

This is not to say family members can’t work in the same workplace—you just have to carefully craft a policy and hire carefully.

One important part of most nepotism policies is not to have family members report to other family members. Admittedly, this can be hard to avoid in family-owned businesses, where typically sons and daughters (and sometimes nieces, nephews, and cousins) come into the business when they finish their education.

But even when family members work well together, in family-owned businesses, nepotism can have a very negative effect on other employees, who see a blocked career path ahead—no matter how good they are at their job, a member of the owner’s family will leapfrog over them for the next promotion.

Morale can be negatively impacted if employees feel they have no chance for promotion, or if they feel family members have special privileges or greater access to the organization’s leadership.

Another difficult situation is when two employees who are not related marry while working for your organization.

What should you do?

Does someone have to leave? Not necessarily if one person doesn’t report to the other. You may need to reorganize, but there is no reason to lose a good performer in this situation unless you have a very small business with no options.

Some firms actually recruit married couples who have good qualifications to take international assignments. It makes relocation much easier.

Just be sure that whatever policy you create allows you to hire the best-qualified applicants and promote the best-qualified employees, and you will be just fine.

About Barbara Mitchell

Mitchell is a human resources and organization development consultant who is widely known in the areas of recruitment and retention. She has experience in both for-profit and nonprofit sectors and has consulted for a variety of organizations around the world.

She served in senior human-resources leadership positions with Marriott International and several technology firms in the Washington, DC, area before co-founding the Millennium Group International, which she sold in 2008.

Her books include The Essential HR Handbook, and The Big Book of HR. Click here to buy the book.