After completing his degree at a university abroad, Budi decided to return to his home country. He took a non-tenure-track teaching position at a local university. In his third year, the Faculty finally advertised two tenure-track positions. Budi was excited to finally have a chance to be promoted. Unfortunately, the Dean of the Faculty personally told Budi to drop his application for the tenure-track position, because she had been instructed by the Rector of the University to appoint two freshly graduated and inexperienced individuals to the positions. Later on Budi learned that the two new applicants were close relatives of the Rector of the University. In Budi's mind, he was "officially" a victim of nepotism.

The above paragraph illustrates nepotism in action. It is not a new phenomenon. In fact, the word nepotism was derived from the old practice of Roman Catholic popes and cardinals to appoint their nepos (nephew) to strategic positions (Jones, 2012). While extreme cases of nepotism such as the one described above are probably rare in western society, the use of word of mouth to recruit employees is a common example of nepotism still common in modern practice (Gutman, 2012). Despite its long history, nepotism turns out, to my surprise, to be pretty much unexplored territory for social and organizational psychologists. As expressed by Paul M. Muchinsky (2012), "I found more books with devil worship than "nepotism" in the title."

What is nepotism?

A quick look at the Merriam-Webster dictionary yields a simple definition of nepotism as "the unfair practice by a powerful person of giving jobs and other favors to relatives." In his book, Adam Bellow (2003) defines nepotism as "favoritism based on kinship." A classic definition of nepotism is "the bestowal of patronage by reason of relationship regardless of merit" (Simon, Clark, & Tifft, 1966). As Arasli, Bavik, and Ekiz (2006) point out, nepotism today is generally viewed as the practice of hiring or appointing relatives within the same organization. All in all, nepotism in an organization can probably best be understood as an employment or appointment process that relies heavily on the familial relationship that a job candidate has with a certain person (or persons) in an organization, rather than on his or her merit or quality in respect of the job at hand.

Is nepotism bad?

Popular opinion considers nepotism to be bad, but there is actually not much empirical research to really conclude either way. However, there is some research addressing some adverse impacts of nepotistic practice on organizational effectiveness. For example, a survey among hotel employees in Cyprus showed that people who perceived their organization as nepotistic were more likely to have low job satisfaction and a higher intention to quit their job, and were more likely to spread negative opinions about the organization they worked for (Arasli, Bavik, & Ekiz, 2006).

One interesting avenue for research emerges from the study conducted by Durante, Labartino, and Perotti (2009) about nepotism in Italian academia. They constructed an academic homonymity index (AHI), which can be understood in part as an index of how common a specific last name is within an academic unit (faculty, department, or university) relative to the geographical population. The assumption in this context is that people with the same last name are most likely to have familial ties, which means that a high AHI would indicate high familial connection within an academic unit (i.e., potentially high practice of nepotism). Having established the AHI, Durente and colleagues found that faculties with high AHI tended to have poor academic productivity (e.g., research, student performance, and professor profile). In other words, faculties with more endorsement of nepotistic practice were less likely to be productive.

To sum up, nepotism may result in an undesirable impact on organizational effectiveness. However, some writers have pointed to the benign side of nepotism that could potentially do more good than harm in terms of organizational effectiveness. Let us take a look at this benign side.

Are there any benign sides of nepotism?

In a discussion about nepotism in family business, Jaskiewicz and colleagues (2013) pointed to generalized social exchange, trust, and reciprocity as some of the key ingredients of successful organizations. The advantage of hiring a family member is that these ingredients are already pre-established. Let’s say a manager is left with two candidates for employment: his nephew and a stranger. Both are equally qualified for the job. If the manager decides to hire the stranger, he will have to build up exchange, trust, and reciprocity from scratch, and there is no guarantee that this new relationship will turn out as expected. In this case, a pre-established (good) relationship between the manager and his nephew would give the manager more grounds for his decision than hiring the stranger.

Another potentially benign side of nepotism is the shared values of family members (Jones et al, 2008). It is pretty common for people to talk about their work at home. The child of a psychologist, for instance, will probably have picked up a lot about psychology as his/her parent talks about work over family dinner. This kind of interaction at home will give the child a head start and may lead him or her to develop interests and values in the parent’s field.

Closing remarks

The current empirical evidence does seem to point to some adverse outcomes of nepotism. However, the fact that there is very little research on the topic leads me to remain agnostic in my judgment. I think the benign side of nepotism deserves more empirical concern. Nepotism may discriminate against non-family members, but an overly generalized anti-nepotism policy would end up discriminating against a capable job applicant who happens to be related to someone within the organization.