What is Nepotism? | Meaning & Definition | Akrivia HCM

Nepotism is the practice by a family member or close associate of an organization of favoring other members of that group over more qualified outsiders for appointments to positions of influence and responsibility, especially to the exclusion of persons not related to the group. Most jurisdictions regard nepotism as a conflict of interest. Nepotism can also refer to particular appointments, such as those awarded to family members or close associates regardless of merit or qualification.

What is nepotism?

Nepotism is when an employer gives preferential treatment to an employee or job applicant because of their family relationship or personal connection to the employer.It is often seen as unethical because it can lead to favoritism and create an unfair working environment.

Types of nepotism

  1. Reciprocal nepotism: Reciprocal nepotism is defined as hiring or promoting someone based on a personal relationship rather than on merit or qualifications. It can occur when family members, close friends, or other individuals with personal ties to the employer are given preferential treatment over more qualified candidates.
  2. Entitlement nepotism: Entitlement nepotism is when an employee is aware that their preferential treatment is due to their family connections.

Why are nepotism cases prevalent?

Nepotism is prevalent in every society because of a solid emotional bond between relatives. It is characterized by the preferential treatment given to family members over non-relatives in terms of access to material resources, opportunities, and services. Nepotism can cause adverse effects on the organizational structure since it encourages the rise of personal influence, friendship, and connections within the organization rather than merit. Also, nepotism has been seen as a negative influence on organizations because it encourages favoritism and increases corruption and fraud.

What is the difference between nepotism and favoritism?

The two words are used similarly as both refer to discrimination towards an individual by neglecting the benefits of others. However, there are differences in their definitions. Nepotism is defined as “favouritism granted to relatives or friends,”” whereas favouritism is defined as “”discrimination in favor of oneself or one’s group.”

In short, nepotism and favoritism are two sides of the same coin – if you were going for a job interview for a position at your friend’s firm and you were accompanied by your best friend who occurs to be your cousin, this could be considered nepotism. If your best friend didn’t accompany you, but another member of your family did instead, then this could be regarded as favoritism.

What are some of the laws related to nepotism?

Some of the laws related to Nepotism are:

1) In India, a law governs Nepotism in government organizations. As per rule 4(1) of the CCS (Conduct) Rules, no government servant shall use their influence directly or indirectly to fix employment for any member of their family in any company or firm.

2) The Government has also issued guidelines on appointments in government service. As per this guideline, members of the immediate family of a Government servant cannot be appointed in the same department.

3) The guidelines also advocate that immediate family members should not be given contracts worth more than Rs 10 lakhs by a public sector undertaking during two years preceding their appointment and for one year after its termination.

4) A bill was introduced in Rajya Sabha in December 2011, which sought to prohibit ministers from appointing relatives under them in their ministries. The bill was passed in February 2012 and became an Act on 23 June 2012. It came into force w.e.f 14 August 2012, thus making it illegal for ministers to appoint their close relatives to posts in their ministry or department.

5) In case of violation of provisions mentioned above, it can take disciplinary action against concerned government servants.

Are nepotism laws illegal in India?

Nepotism is not illegal in India, but it is a form of corruption. Within the Indian culture, nepotism has been practiced for many centuries and has become so deeply rooted that it is hard to make people realize its ill effects.

What is nepotism called in politics?

Nepotism is also known as Cronyism in politics. Cronyism is a practice whereby jobs or other opportunities are awarded not based on merit or qualifications but to the closest friends, relatives, and associates of those in power.

Cronyism is often practiced in politics, which may be informal and unspoken.

In what industries and sectors do nepotism practices prevail?

Nepotism is prevalent amongst many countries and organizations in the world. Among the top, most common sectors where nepotism prevails are politics, entertainment, and corporate/government organizations (for employment).

Effects of nepotism

Nepotism in the workplace can have many adverse effects, 

  1. Lowering morale: Employees may feel that favoritism is shown to certain individuals, making them feel undervalued or less important. This can lead to decreased motivation, productivity, and a lack of organizational trust.
  2. Creating animosity among colleagues: This can be especially true when someone is given a job or promotion because of their familial relationship, as opposed to their qualifications or experience. This creates an environment of unfairness and can make it difficult for others to feel valued or respected. 
  3. Lack of trust:Nepotism can lead to distrust, especially when certain individuals are receiving preferential treatment because of their connections to particular individuals. This can cause resentment among those who feel they are not given the same opportunities as those who are related to those in positions of power. This can ultimately lead to a breakdown of trust in the organization, as people may feel that their contributions should be valued and recognized.
  4. Unfairness:Nepotism is showing favoritism to relatives or close friends by those in power or influence positions. This type of favoritism can have unfair consequences, such as hiring less qualified individuals and preferential treatment of family members. This unfairness can lead to resentment, a breakdown of trust, and a lack of motivation from those who feel they are being passed over for opportunities.
  5. Lack of diversity: Nepotism can lead to a lack of diversity in the workplace, as those in positions of power are more likely to hire people similar to them in terms of background, ethnicity, gender, and other characteristics. This can lead to a homogeneous workplace, limiting the perspectives and ideas that can be heard in the workplace.

How to handle nepotism?

It is important to remember that everyone should be treated fairly and equally in the workplace, regardless of family relationships. However, some strategies can help employers manage nepotism:  

  1. Establish clear policies: Make sure to have clear policies specifically addressing nepotism. This should include guidelines on how to deal with nepotism, how to report it, and the consequences of nepotism.
  2. Monitor hiring practices: Monitor all hiring practices to ensure they are fair and unbiased. This includes ensuring that all applicants receive equal consideration regardless of their family ties.
  3. Investigate any reports: If any reports of nepotism arise, investigate them thoroughly. Talk to all involved parties and get to the bottom of the situation. 
  4. Provide clear feedback: If someone is involved in nepotism, provide clear feedback and consequences.
  5. Encourage open communication: Encourage open communication between employees and managers. This will help ensure that any problems related to nepotism are quickly addressed and resolved.


Note: Use the DE&I dashboard to help organizations track and measure their progress in creating a diverse and inclusive workplace. This dashboard is designed to help organizations identify areas where they need to focus their efforts and resources to promote diversity and inclusion. Additionally, it provides real-time insights into the organization’s progress in achieving its de&I goals. 


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