Nepotism is the act of hiring or promoting a person simply because that person is a family member. Even when there is somebody better equipped for the job, the family member is rewarded with it. Individuals weigh the pros and cons of nepotism based upon whether they benefit or are hurt by the practice.
Pro: Building a Legacy
A parent who has worked his entire career in order to hand his company off to his children is likely to see nepotism as a good thing. After all, it was one of the things that motivated him to build his company. If his children or other family members are interested in being part of the business, they may see the practice as a good thing too.
Difficulty arises when a relative who is unfairly promoted realises that she is not respected by her co-workers. Once other employees of an organisation have determined that the system is unfair and that less talented people are hired solely on the basis of bloodline, there is likely to be resentment and that anger can splash back on the person who was promoted through nepotism.
Pro: Family Unity
Members of one family who work for the same company have time together. Even if they occasionally bicker, working toward a single goal can be a unifying experience. Working with a family member also gives you the opportunity to see your relative in a new light and to appreciate talents you may not have known he possessed.
Con: Potentially Weak Employees
It is possible that the company is ill-served when a family member is automatically promoted to a position of authority. If there is someone who could do the job better and could help the company in a more meaningful way, nepotism can put the brakes on growth. Worse yet is when a family member is truly bad at his job but continues to hold it due to his familial relationship. A string of poor hiring choices will erode an organisation's ability to do business.
Lack of Federal Direction
There is nothing unusual about workplace nepotism. There are no federal laws aimed at nepotism, although some states and cities have passed antinepotism laws to protect public sector workplaces. A case could be made though that in a company of 15 or more employees, continuing to hire relatives of a certain gender or race to the exclusion of other races and the opposite gender constitutes unfair labour practices.