Justified or Genes – Employing Family Members

Employing family members in an organisation, other than a family business, is a minefield for management – especially in the public sector with its particular standards of probity and transparency. This is especially so when senior management is caught in the paradox of wanting to hold to the principle of appointment on merit and at the same time being committed to avoiding any appearance of discrimination or nepotism. So what happens when a job application is received from a candidate who is eminently qualified but closely related to the person to whom they would report if appointed?

Family ties create knotty problems.

It can happen anywhere but is often seen in smaller communities where recruitment or promotion can result in one family member reporting to or managing another member of their family, owing to:

  • A limited employment pool in the local economy;
  • Family members possessing skills or qualifications in demand by the organisation;
  • Family members working in the organisation being appointed/promoted to the same work area as another family member;
  • “Workplace romances” that result in married or de-facto relationships being formed.

The most obvious clash in the policy paradox is where the relationship is spousal but there are equally challenging scenarios such as where a close family relation of a member of the Executive Team is employed as a direct report to another member of the Executive Team. In such cases the employee may be compromised by being privy to information affecting their family member. Alternatively when needing to discipline the direct report their manager might feel compromised because of the manager’s peer relationship with the other Executive Team member.

There are other risk areas in employing family members in reporting relationships, including:

  • Difficulties that can arise when a manager is called upon to exercise discipline on their own family member;
    Gordianknott

    Image: maa.org

  • Work allocation or workplace circumstances that give rise to allegations of favoured treatment or nepotism;
  • Actual opportunities to conspire, collude or otherwise participate in improper conduct.
  • Actions which could expose the organisation to challenges including legal challenges due to weaknesses in its internal control frameworks and reporting, presented by the close family relationship;
  • The possibility that conflict of interest occurs when private or family interests interfere, or appear to interfere, with a duty to put the public/company interest first.                                                                                                                    

The Gordian Knott was supposed to defy unravelling – so Alexander the Great is reputed to have exercised some early “ouside the square” thinking and just cut if off. What can we do with our knotty problem? 

Navigating the genes minefield.

Appointment on merit is fundamental to professional selection and recruitment of employees whether in the private or public sector. The best person should be selected after reviewing all relevant information (including reference checks) about the skills, training and qualifications of the applicants.

Employing family members - a minefieldRecruitment of a family member reporting to another family member is not of itself prohibited or improper. However, where that circumstance is likely to occur the selection panel and the relevant appointing manager needs to accurately document the selection process followed and be able to demonstrate that through their process sufficient controls were in place so that both sides of the discrimination argument were covered.

(Image: info.pneuron.com)

That is, no acts or decisions of discrimination, favouritism, prejudice or bias resulted in the appointment or rejection of a candidate merely on the grounds of family or other close affiliation and discounting their comparative advantage of skills and qualifications compared to other candidates.

At the same time there are valid considerations in these selection decisions concerned with the integrity of the organisation’s management systems. That integrity can itself be compromised by exposing managers and employees to the risk of breaching code of conduct principles (whether deliberately or inadvertently) through situations where family relationships create opportunity for one or other of the parties to act in an inappropriate way or fail to act in an appropriate way, contrary to good management practice.

Using policy to resolve the paradox.

A paradox is created when two seemingly opposed or contradictory principles are seen to coexist without being fully resolved. In implementing its recruitment policy involving close family relationships, management should be committed to ensuring sound management direction which complies with relevant legislation, provides clear guidelines for recruitment and promotional practices and ensures ethical behaviour, good governance and appropriate internal control to address real or perceived conflicts of interest.

It can do this by formalising a policy that includes appropriate terms, conditions, processes, controls and procedures to be followed in all recruitment scenarios. The policy should include checks and balances to guard against creating inappropriate management reporting structures and at the same time ensure the fundamental principle of appointment on merit is maintained. By making this policy clear to all current and prospective employees, applicants will be aware of the conditions applicable to their candidature and the constraints on selection panels in evaluating employment applications.

Under no circumstances should this policy be used to blatantly discriminate in breach of the various categories of discrimination provided for under relevant Anti-discrimination legislation, which should of course be consulted before any such policies are developed.

Chicknegg

 Perhaps the greatest historical paradox…which came first?

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