Entrepreneurs and favouritism in small businesses“It’s not what you know, but who you know”

Nepotism and favouritism are significant issues in most small companies. These seem to be accentuated in the entrepreneurial sphere, where either family and friends are employed because the entrepreneur knows and trusts them, or it becomes a convenient recruitment process short cutting many aspects of red tape and inconvenient checks. 

It is also a common habit of entrepreneurs to show preference to those who work well, further the company’s goals, or simply ‘click’ with the entrepreneur. Although this sounds natural, and in some respects even acceptable, the concept of inequality in the treatment of staff raises its head as a significant issue for both the favourite and non-favourite employees. It is not only unethical, but also counter-productive.

The favourites often become victimised and comments such as “you get anything you ask for” become prolific in the hallways, whereas “I never get anything, no matter how badly I need it to do my job!” is often also heard. Whether the favouritism is justified or not, whether it exists or not, the reality is that it is a destructive practice in any business, and even more so in a small company where each staff member needs to make a difference.

What is the solution? A simple and structured performance based reward system that correlates directly to work tasks and projects. The problem in implementing this is the general lack of systems in entrepreneurial businesses.

A final note worth considering: if you were building a business, and some employees worked harder that others and added greater value, do you think you could conceal a preference for them?

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