How favoritism undermines businesses

If you run your own business then it is in your interests to get the best person for the job and to promote people based on the value they add to your business. However, if you choose to do otherwise, such as hiring and promoting your friends or relatives or people you like, then ultimately that is your choice: it's your money and if you lose out as a result of your decision then that is your prerogative.

However, if you are a manager in a government organisation or a publicly traded company, then basing decisions on factors other than what the person adds to the business effectively means that you are stealing from the "owners" (i.e. taxpayers or shareholders). In effect, you would be deliberately creating a sub-optimal outcome for reasons that have nothing to do with the success of the business, aiming instead to benefit your "favourites".

And this effect doesn't just stop at sub-par work being performed by your favorites. Let's look at some of these consequences.

Firstly, you undermine confidence in the competence of those so favoured. Generally, the feeling among employees who see what is happening is that if the favourites were all that good then they would be able to compete on their own merits. So the fact that they had to be given the opportunity rather than earn it suggests that they are less competent than others who might have competed for the opportunity. It also suggests that the person playing favourites is aware of this and has deliberately short-circuited any competitive process for that very reason. In some ways being the favorite is a double-edged sword: on the one hand you are being given the benefit of an opportunity, but on the other hand, even if you would have won the opportunity on merit in a competitive process, your reputation as competent in your own right is being undermined. And that can have consequences later on if your "protector" leaves the business or is moved elsewhere within the business.

Secondly, the person loses the confidence of the workers. If they are prepared to act with so little integrity in this matter then what else may they be doing? Can they be trusted? Who may they be undermining behind the scenes without that persons knowledge? Where there is a lack of transparency, workers may fill in the blanks themselves and draw their own conclusions, tinged with a justifiable paranoia.

Thirdly, such favoritism demotivates other workers: if promotion is based on being the boss's favourite then what is the point in doing a good job? Or, they may continue to do a good job just so that they get a good recommendation when they apply for jobs in other, fairer organisations.

Fourthly, it undermines co-operation within the workplace. You can end up with an environment were people do the least they can do without getting fired and where change is a struggle because disaffected workers withdraw their participation in change measures. Where rewards are not based on merit, passive resistance becomes the strategy of choice.

Finally, you fail to recognise and fully deploy the skills and knowledge of other employees who may have a greater claim to the opportunities on offer.

In summary, if you are a manager working in a business you don't own, then by playing favourites you are not only failing to act with fairness or integrity but aren't even earning your own salary since you are sowing the seeds of problems and dissension within the business instead of moving it optimally in the direction of its objectives.

I've painted a pretty grim picture. But unfortunately it is a reality in many organisations today when managers get it into their heads that they are in charge of their own little fiefdoms and lose sight of why they were hired in the first place.