Is it okay to hire friends at work?

How people react to someone hiring a personal acquaintance depends on their cultural background and where they are in the world, says UNSW's Josh Keller

It's Monday morning, you stroll into work and there's a new face in the office. Having had the customary kitchen chat while making the coffee, you realise the new employee is long-time friends with the manager. Do you think, 'This is cronyism of the highest order' or, do you view the appointment as 'The management knows what they're doing, and this is best for the company'? Associate Professor Josh Keller says your reaction could vary depending on where you are in the world.

Culture plays a big part

Professor Keller and his fellow researchers examined differences in perceptions about hiring people with personal ties by conducting an analysis of the perceived fairness, profitability, and overall evaluation of hiring decisions in China and the United States. He said, "We found that the Chinese were more punishing of the hiring decisions that involved close personal ties than Americans in some specific contexts, in particular when the candidate was qualified."

Americans (in the workplace) were willing to overlook the personal connection if the new employee was found to be qualified for the position. Chinese workers were not able to overlook cronyism even when the appointee was qualified for the role. When the Chinese workforce was aware of an employee with a more indirect personal tie, for example, a government official as opposed to a family member, then the sentiment changed from the appointment being unfair to it being unfair but necessary – an acceptance, as part of
business.

The Business School Associate Professor explains that workers in the United States did not separate fairness concerns and overall evaluation in the same way as Chinese workers. "Workers from the US were more 'straightforward' with their judgments. They thought it was unfair and thought it was bad for business, overall a bad evaluation, and so they made a direct judgment based on fairness concerns," Keller says.

Hiring – making a decision

The UNSW Business School academic says that when it comes to hiring employees in the real world, the decision-maker needs to strike a balance. If you ignore the fact that people can gain resources through personal ties, they may lose out on those resources completely.

At the same time, if you’re always making the assumption that personal ties should always be used for resources then you may lose out on alternative ways of getting those resources – so both can be problematic.

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