Why Playing Favorites in Business Can Cost You Trust, Profit, and Growth
Are You Paying for Loyalty or Performance?
A contractor I know—let’s call him Mike—hired his brother-in-law to manage operations. He wanted to help his family and figured blood would be good for business.
At first, everything seemed fine. But within months, cracks started to show. His brother-in-law was unorganized, slow to respond to customer issues, and constantly blamed others for mistakes. Despite this, he was collecting a fat paycheck with no performance incentives.
Mike knew it was a problem, but he avoided confrontation. After all, firing family would create drama at Thanksgiving, right?
Then, the real costs hit.
- The team stopped pushing for excellence—why should they, when favoritism was in play?
- A top-performing project manager quit, fed up with double standards.
- Customer complaints increased, and Mike found himself back in the weeds.
Eventually, Mike realized what had happened: his business was bleeding out because he hired for the wrong reason—not talent, but family ties.
The Price of Hiring for the Wrong Reason
Keeping an underperforming family member in a key role is one of small businesses’ most dangerous sacred cows. It destroys:
- Company Culture – If your team sees someone getting paid big money for little effort, they will disengage. Your standards become meaningless.
- Your Credibility as a Leader – Weak leaders play favorites. Strong leaders hold everyone accountable—even family.
- Your Top Talent – The best employees won’t stick around if mediocrity is rewarded.
- Your Bottom Line – The true cost isn’t just their salary—it’s the lost productivity, bad morale, and missed growth opportunities.
Breaking the Sacred Cow: How to Fix It
If you’ve made this mistake, you have two options:
1. Hold Them Accountable
- Set clear expectations and performance metrics.
- Implement performance-based pay (bonuses for results, not just showing up).
- Treat them like any other employee—no special treatment.
2. Make the Hard Call
- If they refuse to improve, you must let them go.
- Offer them a graceful exit—perhaps a different role or a transition period.
- Remember: keeping them on hurts both them and your business.
A Final Leadership Question
If this person wasn’t family, would you tolerate this performance?
If the answer is no, then you know what you need to do.
True Contractor Freedom comes from holding high standards, making tough choices, and leading with integrity—even when it’s uncomfortable.
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