Nepotism refers to using power to provide jobs or benefits to family and friends. While it can provide benefits like loyalty and trust, it also has major drawbacks. Nepotism can lead to less productivity as non-relatives see limited career growth, increased legal risks from discrimination lawsuits, and disruption of the workforce from a lack of fairness. It also results in greater employee turnover, lower work ethics, reduced employee morale, and lower loyalty to the organization. To address nepotism, employers should have clear, written guidelines on hiring and promotions based on merit rather than relationships and allow employees to voice concerns professionally.