It is often said that the federal government needs to be more like the private sector (Brooks, Reference Brooks2013; Campbell, Reference Campbell2011; Harvey, Reference Harvey2012; Miller, Reference Miller2013; Neal, Reference Neal2013; Schnurer, Reference Schnurer2013). However, after reading Jones and Stout's (Reference Jones and Stout2015) summary of private-sector antinepotism policies, we wonder whether the opposite is true when it comes to nepotism and cronyism: Should the private sector be more like the federal government? According to Jones and Stout, many organizations have antinepotism policies that prohibit the employment of the friends and family of current employees. We believe that these policies might go too far, and we propose that the policies used by the federal government could serve as a model for private-sector organizations. We also think that the federal government can shed some light on why organizations want to prohibit nepotism and cronyism.

In the federal government, nepotism and cronyism are largely covered by two laws: the Prohibited Personnel Practices (1978; 5 U.S.C. § 2302) and the Merit Systems Principles (1978; 5 U.S.C § 2301) statutes. (Relevant portions of these laws, including definitions, are provided in the Appendix.) The Prohibited Personnel Practices (1978) statute states that it is illegal for any federal employee to “appoint, employ, promote, advance, or advocate for [the] appointment, employment, promotion, or advancement” of a “relative.” Basing hiring decisions on nepotism and cronyism is also inconsistent with the Merit Systems Principles (1978) statute, which states that “selection and advancement should be determined solely on the basis of relative ability, knowledge, and skills, after fair and open competition” (5 U.S.C. § 2301(b)(1)) and that “employees should be . . . protected against personal favoritism” (5 U.S.C. § 2301(8)). The first quote seems incompatible with nepotism and cronyism, in which selection and advancement would be determined on the basis of family relationships and friendships rather than on the basis of knowledge, skills, and abilities. The second quote refers mainly to the treatment and promotion of existing employees and is clearly inconsistent with cronyism. Furthermore, if a hiring manager chooses to hire a relative instead of the most qualified applicant, he or she would be engaging in another prohibited personnel practice: “willfully obstruct any person with respect to such person's right to compete for employment” (Prohibited Personnel Practices, 1978; 5 U.S.C. § 2302(b)(4)).

Both of these laws are fully enforceable; individuals can report violations of the Prohibited Personnel Practices statute or the Merit Systems Principles statute to the U.S. Office of Special Counsel and the U.S. Merit Systems Protection Board, respectively. Violations are investigated and can lead to disciplinary actions (e.g., Rentz v. U.S. Postal Service, 1984; U.S. Department of Justice, 2012; U.S. Patent and Trademark Office, 2014; Welch v. Department of Agriculture, 1988). We recognize that not all violations are necessarily reported; however, a recent governmentwide survey reported that only a small percentage (less than 5%) of respondents claimed they were denied a job because of nepotism (Ferentinos & Osowski, Reference Ferentinos and Osowski2013).

A key element in the federal government model is that the friends and relatives of a federal employee can be hired to work for the organization. However, they must apply and compete for the position, just like any other applicant for federal employment. For example, the son of a U.S. Border Patrol station chief would be able to apply for an entry-level border patrol agent position (although he would most likely be assigned to a different station than his father). However, that agent would still have to meet the minimum qualifications, pass the entrance examinations, and graduate from the U.S. Border Patrol Academy just like every other applicant. Exceptions could not be made because his father is a higher ranking border patrol agent. Indeed, Dickson, Nieminen, and Biermeier-Hanson (Reference Dickson, Nieminen, Biermeier-Hanson and Jones2012) showed that it is important to distinguish hiring a friend or family member who is well qualified for a job from hiring a social connection while ignoring the substandard qualifications of the social connection. This is in stark contrast to the private-sector policies described by Jones and Stout (Reference Jones and Stout2015), whereby friends and relatives are forbidden from obtaining employment in the organization.

Private sector policies that absolutely prohibit the hiring of friends and family have three limitations; these limitations are resolved by the federal government's model. First, the model helps to ensure that an employer hires the best qualified applicants (who will have the highest levels of predicted performance if a valid selection system is used). Second, the model produces a selection system with true procedural justice. All applicants are treated the same, regardless of who they know and who they are related to; instead, the best applicants are hired with the use of an objective and valid selection system. Third, the model allows friends and relatives to compete for positions in the organization but reduces the risk of nepotism and cronyism by removing the related employee from the hiring process.