What does nepotism refer to in the workplace setting?

Nepotism in the workplace refers to the practice of giving preferential treatment to relatives or friends when it comes to hiring and promotion. This often involves allowing family members to work for the same employer, which can lead to questions about fairness and meritocracy within the organization. When relatives are employed, it may give rise to concerns about bias in decision-making processes, where personal relationships could affect professional responsibilities and outcomes.

The other options highlight different aspects of employment practices that do not align with the concept of nepotism. Hiring based on experience, promoting based on performance, or establishing a merit-based process all emphasize objective qualifications and efficiency, which stand in contrast to the preferential treatment associated with nepotism. Therefore, option B accurately captures the essence of nepotism in the workplace context.