By Enoch k. AKUFFU-DJOBI
In many organizations, the Human Resource (HR) department is seen as a facilitator of employee growth and development. However, when internal politics, power cliques, favoritism and informal alliances form within HR, they can function like a cartel, intentionally or unintentionally blocking the progression of deserving employees.
Such cartel-like behavior undermines meritocracy, stifles innovation, and diminishes employee morale, leading to disengagement and high turnover rates.
While I am an accounting and banking professional and not an expert in Human Resource Management (HRM), I have developed a keen ability to detect anomalies within HR systems through the lens of professional skepticism. I have identified patterns and irregularities that often go unnoticed. This article therefore, explores how HR cartels are formed, their impact on employee progression, and steps organizations can take to dismantle these harmful practices.
What is the issue?
In recent years, a troubling trend has emerged in some Ghanaian organizations. It is not uncommon to see unqualified or underqualified individuals hired simply because of their connections to HR personnel or senior management members (God father and mother factor). A company in Accra, for example, recently faced backlash after it was discovered that several key positions were filled by friends of the HR manager, rather than qualified internal candidates.
This not only undermines the company’s talent pool, but it also demoralizes capable employees who are passed over despite their dedication and performance. Similarly, employees at a mid-sized company in Kumasi expressed dissatisfaction after witnessing multiple cases in which certain individuals were promoted after only a short period of time, while long-serving, deserving employees were consistently overlooked. An investigation revealed that the promoted individuals had personal relationships with senior HR staff, giving them an unfair advantage over others. What’s more?
Employees at a government agency in Ghana became suspicious when they noticed a pattern of irregular promotions and unexplained salary increases. Despite several attempts to raise concerns through official channels, the HR department refused to disclose the criteria used to make such decisions, fostering a culture of distrust within the organization. The lack of transparency enabled the HR cartel to maintain control over decisions, making it difficult for anyone to challenge them. How are these cartels formed?
How Cartels Form in HR
A cartel in the HR department refers to a small, influential group of individuals who control key decision-making processes, particularly around normalization, promotions, salary adjustments, and recruitment. These groups often emerge due to personal relationships, favoritism, or power dynamics, and they work together to protect their interests and the interest of their cronies, often at the expense of other employees’ career development. Cartels can manifest in various ways, such as the following:
- Favoritism and Bias: HR personnel may favor certain employees due to personal connections, political alliances, or seniority within the organization. They use their influence to ensure that only favored individuals receive promotions or salary increases, regardless of performance or qualifications.
- Insider Promotion: HR cartels often create an exclusive circle where promotions are reserved for members of their own group or their allies. This can result in a lack of diversity in leadership positions and discourage employees who are not part of the inner circle from doing the needful for promotions due to lack of meritocracy.
- Gatekeeping Opportunities: By controlling access to professional development programs, leadership training, or high-visibility projects, cartels can limit the growth potential of employees outside their group. This effectively keeps talented employees from gaining the skills and exposure needed to advance in their careers.
- Suppressing Dissent: HR cartels may actively suppress employees who voice dissent or challenge the status quo. These employees may find themselves sidelined, denied opportunities, or even labeled as “difficult” or “uncooperative,” further limiting their chances for progression.
The Impact on Employee Progression
When a cartel controls HR decision, the organization suffers in several ways:
- Demoralization of Employees: When employees see that progression is not based on merit but on connections or favoritism, their motivation to perform diminishes. This can lead to disengagement and reduced productivity.
- Talent Drain: Talented employees who feel stifled in their current roles are likely to seek opportunities elsewhere, resulting in a loss of valuable human capital. Organizations with HR cartels often face high turnover rates as top performers leave in search of more meritocratic environments.
- Limited Diversity and Inclusion: HR cartels tend to favor a homogenous group of people, often those with similar backgrounds, beliefs, or affiliations. This leads to a lack of diversity in leadership positions, which can stifle innovation and creative problem-solving within the organization.
- Stagnant Organizational Growth: When employee progression is stifled, it limits the potential for fresh ideas and innovation within the company. As a result, the organization may fall behind competitors who foster a more dynamic, merit-based culture.
Signs of HR Cartels in your Organization
Employees and leadership should be aware of the following signs that suggest a cartel may exist in the HR department:
– Opaque Decision-Making: Promotion, roles and salary decisions are made without clear criteria or are not transparently communicated to employees. As such, promotions are covetously done, and employees are advised or prevented from discussing issues relating to their promotions, and other matters among themselves.
– Repetitive Promotions of the Same Group: The same individuals or group of employees consistently receive promotions, while others with equal or superior performance are overlooked based on Machiavellian tactics employed by HR cartels.
– Lack of Internal Mobility: Employees feel there are limited opportunities for progression within the company, despite their efforts and performance.
– Silencing of Feedback: Employees who raise concerns about unfair treatment or suggest improvements are ignored or penalized.
Addressing the Cartel Problem in HR
- Transparency in HR Decisions: Organizations should enforce clear and transparent processes for promotions, salary reviews, and job placements. Criteria for progression should be well-documented and communicated to all employees. This helps to ensure that merit, not favoritism, drives career advancement.
- Objective Performance Evaluations: Implementing performance evaluation systems that are based on measurable criteria rather than subjective judgments can help dismantle favoritism in HR decisions. Multi-source feedback systems (360-degree reviews) can offer a more balanced view of employee performance.
- External Audits of HR Processes: Periodic external audits of HR practices can reveal inconsistencies or biased decision-making. Independent reviews ensure that all employees are treated fairly and that HR policies are consistently applied across the organization.
- Encouraging Whistleblowing: Organizations should encourage employees to report unethical behavior, including favoritism and gatekeeping, without fear of retaliation. A well-structured whistleblowing system allows employees to report cartel-like behavior anonymously and confidently.
- Leadership Accountability: Top leadership should take responsibility for overseeing HR practices and ensuring they align with the company’s values of fairness, respect, equity, and inclusion. Leadership must actively challenge any signs of power consolidation within HR that could lead to a cartel-like structure.
- Diversity and Inclusion Programs: Proactively fostering diversity in hiring and promotion practices can counteract cartel behavior. Leadership should ensure that opportunities for advancement are available to employees from diverse backgrounds, promoting an inclusive culture that values all contributions equally.
Conclusion
A cartel in the HR department can severely impede employee progression, leading to dissatisfaction, decreased productivity, and a loss of talent. To address this, organizations must foster transparency, fairness, and accountability within HR processes.
By promoting merit-based advancement and actively dismantling internal power structures that favor a select few, companies can build a healthier, more dynamic workplace where every employee has a fair chance to grow and succeed. The removal of these artificial barriers is not only beneficial for individual employees but is also crucial for the long-term success of the organization.
Enoch is a Chartered Accountant / Certified Banker with a deep passion for accounting, banking, and governance. His expertise spans both education and practice reflecting a commitment to research and knowledge sharing. He can be reached via [email protected]). Contact: +233244201383.
