What you describe is how social circles form, not how working groups designed around producing some objective are formed. When you're looking for a more "freef

What you describe is how social circles form, not how working groups designed around producing some objective are formed. When you're looking for a more "freeform", "directionless" (in the sense of not having a "deliverable") social environment, you tend to gravitate towards people you enjoy being around. This is normal. Ideally, you try to expand yourself some by also looking for people you wouldn't gravitate towards, so that you can gain a wider perspective -- but that ideal is starting to get objective-oriented. In a business, there is a "direction" and a "deliverable". It's the thing people pay for that the company does/produces, whatever that thing is. So then companies should recognize that their raison d'être is to deliver that thing as best as possible. That means that a company should seek to comprise itself those who most aid it towards its goal of delivering the thing. Which in turn means that companies should be incentivized to retain those individuals that it finds highly capable of delivering the thing. How well people get along within the company is a factor, insomuch as having a group of people who get along well (read: "culture fit") incentivizes the people currently comprising the company to remain at the company, so that the decision of whom to retain and whom to release is more often in the company's hands. It's an ugly cold truth, but it provides some security to people willing to work hard: if you work hard, and you endeavor to aid in the company's goals, you'll be rewarded. This prioritizes ability and skill over the straight-up nepotism you described, rather than ignoring ability/skill in favor of such nepotism. The approach you describe sounds like one my current tech lead would cook up to rationalize his every-so-often decision to fire someone that he just doesn't "gel" with socially.