If she got promoted, would it be because of her work, or her relationship with the boss? If she didn't get promoted, would it be because of her attitude, or her relationship with the boss? If she had an argument with a colleague, was it because she was an entitled slut? If he cut the budget of the department she worked in, was it because he was going off her?
It's pernicious and there's nothing you can do about it except simply not sleep with the people you manage.
If a CEO of a blue-chip like Intel doesn't get this basic rule of management, what other basic mistakes is he going to make? Bring a gun into work? ;)