2.6. Favoritism in family businesses
Problems arise when other employees suspect favoritism on selection criteria or promotion that are different depending on the person, whether he/she belongs or not to the family of the owner ofthe company or family of the manager or to a privileged group based on unfair criteria (Grensing-
Pophal, 2007). Some researchers have found that nepotism in family businesses causes lack of trust in employees other than family members, leading to termination of qualified workers (Kocabas and Baytekin, 2004: 424; Vural and Sohol, 2004: 330; Büte, 2011: 176; Keles et al., 2011: 11). One of the negative results of nepotism is the turnover intention of employees (Bolat, et al., 2017; Araslı & Tümer, 2008). It may be argued that this unfair competition arising from nepotism will lead to a decrease in job satisfaction of non-family managers and employees. Many researchers examining the relationship between nepotism and job satisfaction have also suggested that nepotism leads to a reduction in job satisfaction (Araslı and Tümer, 2008: 1237; Araslı et al., 2006:304; Asunakutlu and Avcı, 2010: 105). Arasli, Arici and Arici’s studies focused on non-family employees. The authors showed that favoritism leads to perceptions of psychological contract violation, which in turn causes higher turnover intention. Additionally, this situation causes lack of trust in non-family members, decrease in job satisfaction and performance of employees and decrease in productivity (Ateş, 2005: 13). Especially recruitment or promotion of an acquaintance without considering their skills will make employees who are not from the family think that there is no sense of justice in the organization, and they will feel distrust. Injustice and distrust affect job satisfaction, motivation and performance negatively (Büte & Tekarslan, 2010).
Pang and Lu indicated that remuneration and job performance had a positive effect on financial performance dimensions such as return on assets, turnover growth rate and profitability while job environment and job autonomy had a positive effect on non-financial performance dimensions, such as customer service, employee productivity and service quality (Pang and Lu, 2018)
Particularly in family businesses where high performance is expected from non-family members, the wage system is likely to favor family members, leaving managers in the company (Büte, 2009: 737).