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).