the effects of nepotism and favoritism on employee ... · fine cronyism as preferential treatment...

TODAĐE’s Review of Public Administration, Volume 5 No1 March 2011, p. 185-208.

The Effects of Nepotism and Favoritism on Employee Behaviors and Human Resources Practices: A Research on Turkish Public Banks

Mustafa Büte *

Abstract: The aim of this study is to analyze the effects of nepotism on employees’ behaviors and human resources management prac-tices in Turkish public banks. The data were collected via survey from the public banks operating in Ankara. Out of a total of 300 questionnaire forms distributed, 243 were used for analyses. Re-search model and hypothesizes that were designed via literature scanning, as a part of the objectives of the research, were subjected to Path Analysis using LISREL 8.54 statistical package program. The survey method was used for collecting data. The results of the research revealed that nepotism had significant negative effects on intention to quit, job satisfaction, organizational commitment and human resource management practices. Besides, human resource management practices were found to have positive significant ef-fects on job satisfaction and organizational commitment.

Key Words: Nepotism, favoritism, cronyism, public banking sector and human resource practices.

INTRODUCTION

Nepotism, favoritism and cronyism have been criticized as being unprofessional (Abdalla, Magharabi - Raggad, 1998). While preventive legal measures are adopted against preferen-tial treatment in developed countries, in developing countries such practices continue to be part of daily life (Boadi, 2000).

Nepotism and favoritism is a very common behavior in business life (Araslı, Bavik - Ekiz, 2006: 296). In the organiza-tions with intense preferential treatment, the human resources

* Asst. Prof., Bayburt University, FEAS.

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departments fail to independently carry out its activities. Thus, under such conditions, appointments based on competence and knowledge accumulation seem impossible. If employees are in competition with a privileged individual, their probability of promoting is quite low (Abdala, Maghrabi - Al-Dabbagh, 1994). Moreover, working under an incompetent person is dis-tressing situation for an employee subject to preferential treat-ment. Inequality between the contribution rate and the benefit offered makes employees think they work in an unfair environ-ment. The lack of confidence that appears in such circum-stances negatively affects job satisfaction, organizational com-mitment and individual performance. Especially favoritism-based pay system leads to detachment from the organization (Büte, 2009: 737). While this means a weakness for the favored individual, it denotes the existence of an organizational climate that supports preferential treatment for the organization in question. In such an environment, individual and organizational failure is ultimately inevitable. However, unfortunately, available studies on nepotism, favoritism and cronyism both in domestic and foreign literature are limited. Due to the above-mentioned reasons, it is extremely necessary and important to explore this topic. This study has investigated the effects of nepotism and favoritism in the Turkish state banks. The results of this study are important in focusing on a critical problem, which is known, but is rarely examined as well as in guiding the state bank managers.

The research consists of two parts: theoretical and practical. In the first part, the literature on preferential treatment, human resources management practices, job satisfaction, organiza-tional citizenship and turnover intention was reviewed, and the model and hypotheses of the research were constructed. In the second part, a survey was conducted among 243 employees working in three state banks operating in Ankara.

PREFERENTIAL TREATMENT

Although the phenomenon of preferential treatment is con-sidered a “form of corruption” that appears in the political deci-


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sion-making process (Kayabaşı, 2005: 56), it is at the same time one of the major problems of the public bureaucracy. Fa-voritism first entered the public policy and administration litera-ture with the misuse of the system of favoritism adopted by General Jackson, when he was elected as the US president in 1828, in the practice (Tortop, 1994: 48).

Bestowing privilege to some individuals in the organization may not always be for direct pecuniary interests. It may arise from certain commitments and obligation. That is to say, ra-ther than an economic power, such as money or property, the likelihood of the use of a non-pecuniary power, i.e. kinship ties, as the means of influencing is highly probable (Berkman, 1983: 25-26). Such non-pecuniary, direct and interest-oriented prac-tices are defined as “preferential treatment”.

Oktay (1983: 209) defines preferential treatment as “the state of prevalence of specific criteria, such as attendance to the same school, being from same place or similar political tendency, in the relations in organizational units or in the rela-tions between these units and social environment, thus replac-ing universal criteria governing the management studies”.

Despite preferential treatment manifests itself in different forms depending on the relationship between the organization or the individual that benefit from the privileged treatment, it has three common forms:

The first of the forms of preferential treatment is nepotism. The word nepotism is from the Latin word 'nepos', meaning “nephew” (Kiechel, 1984: 143). Today. The concept of nepo-tism refers to the misuse of office in favor of family members (Ford - McLaughlin, 1985: 57). Nepotism, which is considered as unprofessional behaviors in work life, still exists and contin-ues to be negatively perceived at present. Favoritism is the second form of preferential treatment. The

word ‘favoritism’ has two somewhat different meanings: (i) the general inclination to favor one person or group over others, and (ii) concrete preferential treatment of those to whom one has personal connections, such as relatives, friends, neighbors


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or other acquaintances (Loewe et al., 2007: 19-20). In defini-tion, “favoritism” refers to the provision of special privilege to friends, colleagues and acquaintances in the areas of employ-ment, career and personnel decisions (Araslı - Tümer, 2008: 1239). While nepotism is practice of showing preferential treatment toward one's relatives (by blood or marriage), favorit-ism is shown towards friends and acquaintances.

The third form of preferential treatment is “Cronyism”. This concept is a compound of the word crony, which seems to have originated as a slang among undergraduates at the Uni-versity of Cambridge in the 17th Century, meaning close friend (Khatri - Tsang, 2003: 290). Araslı and Tümer (2008: 1239) de-fine cronyism as preferential treatment only to long-standing friends regardless of their qualifications, such as skills, compe-tence, success or level of education, especially due to sharing the same political preference.

In nepotism, which is briefly known as relative favoritism, the subject of preferential treatment is blood relation and emo-tionality is the major element as required by primary relations. Favoritism, on the contrary, involves the latent effect of ties with close friends, pals and acquaintances other than family members. As for cronyism, it is more political preference-oriented with the motive of preserving himself or herself or his or her current status. Nepotism, which is a common strategy adopted especially in family-owned companies to prevent loss of power belonging to family members, is one of the major ob-stacles to the professional behavior, democracy and institu-tionalization (Özler, Özler - Gümüştekin, 2007: 438-439).

The preferential treatment means weakness in respect of the privileged individuals, while labor loss and failure for the work environment, as success and skills are not criteria for appoint-ment. While choosing employees, organizations must consider the compatibility of the candidate to the nature of the job as well as his or her education, experience and his or her knowledge on the department and sector. However, if the can-didate in question has any kind of relationship with one of the


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executives or the owner of the firm, the department that makes the choice loses its objectivity (Đyiişleroğlu, 2006: 44).

In organizations with intense preferential treatment, kinship, fellow townsmanship or friendship or other forms of relation-ship replace the principles of merit, such as knowledge, skills, ability, competence, success or level of education, in the re-cruitment or promotion of employees (Đyiişleroğlu, 2006: 44). Moreover, working under an incompetent person is distressing situation for an employee subject to preferential treatment. In-equality between the contribution rate and the benefit offered makes employees think they work in an unfair environment. The lack of confidence that appears in such circumstances negatively affects job satisfaction, organizational commitment and individual performance. Especially favoritism-based pay system leads to detachment from the organization (Büte, 2009: 737). In the organizations with intense preferential treatment, the human resources departments fail to independently carry out its activities (Abdalah, Maghrabi - Al-Dabbagh, 1994). . If employees are in competition with a privileged individual, their probability of promoting is quite low. The climate of unfair competition arising from nepotism and favoritism adversely af-fects job satisfaction of employees leading to weakening in or-ganizational commitment and thus, triggers the intention to quit (Araslı, Bavik - Ekiz, 2006: 297). Besides, nepotism and fa-voritism practices based on kinship may sometimes cause fam-ily struggles, conflicts between generations, weakened organi-zational commitment and turnover of competent and high-quality managers (Özler et al., 2007: 438-439). Working under persons, who are appointed to important positions regardless of their degree of skills and abilities, leads to lack of confidence in non-family member employees, decrease in job satisfaction and performance, decline in organizational efficiency and lower organizational commitment (Ateş, 2005: 13).

In their study, Araslı and Tümer (2008: 1237) found that among the forms of preferential treatment, nepotism, favorit-ism and cronyism increased job stress of employees and thus boosting job satisfaction. In addition, according to Asunakutlu


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and Avcı’s (2009: 736) study, the promotion and processing dimensions of nepotism and favoritism had a negative relation-ship with job satisfaction. Considering the purpose of the study, the following hypotheses were developed in view of the findings in the literature:

H1: Nepotism and favoritism have a significant negative ef-fect on human resources practices.

H2: Nepotism and favoritism have a significant negative ef-fect on job satisfaction.

H3: Nepotism and favoritism have a significant negative ef-fect on organizational commitment.

H4: Nepotism and favoritism have a significant positive ef-fect on turnover intention.

HUMAN RESOURCES PRACTICES

Human resource management in an organization is very important. These activities include recruitment, selection, train-ing, career development, compensation, and performance ap-praisal (Yüksel, 2003: 30-32). Human resource management practices are able to provide an organization with a competitive advantage in a working environment. Moreover, they can assist job satisfaction and may increase the organizational success while reducing the intention to quit (Araslı, Bavik - Ekiz, 2006: 297; Pare, Trembley - Laonde, 2001). In view of these findings, the research hypotheses were constructed as follows:

H5: Human resources practices have a significant positive effect on job satisfaction.

H6: Human resources practices have a significant positive effect on organizational commitment.

H7: Human resources practices have a significant negative effect on turnover intention.

JOB SATISFACTION

In general sense, job satisfaction is defined as individuals’ content with their jobs (Akıncı, 2002: 2). According to another definition, job satisfaction is a soothing and calming feeling,


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which the individual endeavors to gain from his or her overall work environment (from job itself, working group and work or-ganization. Financial interests derived from the job, co-workers, with whom one enjoys to work with and the happiness of achieving something (Akıncı, 2002: 4).

There is a very close relationship between job satisfaction and organizational commitment (Aktay, 2010: 49; Saklan, 2010: 82). Many relevant studies point to a positive relationship between these factors (Stroh et al., 2002: 294). Accordingly, employees satisfied with their jobs tend to exhibit more volun-tary behaviors intended for the benefit of their organization (Saklan, 2010: 82). Mathieu and Zajac found that job satisfac-tion was related both with affective and continuance commit-ment, while Hackett, Bycio and Hausdorf found that job satis-faction had a positive effect on affective and normative com-mitment (Saklan, 2010: 82).

Employees’ level of job satisfaction has certain social and economic consequences in respect of both themselves and their organization. The previous studies indicate that employ-ees’ level of job satisfaction affect their job performance, job at-tendance, intention to quit as well as their mental and physical condition (Efeoğlu, 2006: 32; Yurtseven, 2008: 43).

It is asserted in general that there is an inverse relationship between job satisfaction and intention to quit (Dole - Schroed-er, 2001: 235-236; Efeoğlu, 2006: 32; Yurtseven, 2008: 43). The studies that investigated the relationship between job satis-faction and intention to quit found that employees with low job satisfaction tended to leave their job (Dole - Schroeder, 2001: 236). In the light of these findings, the following hypotheses were formulated:

H8: The perceived job satisfaction has a significant positive effect on organizational commitment.

H9: The perceived job satisfaction has a significant negative effect on intention to quit.

ORGANIZATIONAL COMMITMENT AND TURNOVER INTENTION


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Organizational commitment refers to loyalty and devotion to the organization, dedication to the organizational goals and in-volvement in organizational activities (Çekmecelioğlu, 2007: 16). Employees with high organizational commitment attend work regularly, protect organizational assets, share organiza-tional goals and support the organization at hard times Ceylan - Demircan, 2002: 59).

Organizational commitment directly affects the intention to quit. The intention to leave the job is the most powerful and di-rect sign of turnover behavior and determines whether the em-ployee seeks another employment opportunity or intend to quit his or her job, or not. There is a negative relationship between the three-dimension organizational commitment (affective commitment, continuance commitment and normative com-mitment) and turnover intention. Especially affective commit-ment has a strong effect on intention to quit (Ceylan - Bayram, 2006: 106-107). Employees, when they are satisfied with their jobs and believe that their supervisors are supportive, sensitive and fair, tend to fulfill their job-related responsibilities. The rela-tionship between the organizational citizenship behavior and organizational factors affecting this behavior generally mani-fests itself in the mutual benefit exchange between the organi-zation and the employee. The employee endeavors to acquire both material and spiritual benefits. The employee wants a sat-isfactory balance between his or her efforts and benefits from the organization. If benefits are lower than the expected, the in-dividual tend to decrease his or her efforts and with the inten-tion of quitting, begins to think about other job alternatives (Ceylan - Demircan, 2002: 57-58). In view of these findings, the following hypothesis was constructed:

H10: Organizational commitment has a significant negative effect on intention to quit.

A RESEARCH ON THE EFFECTS OF NEPOTISM AND FAVORITISM IN THE TURKISH STATE BANKS ON EMPLOYEES


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This section contains the importance, purpose, method and scope of the study, and demographic characteristics of the re-spondents and scale of the survey.


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The Importance and Purpose of the Study

Nepotism and favoritism is a very common behavior in business life (Araslı, Bavik - Ekiz, 2006: 296). In heavily nepo-tism-oriented businesses, if nepotism is felt intensively, the human resource management practices cannot work inde-pendently. Thus, under such conditions, appointments based on competence and knowledge accumulation seem impossi-ble. It is very difficult to promote employees, if they compete with the one who has a family member, relative or friends in the higher-level position in the organization (Abdala, Maghrabi - Al-Dabbagh, 1994). Moreover, working under an incompetent person is distressing situation for an employee subject to pref-erential treatment. Inequality between the contribution rate and the benefit offered makes employees think they work in an un-fair environment. The lack of confidence that appears in such circumstances negatively affects job satisfaction, organizational commitment and individual performance. Especially favoritism-based pay system leads to detachment from the organization (Büte, 2009: 737). (Büte, 2009: 737). While this means a weakness for the favored individual, it denotes the existence of an organizational climate that supports preferential treatment for the organization in question. In such an environment, indi-vidual and organizational failure is ultimately inevitable. Howev-er, unfortunately, available studies on nepotism, favoritism and cronyism both in domestic and foreign literature are limited. Due to the above-mentioned reasons, it is extremely necessary and important to explore this topic. This study has investigated the effects of nepotism and favoritism in the Turkish state banks. The results of this study are important in focusing on a critical problem, which is known, but is rarely examined as well as in guiding the state bank managers.

The purpose of this study is to investigate the effects of nepotism and favoritism in the Turkish state banks on the em-ployee behavior and human resources practices.


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Methodology

Within the scope of the purpose of the research, the re-search model and hypotheses developed via the literature re-view was subjected to the Path Analysis by using LISREL 8.54 statistical software package. In this research, the survey meth-od was employed in gathering data. Cross-sectional data were obtained via a previously developed research model and scale, and were analyzed by quantitative methods. As the state bank executives were given assurance of confidentiality the names of the banks would not be disclosed, the relevant banks were rep-resented by symbols. The state banks located in Ankara, which were the universe of the survey, were composed of total 223 branches and about 800 personnel. Bank A had 54 branches, Bank B, 91 branches and Bank C, 78 branches. Due to the costly and time-consuming process of contacting all the state bank branches located in Ankara, a 300-respondent sampling from the relevant state banks was developed taking into ac-count the location, accessibility and financial factors and the questionnaire forms prepared were sent to the employees in-cluded in the sampling. 250 questionnaire forms were re-turned. Seven questionnaire forms that were not completely filled out were left out of consideration. Hence, total 243 ques-tionnaire forms were considered.

The Research Model

Nepotism and favoritism practices are also major concerns in the banking sector (especially in state banks) as in all sectors dependent on human involvement. In this study, which investi-gated the effects of nepotism and favoritism on employees of the state banks, a literature review was conducted and a re-search model was developed. The model, which was con-structed by using variables such as nepotism and favoritism in the literature, human resources practices, job satisfaction and intention to quit was added the variable of organizational commitment which was predicted to be associated, though not seen in the literature. In addition, some studies in the literature have recommended the analysis of the organizational com-


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mitment variable (Araslı - Tümer, 2008: 1238-1239). Thus, the organizational commitment variable, which was included in the research model, can be considered as the contribution of this study to the literature.

The model developed on the effects of nepotism and favorit-ism practices on the state bank employees is provided in Chart 1.

Chart 1. The Research Model H4+ H2- H8+ H1- H10- H9- H5+ H6+ H7-

Organizational Commitment

Preferential Treatment Nepotism Favoritism

Human Resources Practices

Turnover Intention

Job Satisfaction


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The demographic characteristics of the respondents are presented in Table 1. The majority of respondents were female (61.73%). The breakdown of the respondents by bank was very close to one another. About half of them (46.91%) were in the 21-30 age group. Nearly two-third of respondents (65.02%) were married; two-third (65.02%) were with Bachelor’s Degree. The groups responded to the questionnaire were with a sector experience close to each other.

Table 1. Demographic Characteristics CHARACTERISTICS

Frequency Percentage %

CHARACTERISTICS

Frequency Percentage %

GENDER - Male - Female

93 150

38.27 61.73

MARITAL STATUS - Married - Single

158 85

65.02 34.98

BANKS - A Bank - B Bank - C Bank

84 80 79

34.57 32.92 32.51

EDUCATION LEV-EL - High School and Below - Undergraduate - Postgraduate

45 158 40

18.52 65.02 16.46

AGE - 20 and below - 21–30 - 31–40 - 41–50 - 51 and above

23 114 69 30 7

9.47 46.91 28.40 12.35 2.88

SECTOR EXPERI-ENCE - Less than 5 years - 5-9 years - 10 years and more

63 100 80

25.93 41.15 32.92

The Scale of the Research

In the research, a questionnaire form consisting of 37 ques-tions was employed in order to identify the relationships be-tween nepotism and favoritism and human resources practices, affective commitment, job satisfaction and turnover intention.

In the research, 10 questions on “nepotism and favoritism” were taken from the scale developed by Abdala, Magharabi and Raggad (1998). In this group, Cronbach’s Alpha coefficient was found to be 0.89. 12 questions related to “Human resources practices” were taken from the study of Araslı et al. (2006); Cronbach’s Alpha coefficient was 0.93. 6 questions for measur-ing “Affective Commitment” were taken from the article of Mowday et al. (1982): Cronbach’s Alpha coefficient was found to be 0.88. 6 questions on “Job Satisfaction” were taken from the study of Babin and Boles (1998): Cronbach’s Alpha coeffi-cient was found as 0.91. Finally, 3 questions related to “Inten-


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tion to Quit” was taken from Babin and Boles’s (1998) study; Cronbach’s Alpha coefficient was found to as 0.81.

In the questionnaire, 5-point Likert scale from 1=strongly disagree, 2=disagree, 3=neutral, 4=agree to 5=strongly agree was employed. The data were gathered by a research team composed of students in the period of January-June 2010. More than half of the survey was conducted via face-to-face interviews. The remaining were given to respondents to be filled out at home and were collected the next day. Some of the questions were translated from their English version into Turk-ish. The reliability and comprehensibility of the Turkish version of the questions were tested by University lecturers and English teachers. Besides, demographic background of respondents was presented.

The Cronbach’s Alpha coefficient, which is calculated in the framework of irternal consistency that indicates the reliability coefficient of the survey scale, was found to be (0.88). 37 ques-tions included in the questionnaire form were subjected to the descriptive analysis. At the end of the anaysis, the questions were loadad on five variables. The variance explained by the variables was found as 71.33%. In the factor analysis, 7 items were loaded below the expected variables, i.e. below the 0.60 load value, the acceptable load value in the literature. Thus, the said questions were not subjected to the subsequent analyses. The items excluded from the survey were as follows: Nepotis and Favoritism; “In this bank, employees, who are promoted or rewarded because of family ties damage the organization” and “Friends and acquaintances of bank executives are frustrated by the fact that they never really know if they are promoted or rewarded based on merit or personal reasons”; Human Re-sources Practices: “My bank frequently uses “recruitment tests” during employment”, “New employees go under regular skill training programs in order to perform their jobs”, “Performance evaluations involve the agreed objectives set by middle manag-ers and goals of employees” and “In my bank, appointments are based on job criteria”. The only statement on job satisfac-


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tion excluded from the survey was “Most days I am enthusiastic about my work”.

FINDINGS

The Results of the Confirmatory Factor Analysis

In order to confirm the results of the descriptive factor anal-ysis, a confirmatory factor analysis was conducted. The results produced five variables. Thus the results of descriptive and confirmatory analyses were found to be consistent. As can be seen in Table 2, the data comply with the model. In addition, factor loading for each items was found as 0.50; their t values were above 2.00.


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Table 2. The Results of Confirmatory Factor Analysis

Sta

ndar

d Lo

adin

gs

T V

alue

s

Factor 1: Preferential Treatment (Nepotism-Favoritism) 0.79 13.78

Employees of this bank always feel that they need someone they know or a friend in a high-level position.

0.78 13.71

Supervisors are afraid of subordinates who are related to high-level executives. 0.71 12.91 I am always careful when speaking to family or relatives of bank executives. 0.69 11.98

Executives are more interested in keeping friends and acquaintances in good positions than they are in those employees' performance or the organization's profitability.

0.67 11.62

The expectations of executive relatives and acquaintances are given priority. 0.65 11.08

Banks permitting employment of executives' relatives have a hard time attracting and retaining quality people who are not relatives.

0.76 13.73

Banks permitting employment of executives' relatives have a difficult time firing or demoting them if they prove inadequate.

0.69 12.04

High-level executives of this bank have a hard time demoting or firing friends and acquaintances.

0.69 12.05

Factor 2: Human Resources Practices During the employment process the bank explains both thepositive and the neg-ative aspects of the job.

0.61 10.88

My bank uses standardized interview methods during employment. 0.65 12.57

Personnel for this bank will go under educational programs at leastonce a year. 0.66 12.32 My bank does systematic analysis to identify what is missing in the educational programs for the employees.

0.77 13.94

My bank takes service behavior, and its development as basis for the educational programs.

0.79 14.38

My bank uses the results from the education programs to reacheducational tar-gets.

0.67 11.65

My bank takes job-related criteria for promotions and appointments. 0.69 10.71 The emplıyees learn the performance evaluation results with an official notifica-tion.

0.71 10.56

Factor 3: Job Satisfactionni

I consider my job rather unpleasant. 0.75 13.63 I am often bored with my job. 0.80 15.71 I feel fairly well statisfied with my present job. 0.83 16.24 I feel very tired at the end of the work day. 0.84 13.54

I am disappointed that I ever took this job. 0.81 16.31 Factor 4: Organizational Commitment

I would be happy to spend my remaining career in this benk. 0.77 13.98

I really feel as if this organization's problems are my own. 0.84 14.25

In this bank, I feel “part of the family”. 0.83 14.11

I have an emotional bond with this organization. 0.81 15.71

I feel a strong belonging to this organization. 0.75 13.39

I am proud to tell others that I am part of this organization 0.86 12.75


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Notes: Each item is measured on a five-point Likert scale. All correlations are signifi-cant at 0.001 level.

Within the framework of Confirmatory Factor Analysis, Chi-square/df, Goodness-of-Fit Index, Adjusted Goodness-of-Fit Index, Comparative Goodness-of-Fit Index, the Normed Fit In-dex, Non-Normed Fit Index, Root Mean- Square Value and Root Mean Square Error of Approximation were conducted. The results of all Goodness-of-Fit Indices supported the com-patibility of the the research data with the model.

The Findings of Correlation Analysis

The calculation results of the correlation coefficients be-tween the factors are provided in Table 3. All correlations were significant at 0.01 levels. In addition, the highest correlation was found between human resources practices and job satis-faction (0.69); the lowest correlation was between human re-sources practices and and intention to quit (0.31). Lastly, means and standard deviations of composite factors were cal-culated and it was found that the results supported the distinc-tive validity of the scale.

Table 3. Means, Standard Deviations and Correlations Related to All Variables Used in the Model

Variables 1 2 3 4 5 1.Preferential Treatment (Nepo-tism-Favoritism

1.00

2. Human Resources Practices -0.49 1.00 3. Job Satisfaction -0.57 0.69 1.00 4. Organizational Commitment -0.43 0.47 0.53 1.00

5. Turnover Intention 0.31 -0.59 -0.57 -0.61 1.00 Means 3,07 3,14 3,07 3,5 2,87 Standard Deviations 0,66 0,68 0.51 0.63 0,55

All correlations are significant at 0.00 levels.

Faktör 5: Turnover Intention

I often think of resigning from my job. 0.77 13.24

If I leave my job, I won't lose much. 0.75 11.95

Most probably, I will be looking for a new job soon . 0.77 13.36

Uyum Đndex Sonuçları: Chi-square /df = 2.79 GFI (Good of Fit Index) = 0.87 AGFI (Adjusted Good of Fit Index) = 0.81 CFI (Comparative Fit Index) = 0.92 RMR (Root Mean Square Residual) = 0.057


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The Findings of the Path Analysis

The results of the Path Analysis conducted for the evalua-tion of the hypotheses are given in Table 4.

At the end of the research, it was found, as seen in Table 4, that in general, nepotism and favoritism had significant nega-tive effects on human resources practices, job satisfaction, in-tention to quit and organizational commitment. Thus, H1, H2, H3 and H4 were confirmed.

The analysis results indiated that human resources practices had a significant positive relationship with job satisfaction and organizational commitment. Hence, H5 and H6 were also vali-dated. In addition, a significant negative relationship was found between human resources practices and intention to quit.

Table 4. The Results of Path Analysis

Variables

Standard Parameter Calcula-tions (ML)

T- Values

Their effects on Human Re-sources Practices

Preferential Treatment (Nepo-tism-Favoritism)

0.26 -3.73

Variance Explained (R2)= 0.59 Their effects on Job Satisfac-tion


0.16 -3.32

Human Resources Practices 0.39 6.05 Açıklanan Varyans (R2)= 0.34 Their effects on Organizational Commitment


0.19 -3.91

Human Resources Practices 0.37 5.77 Job Satisfaction 0.39 4.73 Variance Explained (R2)= 0.47 Their effects on Turnover Preferential Treatment (Nepo-tism-Favoritism)

0.25 3.98

Human Resources Practices -0.29 -4.28 Job Satisfaction -0.26 -2.97 Organizational Commitment -0.27 -3.94 Variance Explained (R2)= 0.51


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The results of the analysis revealed that job satisfaction had a significant negative relationship with intention to quit, while a significant positive relationship .organizational commitment. Thus, H8 and H9 were accepted. Finally, a significant negative relationship was found between organizational commitment and intention to quit. Hence, H10 was also accepted.

The nepotism and favoritism factors explained 59.0% of the variance related to the effects on human resources practices.

Discussion

Tei research investigated the potential effects of nepotism and favoritism or human resources practices, job satisfaction, organizational commitment and intention to quit in the state banks located in Ankara. Thi findings from the Path Analysis indicated that nepotism and favoritism had negative effects on all variables.

As in many services sectors, nepotism and favoritism prac-tices are also very common in the banking sector due to its de-pendence on human involvement (Abdalla, Magharabi - Rag-gad, 1998; Ercenap, 2006). This study, which was conducted via the literature review and a survey conducted among the state banks operating in Ankara reached similar results with other available studies in the literature in terms of significant positive effects of nepotism and favoritism on human resources practices. It is a a clear organizational fact that in organizations, where nepotism and favoritism practices are very common and are considered normal, the executives cannot behave fairly to the employees. However, nepotism and favoritism do not affect every employee in the same manner; such practices have very adverse effects especially on the efficiency of qualified employ-ees, who are enthusiastic about work. Considering that those employees will reflect the said negativity on their co-workers, it is not difficult to anticipate that the damage nepotism and fa-voritism will cause to to the organizational efficiency and effec-tiveness will be much worse.

The results of this study indicated that nepotism and favorit-ism had negative effects on job satisfaction and organizational


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commitment, while they positively affected intention to quit. It is an expected outcome that an unfair work environment, where organizational democracy has not been established, leads to job dissatisfaction in employees and demotivates them. Such a situtation decreases their job involvement and their loyalty to the bank. Then, the possible consequences will be absenteeism, tardiness and turnover. Besides, employees working under such unfavorable conditions will look for a better job and will quit as soon as they find.

The analysis results of all hypotheses were empirically con-firmed. In line with previous empirical studies, job satisfaction was found to have negative effect on intention to quit (Schmit - Allscheid, 1995; Babkus et al., 1996; Hussain, Khan - Bavik; Araslı, Bavik - Ekiz, 2006) and positive effect on organizational commitment (Stroh et al., 2002: 294; Saklan, 2010: 82). This indicates that employees with high level of job satisfaction are loyal to their job and have organizational commitment. The re-sults of the survey revealed that job satisfaction plays key role on the way to organizational success. Although physical ap-pearance is important especially in the services sector, the be-haviours of employees affect the quality of services. Therefore, organizations should first satisfy their employees in order to satisfy their customers.

CONCLUSION, LIMITATIONS AND SUGGESTIONS

Conclusion

There are still numerous unanswered questions about nepo-tism and favoritism in the literature. Our national economic, social and cultural values make nepotism and favoritism in our work life inevitable. This study examined the effects of nepo-tism and favoritism in the state banks on human resources practices, job satisfaction, organizational commitment and in-tention to quit.

This study has revealed the necessity for the indepndent and effective management of human resources departments of the state banks. Moreover, human resources practices in the state banks should be re-regulated so as to to become fair and in fa-


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vor of all employees. The executives of the state banks should exhibit an open and transparent management towards the em-ployees. The reason is that the perceived job satisfaction and justice will positively affect the organizational commitment of employees and thus will improve their efficiency. When em-ployees perceive a fair climate in the bant, instead of favoritism-dominated climate, their organizational and job involvement will increase, thus providing the state banks with a competitive advantage.

Limitations

This study has certain limitations. First, this study investi-gated the effects of nepotism and favoritism on human re-sources practices, job satisfaction, turnover intention and or-ganizational commitment. In future studies, other factors that might possibly have relationship with nepotism and favoritism, such as job stress, internal motivation and trust in supervisor might be investigated. Secondly, future studies with a larger sample size and conducted in the private banking industry or in other services sectors might produce more reliable and differ-ent results. Thirdly, the researchers of future studies are rec-ommended to employ one of the probability sampling methods for further generalization of the results. Fourthly and lastly, in this study the concept of preferential treatment has been de-termined as a general concept covering nepotism and favorit-ism. In future studies, the effects of these concepts might be examined separately.

Suggestions

The results obtained from this study are important for the executives and employees of the state banks operating in Anka-ra. The executives should primarily develop their human re-sources department in order to increase the performance, effi-ciency, job satisfaction and organizational commitment of their employees. Hence, the bank executives can improve the em-ployee efficiency by using the functions of human resources.

The findings of the study indicate that nepotism and favorit-ism have advedse effects on employees and that advantages


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arising from nepotism and favoritism are only in favor of the privileged person. In addition, nepotism and favoritism nepo-tism paralyze human resource practice and negatively affect the employees’ perceived justice. Organizations can achieve suc-cess only by the contribution of each individual. However. Nep-otism and favoritism damage the team spirit on the way to success. Moreover, in organizations with intense nepotism and favoritism, employees, for the purpose of promotion, will prefer to establish close relationship with any of the family members, who might favor him or her, instead of working harder. Despite limited job opportunities in Turkey, the organizational com-mitment of employees with low level of job satisfaction due to nepotism and favoritism may decrease and thus, may quit their job.

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