Nepotism Effects on Job Satisfaction and Withdrawal Behavior: An Empirical Analysis of Social, Ethical and Economic Factors from Pakistan

Abstract

Nepotism practices have had a severe impact on the social, ethical, and economic culture of not only corporations but also countries in the modern world. Nepotism behavior not only discourages the determined and motivated employee, but also has a detrimental impact on the worker's satisfaction, performance, and contribution to the firm's success. This increases economic tensions due to workers' dissatisfaction with their jobs and occasionally withdrawal intentions, resulting in poor economic activity and a decline in society as a whole. The purpose of this study is to see how organizations' nepotism affects individual work happiness, withdrawal behavior, social and ethical values, and the country's economic development. The study's target audience was private-sector employees, including managers, non-managerial staff, and middle and lower-level employees. Convenient sampling was used to ensure that the target population was accessible and available. The findings demonstrated that organizational nepotism causes substantial harm not only to employees but also to businesses and the economy. The employee who is happy with his or her job and working environment is less likely to withdraw.

1. Introduction

Nowadays, the popular belief about private organizations is that their positions are filled mostly on the basis of nepotism and favoritism, rather than based on knowledge, talent, or fitness standards for the available position. The job openings are targeted towards a specific set of people who work closely with these organizations. Private organizations face lots of internal and external pressure as well as favoritism in filling their job vacancies. The pressure is exerted by the Political elite, friend, or relative of the top management. Due to pressure and favoritism, skills, eligibility, know-how, and suitability standards of the post are overlooked during the procurement process (Paais & Pattiruhu, 2020).

There is now evidence that nepotism has both positive and negative consequences. Nepotism is beneficial to small businesses. For example, the person to be engaged is frequently found in a short amount of time. It’s a huge help to be informed of this person’s characteristics and productivity ahead of time. Working with a relative can also help small businesses develop a strong communication network and foster a supportive family environment (Abdalla et al., 1998; Ponzo & Scoppa, 2010). In contrast to these beneficial impacts, nepotism may erode confidence and commitment to employers among non-kin employees. Because workers begin to believe that rewards are not determined by the nature of their job but rather by their closeness to management. Employees no longer see achievement as meaningless. Additionally, in organizations characterized by nepotism, there may be polarization between kinship and non-kinship employees. Productivity declines in such instances, even among workers who are not affiliated to either group (Khatri & Tsang, 2003). As a consequence, workers’ faith in their institutions is eroded, as is their loyalty, job productivity, and job satisfaction. Professionalization declines and the institution approaches collapse in institutions with nepotism (Nguyen & Nguyen, 2020). Public institutions constitute the country’s biggest professional business network. Injustice, nepotism, and inequality within these institutions erode individuals’ faith in their superiors, institutions, and ultimately in their state.

Nepotism is very common in Pakistani culture. Nepotism in Pakistan has had its strong political roots for so long. The governments of Pakistan’s Muslim league Noon PML-N and Pakistan’s people party PPP have been found practicing nepotism during their governmental time span. Their eras were full of nepotism, and they favor their own family members to become part of the government and gave the main positions of the different departments to their affiliates. Lately, before the election of the new government, Pakistan Tehreek e Insaaf PTI, the newly-elected Pakistani government claimed that they will eradicate the concept of nepotism from the government. But that was just a promise, as other political representatives did in the past. And even in the election when Jahangir Tareen could not perform in NA-154, his son Ali Tareen took his place without any prerequisites. Hence, it can be concluded that Pakistan is still struggling with the curse of nepotism.

Vacancies are advertised for jobs, but the recruitment process has already been tainted since vacancies are published, but the people who will be hired have already been chosen. The goal of posting job openings is to generate a lot of money from the applications. During the recruitment and promotion process, people with references are required. People in positions of power fill positions with their friends, regardless of their ineligibility, discouraging genuine talent. As a result, qualified and capable people miss out on the job. As a result, nepotism has a detrimental impact on the performance, motivation, and contentment of those applicants who are appointed solely based on merit, as well as the overall performance of the organization (Nuswantara & Pramesti, 2020; Ombanda, 2018).

The most significant difficulty for today’s organizations is retaining and engaging experienced and skilled employees. Employees withdrawing from their respective organizations is a negative result of nepotism behavior. Employees’ withdrawal behavior can be seen in organizations that are progressively discriminating in their treatment of non-affiliates, such as uneven opportunity, imbalance in rights, no advancement, no bonuses, and so on. Working in this type of environment is unpleasant for the workers’ health and the organization itself. The discriminatory conduct of organizations not only makes the worker emotionally exhausted but also reduces motivation, engagement, commitment, and enthusiasm. The groundbreaking aspect of this research study is that nepotism behavior has never been researched in conjunction with individual work satisfaction, withdrawal behavior, social and ethical ideals, and the country’s economic progress, and in that sense, this study aims to fill the vacuum.

The foremost basis for this study is evaluating the impact of Nepotism behavior on Individual Job Satisfaction and Withdrawal behavior. Furthermore, the study also intends to assess the impact of Nepotism behavior on the social and ethical values and economic development of the country.

2. Literature Review and Hypothesis Development

2.1. Effects of Nepotism on Job Satisfaction and Withdrawal Behavior

The concept of nepotism entails awarding special privileges, recruitment, and development of incompetent candidates or candidates not meeting the job requirements, description, and qualification of the vacant post, just because of personal interests, friendship, or relationship (Kwon, 2006). “Nepotism” is defined as having a preferential attitude toward friends, relatives, or a political tie. The approach usually entails awarding employment, progressing a career, and training based on so-called behavior rather than merit.

Nepotism is a form of favoritism that is granted to relatives and friends in various fields, including business, politics, entertainment, sports, fitness, religion, and other activities This practice refers to the hiring of a certain person who assists organizations in accomplishing their so-called “desired purpose” based on affiliation with the personnel rather than equity or justice. From a pool of potential candidates, prioritizing a set of people just because they have a connection to one of the top managerial positions” (Kwon, 2006). In simple words, “nepotism is the hiring or promotion of a candidate regardless of his or her knowledge, skills, abilities, achievements, experience but in the real world based on relationship ties, personal interests or so-called favoritism” (Isaac, 2019). The nepotism behavior arose in the “Renaissance period” after the church Pope hired their nephews on the highest ranks without considering their fitness and capacity The term comes from the Italian word nepotismo, which is based on Latin root nepos meaning nephew. Since the Middle Ages and until the late 17th century, some Catholic popes and bishops – who had taken vows of chastity and, therefore, usually had no legitimate offspring of their own – gave their nephews such positions of preference as were often accorded by fathers to sons. Several popes elevated nephews and other relatives to the cardinalate. Often, such appointments were a means of continuing a papal “dynasty” (Karim & Qamruzzaman, 2020). This behavior prompts a critical concern in the recruitment process because it has discouraged the profound quality of those candidates who were not the Pope’s nephews.

Favoritism and nepotism convey an unwelcome message to workers that the business is unconcerned about their human capital; as a consequence of the unequal allocation of resources, promotions, and other factors (Abdalla et al., 1998). Workers must also feel a sense of reciprocal respect from their bosses. While some researchers have claimed that cynicism is influenced by the supervisor-subordinate relationship (Chiaburu et al., 2013), a poor relationship with supervisors demoralizes employees. This is because a supervisor’s incivility may jeopardize an employee’s future employment prospects, as such people are prone to being cynical; thus, supervisor incivility is a broad category. According to research, hotel employees are acutely aware of their managers’ uncivil behavior, both interpersonal and informational. Exhibiting nepotism toward close affiliates and discriminatory behavior toward non-affiliates leads to more disagreements and an unpleasant and unhealthy working environment for employees. Excessive nepotism on the part of organizations reduces employee satisfaction with their jobs and increases withdrawal behavior. If employees are dissatisfied with their jobs and workplace, achieving organizational goals and objectives becomes difficult.

Employee job satisfaction would suffer if a company uses nepotism. As a result, they will perform badly, be less focused on achieving organizational goals, resulting in reduced earnings and a greater proclivity for withdrawal behavior. Withdrawal behavior is caused by a discriminating, demanding, and stressful work environment, as well as unequal employment opportunities and inequity. As a result, employees lose their commitment, passion, and determination, and are more likely to leave the company. This psychologically negatively affects the worker.

H1: Nepotism negatively impacts Individual Job Satisfaction.

H2: Nepotism positively impacts Individual Withdrawal behavior.

2.2. Impact of Nepotism Behavior on Social and Ethical Values and Economic Development

People are forced to become more cohesive to solve problems, and in small nations, in particular, the lack of anonymity allows political leaders to collect a great deal of personal information on voters and citizens who can be easily identified and victimized, such as by being denied jobs. This issue of nepotism affects not only an organization’s management development, advancement, control, image, and public relations. The most common criticism of nepotism has been that it is unprofessional. Opponents say that the growth of an intellectual, analytical approach to management means nepotism will wane and ultimately disappear. The objective of this research, however, is to demonstrate that, despite allusions to the contrary, nepotism exists in business organizations, particularly in less developed countries where it is a reality of life. Research has shown that there are two types of practical ramifications of exhibiting Nepotism behavior. Because it contradicts social equity, equal rights, and opportunities, many entities, associations, individuals, or societies believe this behavior to be morally wrong (Riggio & Saggi, 2015). The other implication encourages the exhibition of nepotism behavior, which indicates that some practitioners believe this practice is financially advantageous because it provides sources of employees at a low procurement cost.

Nepotism assists in reducing the cost of vacant advertising posts, and through this practice, close affiliates gain loyalty, build trust by procuring them. Close affiliates who are hired only based on ties, rather than merit, eligibility, or job criteria, would be more valuable and generate greater profits by not leaving the firm (Ombanda, 2018). In some cases, employees who are close affiliates are more obligated, engaged, and motivated towards the organizations, increasing the profit ratio for their respective companies and exhibiting fewer chances of resigning (Riggio & Saggi, 2015). Although it is socially acceptable to provide career opportunities to family members, nepotism causes financial problems by forming a group of close associates in the job circle, resulting in a concentration of employment and income.

In Pakistan, nepotism is becoming a big issue, contributing to economic and financial crises. Nepotism can be seen in every aspect of a country’s administration, whether it is electoral, economic, military, executive, or judicial. Pakistan’s economic prosperity, wellbeing, economic progress, recognition, respectability, truthfulness, honor, and social position were all robbed as a result of the catastrophe. The harsh reality of the world is that when it becomes incredibly difficult for a country to improve openness, honesty, legitimacy, and freedom to speak and share information, incompetent, under-qualified officials run the country’s affairs, leading to destruction. Pakistan has been sculpted far away from economic development as a result of this disaster.

H3: Nepotism has an inverse impact on the Social and Ethical values of a country.

H4: Nepotism has an inverse impact on the economic development of a country.

3. Date and Methodology

In this study, the Quantitative Research approach was used to verify and evaluate the research study’s presumed hypothesis. This study takes a descriptive approach. This research study’s target group is private-sector employees, including managers (decision-makers), non-managerial, and middle and lower-level employees. The non-contrived research setting is used to determine the “cause and effect” relationship between the variables in this study. The time frame for this research study is cross-sectional because of its advantage of generalizability in producing interpretations regarding variables, i.e., Nepotism, Job Satisfaction, Withdrawal behavior, Social and Ethical Values, and Economic development from employees of three targeted firms, i.e., Haleeb Foods, Sapphire and Bata.

Convenience sampling is used to ensure that the targeted population is accessible and available. The “person” is the unit of analysis for this investigation. A total of 250 Haleeb foods, Sapphire, and Bata respondents took part in this study. There were six sections to the survey questionnaire. The first encompasses demographics (name, gender, age, organization, designation, email, tenure, monthly income), the second part encompasses twelve close-ended questions on nepotism which is measured using the tool of “Paul Olendo Ombanda, ” the third part has ten close-ended questions on individual job satisfaction which is measured using the tool of “Scott MacDonald and Peter Maclntyre, ” fourth part has eight closed-ended questions on withdrawal behavior which is measured using the tool of “Walsh, Ashford, and Hill, ” fifth part comprises five close-ended questions on social and ethical values which is measured using a self-developed tool, and the last part comprises five close-ended questions on economic development which is measured using a self developed tool. The permission for using the tool has been taken from the respective author.

Nepotism scale: Asunakutlu and Avci (2010) were the creators of this scale and which was created to assess the level of nepotism. The score’s height indicates a high level of nepotism per capita. A ten-item Likert scale is used. Promotion-NS, working procedure, and staff recruitment and selection are the three subdimensions of the scale. The subdimensions of the Nepotism Scale, such as ‘promotion- NS’ and ‘employee recruitment and selection, ’ examine favoritism and nepotism in these areas. High ratings in these subdimensions imply that familiarity is more important than skills and talents. The ‘working method’ subdimension measures the idea that persons close to the management are more respected and receive more rewards.

Job satisfaction: There are eight items on this 5-point Likert scale. The scale is divided into five sub-dimensions, each of which examines different aspects of job satisfaction: labor, remuneration, advancement-JSS, supervision, and coworkers. The ‘work’ subdimension assesses how important, meaningful, entertaining, or proud people feel about their jobs. The ‘pay’ sub-dimension assumes that individuals receive adequate compensation and that wage standards are well defined. The ‘promotion-JSS’ subdimension determines whether professional advancement is possible and whether these phases are objectively defined. The ‘supervision’ subdimension includes valuing employees’ perspectives, appointing fair supervisors, and engaging with them in a friendly way. The subdimension ‘coworkers’ evaluate coworkers’ accountability, reasonableness, communication, and entertainment.

4. Results

The quantitative data is analyzed using SPSS Statistics. The data appears to be normal. The demographics section of the questionnaire tool is one part, and the close-ended questionnaires are the other. The following Table 1 depicts the frequency and valid percentage of male and female respondents.

Table 1: Demographic Profile of the Respondents

Table 2 shows the findings of the validation and reliability of the research latent construct and measurement variables. It is clear from the test statistics of each latent construct and measurement variable, as well as the overall sample, that test statistics are higher than the target threshold value of 0.70. As a result, we can deduce the study’s internal consistency and appropriateness in assessing the study’s target variables (Andriamahery & Qamruzzaman, 2022).

Table 2: Measurement Validation

The table depicts the mean values of all the variable terms under study. The mean value of variable Economic development is higher (4.0704) than the other variable terms’ mean value, see Table 3.

Table 3: Mean and pair-wise correlation

The Pearson Correlation between Nepotism and Individual Job Satisfaction is found to be –0.090 with a significance level of 0.154. This depicts that Nepotism behavior has a negative but not significant relationship with Individual Job Satisfaction. The Pearson Correlation between Nepotism and Withdrawal behavior is found to be 0.822 with a significance level of 0.000. This depicts that Nepotism behavior has a positive and significant relationship with withdrawal behavior.

The Pearson Correlation between Nepotism and Societal and ethical values is found to be –0.008 with a significance level of 0.899. This depicts that Nepotism behavior has a negative but not significant relationship with social and ethical values. The Pearson Correlation between Nepotism and Economic Development is found to be –0.160 with a significance level of 0.011. This depicts that Nepotism behavior has a negative but significantly weak relationship with Economic development.

In the next, the study performed regression analysis in assessing the proposed hypothesis and the results of regression analysis are displayed in Table 4.

Table 4: Regression Analysis and Hypothesis Validation

Dependent Variable: Individual Job Satisfaction

The correlational coefficient is 0.090, with a significance value of 0.154. The coefficient beta value of Nepotism behavior is –0.076, indicating a one-unit variation in Nepotism behavior causes a change in employee job satisfaction. Because the significance value is 0.154, more than the normal value of 0.05, the value shows a negative but statistically insignificant influence of nepotism behavior on individual job satisfaction.

Dependent Variable: Withdrawal behavior

The correlational coefficient is.822 with a significance level of 0.000. The coefficient beta value of Nepotism behavior is .895, which states that a one-unit variation in Nepotism behavior causes a change in withdrawal behavior. Because the significance value is 0.000, less than the normal value of 0.05, the value shows a positive and statistically significant influence of nepotism conduct on withdrawal behavior.

Dependent Variable: Social and Ethical values

The value of the correlational coefficient is 0.008, with a 0.899 significance value. The coefficient beta value of Nepotism behavior is –0.008, indicating that a one-unit variation in Nepotism behavior causes a change in the employee’s Social and Ethical values. Because the significance value is 0.899, more than the normal value of 0.05, the value shows a negative but statistically insignificant influence of nepotism behavior on the employee’s social and ethical values.

Dependent Variable: Economic development

The value of the correlational coefficient is 0.160, with a 0.011 significance value. The coefficient beta value of Nepotism behavior is –0.076, which indicates that a one-unit variation in Nepotism behavior causes a change in Economic development. The value exhibits a negative but statistically significant effect of Nepotism behavior on the Economic Development of a country because the significance value is 0.011.

5. Discussion and Conclusion

All four hypotheses have been acknowledged by previous research investigations by researchers who have attempted to create a comparable association in some fashion, but none have been examined in the Pakistani setting. Hypothesis 1: Nepotism behavior negatively impacts Individual Job Satisfaction. The second hypothesis: Nepotism behavior positively impacts Employee Withdrawal behavior. The third hypothesis, Nepotism behavior, negatively impacts the Social and ethical values of a country (Ombanda, 2018). The fourth hypothesis: Nepotism behavior negatively impacts the economic development of a country. Table 5 shows the most common responses received from respondents when filling the questionnaires.

Table 5: Common Responses

In any community, nepotism is a curse. Even behaving in a nepotistic manner is forbidden in our religion. The government should take genuine steps to enforce the merit system so that those with genuine competencies and abilities for a given job can come on board and manage all the work for which they are qualified. Officials in charge of human resources should take extra precautions to prevent nepotism in the procurement, advancement, and pay distribution processes, among other things. Employees who are hired on merit are not only discouraged but are also demotivated to perform properly. Employees who are happy in their jobs and their working environment are less likely to withdraw.

The findings of this research study demonstrate that declining nepotism behavior from organizations boosts individual job satisfaction, helps in lessening their withdrawal behavior, improves the social and ethical values, and advances the country’s economic development, growth, and prosperity. The study recommends that equal opportunity, no discrimination, and fairness should be established in procurement, training and development, incentives, and reward systems.

This research is carried out in the city of Lahore. Future research studies could be carried out in other cities of Pakistan, i.e., covering more cities of the country like Karachi, Quetta, Peshawar, Faisalabad, Sialkot, etc. The Researcher focused on evaluating and assessing the impact of Nepotism behavior on Individual Job Satisfaction and Withdrawal behavior. Other variable terms like Emotional Exhaustion, Organizational trust, Job performance can be deliberated in future research studies. The research study used a Quantitative Research methodology. A mixed method approach can be deployed in future studies. The Researcher for the availability and accessibility of the targeted population employs a Convenience sampling. Other sampling techniques i.e., purposive sampling can be employed in future studies. This research study comprises a sample of 250 respondents. Bigger sample size can be used in future studies.

*Acknowledgments:

[1] Funding: no financial assistance received from any organization and person.

[2] The author confirms no conflict of interest