Chapter 1

INTRODUCTION

Background of the Study

In today’s business world, the challenges of management are the practices of

nepotism, which most ignore the needs for experience, professionalism, and knowledge.
In industrialized countries, nepotist practices are restricted by legislative measures.
However, nepotist practices repeatedly persist in daily business processes in developing
countries, as there is no precise implementation of the policy against such practices.
This study has examined nepotism in terms of its effect on organizational outcome
variables with ambiguous impact. There is little empirical evidence of the relationship
between nepotism and employee emotional engagement, especially in the context of the
study. This study has shown that nepotism is beneficial to such nations, and practices of
nepotism repeatedly persist in the daily business processes of the business environment
(Chukwuma I. A.-I., 2019)

Workplace nepotism is the act of providing preferential treatment or favoritism

towards family members in a workplace setting. It can be considered a form of
workplace discrimination. The key here is that it is unfair or preferential treatment based
on family relations rather than qualifications. If a family member is the strongest
candidate for a specific role, promotion, or project assignment, it’s not necessarily
nepotism to select them (Mckenna, 2024).

Nepotism is a sort of conflict of interest. This behavior means providing unearned

income in an unethical way to a relative or somebody from family connection (Gyimah-
Boadi, 2000). Nepotism term is used when somebody is employed or promoted in a
company just because of his family connections by ignoring his characteristics and
without considering some factors such as education level, capabilities, abilities and
accomplishments. Nepotism is a concept which was defined as nepotismo in Italian
through the history. Nepotism was first used to describe the popes who accorded
privilege to their own relatives (İyiişleroğlu, 2006).

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 Additionally, working with one of the relatives can foster a strong sense of loyalty
and commitment, which can enhance teamwork and collaboration. However, nepotism
can have a detrimental impact on employee performance by fostering an environment of
unfairness, distrust, and limited opportunities for professional growth and development. It
can lead them start to think that gratifying is not done according to the nature of their
work and yet it is done according to their closeness to management. In this case,
productivity decreases especially to those employees who are not related with both
groups. As a result, employees' trust in their organizations, loyalty, job productivity and
job satisfaction are weakened. In organization with nepotism, professionalization
decreases and the institution moves towards failure.

Employee satisfaction and welfare are crucial to their productivity. However, the
increased workload decreases employee performance. One of the problems that
increase the workload is the low number of workers working in institutions. (Mustafa
Yavuz, 2020)

Statement of the problem

Nepotism is when people are hired or promoted because they are family or
relatives, without considering their skills, abilities, success, or education level (Masters,
1983) (Özler, 2007). Nepotism is a natural part of human endowment. How it's perceived
is tied to culture (Jones, 2011). Nepotism is present in all industries, with certain
situations being easier to comprehend, such as family-owned businesses employing
their teenage children for weekend tasks like waiting tables or managing the reception
desk. However, in other cases, nepotism becomes more concerning, particularly when
an unqualified individual secures a senior position or promotion ahead of more qualified
candidates solely due to their relation to a company owner or executive (Mckenna,
2024). Nevertheless, nepotism isn't always entirely negative. Employing or promoting a
family member can offer certain benefits or advantages (Sun, 2019). This led the
researchers to the question: “Does nepotism have a significant role in maintaining a
work environment?”

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 Therefore, this research seeks to examine and analyze the effects of nepotism in
the workplace, focusing on how favoritism towards relatives or close associates impacts
employee performance, career advancement opportunity and overall productivity.
Specifically, this research sought to answer the questions:

1. Does nepotism positively affect the organization in terms of

1.1. Workplace Environment
1.2. Employee Productivity
1.3. Career Advancement Opportunities

2. Does nepotism negatively affect the organization in terms of:

2.1. Workplace Environment
2.2. Employee Productivity
2.3. Career Advancement Opportunities

3. Does hiring a qualified Human Resource Manager impact the practice of

nepotism in an organization in terms of:
3.1. Workplace Environment
3.2. Employee Productivity
3.3. Career Advancement Opportunities

4. Does nepotism cause employment turnover in an organization?

5. Does nepotism persist in an organization?

6. Has nepotism become an acceptable practice in an organization?

Objectives of the Study

The study generally aims to determine the effects of nepotism on employee

performance, job satisfaction, and career advancement in the Municipality of Manticao,
Misamis Oriental, particularly the government employees.

In order to address the general objective, the following specific objectives were
addressed:

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  To assess the extent of nepotism prevalent among government employees in the
Municipality of Manticao, Misamis Oriental.
 To examine the impact of nepotism on employee performance within the
workplace.
 To investigate the relationship between nepotism and job satisfaction among
government employees.
 To analyze the influence of nepotism on career advancement opportunities for
employees in the Municipality of Manticao

Significance of the Study

The importance of researching how nepotism affects employee performance, job

satisfaction, and career advancement lies in its potential to reveal its negative influence
on how organizations function. By examining these factors, companies can develop
effective policies and practices that lessen the harmful effects of nepotism, ultimately
promoting a workplace based on fairness and merit. This research contributes to
improved employee well-being, optimized performance, and fair career advancement,
benefiting both individuals and the overall company culture. The findings of this study will
be valuable for future researchers and students studying nepotism, serving as a
reference for their own work.

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