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The effects of nepotism on human resource management


The case of three, four and five star hotels in Northern Cyprus
Huseyin Arasli
School of Tourism and Hospitality Management, Eastern Mediterranean University, Mersin, Turkey

Effects of nepotism on HRM 295

Ali Bavik
Department of Tourism and Hospitality Management, Cyprus International University, Mersin, Turkey, and

Erdogan H. Ekiz
Department of Hotel and Tourism Management, The Hong Kong Polytechnic University, Kowloon, Hong Kong
Abstract
Purpose The purpose of this study is to investigate the potential effects of nepotism on human resource management (HRM) practices through the use of Turkish Cypriot hotel employees in three, four, and five star accommodation establishments in Northern Cyprus. Design/methodology/approach Questionnaires were distributed to full time hotel employees in three, four, and five star hotels in Northern Cyprus. Of the 500 distributed, 257 usable questionnaires were retrieved. A judgmental sampling approach was used. Findings The principal finding is that nepotism has a significant negative effect on HRM, job satisfaction, quitting intention, and negative word of mouth. The study also shows that HRM exerts a significant positive effect on job satisfaction. Research limitations/implications This study reveals that nepotism is an unprofessional phenomenon that provides benefits merely to the family members or close friends. Therefore, nepotism paralyzes human resource practices and affects the level of satisfaction among employees. Although the job opportunities are limited in the hotel industry in north Cyprus, employees may think of quitting their jobs or using negative word of mouth if their job satisfaction level is not enhanced. Customers perceive and evaluate the quality by considering the attitude, behavior and tone of the voice of employees. Therefore, priority of satisfaction has to be given to the employees in order to satisfy the customers. There are several limitations to the current study. In future studies, other variables such as role stress, organizational commitment, and different facets of job satisfaction may be used in order to examine the probable relationships. Secondly, future research with larger sample size elsewhere would be productive to provide a support for the generalization of the present findings. Thirdly, this study employed judgmental sampling approach. Future studies may use probability-sampling approach in order to support the current study findings. Originality/value This study is necessary and useful for three reasons. Firstly, it investigates the possible impacts of nepotism on multiple organizational dimensions, which is a relatively virgin area. Secondly, the effects of nepotism have been mostly examined at the macro level resulting in a paucity of empirical research especially at the organizational level. Thirdly, the study provides some propositions and managerial implications to owners, managers, and employees in North Cyprus where the tourism and hospitality industry constitutes an essential part of the economy. Keywords Human resource management, Customer satisfaction, Employees, Hotels, Cyprus Paper type Research paper

Introduction Socio-cultural, economic, educational, and political circumstances force people to become more cohesive in order to solve problems and in small nations in particular, as

International Journal of Sociology and Social Policy Vol. 26 No. 7/8, 2006 pp. 295-308 # Emerald Group Publishing Limited 0144-333X DOI 10.1108/01443330610680399

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Anckar and Anckar (1995) highlight, the lack of anonymity allows political leaders to accumulate a great deal of personal information on voters and citizens who can be easily identified and victimized, such as by being denied jobs (Hope, 1986). This issue of nepotism has implications not only for management development, promotion, control, image, and the public relations of an organization, but also for executives who have or would like to have relatives in management positions. Nepotism has been criticized mostly as being unprofessional. Its opponents have claimed that the rise of an intellectual, analytical approach to management spells the decline and ultimate extinction of nepotism. However, the aim of this paper is to show that despite allusions to the contrary, nepotism is alive in business organizations (Westhead et al., 2002; Parker, 2004; He, 2005), especially in less developed countries where it is a reality of life (Boadi, 2000). Nepotism is a very common behavior in service business life. The tourism and hospitality industry is no exception. Because of its intensive labour characteristics, tourism and the hospitality industry is heavily dependent on human involvement. Due to this dynamism, the impact of nepotism in service organizations is often witnessed and that favouring relations nepotism affects behavioral outcomes such as job satisfaction, quitting intensions and word of mouth communications in tourism organizations. This study is necessary and useful for three reasons; firstly, this study investigates the possible impacts of nepotism on multiple organizational dimensions, which is a relatively virgin area. Secondly, the effects of nepotism have mostly so far been examined at the macro level (Abdalla et al., 1998; Boadi, 2000; Nolan, 2005; Mutlu, 2000). The result is a paucity of empirical research, especially at the organizational level. Thirdly, this study provides some propositions and managerial implications to owners, managers, and employees in North Cyprus where the tourism and hospitality industry constitutes an essential part of the economy and a significant portion of the overall gross national product (Arasli et al., 2005; Ekiz, 2003, Altinay and Bicak, 2002). Literature Nepotism Abdalla et al. (1998) state that nepotism is derived from the Latin word Nepot (nephew). It is defined today as the employment of relatives in the same organization. In addition, the longman dictionary of Contemporary English defines nepotism as the practice of favoring ones relatives when one has power or a high office, especially by giving them good jobs. To be more specific, nepotism is a certain type of conflict of interest. In heavily nepotism-oriented businesses, if nepotism is felt intensively, the human resource management practices cannot work independently. Due to this, it is not possible to have meritocracy in the organization (Smyrnios, 2004). In the presence of nepotism, the employee may not be sufficiently motivated. Whether the employees undertake managerial or non-managerial work, it is very difficult to promote them if they compete with the one who has a family member, relative or friends in the higher level position in the organization. Nepotism can also affect directly the level of satisfaction of employees. Because of this, it can also have effects on the behavioral intentions of employees such as quitting intention and negative word of mouth. Based on this, the following hypotheses are formulated: H1. Nepotism will have a significant negative influence on human resource management. H2. Nepotism will exert a significant negative influence on job satisfaction.

H3. Nepotism will exert a significant positive influence on quitting intent behavior. H4. Nepotism will exert a significant positive influence on negative word of mouth. Human resource management Human resource management in an organization is very important. These activities include recruitment, selection, training, career development, compensation, and performance appraisal. They are the basic functions of an organization (Tsaur and Lin, 2002; Reid et al., 2002). Human resource management practices are able to provide an organization with a competitive advantage in a working environment. They can assist job satisfaction and may increase the organizational success while reducing the intention to quit and negative word of mouth of employees (Burke, 2003; Pare et al., 2001; Bond, 2004). If human resource management mechanisms do not work effectively and efficiently, an employee will lack commitment and loyalty toward the organization. Lack of trust to business causes the demoralization of employees (Astrachan et al., 2002). The weight of the existing evidence leads to the following hypotheses: H5. Human resource management will exert a significant positive influence on job satisfaction. H6. Human resource management will exert a significant negative influence on quitting intent behavior. H7. Human resource management will exert a significant negative influence on negative word of mouth. Job satisfaction Job satisfaction is defined as an individuals reaction to the job experience (Berry, 1997). In other words, job satisfaction refers to an individuals positive emotional reactions to a particular job. It is an effective reaction to a job that results from the persons comparison of actual outcomes with those desired, anticipated, or deserved (Madamba and De Jong, 1997). There are various components that are considered to be vital to job satisfaction and there have been many studies to identify the determinants of job satisfaction (Berry, 1997; Madamba and De Jong, 1997; Ross, 1998; Gillen and Chung, 2005; Robbins, 2003). These variables are important because they all influence the way a person feels about their job. On the business side, many managers seem to follow the simple belief that happy workers are more productive and have greater job satisfaction that leads to improved performance. Schmit and Allscheid (1995) point out in their study that satisfied employees display higher productivity and work beyond their job description, and do not engage in negative word of mouth. In addition, satisfied employees do not represent higher level of absenteeism or quitting intent in their job. It has been reported that job satisfaction is negatively related to employees propensity to leave the organization (Babakus et al., 1996; Hussain et al., 2003). This leads to the following hypotheses: H8. A high perceived level of sincere job satisfaction will have a significant negative effect on quitting intent behavior. H9. A high perceived level of sincere job satisfaction will have a significant negative effect on negative word of mouth. Quitting intention and negative word of mouth Ennew et al. (2000) claim that satisfied employees do not display a quitting intention. In addition, satisfied employees who have no intention to exit have a positive word of mouth about their organizations. Oppositely, Mattila and Patterson (2004) notice that

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employees with quitting intentions tend to say negative things about their organizations. Based on this, the following hypothesis is formulated: H10. Quitting intention will exert a significant positive influence on negative word of mouth. Above mentioned hypotheses are displayed in Figure 1.

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Methodology In Northern Cyprus, 700 full time employees are employed in the 16 three-star hotels, six four-star hotels, and five five-star hotels in the region. One and two-star hotels were not considered in this empirical study since there were mainly used for dormitory and gambling purposes and attract only very few tourist to their establishments. The sample for this study included all full-time employees who work in three, four, and fivestar hotels in Northern Cyprus. The questionnaires were personally distributed to hotel employees, and they were given assurance of confidentiality. Hotel employees were requested to fill out the questionnaires in a self-administered manner. The data was collected; after three visits, by a research team in April 2005. Of the 500 questionnaires distributed, 257 usable questionnaires were retrieved with a response rate of 51 per cent. A judgmental sampling approach was undertaken for data collection. As demonstrated in Table I, the majority of the respondents (64.2 per cent) were male. More than 40 per cent of the respondents were between the ages of 18 and 27, and four per cent of the respondents were between the ages of 48 and 57. More than 50 per cent of the respondents had secondary education, and 1.6 per cent of the respondents had graduate and PhD education. The respondents were mainly from four and five-star hotels (59 per cent) and the remaining 41 per cent from three-star hotels. Additionally, more than 50 per cent of the respondents work in the F&B department and only one respondent in human resource department (0.4 per cent of all respondents). Measures A 36-item survey instrument was used in order to find out the possible relationships among the study variables, namely nepotism, human resource management, job satisfaction, quitting intention and negative word of mouth. The study variables are abbreviated as given here; nepotism (NEPO), human resource management (HRP), job satisfaction (JSAT), quitting intention (QUIT), and
H3 +

Nepotism
H6 H2 H8 H1 -

Quitting Intention

Job Satisfaction .
H5 + H4 +

H9 -

H10 -

Figure 1. The conceptual model

HRM

H7 -

Negative Word of Mouth

F Age 18-27 28-37 38-47 48-57 Total Gender Female Male Total Experience 1-4 5-7 8-10 11 years and more Total Education Primary school Secondary/high school Vocational school Undergraduate Graduate-PhD Total Number of stars 3 stars 4 stars 5 stars Total Department F&B Front office Accounting Housekeeping Kitchen Security Human resource Total

Percentage

121 106 26 4 257 92 165 257 106 83 45 23 257 26 132 61 34 4 257 68 83 106 257 147 45 13 40 9 2 1 257

47.1 41.3 10.1 1.6 100.0 35.8 64.2 100.0 41.2 32.3 17.5 8.9 100.0 10.1 51.4 23.7 13.2 1.6 100.0 26.0 33.0 41.0 100.0 57.2 17.5 5.1 15.6 3.5 0.8 0.4 100.0

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Table I.
Demographic breakdown of the sample (n = 257)

negative word of mouth (NWOM). Ten items measuring NEPO are adopted from Abdalla et al. (1998). The human resource variable is measured by Tsaur and Lins (2002) 13 items. The remaining variables, JSAT, QUIT, and NWOM with 13 items, are adopted from Babin and Boless (1998) study. All items originally were in English, so translations were needed into Turkish by using a back-translation method (McGorry, 2000). The cross-linguistic comparability of the questionnaire was further tested with the faculty members of a Turkish university who were fluent in both languages. Nepotism. NEPO was measured via ten items in reference to the study by Abdalla et al. (1998). This study report coefficient alphas of 0.88, respectively. Responses to NEPO items were elicited on a five-point Likert scale ranging from 5 = strongly agree to 1 = strongly disagree.

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Human resource management. Thirteen items were used in reference to the study by Tsaur and Lin (2002) in order to measure the explanation. This study report coefficient alphas of 0.90, respectively. Responses to HRM items were elicited on a fivepoint Likert scale ranging from 5 = strongly agree to 1 = strongly disagree. Job satisfaction. JSAT was measured via seven items in reference to the study by Babin and Boles (1998). This study reports coefficient alphas of 0.92, respectively. Responses to JSAT items were elicited on a five-point Likert scale ranging from 5 = strongly agree to 1 = strongly disagree. Quitting intention. QUIT was measured through three items in reference to the study by Babin and Boles (1998). This study reports coefficient alphas of 0.81, respectively. Responses to QUIT items were elicited on a five-point Likert scale ranging from 5 = strongly agree to 1 = strongly disagree. Negative word of mouth. NWOM was measured via three items in reference to the study by Babin and Boles (1998). This study reports coefficient alphas of 0.83, respectively. NWOM items were elicited on a five-point Likert scale ranging from 5 = strongly agree to 1 = strongly disagree. Psychometric properties of the study instrument In assessing the psychometric properties of the instrument, issues of reliability, dimensionality, convergent, and discriminant validity are considered. In order to provide support for the issue of convergent validity, corrected item-total correlations were computed. As indicated in the study, the inter-item correlations being equal to or exceeding 0.35 provide a support for the convergent validity of the scale. The results of the corrected item-total correlations exceed 0.35. Overall, the results of this assessment support the issues of convergent validity of the scale. After employing corrected item-total correlations, reliability coefficients were computed for each study variable and at the aggregate level. Alpha coefficient was found to be 0.88 at the aggregate level and, as shown in Table II, all reliability coefficients were deemed acceptable. Specifically, reliability coefficients ranged from 0.81 to 0.92 for the study variables. Overall, these findings virtually show that each coefficient exceeds the minimum acceptable level of a newly developed scale, 0.50 as recommended by Nunnally (1978). The confirmatory factor analysis results reported in Table II indicate that 2/df is 2.14, GFI is 0.81, AGFI is 0.78, and CFI is 0.88. More specifically, there is partial evidence that the existing data supports the model with an acceptable 2/df value, and the CFI approaching 0.90. Unfortunately, GFI and AGFI are below 0.90. However, it can here be enclosed that the close or very good fit statistics can be obtained through a large sample size. Table II indicates a reasonable fit of the five-factor model to the data based on a number of fit statistics (Diamantopoulos and Siguaw, 2000). As demonstrated in Table II, the majority of the factor loadings are above 0.60. Overall, these results provide a support for the dimensionality, convergent, and discriminant validity of the scale (Anderson and Gerbing, 1988). The study variables consisted of NEPO, HRM, JSAT, QUIT, and NWOM. As indicated in the study, there were compelling reasons to delete some items in the survey instrument. In addition, as it is been seen in Table III, each value of the corrected itemtotal correlation is higher than the cut-off value of 0.35 (Saxe and Weitz, 1982). Several items were below the cut-off value of 0.60 as recommended by Nunnally (1978) and therefore; were deleted from the scale. For instance, Promotions are based on number of years of experience from the human resource practices dimension; Workers who

Scale items NEPO Workers at this institution always depend on a high-ranking relative Department heads are scarred off workers who have relations in upper-administration I watch what I say when I talk to colleagues who are relatives of upper-administration Workers try to meet the demands of other workers who have relatives in the upper-administration Workers value family members benefits rather than the companys benefits in general NEPO causes internal conflicts in the firm This firm has to keep personnel who have not any relatives for long term It is very difficult to remove or to demote people who have relatives in the upper-administration Human resource practices My company while employing a new person often uses employment tests (Foreign language tests, personality tests, knowledge tests, etc.) During the employment process the company explains both the positive and the negative aspects of the job My company uses standardized interview methods during employment Personnel for this firm will go under educational programs at least once a year Does the company give proper and official courses in preparation of the employees at their jobs? My firm does systematic analysis to identify what is missing in the educational programs for the employees My firm takes service behavior, and its development as basis for the educational programs My firm uses the results from the education programs to reach educational targets The workers learn the performance evaluation results with an official notification Performance evaluation reflects common aims for the firm which has been studied and agreed upon My firm takes job-related criteria for promotions and appointments JSAT I consider my job unpleasanta I am often bored with my joba I feel fairly well-satisfied with my present job Most of the time, I have to force myself to go to worka Most days, I am enthusiastic about my work I am disappointed I ever took this joba QUIT I often think of leaving my job I will not loose much if I were to leave this job It is highly possible that I will be looking for a new job

Standardized loadings

T-values

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0.74 0.72 0.68 0.65 0.76 0.69 0.69 0.75

13.40 12.69 11.83 11.08 13.75 12.04 12.05 13.53

10.13 0.63 0.68 0.69 0.77 0.74 0.76 0.67 0.63 0.6 0.61 0.73 0.82 0.83 0.75 0.81 0.84 0.78 0.73 0.78

0.60 10.79 11.94 12.24 14.12 13.34 13.94 11.65 10.86 10.07 10.4 13.30 15.66 16.02 13.76 17.94 16.40 13.20 12.15 13.24 (Continued)

Table II.
Confirmatory factor analysis results

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Scale items NWOM I always talk positively about this firm to othersa I always recommend this firm to everyonea I always encourage my friends to work for my firma Fit indices 2/df GFI (goodness of fit index) AGFI (adjusted goodness of fit index) CFI (comparative fit index) RMR (root mean square residual)

Standardized loadings

T-values

302

0.66 0.89 0.80 2.14 0.81 0.78 0.88 0.061

11.21 16.38 14.34

Table II.

Notes: Each item is measured on a five-point Likert scale. All loadings are significant at 0.001 levels or better; aindicates a reverse coded item

get promoted due to kinship or relatives damage the company; Workers who have relations with the upper-administration in this company cannot realize the reasons for their success as whether it is for their relations or for their performance from nepotism dimension and salary item from JSAT dimension. Additional assessment was also undertaken using composite scores. Specifically, composite scores for each study variable were calculated by averaging scores in order to measure discriminant validity across items representing that dimension. As it is demonstrated in Table III, all correlations among the study variables are significant at the 0.01 level. The correlations among the study variables range from 0.39 (human resource practices and NWOM) to 0.64 (human resource practices and JSAT). Means and standard deviations of composite scores of the study are also given in the Table III. Overall, these results provide additional support for the discriminant validity of the scale. A scrutiny of the path analysis in Table IV reveals that the magnitudes of the standardized path coefficients offer insights into the relative roles among each other. The study variables; NEPO explains 61 per cent of the variance in human resource practices. In addition, the study results reveal that NEPO and human resource practices collectively explain 32 per cent of the variance in JSAT. Human resource
Variables NEPO HRP JSAT QUIT NWOM Means Standard deviations 1 1.00 0.45 0.58 0.63 0.41 3.10 0.64 2 3 4 5

Table III. Means, standard deviations, and correlations of the study variables

1.00 0.64 0.58 0.39 3.13 0.60

1.00 0.61 0.44 3.07 0.52

1.00 0.55 2.88 0.67

1.00 3.34 0.55

Notes: Composite scores are calculated by averaging items representing that measure. Responses range from 1 to 5. Higher scores indicate favorable responses. All correlations are significant at the 0.01 level

Standard parameter estimates (ML) Impact on human resource practices NEPO Explained variance R2 = 0.61 Impact on JSAT NEPO Human resource practices (HRP) Explained variance R2 = 0.32 Impact on QUIT NEPO Human resource practices (HRMP) JSAT Explained variance R2 = 0.31 Impact on NWOM NEPO Human resource practices (HRMP) JSAT QUIT Explained variance R2 = 0.53

T-values

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0.27 0.12 0.38 0.23 0.08 0.28 0.34 0.42 0.46 0.34

4.07 3.20 5.85 4.07 1.16a 3.36 4.11 6.93 8.14 5.05

Note: aRepresents not significant relationship thus the hypothesis was rejected

Table IV.
Path analysis results

practices variable display the largest path coefficient to JSAT 38. The study variables NEPO, human resource practices, JSAT explain 31 per cent of the variance in QUIT. JSAT variable displayed the greatest path coefficient to QUIT (0.28). The study variables, (NEPO, human resource practices, JSAT, and QUIT jointly explain 53 per cent of the variance in NWOM. JSAT variable display the largest path coefficient to NWOM (0.46). Tests of research hypotheses path analysis results The hypothesized relationships demonstrated in the preceding parts were tested using path analysis (Joreskog and Sorbom, 1996). The first group hypotheses refer to the effects of NEPO to HRM, JSAT, QUIT, and NWOM. Specifically, the second group hypotheses refer to the effects of perceived JSAT on QUIT and NWOM. A careful examination of Table IV reveals that NEPO has a significant negative effect on HRM, JSAT, OUIT, and NWOM. Thus, H1, H2, H3, and H4 are accepted. Table IV also shows that HRM exerts a significant positive effect on JSAT. Thus, H5 is accepted. However, HRM does not demonstrate any significant relationship with QUIT. Therefore, H6 cannot be supported. Additionally, findings demonstrate that HRM depicts a significant negative relationship with NWOM. Thus, H7 is accepted. Results also show that JSAT has a significant negative impact on both QUIT and NWOM. Therefore, both H8 and H9 are supported. Path analysis results indicate that QUIT has a significant positive relationship with NWOM. Hence, H10 is also accepted. Discussion This study examined the potentials effect of NEPO on human resource practices, JSAT, QUIT, and NWOM of employees in the hotel industry in Northern Cyprus. The path analysis results reveal that NEPO has a considerable negative effect on each of these variables. The structure of socio-cultural, economic, educational, and political

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circumstances all push people to be more cohesive and tolerant toward NEPO in small countries. That is a very common behavior in the service industries in small states as well as in the hospitality industry which is highly labour intensive. Relevant to the literature findings (Nelton, 1998; Abdalla et al., 1998), data analysis also suggests that NEPO is an important issue and has a significant negative influence on HRM in accommodation establishments in North Cyprus. This implies that HRM have been practicing unfair activities relevant to employees recruitment, selection, appraisal, promotion, and disciplinary procedures. In another words, the managers have committed unfair activities under the pressure of NEPO. Therefore, NEPO is not only affecting existing employees, but also ambitious professional managers who will be discouraged from joining such hotels. Empirical evidence indicates that NEPO will exert a significant negative influence on JSAT and significant positive relationships both with QUIT and NWOM. Working in an unfair competitive environment makes employees dissatisfied, and demoralizes them in their jobs. They might become disloyal and uncommitted to their hotels. They also might lose interest in their work involvement, cooperation with their coworkers, and coordination in their hotels activities. All of these may upset many of the employees and may pull down their productivity. Potential outcomes could be absenteeism and increase in the overall turnover because NEPO results in unfair advancement. In addition, NEPO causes disappointment, frustration, and stress for the employees to the degree that they might tend to use NWOM in the hotel or may want quit as soon as they find any alternative jobs. Although QUIT is not significantly related to human resource practices (HRM) in other empirical studies (e.g. Pare et al., 2001), the results reported here display a significant positive relationship between these two variables. These may be explained with the evidence of this study, which suggests that HRM boosts JSAT and organizational performance if HRM works properly. Otherwise, employees will demonstrate a NWOM. However, the findings do not support the negative effects of human resource practices on QUIT. The reasons can be enumerated as follows. Firstly, the existing economic conditions of Northern Cyprus allow limited competition in the working environment. Secondly, HRM is still in a developing stage in the accommodation establishments in the country. Thirdly, people might approve that the existing poor working conditions or financial difficulties may push people to live and work under the lack of a professional structure. Consistent with previous empirical investigations (Schmit and Allscheid, 1995; Babakus et al., 1996; Hussain et al., 2003), JSAT has been found to exert a significant negative effect on both QUIT and NWOM. This means that satisfied employees are more loyal and committed and do not tend to exit from the organization. In addition, if working conditions keep employees pleased, they are inclined to use positive word of mouth both inside and outside of the organization. When the final hypothesized relationship is examined, evidence reveals that QUIT exerts a significant positive influence on NWOM. Consistent with other studies (e.g. Ennew et al., 2000; Mattila and Patterson, 2004), the higher the level of QUIT, the more frequently the intention to use NWOM about the same organization is expected. Implications These findings have important implications for managers and service providers in the Northern Cyprus hotel industry. In order to enhance the level of employee performance and satisfaction, hotel owners have to improve their human resource practices. Therefore, hotels need to use professional working systems and organize training

programs by their human resource or personnel departments management. This is also supported by Arasli (2002) who argues that hotels aiming to bring a total quality management philosophy to their organizations should provide scientifically based training programs. In other words, hotel owners may be able to encourage employees to enhance their performance through the use of human resource practices. The current study reveals that NEPO is an unprofessional phenomenon that provides benefits merely to the family members or close friends rather than the organization as a whole. Therefore, NEPO paralyzes the human resource practices totally and affects the level of perceived justice among the employees. Unfair incidents occurring because of NEPO in an organization such as selection, promotion, delivering equipment, shifting, and rewarding of a family member probably reduce the level of employee satisfaction. These may lead employees to neglect their vital obligations or decrease their working performance. In the current study, NEPO was found to be an unethical behavior that affects the other employees negatively. NEPO may cause the formation of new groups both vertically and horizontally. Working under the NEPO rules mostly may drive employees to have a closer relationship with family members in order to strengthen their positions rather than displaying higher performance. Although the job opportunities are limited in the hotel industry in north Cyprus, employees may think of quitting their jobs or use NWOM if their JSAT level is not enhanced. The current study also reveals that JSAT is the key factor for organizational success, since higher levels of perceived JSAT lead employees to be more loyal and committed and to provide better service. In addition, in the service industry, although physical appearance of the establishment is important, the behavior of the employees is a complementary factor during service encounters. Customers perceive and evaluate the quality by considering the attitude, behavior, and tone of the voice of employees. Therefore, priority of satisfaction has to be given to the employees in order to satisfy the customers. Conclusion Still there are many unanswered questions about the impact of NEPO on the employee related issues. In north Cyprus, NEPO is an inevitable result of the existing economic, cultural values, and educational system. In the current study, the effects of NEPO on human resource practices, JSAT, QUIT, and NWOM were examined. It has become increasingly clear that in future, HRM must be managed and operated professionally and strategically not as the currently popular systems. However, managers and owners have to provide effective control on human resource practices. There has to be fair and consistent implementation of employee policies. In order to keep up with the changes in the global environment, professional systems need to be followed and adapted to the organization. Human resource departments have to have sufficient power and authority in order to help ensure that employee policies will be implemented without discrimination; ethically and affirmatively. It is certain that family members are the desirable employees. However, the owners have to avoid the practices of NEPO among the employees and the openness has to be one of the principals of the organization. Therefore, higher levels of perceived justice and satisfaction lead employees to be more loyal and committed to their organization. Finally, satisfied employees display higher performance and they tend to working beyond the job description. In this way, employees will also become desirable

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employees just as family members, and this may add to competitive advantage in organizations, which is not possible to imitate. Limitations There are several limitations to the current study. First, this study has investigated the effects of NEPO on human resource practices, JSAT, QUIT, and NWOM. In future studies, other variables such as role stress, organizational commitment, and different facets of JSAT may be used in order to examine the probable relationships. Secondly, future research with larger sample sizes elsewhere would be productive to provide a support for the present findings. Thirdly, this study employed a judgmental sampling approach. Future studies may use a probability-sampling approach in order to support the current study findings. Fourthly, the selection of a single industry may lead to questions for generalizing the study findings. However, the research indicates that the selection of a single industry eliminates problems that may emerge from industry differences (Hartline and Ferrell, 1996). Fifthly, the current study investigates the potential effects of NEPO and how the employees perceive the consequences. Further studies may explore NEPO from the owners point of view. Finally, in the study, the effect of QUIT on NWOM is examined. In further studies, potential relationships between QUIT and NWOM may mutually be examined.
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Ross, L.D. (1998), A practical theory of motivation applied to hotels, International Journal of Contemporary Hospitality Management, Vol. 10, pp. 21-47. Saxe, R. and Weitz, B.A. (1982), The socio scale: a measure of the customer orientation of salespeople, Journal of Marketing Research, Vol. 19, August, pp. 343-51. Schmit, M.J. and Allscheid, S.P. (1995), Employee attitudes and customer satisfaction: making theoretical and empirical connections, Personnel Psychology, Vol. 48 No. 3, pp. 521-36. Tsaur, H. and Lin, C.Y. (2002), Promoting service quality in tourist hotels: the role of HRM practices and service behavior, Tourism Management, Vol. 25 No. 1, pp. 471-81. Westhead, P., Cowling, M. and Storey, J.D. (2002), The management and performance of family business in the UK, Storey Centre for Family Member, July, pp. 1-4. Further reading Marullo, G.G. (1997), Hiring your child: tax break and trade-offs, Nations Business, Vol. 85 No. 6, pp. 59-60. About the authors Huseyin Arasli is an Associate Professor or management at Eastern Mediterranean University in north Cyprus. He has been teaching management related courses for ten years in tourism department and has recently published several scholarly articles in different journal such as Journal of Small Business Management, Total Quality Management and Business Excellence Journal, Tourism Management Journal, Services Marketing Quarterly Journal, International Journal of Bank Marketing, and International Journal of Health Care Quality Assurance. Ali Bavik holds a Bs and MSc of Tourism and Hospitality Management from Eastern Mediterranean University in north Cyprus. He is currently working as a managing director of a local travel agency in north Cyprus. He published several scholarly articles in both international and national journals and present papers in local conferences. Erdogan H. Ekiz holds a Bs of Tourism and Hospitality Management and a MBA from Eastern Mediterranean University in north Cyprus. He currently works as an instructor in Cyprus International University in north Cyprus. He is teaching tourism and business courses for ten years in tourism and hospitality management department. He published several scholarly articles in both international and national journals as well as he attended and present papers in both local and international conferences. He is currently in search for PhD program in services marketing field. Erdogan H. Ekiz is the corresponding author and can be contacted at: erdogan@ciu.edu.tr

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