TERM REPORT

PROBLEM: NEPOTISM AND FAVORISM LEADING TO EMPLOYEES

DISSATISFACTION AND LOW PERFORMANCE

DATE: 17/08/2019

GROUP MEMBERS:
SHAKEELA CHANDIO (23478)
USAMA BIN ALI KHAN (23552)
Contents
INTRODUCTION ....................................................................................................................................... 2
INTRODUCTION OF COMPANY ........................................................................................................... 2
PROBLEM STATEMENT........................................................................................................................ 3
LITERATURE REVIEW: .............................................................................................................................. 4
IMPLICATION OF THEORY ....................................................................................................................... 7
ORGANIZATIONAL CULTURE ............................................................................................................... 7
IMPROVING ORGANIZATIONAL CULTURE....................................................................................... 8
IN SUMMARY .................................................................................................................................. 9
MOTIVATION:.................................................................................................................................... 10
TWO-FACTOR THEORY .................................................................................................................. 10
IMPROVING HYGIENE FACTORS: ............................................................................................... 10
IMPROVING MOTIVATION FACTORS: ....................................................................................... 11
ADAM’S EQUITY THEORY: ............................................................................................................. 12
WAYS TO REDUCE INEQUITY ..................................................................................................... 13
BEHAVIORAL: ........................................................................................................................ 13
COGNITIVE: ........................................................................................................................... 13
DECISION MAKING MODEL: .............................................................................................................. 14
SUGGESTION AND SOLUTION: .............................................................................................................. 15
CONCLUSION......................................................................................................................................... 15

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 INTRODUCTION

INTRODUCTION OF COMPANY

Creating value through the energy transition

In the past five years we have been rapidly delivering a strategy of transformation that was
designed to enhance our business model by drastically reducing debt, increasing production
and finding new ways to diversify our company. We have built a new ENI based on
efficiency, integration and deployment of new technologies.

We are captivated On investigation What's more production, gas and power, refining
Furthermore advertising Furthermore seek after the whole worth making chain. We point
on develop by centering around innovation, effectiveness and the environment, finishing
our change under a completely incorporated oil Furthermore gas organization.

For a normal creation of 1.7 Mboed and income totaling euro 74 billion in 2017, ENI will be
a standout amongst the A large portion significant coordinated circuit vitality organizations
in the reality working in oil What's more gas, energy generation, petrochemicals, oilfield
administrations development and building. For these organizations it need An solid
aggressive edge Furthermore heading adrift worldwide advertise positions.

ENI may be recorded on the Italian what’s more New York stock trade.

ENI has been working On Pakistan since 2000. ENI Pakistan is that driver of the Bhit
Furthermore Kadanwari gas generating fields, Also will be an accomplice in the outsider
worked fields about Zamzama, Sawan, Miano Furthermore Rehmat.

For a yearly Normal net equity preparation for through 50,875 boepd ENI Pakistan ranks
Likewise those biggest remote producer in the Pakistan E&P segment.

ENI Pakistan will be the driver about Gorakh, Mithi, Rajar, Umarkot and Thar investigation
obstructs inland What's more need two seaward investigation licences “M” & “N” in the
Indus delta. ENI Pakistan may be also an accomplice in the center indus inland investigation
squares of Mubarak, soutane West Miano, Gambat & Latif.

 The fundamental exercises in the inland Furthermore seaward upstream division

directed Eventually perusing ENI to Pakistan, since 2000.
 The exercises in the characteristic gas segment.
 ENI business settings What's more contacts over Pakistan.

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Exploration & Production

ENI has been present in Pakistan since 2000. In 2018, ENI’s production mainly composed of
gas amounted to 106 mmcf/d, over a developed and undeveloped acreage of 14,876 square
kilometers (5,786 square kilometers net to ENI).

Exploration and production activities in Pakistan are regulated by concessions (onshore) and
PSAs (offshore).

Production ENI’s main operated permits are Bhit/Bhadra (ENI's interest 40%) and Kadanwari
(ENI's interest 18.42%). Furthermore ENI participates in the Latif (ENI’s interest 33.3%),
Zamzama (ENI's interest 17.75%) and Sawan (ENI's interest 23.7%).

Development Development activities concerned production optimization through drilling

activities of new wells, optimization of onshore existing facilities and rigless activity of
productive wells to mitigate the natural fields production decline.

Gas & LNG Marketing and Power

Natural gas production in Pakistan in 2018 amounted to 106.1 million cubic meters / day.

PROBLEM STATEMENT
NEPOTISM AND FAVORITISM IN RECRUITMENT

performance
appraisal
nepotism and
favorism
availibility of
programmed
low performance complete
system
information

After noticing the glitch in Human Resource Department of ENI Petroleum it has emerged
that the referral system of recruitment is one of the main problems of our HR Department
which is mostly caused by weak structure of HR hierarchy and strong employee connections
with the sENIor management of the company.

This has caused the decrease in output of employees and has raised tension and frustration
among employees hence low performance and low employee retention.

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 LITERATURE REVIEW:

We review and read some articles to see if nepotism actually affects the employee turnover
and how much it impacts a standard organization. And as we expected it did exist and so did
its impacts on management and employee relation and how it decreased the output of
employees. Following are the articles that show how nepotism and politics in organizations
affect the creativity and motivation of employees.

Malik quotes in this article that we inspected the relationships between perceived
organizational politics, knowledge hiding, and employee creativity. In addition, we aim to
examine the moderating role of professional commitment in the relationship between
perceived organizational politics and knowledge hiding. The sample of the study comprised
316 faculty members and matched supervisors from three large public sector universities in
Islamabad, Pakistan. Data were collected using a self-administered questionnaire and
hypotheses were tested with linear regressions. We found that perceived organizational
politics positively predicts knowledge hiding that, in turn, negatively predicts employee
creativity. Further, professional commitment attenuated the positive relationship between
perceived organizational politics and knowledge hiding. We contribute to the literature by
demonstrating that perceived organizational politics exerts its negative effects on employee
creativity directly as well as indirectly through its impact on knowledge hiding behaviors. A
number of practical implications are also discussed.

In conclusion, we demonstrated that POP can have detrimental impact on employee

creativity directly as well as indirectly through knowledge hiding behaviors. Further, we
found that the positive relationship between POP and knowledge hiding is moderated by
professional commitment. Managers of organizations where creativity is important are
advised to pay attention to promote less political environment, encourage knowledge
sharing, and enhance professional commitment of their employees.

MALIK, (2018)

Further shading light on existence of nepotism in different sectors and its impact on
motivation and employee satisfaction this article also confirms how public sector hospitals
in Pakistan need to focus on the political aspect of the organization in term of nepotism
& favoritism practices as it influences the performance of employees & HRM practices
execution. This study reveals that nepotistic practices affect employee performance and
HRM practices negatively. On the other hand, favoritism practices affect employee
performance and HRM practices positively. Therefore, organizations need to make some
effective policies to prevent the political aspect within the organization in the form of
nepotism & favoritism. This form of politics affects the performance of employees as well as
organizational performance. Hence, execution of HRM practices needs to be
implemented on merit without being considered the relatives and friends. Future
researchers should investigate the effect of nepotism and favoritism as a form of

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organization politics on HRM practices & employee performance in other sectors. In
addition, the future researcher may also inspect the organization politics in terms of
nepotism & favoritism as mediating variables between HRM practices and employee
performance or with some other mediating & moderating variables. Moreover, studies
needed to be examined in the future in which nepotism and favoritism perhaps be
inspected with job-related behavior such as absenteeism, work stress, and job
satisfaction.

YASMEEN, R., BIBI, M., & RAZA, A. (2019)

Based on in-depth interviews with different categories of banking sector employees in

Ghana, employees from other organizations outside the banking sector as well as from the
Executive Secretary of the Ghana Initiative Integrity, the following is a summary of the
study. “Whom you know” is known by all people and classes of society as each person is
either a user of “Whom you know” or the intermediary himself/herself. “Whom you know”
has become a commonly-used practice for implementing an issue for reasons related to the
sect, tribe or the party. It has been observed that there are several reasons for the
increasing use of “Whom you know” including the nature and culture of the Ghanaian
society where tribalism or sectarianism force people to support and defend a brother or a
friend whether they are unjust or aggrieved. Also, bureaucracy which is endemic in all public
institutions slows down the process of executing any transaction thus forcing the
transaction holder to search for an intermediary to expedite the task accomplishment.
There is a weakness in the monitoring role of public institutions as well as poor general
concept of professional ethics: only rarely do they exist. The Banking Sector in Ghana is an
attractive sector for the youth due to the better job benefits it provides compared with
other sectors, leading to crowded queues of job applicants wishing to work in this field.
“Whom you know” is a double-edge weapon having its positive and negative effects on the
individual. The research contributes an increased awareness of the factors of the problem
and their impact on individuals and the society, in addition to suggesting methods for
solving this problem.

NYUKORONG, (2014)

After solid verification of impacts and effects of nepotism in organizational structure and
massive corruption it brings upon system in above articles, it’s now time to see how
reengineering will help fight nepotism and will it work? This study analyzes the effects of
reengineering, nepotism and mobbing on employee performance. Especially in the current
century, in the dynamic market of companies where modern management techniques are
prominent and companies apply innovative initiatives to raise firm and employee
performance, acquiring competition advantage has gained great importance. For the
purpose of having a more efficient and productive management of organizations, a new
need has arisen for reorganization necessity, which is called as also reengineering. Besides
that, it has been seen that in this change process it is now more important to detect

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nepotism and mobbing implementations that may adversely affect the employees’ morale
and remove them from the system by managers. In this study, only two hypotheses have
turned out to be meaningful. As much as the number of relations that we expect to be
meaningful, we have had some outputs from the hypotheses, which showed no relation or
meaning. For example, in this study we could not see any effect of nepotism on employee
performance. As an explanation to that, it may be thought employees see nepotism as quite
normal criteria at recruitment and promotion. In other words, employees are accepting
nepotism without difficulty. Considering that some people are recruited by this way in
organizations, nobody can deny the nepotism fact. In this sense, it seems possible that
nepotism, an inseparable part of family-owned companies, will maintain its existence in far
future, as well. According to the questionnaire, it is really hard to evaluate mobbing which is
the other independent variable that has turned out as meaningless. Similarly one can argue
that there not any significant relationship between these factors. However statistical
relationship, which we could not find between mobbing, nepotism and employee
performance, might only represent the limited research sample. Thus, these relationships
might also be investigated by considering other social-humanitarian factors. Nonetheless,
some factors such as anxiety to fill questionnaire, threat of getting fired or work stress may
prevent employees from giving the real information. For that reason, it would be more
reasonable to use the techniques of fields such as sociology and physiology in order to
evaluate mobbing. For instance, the method of live observation or cyber laboratory
application may be used. Another effective observation method is to insert a bi-directional
agent among employees, which is expected to be a quite effective way for mobbing
evaluations. In the world where human beings change their working manners and daily
routines, change at corporate culture is inevitable. The companies, which does not accept or
refuse adapting to this change, reduce the motivation and performance of their employees.
As seen from the analysis results, transforming the corporate culture from conservative to a
productive quality positively affects employee performance and helps the institution to
adapt to the change. Under the light of the outputs of the research, some advices for
managers especially in reengineering process are as follows: - If managers of institutions
persuade all employees to move as customer-oriented and take risks when required as a
corporate culture, they can achieve a huge increase at employee performance. As suggested
by the analysis results, to tolerate the mistakes of employees may positively affect
performance. - For employees, working as customer-oriented instead of manager-oriented
and having a self-development opportunity in this way are directly effective on their own
performance. At the same time, if employees do not see their managers just as the person
who orders, but as a leading person, they can have more performance at keeping the quality
level of their job. - To determine, enlarge and make multidimensional the job definitions of
employees beforehand are very important criteria in terms of employee empowerment. In
this way, employees can increase their professional abilities and their performance at
adapting to new duties.

GOK MS, EKMEKCI M (2015)

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 IMPLICATION OF THEORY

ORGANIZATIONAL CULTURE
It may be those air that pervades those inner part of a shares of the organization alternately
Acquaintanceship. Hypotheses about authoritative society endeavor should illustrate the
phenomena that happen to also around people. Those applied consider in regards
authoritative society may be frequently all the known as the wonder about investment.
Instead of An scientific formula, those consider for authoritative society incorporates
imparted understanding, immaterial holding qualities and assumptions, and the impacts
society need ahead human conduct. Seeing the wonder of authoritative society permits
organizations to fortify their attempting situations.

There may be an presence from securing a sure authoritative structure that identifies with
those the long run At those examination hails What's more just the individuals who have the
strongest association with those power regardless of the thing that qualification that
persnickety bring identified with any sort of field if its attainable as stated by those set of
responsibilities or no that representative will get that employment.

Keeping in mind personality we might apply certain hypotheses in this respect on this social
structure that need been defiled for nepotism that need brought up disappointment
"around deserving representatives diminishing over particular occupation execution and
also non accomplishment of the authoritative objectives. This might have been measured As
far as those inclusions for authoritative parts to authoritative hones and courses consistency
on self-destructive considerations and conduct Furthermore clarity on qualities.

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IMPROVING ORGANIZATIONAL CULTURE
1. Embrace Transparency
Transparency isn't just positive in the hiring of employees. The effects of a transparent
company culture impact the entire organization and the people it serves.
2. Recognize and Reward valuable contributions
Employee recognition doesn't have to come exclusively from the top. It's often even more
impactful when recognition comes from all around—from leaders, from peers, from
everyone.
Peer-to-peer is the most effective method of infusing recognition into your culture
3. Cultivate strong coworker relationships
Having a strong relationship at work drives employee engagement, but it doesn't happen
automatically. Building strong coworker relationships takes time and effort. It's easy to
engineer spaces and situations that promote coworker interaction.
4. Embrace and inspire employee autonomy
Embracing your team's autonomy allows them to make the sometimes difficult, but
incredibly rewarding leap from being held accountable to their responsibilities to embracing
accountability as they take on, and own, initiatives.
5. Practice Flexibility
Workplace flexibility could mean many things, from a parent stepping out for a few hours to
watch a school play, to work-from-home opportunities, or an employee taking a much-
needed sabbatical.
6. Communicate Purpose and Passion
There are no "purpose professions." You may need to find out what's important to your
employees, and that goes back to forging relationships.
The better you understand their goals and aspirations, the better you can help your team to
see the purpose in their work.
7. Promote a team atmosphere
This shift in mentality from people (or siloed groups of people) working toward individual
goals to a unified team, all pulling in one direction can make an enormous difference in the
results of your work.
8. Give and solicit regular feedback
Giving helpful, timely feedback is a benefit to everyone. You can reward good behaviors and
results as they occur, encouraging more of the same.
If an employee is consistently having trouble meeting management's expectations that
crucial feedback shouldn't come as a surprise at the end of the year. They need feedback
and most importantly support when it's easy to make a correction
The best managers and leaders are listeners and facilitators. It's vital to give employees the
tools they need to understand when and why they're doing well, and how to fix it when
they're not.

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 9. Stay True to your core values
Real core values are much more than a list of bullet points on a company's About Us page.
Core values are a company's guiding light. They're the inseparable principals at the heart of
an organization.
10. Give culture building the effort it deserves
A truly amazing company culture is a constant work in progress, because as a company
evolves, so do its constituents.
Devote time to nurturing your company culture. Exemplify it in every way you can so that
your team will be able to recognize and emulate it.

IN SUMMARY
Building an outstanding company culture is one of the most rewarding tasks you can take
on. A great culture attracts the best workers, increases overall retention, improves
performance, and lowers costs, just to name a few things.

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MOTIVATION:

There is existence of Dissatisfaction and relates to the time when appraisal comes and only
those who have the strongest connection with the authority no matter what performance
they had, they gets the promotion than those on merit.

Keeping this in mind we can apply following few theories in this regard on this organization
structure that has been corrupted with nepotism that has raised dissatisfaction among
worthy employees decreasing in job performance and work enthusiasm.

TWO-FACTOR THEORY
Accepting a person's relationship to work is fundamental, and that mentality towards work
can decide achievement or disappointment, analyst Frederick Herzberg pondered, "What do
people want from their jobs?" He requested that individuals portray, in detail,
circumstances in which they felt outstandingly fortunate or unfortunate about their
occupations. The reactions varied altogether and drove Hertzberg to his two-factor theory
called motivation-hygiene theory.

Referring to this chart we can clearly see where our organization needs to work to improve
relationship with employees and improve employee job satisfaction and work ethics.

IMPROVING HYGIENE FACTORS:

 It’s high time that coworker relationship needs to be improved by eliminating sense
of entitlement among those employees who have the status of favorism and they
feel of themselves higher than other deserving employees. It can only be done when
higher management enforces the idea of selection and appraising on merit and
performance.

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  We can improve the policy and rules for job promotion and improve the appraisal so
that it’s based purely on merit and performance rather than appraising employees
who have strong connection among company and favorism.

 A supervisor needs to be friendlier, easily to communicate with and just in providing

feedback of employee performance, giving praise to rightful and deserving
employee.

IMPROVING MOTIVATION FACTORS:

We can see that in above chart if hygiene factors are improved in this organization’s setup,
motivation factors might get improved on itself.

 Achievement and Recognition: employees will only have sense of achievement when
they would get work recognition and job satisfaction. We need to improve that by
giving the credit when due. And praising employee for that.

 Acknowledgment: an occupation must furnish a worker with commendation and

acknowledgment of their triumphs. This acknowledgment should originate from
both their bosses and their companions.

 The work itself: The activity itself must be intrigued, changed, and give a sufficient
test to keep employees persuaded.

 Responsibility: Employees should "own" their work. They should consider

themselves in charge of their tasks and not feel just as they are being
micromanaged.

 Advancement: Promotion opENIngs should exist equally for the representative.

Nepotism and favorim is high in our company that needs to be eliminated from firm
and on merit grounds opportunities should exist for each potential employee.

 Growth: The activity should offer representatives the chance to adapt new abilities.
This can happen either at work or through intense trainings.

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ADAM’S EQUITY THEORY:
Equity Theory suggests that an individual's motivation depends on what the person in
question considers being fair when compared with others. At the point when connected to
the work environment, Equity Theory centers on a worker's work-remuneration relationship
or "exchange relationship" as well as employers efforts to decrease any unfairness that
might arise. Equity Theory manages social connections and decency/injustice; it is otherwise
called The Social Comparisons Theory or Inequity Theory.

At the point when contrasted with other individuals, people need to be remunerated
decently for their commitments (the results they experience comparing to their input(s)). An
individual's beliefs with respect to what is reasonable and what is unjustifiable can influence
their motivation, frames of mind, and practices. Equity Theory clarifies how generously
compensated union labors can take to the streets when nobody else appears to get why.
Similarly, generously compensated athletes feel they are not genuinely repaid contrasted
with their friends.

This model suits best to our problem statement how one employee is gives preference to
other with strong connections at back end despite the fact that other employee is really
deserving and has more expertise than those compensated.

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This model will help the management understand what is causing the downfall in employee
engagement and job commitment.

WAYS TO REDUCE INEQUITY

BEHAVIORAL:
Behavioral processes involve changing an individual’s input or outcomes. These behaviors
can be positive, such as being more productive at work, or negative, such as decreased
productivity at work.

1. Altering their input to equal outcomes such as leaving early or slacking off.
2. Modify outcomes to equal inputs such as asking for a pay increase or stealing.
3. Convincing others to alter inputs such as complaining to superiors.
4. Withdrawal such as tardiness or turnover.
5. Protesting against nepotism.

COGNITIVE:

Cognitive processes include creating justification for the inequality to mold it to seem
impartial, misshaping view of data sources and results, modifying the comparative other, or
whatever other strategy that endeavors to re-outline the impression of the circumstance.

1. Changing own inputs or outcomes (e.g., "I'm not giving it my best," "I have leisure
time, I’m lazy")
2. Alter inputs or outcomes of others (e.g., he/she gets more intrinsic value than me
but they have to live far from home.)
3. Stop comparing to others. The longer a person compares to others the harder it is to
change.

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DECISION MAKING MODEL:
Following rational decision making process, keeping in mind the HR problem we have, we
believe that classical model of decision making should be used as we have repeated
problem we have complete information at hand.

Nepotism is rooted in system for that it’s very important that directive style must be used to
implement the decision along all levels of hierarchy.

nepotism and favorism

performance appraisal and

low performance

availibility of
complete information

programmed
system

certain
solution

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 SUGGESTION AND SOLUTION:

After doing thorough reading on problem at hand and theoretical research we have come to
this conclusion apart from this problem happENIng in our company it’s a fact that we cannot
deny the presence of referral hiring in local and multinational companies.

What we can do to eliminate the negative it has over the environment of organization and
general moral of employees in workplace?

There are multiple solutions that we have come up with. Those are as follows;

Elimination of referral hiring for new recruits at trainee level. Management should
only seek this option at higher managerial level post.
Reengineering of hierarchy.
Outsourcing the talent, through this method, referral system and nepotism will end
at the very beginning.
Hire external source for performance appraisal purposes.
Clear and consistent way of assessment backed up by data and source as evidence.
Reinforce that being a part of the family or a companion may get you in the
entryway, yet you need to perform - and likely to a higher level and without as much
applause.

CONCLUSION

Nepotism for the most part has a negative relationship in western, individualistic nations,
for example, the United States, especially if the favored beneficiary isn't qualified. Nepotism
can harm a business by influencing worker assurance, causing friction and hatred.

Be that as it may, it isn't really a completely negative practice. Procuring or advancing a

relative can give certain points of interest. For example, on the off chance that the
competitor has been prepped in the privately-owned company, at that point the individual
may carry profitable social and scholarly money to the position. Jones focuses to an ongoing
nepotism study on NCAA groups that demonstrates that groups with nepotism (at least two
relatives as players or training on a similar group) will in general perform preferable and
prevail upon more games those without it.

THE MAIN CONCERN: The manner in which individuals react to nepotism at work depends
to a great extent on the capabilities and mindfulness of the up-and-comer being referred to,
just as straightforwardness in the enlisting procedure. On the off chance that you end up in
a work circumstance where nepotism is a glaring issue that disturbs your work environment
fulfillment and expert development, here are five different ways to adapt.

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