Consultants, think tanks, and business schools study nearly every element of modern business. There’s no shortage of studies regarding the various decision-making processes at work in most modern enterprises, and there are more studies on productivity, inventory management, and compensation than you can shake the proverbial stick at. Yet one area – favoritism - is woefully under-studied, which is a shame, because one of the few recent studies on the topic suggests that while executives overwhelmingly view it as a bad practice, an even larger majority admit to having used it themselves.
Favoritism is Widespread
A 2011 survey of executives at large organizations by research and consulting firm Penn Schoen Berland for Georgetown University’s McDonough School of Business found that when it comes to promoting employees, favoritism is rampant. This is in spite of the fact that most of those organizations have policies in place to reduce the incidence of favoritism. The study does not suggest the cost or other impact of widespread favoritism, however, and this illustrates the problem in studying such things as favoritism and its related problems, cronyism and nepotism. Although 83 percent of executives agree that favoritism leads to poorer decisions, neither they, nor the study, tell just how much poorer those decisions are.
Favoritism in Top Management
Another study, conducted in 2004 by the consulting firm Watson Wyatt, found that a significant minority of employees questioned the integrity of top management, and of those, 62 percent cited hypocrisy and favoritism as their reason. This leads to a decline in job commitment, a troubling sign for companies concerned with retaining good employees as the economy improves. Indeed, nearly a third of those surveyed in the Watson Wyatt study said they would leave their current employer if they could. Taken together, the Georgetown and the Watson Wyatt studies confirm the conventional wisdom that favoritism is bad for an organization, both for the quality of the decisions made by those promoted via favoritism, and for the practice’s impact on other employees. Another study challenges that conventional wisdom, however.
Favoritism as a Positive Tool
A 2013 study by the Sauder School of Business at the University of British Columbia, explores workplaces whose managers employ favoritism by giving preferential treatment to their top performers. Those favored workers, in turn, respond with continuously superior results; if they slip, the manager switches favorites. This study suggests that treating all workers equally reduces workers’ incentive to excel. The key to playing favorites without creating resentment in the rest of the workforce has two elements: treat everyone reasonably well, but give a little better treatment to those who are performing the best. When favoritism is based on job performance, the study suggests, other workers are more likely to accept it. Of course, it may also be the case that any worker can claim the “favorite” title by turning in a better performance. This study also shows a cultural side to performance-based favoritism, with preferential treatment of star employees being more prevalent in the U.S., and a more egalitarian approach taken in Asian, European and Canadian workplaces.
An overwhelming majority of the executives polled in the Georgetown study saw favoritism at work in their organizations. A far smaller percentage of the workers included in the Watson Wyatt study saw favoritism as a major problem in their organizations. The third study, from the University of British Columbia, suggests that there’s “good,” job-oriented favoritism, and “bad” favoritism, which is based on other attributes less under the control of workers. It may also explain the difference between the first two studies: perhaps the executives in the first group reported all forms of favoritism, while the workers in the second group reported their negative attitudes about “bad” favoritism. What’s clear is that favoritism is a topic that’s still misunderstood and needs more study.
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