When employees feel betrayed: The mediating role of psychological contract violation on nepotism and workplace commitment in the hotel industry

Nepotism is prevalent in the workplace. Though the impact of nepotism on workplace commitment has been studied in its general form, the reason why nepotism produces such an impact remains understudied, especially in collectivist cultures (where family and friends are highly important) and service settings (where nepotism manifest publicly among frontline employees). To address this gap, this study adopts a psychological contract perspective and investigates the role of psychological contract violation as a mediator or the “why” behind the relationship between nepotism and workplace commitment, with psychological attachment and turnover intention serving as affective and behavioral representations of workplace commitment. Using partial least squares structural equation modeling on a two-wave (time lag) survey of a sample of 488 frontline employees in the Indian hotel industry as a case, this study proactive mitigates common method bias while revealing that psychological contract violation acts as a complementary mediator between nepotism and workplace commitment in the form of psychological attachment and turnover intention. The study concludes with implications to mitigate nepotism and strengthen workplace commitment. • Nepotism can occur in collectivist cultures and service settings. • A two-wave (time lag) survey of 488 frontline hotel employees offers three key insights on current affairs. • 1. Nepotism continues to pose a significant threat to workplace commitment in the new normal. • 2. The threat of nepotism manifests as reduced psychological attachment and increased turnover intention. • 3. Psychological contract violation (mediator) explains the “why” behind the existential threat of nepotism.