Loyalty - Does It Really Matter?

The long-term success of any company depends heavily upon the quality and loyalty of its people. Few corporate executives would disagree with this idea conceptually.

More often than not, we have seen companies (especially the traditional ones) stress on Loyalty as an important value that employees need to imbibe. We have seen people spend a major part of their work life for a sole employer spanning over 3 to 4 decades. We have seen firms rewarding these employees through Lifetime achievement and Longest Player awards. We have seen them take up mentorship roles and act as the ones who will help in the inheritance of culture to the next generation of workers. They are the ones who have been with the company during the good and the bad times. They are the true loyalists – to be revered for their wisdom and the labour that they put in helping their company grow.

Ironically we have also seen that when bad times set in, these loyalists are the first in line to be shown the door! Firms that had been basking in the glory of the good times suddenly start talking about enhancing ‘productivity’ and reducing ‘unnecessary expenses’ (cost optimization) which had till recently been a mandate only on paper.

And it is also true that most employers treat the economic value of employees in enhancing customer relationships and company profits as "soft" numbers, unlike the "hard" numbers they use to manage their operations, such as the cost of labor.

So, Does Loyalty really matter these days?

Perhaps not if Loyalty is defined in its traditional sense.Times have changed dramatically and so has the relationship between employers and employees. Mostly these relationships remain transactional – “I would do this for you and you would reward me for what I do – nothing more nothing less”.

Perhaps this sort of an agreement is reached upon the very first day of appointment – when the candidate (or prospective employee) has already decided that he/she plans to stay with the organization for X years only – and the employer too who is well aware of this – plans and schemes things only for this X years that would be available to squeeze the maximum out of the employee. The burgeoning Job market has also meant that Loyalty derived from years of toil is today being transformed into mere commitment of a few years.

In light of such a transactional agreement, there are no chances of breeding loyalty. With the umpteen number of employment opportunities available these days, loyalty is not a necessary value that employees need to have – just minimum compliance to the rules and do what is required to gain the maximum out of the employer!( in terms of compensation, benefits and rewards).Moreover we are seeing the end of the lifetime contract with employers and the emergence of a generation who are more loyal to their careers than to their employers.

Hence there is fairness in the view of employers taking such a stand.

Loyalty, Performance and Profitability

Though Loyalty as a value is to be cherished – in a world riddled with competition – Loyalty without performance can do more harm than good. That would mean harboring those who refuse to leave their employer but at the same time are not being significant contributors to the growth of the organization. Loyalty then becomes a double-edged sword for employers! Some studies have shown that Loyalties' link to profitability, but most of these theories remain inconclusive and difficult to measure. More often these loyalists are the first causalities of a layoff.

The Resolution?

Welcome to the New Age Loyalty

The solution perhaps might lie in the way employers define and Rethink on Employee Loyalty.

It is essential to know that Loyalty is not a Either/Or proposition. Loyalty has to be mutual and not one way.

"Employees can give their employers 100 percent and provide great performance while furthering their own careers," says Joyce Gioia of The Herman Group, a consultancy based in Greensboro, North Carolina "The two aren't mutually exclusive," especially when the skills that a person masters to further her own career are also what the company needs.

• Matching Employee Aspirations to Company Goals

A key action would be strike a balance between the aspirations of employees and the needs of the organization. Most often employees feel that they have been betrayed by their employers by being refused a desired position or role. Whereas the employers are themselves constrained by the fact that they cannot satisfy every employee aspiration without significantly compromising on its own objectives.Its also vital that employees are communicated on why certain of their aspirations cant be met. This would bring a lot of things to the right perspective of those who are discontented. And every measure must be taken to ensure that such discontent is nipped at its bud. Remember these words of wisdom....

The best kind of loyalty is when both parties are benefiting.
— Scott Brooks, Gantz Wiley Research

• Build Relationships not Contracts

The world today is filled with contracts and agreements. Even personal relationships are based on Contracts with several strings attached. Though these contracts are good in the short run to achieve certain objectives, they rarely materialize into meaningful lifelong relationships.

Employers would have to go out of the way to gain employees' trust which will ultimately breed Loyalty - just as they would do with their own customers. Treating them as reliable, trustworthy and responsive individuals- who spend a good amount of their "awake" time working for mutual benefit (of himself and the organisation )- would do a lot in building employee loyalty.


Remember, healthy relationships last longer and don't carry an expiry date!

• Reward Loyalty - Show You Care
  

Rewarding Loyalty is one of the easiest ways to reinforce desirable values in the organization. Such recognition should be made in public. Apart from the generic rewards that get doled out as " Longest Player Award" or "Lifetime Achievement Award", it would also be desirable to praise them for their specific performances and achievements over the years.As an employer, one should place "Loyalty with Performance" as the most rewarded value of the organization.

One Final Word:

There's no doubt that for employers, committed, loyal and hardworking employees are their best asset. By learning how to retain high-value employees, you and your entire workforce can focus more on the overall success of your business.


I love contradictions and here is one on Why Loyalty Matters by Phil Gerbyshak posted on bizzia.com