Employee Loyalty – Does it Still Exist?
By: Rich Kramarik
These days, your best workers are likely to
show more loyalty to their careers than the company. That’s a polite way of
saying that your employees are more concerned about themselves than the company
where they work. What CEOs need in order to avoid frustration over loyalty is a
new view of loyalty and its meaning to employers and employees.
Few business leaders would deny the
importance of organizational loyalty; perhaps fewer still believe they can
achieve it the way they once did. After all, the lifetime contract expired long
ago, and your people—especially your best people—are more likely to display
loyalty to their careers than to you, their employer.
The nature of the relationship between
employers and employees has undergone a fundamental shift: Today, workers not
only don't expect to work for the same company for ever, they don't want to.
They are largely disillusioned with the very idea of loyalty to organizations.
But, at the same time, they don't really want to shift employers every two to
three years for their entire careers. Similarly, companies can’t afford to
replace large portions of the workforce on a similar schedule.
So where does this leave us? Is there a way
for both employers and employees to strike a brand-new balance when it comes to
loyalty—one that gives organizations the focus and expertise they need to
compete and employees the career development opportunities they demand?
The answer is yes, but only if companies
are willing to rethink how they define loyalty and how they manage their people.
Loyalty should not be viewed as an either/or
proposition. It's true, the experts say, that to produce their best work,
employees must be loyal to the company and what it stands for. But employees can
give their employers 100 percent and provide great performance while furthering
their own careers. The two aren't mutually exclusive, especially when the skills
that employees master to further their own career are also what the company
And when firms help workers acquire new
skills that support their professional advancement, they often win those
workers' commitment—and attract loyal new employees. This gives rise to another
important point: Employers can promote company loyalty by helping people grow
out of their jobs—ideally, into new ones within the company.
But even when you can't retain talent, it
doesn't mean departing employees weren't loyal. Indeed, another mistaken
assumption is that loyalty has to mean "forever." It's like dating: You can be
faithful to the person you're seeing now while you're involved with him or her,
but that doesn't mean you won't move on to dating someone else later. Likewise,
companies shouldn’t strive to keep all employees forever. You don't want blind
loyalty. The best situation is when both parties are benefiting.
Wouldn’t you rather have a star performer for three years than a
dud for life.
and company loyalty
If an employee's loyalties to his career and
to an employer aren't mutually exclusive, how can leaders ensure that the
employee-employer relationship pays off for both parties? The most effective
executives and managers are applying these strategies:
growth with company goals. When a company helps its employees develop
expertise that furthers their professional development and enables the
company to address its thorniest challenges, both types of loyalty align
powerfully. How to achieve this alignment? Encourage managers to discuss
their direct reports' career goals with them as often as possible. Managers
need to help their people identify links between their own professional
goals and the company's goals. When people understand the larger business
context in which the company is operating, they can more easily define ways
to advance their own careers.
with variety and autonomy. Jobs that provide variety and the freedom to make
decisions and mistakes engender extensive loyalty. Allowing people to take
ownership of projects gives them the opportunity to develop new skills and,
just as important, the chance to show what they can do.
relationships. For many employees, loyalty is born or cemented through
relationships with supervisors and colleagues. The number one reason people
leave an organization isn't inadequate pay or benefits. It's the day-to-day
relationship with their immediate superior. Leaders seeking to secure
employees' loyalty must work to create a positive bond. How? Keep
commitments. Be fair in distributing rewards and punishment. Clarify your
expectations, and make sure people have the resources and skills they need
to fulfill those expectations.
link between the employees' values and your company's mission. The lifetime
employment contract was never the only way to build employee loyalty.
Emphasizing a company's purpose—why we create wealth—also engenders loyalty,
especially when employees see the connection between their values and the
personnel. The employee is the one responsible for loyalty, so if the person
does not care about loyalty no matter what you do as an employer – you will
not see any positive change in loyalty. The employees must be responsible
for themselves. They need to have personal development plans to build their
skills. They need to have the inclination, ability and understanding of the
importance of influence and relationships. As a CEO you must build a culture
of employee importance to company success and you must hire quality
personnel who fit that culture.
employee loyalty does still exist, both for themselves and the company.
While the employees are with you, they can be 100% loyal to the company.
Just because an employee chooses to leave does not mean they have not been
100% loyal to the company up until the time they leave. To retain your best
employees, align fulfillment of their career goals with the company mission.
Employee Loyalty – Does It Still Exist Case Study
By: Rich Kramarik
Paladin and Associates clients share how they grow employee
Aligning career growth with
Designing work with variety
Focusing on relationships.
Highlighting the link
between employees' values and the company's mission.
Hire quality personnel.
The best kind of loyalty
comes when both parties are benefiting. We recommend assessment tools and
career coaching to identify employees' strengths and decide how to best
leverage those talents for the company's good. The company should also
encourage employees to initiate conversations about how their strengths and
talents might be best used in the organization. When our employees are using
their strengths," one of our clients says, "they find their work more
satisfying and feel that they're supporting their own career paths. Everyone
benefits; it's the best way to do business." At this company, employees are
encouraged to initiate meetings with their supervisors and their bosses'
boss, to discuss career-path possibilities at the company.
At this company, one accountant recently benefited from this process. When
the accountant expressed interest in a management position, her supervisor
reminded her that her assessment indicated strengths in areas other than
management. The accountant then acknowledged that her interest in management
stemmed primarily from an earnings potential concern. "She saw no other way
to earn more," says our client. Based on her interest and commitment to
furthering her career, as well as on her educational background and
strengths—including attention to detail, adherence to rules, and
persistence—the company offered her the position of revenue analyst. In this
role, she provided more value to the organization and took on new
challenges. She also increased her earning potential because the new
position rated higher than her former position in the company’s compensation
system. The employee loyalty grew and the company benefited.
A commitment to variety and
freedom takes some organizational and personal discipline—at the very least,
firms must let employees know they can exercise choice. "When new account
opportunities come along, we describe them at our Monday-morning staff
meeting. We ask, 'Who has the interest and time to tackle this?'" says
another of our clients. In his earlier years at the firm, our client seized
opportunities to master new skills such as creating television ads and
public-service announcements by joining teams formed to serve accounts not
assigned to him. Work on these new accounts earned him the “right” to take
on the accounts after early success. His loyalty increased and the company
relationships among employees can further enhance employee loyalty to your
organization. "Enable people to work through conflicts constructively," says
another client. "Many managers find this concept counterintuitive. But
positive conflict resolution gives people the sense that 'We're in this
together; we're a team.'"
To leverage this principle, our client advises managers to model effective
conflict resolution as well as educate their teams about this powerful
skill. "Read books on various conflict-resolution techniques," he suggests,
"and regularly practice at least one technique that fits your style. As your
comfort with conflict resolution grows, at least some of your direct reports
will begin emulating you." Building loyalty through supportive relationships
helps both the employee and the company.
At one of our Bio-Pharma
clients, the most important meeting every year isn't the holiday party and
annual bonus distribution. It's the holiday program featuring the stories of
patients who have benefited from the company's products. "Our people end up
feeling personally involved in our company's mission to restore people to
full life," says our client. "They can see the end result of their work.
Many of them are profoundly moved by the patients' stories."
By putting a human face on its mission, this company has achieved
employee-retention rates above the industry average. And it gets a whopping
95 percent favorable response rate to the employee-survey item "I have a
clear understanding of the company’s mission" and a 93 percent favorable
response to "The work I do supports the company mission." Admittedly, a
company's mission is especially compelling when patients' lives are at
stake. But organizations in any industry can find ways to help employees see
how their daily work affects customers. When our clients do, employee
loyalty grows and the company benefits.
One of our clients said, “I
have never had a manager that cared about me, gave me good feedback in an
employee performance appraisal or helped me build my skills to do my job.
Now I realize that I was not taking responsibility for my personal success.
I’ve come to realize that supervisors care about their employees when the
employees complete the company mission the manager owns. I now know that
it’s my responsibility to build my skills and that my success comes from
having the right tools to do the job.” We don’t see much loyalty building in
this client’s early experiences. Neither the employer nor the employee took
responsibility for career or mission. Relationship and influence were
non-existent. In this case both the employer and employee would have to
change in order to have a loyalty building culture. Hiring the right
employees will go a long way toward building a loyalty building culture.
Brought to you by:
Bob De Contreras
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