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Best Practices for Building Employee Loyalty

Best Practices for Building Employee Loyalty

  1. Abstract

Research on commitment has demonstrated that maintaining high levels of commitments Important for organizational success and well-being. However, no research has addressed to what extent organizations recognize and reward those individuals who are highly committed and loyal to an organization Today’s employees are mad as hell and they’re not going to take it anymore. The days of job security and pension, by and large, are behind us. The challenge for leaders is to find ways to maintain and increase company loyalty and commitment to ever increasing performance standards. It takes effective coaching to inspire loyalty, hard work and creativity. But more than anything else it requires leaders who are willing to empower their employees.

1.1 Literature Review

By Powers, Edward L.

As the 20th century winds down, predictions about the nature of the workplace in the new millennium have increased as anticipated (e.g., Boyett & Conn, 1991; Boyett with Boyett, 1995). Some aspects of the future workplace, e.g., change (more rapid), self-managed teams (more common), organizational structures (flatter), seem to be straightforward extensions of the 90s. However, for one workplace dimension, employee loyalty, the future is somewhat less predictable.

Status of Employee Loyalty

A typical observation during the last decade was that employee loyalty has eroded and is “continuing to slide” (Jackson, 1997). Downsizing, rightsizing, and re-engineering have resulted in layoffs, a concomitant reduction in employee loyalty (see The Economist, 1993; Moskel, 1993), and urgency for organizations to “win back employee loyalty” (Osborne, 1991).

Conversely, however, there appears to be significant skepticism about the actual demise of employee loyalty. In “The Employer-Worker Bond May Still Be Quite Strong” (The Wall Street Journal, 1998), a Sibson & Company (Raleigh, NC) study reported that nearly 80% of U.S. workers are committed to their employers and 66% believe their employers are supportive of their work efforts. Only 16% plan to leave their job within the next year.

Cheri Swales

Monster Contributing Writer

“The way people treat each other in companies and other organizations is affected by the common vision shared by employees,” says Peter Senge, author of The Fifth Discipline. “One of the deepest desires underlying shared vision is the desire to be connected to a larger purpose and one another.”A study by the American Management Association shows that when employees’ personal values are congruent with their company’s values, their personal lives are better, and they feel better about their jobs. According to Gregory Smith, author of Here Today, Here Tomorrow, “An organization that can create an energized, higher-calling environment will have higher retention and greater productivity.”

Geoffrey Brewer’s seven secrets to building employee loyalty and commitment form a strong foundation:

  1. Set high expectations.
  2. Communicate constantly.
  3. Empower, empower, empower.
  4. Invest in their financial security.
  5. Recognize people as often as possible.
  6. Counsel people on their careers.
  7. Educate them (Motsett, 1998, pp. 30-38)

Terrie Lynn Bittner

There are several reasons for the disappearance of company loyalty. Ambition is one cause. Employees are seeking the best job under the best conditions in our difficult times. A new job offers hope that life will improve. Another reason is that many companies have stopped being loyal to their employees. They want their staff to stay, but they don’t provide an equal commitment to keeping their employees. Employment-at-will laws make it very easy for an employer to remove an employee for any reason at all, and when staff members feel insecure, they move on in order to avoid unemployment.

Two things must happen for a company to be able to brag that it has minimal turnover, which is a selling point in attracting quality employees. First, a company must find the best employees available, using realistic and sensible guidelines for qualifications. Second, the company must create an environment that is reassuring, challenging and community-based so that employees want to stay. Because companies must overcome the impression that everyone is expendable and that companies don’t care about their employees, they must expend exceptional effort to build loyalty. Hiring is dealt with in an upcoming article. In this article, we will focus on creating an environment that promotes loyalty.

What If Your Company Builds Bombs?

Some company’s products do not lend themselves to altruistic values. I worked for Honeywell’s Solid State Electronic Center in Colorado Springs, which built the computer chips in their regulators, mainframe computers, thermostats and bombs. It wasn’t comforting to know my work produced weapons of mass destruction. However, our division’s mission was to improve individuals’ quality of life through the products we built. This was an easier mission to internalize. And yet I eventually resigned, because the company’s values conflicted with my own.

Determine your company’s higher purpose. Don’t think of building cars; instead think of providing safety, reliability and peace of mind to consumers. Once you understand your company’s higher purpose, share it with employees and applicants. Post company values in your employee manual, vacancy notices, brochures, and on intranet and Web sites.

What Else Can You Do?

A company can also increase loyalty and decrease turnover through:

  • Clear and frequent communication. When an organization lets employees know what’s happening, employees feel more included and trusted.
  • Continuous training and tuition reimbursement. The US Department of Labor’s Bureau of Labor Statistics did a Survey of Employer-Provided Training of 1,000 companies in 2001. It showed that companies with high employee turnover train less than other companies. Providing training is important because:
    1. It is an investment in employees, which they see as money in the bank.
    2. When you invest in workers, they are more apt to invest in your company.
  • Expect greatness. When you raise the bar, employees will meet your expectations and feel important.
  • Provide career counseling. When you help employees grow in their careers, they are more apt to stay with you.
  • Invest in employees’ financial futures with a matching 401k. When you have a stake in their financial future, they will want to have a stake in yours.
  • Reward and recognize employees often. Employees crave positive feedback and will be more productive when they receive it.
  • Ask employees for input on important decisions. Employees will feel important and more committed to the mission.
  • Institute exit interviews when employees terminate to determine why they are leaving.
  • Establish a family-friendly work environment. Child-care benefits and on-site ATMs allow employees to spend more time with family.
  • Allow employees to work on visible projects, or add additional duties that interest them.

Loyalty to your company mission doesn’t come easily. You must build it one employee at a time. And building loyalty is much like building trust: It’s easy to tear down; the challenge is to build it up and maintain it.

An employee retention initiative need not be costly to be effective. To get started, you might informally survey employees about their priorities and needs.

Cultivate Employee Loyalty

Loyalty seems like a quality that’s becoming increasingly harder to find, whether it’s employee loyalty to a company or consumer loyalty to a product.

In the past, employees believed when they were hired by a company that they would be with that company until they retired. Starting in the 1980s as companies sought to increase profits; workers’ perceptions of lifetime employment were shattered by corporate downsizing, company relocations to other states or countries and static wages.

The perception of job security today has changed dramatically. In a survey by outplacement company Manchester Partners International, a majority of college graduates said they expect to be laid off at least once during their careers. Of the graduates who participated in the survey, 25 percent indicated they’d be laid off once, 22 percent said twice, 12 percent three times and 6 percent four or more times.

Surprisingly, even though these unstable employment conditions still exist, 72 percent of U.S. workers are satisfied with their jobs and 80 percent said they are more secure than or as secure as they were a year ago, according to a recent Inc. magazine-Gallup survey.

With the national unemployment rate hovering around 5 percent, a 24-year low, employers have found themselves competing for competent workers in a dwindling labor pool. Many companies have been forced to rely more heavily on temporary or part-time employees. This summer’s UPS strike helped draw attention to companies’ increasing reliance on part-time employees.

In addition, the number of hours worked per week by these employees has also increased. Oklahoma City-based temporary-services company Express Personal Services said its employees average 33.6 hours per week, up from 32.9 hours in 1992.

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