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Best Practices for Building Employee Loyalty

Best Practices for Building Employee Loyalty – Topic of Thesis

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 Best Practices for Building Employee Loyalty – 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

www.tml-business-services.com

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.

What do employees want?

So how do you keep good employees around in a job market where the demand for reliable workers exceeds availability?

Job satisfaction is what employees want most from their jobs, reports Sirota Consulting. The New York-based consulting firm found that when job satisfaction was high, only 4 percent of employees indicated they would leave within a year. But when employees weren’t happy, 27 percent said they’d be gone within a year.

J.W. “Bill” Marriott Jr., CEO of hotel giant Marriott International, told USA Today that to retain good employees, “you must establish yourself as a good place to work.” Marriott says this has to come from the owner and top management on down.

The working climate has to reflect that the employer really cares about people. One way that Marriott has achieved this caring image is to be seen by his employees out in the trenches and interacting with them. “If they’re not happy on the job, customers are not happy being with them,” Marriott said. Marriott also conducts satisfaction surveys of its employees and customers. Survey responses are cross-checked to determine if the results jibe. One indication that employees are unhappy, Marriott said, is that they don’t want to look you in the eye.

The nation’s unemployment rate is at an all time low, but activity is at an all time high. How do you keep your employees loyal? Here are five strategies to help.

By BizTalk Editor

Small businesses are particularly vulnerable to turnover, especially when training and recruiting budgets are limited or when experienced workers take on more than their fair share of tasks. A recent survey of 501 small, fast growing companies conducted by Coopers & Lybrand found that 27% of these companies have had to scale back growth estimates, delay or cancel initiatives, or over hire because of their inability to find qualified and skilled employees. So how can smaller companies boost efforts to retain employees-and keep them happy and productive-without spending a lot of money? By drawing on their unique strengths, namely flexibility and innovation. Here are five strategies that have earned high marks with employees

Reward Good Performance

Although 39% of the companies in the Coopers & Lybrand survey are upgrading employee compensation ranges to attract and retain workers, rewards and recognition programs don’t always have to be salary-based or even financial in nature. Powerful recognition and rewards programs include public acknowledgment of an employee’s efforts and results, a plaque or award, dinner for two, or a small spot-cash award of, say, $200 or $300. The point is to show strong performers that their efforts are appreciated.

Provide opportunities for professional growth

Many employees, particularly high performers, need opportunities for professional growth to feel satisfied with their jobs. Ask your key employees what motivates them from a career development standpoint, then find creative ways to provide those opportunities. Can you help an employee who wants to expand his or her skills to find opportunities for informal on-the-job training? Perhaps the employee with management aspirations can lead a project team or begin mentoring other employees. Just don’t assume that all employees want the same things or share your professional interests and goals.

Create flexible work arrangements

Employee turnover can often be traced to work/life conflicts that can be easily and inexpensively remedied with flexible work arrangements. If a company does not offer part-time work schedules, telecommuting, compressed work hours, or some kind of other flexible work situation, an employee with child or elder care responsibilities may have little choice butt to search for a company that does. In a recent survey by Hewitt Associates, nearly half (44%) of the companies offered some form of alternative work arrangement.

Provide retirement security

With the future of Social Security in doubt, employees are increasingly concerned with saving for retirement. Thanks to federal lawmakers’ actions designed to make retirement plans more attractive to small companies, you have more choices than ever when choosing a retirement plan. Profit sharing, SEP, and SIMPLE plans are options that can fit both your budget and your employees’ needs. Plans that provide for company contributions to vest over a period of years may also create an incentive for employees to remain with the company long term.

Enhance Health Care Benefits

Health care benefits are the most valued by employees, according to the Employee Benefit Research Institute. But they are also among the most expensive benefits to offer. Medical Savings Accounts(MSAs) can help ease the burden. Companies with fewer than 50 employees can offer MSAs (funded with tax-deductible contributions from either the company or the employee) if employees are also covered by a high-deductible health insurance policy. Employees then use their MSA funds to cover the deductible or medical care that is not covered by their regular policies. Any leftover funds in the MSAs can be rolled over for use in subsequent years or withdrawal during retirement. Employees in companies that are not eligible for tax deductible MSAs can use flexible spending accounts to make pre-tax contributions that can then be used to cover health or dependent care expenses.

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

 

Employee Loyalty

An Interview with Cheryl Breetwor

In a hot job market, many employers find it difficult to keep workers, who are often lured away by the promise of stock options and their potential for wealth. Cheryl Breetwor gives her perspective on the virtue of loyalty:

There’s a mentality in [the Silicon Valley] that I find interesting — almost like there’s this entitlement. There are some people, no matter what you do for them; it’s never going to be enough. If they’re not making $1 million in a year, they leave.

I ran a company for 16 years that was very successful, but we had a hard time attracting people because we didn’t have the promise of an IPO. Some of our employees who had been with us 14 or 16 years did very well when we were acquired. But people we had hired in the year before the acquisition were trying to figure out ways to get their options accelerated because they wanted to get rich quick. There was some behavior that I thought was pretty ugly — reprehensible really. The intent of an option is to motivate people and have them make an investment for the long term. It’s not a get-rich-quick scheme. In some ways, the point of options has backfired; we see less employee loyalty.

We did a lot of thinks to try to create employee loyalty. Every time we met a goal, we would take employees and their families on these trips. We gave them expensive [gifts]. Then, as we began to do well, these prizes started to come a lot closer together than we had expected. For example, we went from $5 million to $10 million in revenues in one year.

Came Thanksgiving, and the question came up, “What should we do for the employees this year?” In the past we had given out $50 dinner gift certificates. I said, “This year let’s give them See’s candy.” I had a guy come into my office and say I didn’t care about my employees anymore because I only gave them See’s candy. I said, “How can you look at it that way? What about the $50 sunglasses, the wine, the trip we’re sponsoring in January that will us $1,500 plus per employee?” He couldn’t see that. This was a guy in his early twenties that we had promoted three times. He was making about $100,000 a year. He ended up leaving Share Data for [another company], and you know what happened? He got laid off. I guess that was a lesson he needed to learn.

On the other hand, we had an employee who wanted to be a vice president, but we decided not to give him that position. I sent him off for some counseling because I knew it was a disappointment to him. He came out of that and realized he really didn’t like managing people and there were other opportunities for him at ShareData. When we went through our acquisition,…he was working all night long to make the thing happen. He didn’t stand to gain nearly as much as some other employees, but he was negotiating for the team. He was absolutely there for everybody to win.

I suppose there are two ways to look at it: Employees move around from one company to another, and they want to be responsible to their own careers. I come a little more from the old school that says you have to make an investment in the company and learn. It will eventually pay off, but not right away.

Employee Loyalty The True Test
The last question I ask during an interview is “What is the single most important quality that you, as an employee, could offer us, as your employer?”

I hear everything from:

  • Come to work on time
  • Be nice to everyone; even if you hate their guts
  • Don’t drink on the job – drink before you come
  • Well, the single most important thing is to work hard, be productive, give 100% effort if possible, show up every day, ………………………I finally stopped her.  Perhaps she needs to check her thesaurus before answering questions that has the word ‘Single’ in it.

Recognize what your relationship with the other person should be, and guide your actions by that pattern. Employees should take personal interest in the employer’s success, and this goal would preclude stealing trade secrets and wasting work time. Employers ought to recompense employees justly and support employees’ responsibilities in family and community.

If someone does wrong, do not make wild accusations or react solely on the basis of how the situation affects you. Show loyalty by addressing the issue with the person directly.

Failure to address issues communicates indifference toward the relationship, and discussing the issues with others communicates betrayal. Do not hide behind easy modes of communication such as e-mail, and do not use someone else as a go-between or a messenger.

Appeal to moral principles in a way the other person can understand. If you need to discuss your thoughts with someone, find wise advisors who will have the courage and honesty to tell you where you are wrong.

This process may require some time and several conversations. If your influence alone cannot prevail upon a person to seriously consider the issues, involve someone you both respect. If this fails, you might have to step back for a period of time.

The difference between loyalty and bitterness lies in the loyal person’s willingness to give the offender another opportunity to address the problems.

Horror stories abound as to why employees leave their job. According to Denise H. Todd

Studies show that most employees do not leave because of the money but because their jobs are not challenging enough or they feel that management doesn’t appreciate their work. What that all boils down to is a lack of communication. If Someone isn’t challenged, that means the company is not getting as much out of that employee as it could. If the company did give the employee challenging work (along With the day-to-day stuff), then both the employee and the employer benefit. However, most managers don’t even realize an employee is bored until the exit interview. Appreciation is a form of respect. Just like the candidate, employees are people with hopes and dreams that extend far beyond their normal 8-to-5 workday. Appreciating the whole person goes a long way towards employee loyalty.

Communication

Most employees have one simple request that is all too often ignored by employers: Let us know what’s going on. Talk to employees, tell them how they are doing, where they are going, what’s expected of them. They also want to know why the Remember, the worst thing an organization can do is to let an employee find out about something that is happening within the company from an outsider. That will crush morale faster than anything else. The bottom line is simple: Treat candidates and employees with respect. Then again, isn’t that what everyone wants?

 

Dr. B. Lynn Ware and Bruce Fern

Retention specialists with Integral Training

Systems (ITS) in Menlo Park, California says that their research consistently validated the reality that the manager plays a significant role in influencing the employee’s commitment level and retention. Dr. Ware states that one big reason people do consider leaving, it turns out, is that a particular boss didn’t do what he or she needed to do to keep them. Dr. Ware’s concept is very similar to the Gallup Organization’s multiyear study of 80,000 managers in 400 companies that found that an employee’s relationship with her direct boss is more important for retention than company wide policies such as pay and perks.

Dr. Ware created a managing for retention checklist:

Create a great environment – Managers often assume that company policies and organizational culture determine the working environment. But policies can be circumvented or changed – and ultimately the atmosphere in a department or unit is more important to individual employees than the culture of the organization as a whole.

Ware, B. Lynn & Fern, Bruce, Harvard Management Update, Employee Retention: What Managers Can Do, 1999, pages 3-6.

No Jerks Allowed: “It’s easy to be a jerk,” says Beverly Kaye, co-author with Sharon Jordan-Evans of the new book Love ‘Em or lose ‘Em. “A jerk is someone who never says ‘thank you.’ Someone who never says, ‘How’s your kid doing? I heard he was sick.’ Someone who slams the door or gets in a bad mood.” Jerks can be recognized precisely because people don’t stick around. A young MBA named Sharon told the Gallup researchers, “…. But I do know this: When I came here there were thirteen of us on this team. Now, a year later, every single one of them has left, except work for a jerk.” According to Beverly Kaye and Sharon Jordan-Evans, 90% of respondents listed at least one of the first three among their top reasons why some employees stay with the company:

Friendly relations – the opposite of jerk Dom. The ordinary human virtues such as courtesy and respect – plus the recognition that workplaces are social settings, and those managers who take an interest in employees can engender an appealing atmosphere. An example that Jordan-Evans shared that an employee told her the reason she had stayed with the company for many years was really a simple thing. “Every Friday we’d get together at a local pub and the general manager would come in and start the party with one question, ‘So, how was your week?’…. Mostly we just vented. [But] the amazing thing was, he was truly interested. We went home those weekends feeling great.”

Peter Cappelli, a professor at the University of Pennsylvania’s Wharton School, who has studied retention, advocates, “loyalty to companies may be disappearing,” he writes in Harvard Business Review, “but loyalty to colleagues is not.”

Create great jobs – Observe, restructure and reshape your employee’s job descriptions if possible.

Allow autonomy – Give employees an opportunity to solve their own business problem. It’s important you create that type of environment.

Let people stretch – Most people enjoy a challenge. Entrusting them with bigger responsibilities than they had a right to expect at this point in their careers. Give employees a stretch assignment, sometimes before they’re ready. You have to do that in order to keep talent.

Be flexible – managers have learned by experience that flexible work arrangements are “highly successful” in retaining employees. Flexible work plans are effective in boosting retention. Letting employee’s appointment. Today’s harried employees value that kind of flexibility

Ask early; ask often – Great work environments and great jobs are a matter of opinion; what challenges one person may terrify another. So you won’t know how well you’re doing on either score unless you ask.

Don’t wait for the exit interview – Companies routinely ask departing employees why they’re leaving. But exit interviews “just scratch the surface of the causes of attrition.” Employees are likely to report what’s attractive about the new job (more money) without explaining why they were looking in the first place (which may have had nothing to do with compensation). Instead of waiting, hold the conversation now. “Sit your employees down one at keep you,’” advises Sharon Jordan-Evans. Always make it a plural: ‘What are the kinds of things that will keep you? What kinds of opportunities, growth, etc. do you want?’ Sometimes by phrasing it that way, you avoid the one answer “I want a raise,’ which is what managers are afraid of. What we know – and what our research support – is that it isn’t about more money. People get more money and they still go because all those other things that matter more than money are missing.”

Get feedback on the work environment – In addition to asking about individual goals ask people how they like working in your unit. Do they feel included or excluded? Do they have suggestions for change? Start this process, six months after an employees hired, with a formal session asking what they think about the company. “Over the years we’ve made some changes based on others feedback. We have enhanced our tuition changes to our compensation plan.” You can make changes in your unit based on what employees tell you.

Get feedback on yourself – Of course, its tough to get honest assessment criticisms, especially of their bosses. One good technique: explain to your performance, and that you’ve asked a trusted third party (perhaps someone from HR) to interview them. Assure them that you’ll hear – and pay originated. Despite all your best efforts, some people will leave. “You can’t counter the pull of the market,” advises Peter Cappelli; “you can’t shield your people from attractive opportunities and aggressive recruiters.” But you can have an influence on how many people leave and when. The better job you do at building a great unit, the less likely you are to lose the very people you want to keep.

What about poor performers?

It’s hard for most managers to let anyone go. It’s extremely hard in a tight labor market, when you know it might take months to find a replacement. But retention experts don’t advocate keeping someone on just to warm a chair. Having too many poor performers “creates demoralizing down cycles,” says Gerry Ledford, a Los Angeles – based practice leader in employee performance rewards with Sibson & Co. “They clog performance.” Better, says Ledford, to identify weak performers, develop an action plan that gives them a chance to improve – and then quickly take action if things aren’t working out. “Give them help in outplacement. Give them unreasonably generous severance

 

Hudson Institute/Walker Information, “Commitment in the Workplace: The 1999 Employee Relationship

Jose De Jesus MD, 2008

You know what you want, now determine what your employees want.  What will it take to engender in your employees a sense of pride, a willingness to go that extra mile and to serve your patients needs?  You may be surprised to know that the answer is not money. Rather, if your employee is proud of your practice and the services that it provides, if they feel satisfaction with the tasks that they perform and the support that they receive from you, loyalty is the end result. What comes from that loyalty to the practice is that your staff and employees have the needed motivation to do their jobs well, even go beyond what they are required to do to provide excellent service to your patients.

What can you do to build loyalty in your employees?
  • Ensure that your staff understands the importance of their role and how it helps the practice’s overall goals.
  • Demonstrate your appreciation when an employee exceeds a goal.
  • Consider a financial demonstration as well as praise; put in place an employee of the month program.
  • Offer personal and professional challenge and development strategies with job enrichment, job rotation, and opportunity to grow beyond a current level of competency.

Building loyalty with your staff is well worth the effort.  Remember, in the patient’s eyes, every member of your staff is the practice.  With a loyal and dedicated staff, everyone benefits.

 

Topic

2. Best Practices for Building Employee LoyaltyTheoretical Framework

Dependent Variable:

Best Practices for building Employee loyalty

Independent Variable:

  • Set high expectations
  • Communicate constantly
  • Management training
  • Rewards and recognition
  • Health benefit options
  • Paid off time (other than vacation and sick leave
  • Financial security attendance incentives
  • Pension system

 

Now we describe diagrammatically theoretical framework

Best Practices for Building Employee Loyalty

2.1 INTRODUCTION

Maintaining high levels of effective organizational commitment is important for Organizational survival and well-being. Rapid changes in task demands and role definitions due to global competition and the use of information technology mean that traditional control mechanisms are no longer effective. Employee loyalty and commitment have attracted much attention due to the expectation that committed and loyal employees will act in the best interest of an organization. Much research has focused on the antecedents and consequences of commitment. Studies discuss antecedent effects such as task characteristics (Eby, Freeman, Rush & Lance 1999; Glisson & Durich 1988) or leadership styles (DeGrooter, Kiker & Cross 2000). It is often argued that organizations should try and maintain a highly committed and loyal workforce. Meyer (1997) argued that Human Resource Management (HRM) practices such as selection, compensation and promotion are likely to be more distal antecedents of Commitment, compared with leadership styles or task characteristics. On the other hand,

HRM practices have the advantage of being under more direct control by the organization. After all, if you would like to keep those individuals who are loyal and committed, why not include these concerns explicitly in the formal reward allocation process? However, to the best of my knowledge, no research has investigated the effects of explicitly recognizing and rewarding employee loyalty. The present study tries to close this gap by showing the effect of consideration of employee Loyalty in formal reward schemes on attitudes towards one’s job

 

2.2 Background of Study

What is Employee Loyalty?

Employee loyalty can be defined as employees being committed to the success of the organization and believing that working for the organization is their best option.  Further, they do not actively search for alternative employment and are not responsive to offers that are relatively small in difference

Why I have chosen this topic?

Employees are a vital resource for nearly all organizations, especially since they represent a significant investment in terms of locating, acquiring, and training.  The rationale for this investment is that the employee is pivotal in creating value to the customer by means of effectively implementing the organization’s business model. In fact, for many customers, their overall experience with the organization is based on experience with the employee they deal with on any particular transaction. Organizations want employees to make these decisions in favor of the 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.

I ran a company for 16 years that was very successful, but we had a hard time attracting people because we didn’t have the promise of an IPO. Some of our employees who had been with us 14 or 16 years did very well when we were acquired. But people we had hired in the year before the acquisition were trying to figure out ways to get their options accelerated because they wanted to get rich quick. There was some behavior that I thought was pretty ugly — reprehensible really. The intent of an option is to motivate people and have them make an investment for the long term. It’s not a get-rich-quick scheme. In some ways, the point of options has backfired; we see less employee loyalty.

We did a lot of thinks to try to create employee loyalty. Every time we met a goal, we would take employees and their families on these trips. We gave them expensive [gifts]. Then, as we began to do well, these prizes started to come a lot closer together than we had expected. For example, we went from $5 million to $10 million in revenues in one year.

Came Thanksgiving, and the question came up, “What should we do for the employees this year?” In the past we had given out $50 dinner gift certificates. I said, “This year let’s give them See’s candy.” I had a guy come into my office and say I didn’t care about my employees anymore because I only gave them See’s candy. I said, “How can you look at it that way? What about the $50 sunglasses, the wine, the trip we’re sponsoring in January that will us $1,500 plus per employee?” He couldn’t see that. This was a guy in his early twenties that we had promoted three times. He was making about $100,000 a year. He ended up leaving Share Data for [another company], and you know what happened? He got laid off. I guess that was a lesson he needed to learn.

On the other hand, we had an employee who wanted to be a vice president, but we decided not to give him that position. I sent him off for some counseling because I knew it was a disappointment to him. He came out of that and realized he really didn’t like managing people and there were other opportunities for him at Share Data. When we went through our acquisition,…he was working all night long to make the thing happen. He didn’t stand to gain nearly as much as some other employees, but he was negotiating for the team. He was absolutely there for everybody to win.

I suppose there are two ways to look at it: Employees move around from one company to another, and they want to be responsible to their own careers. I come a little more from the old school that says you have to make an investment in the company and learn. It will eventually pay off, but not right away.

Set High Expectations

The first step is to get employees to have realistic expectations about their jobs. How Communicate clearly and honestly with them about their jobs, your expectations, and their futures in the business. Then they can stop worrying about what they don’t know. They can set realistic expectations and focus on being successful in their jobs. Success improves morale.

Management Training

To build employee loyalty it is responsibility of management that they give proper training to their employees. They analyze the gap between actual and expected performance and also analyze their needs that what kind of training will be required for them and trained them according to their need. This thing will remain loyal to their organization.

Rewards and recognition

Reward accomplishments freely and often. Employees need positive feedback to know they are appreciated, and recognizing good performance encourages higher productivity levels. Consider incentives and bonuses when goals are reached, and don’t dismiss the value of a monthly lunch out or gift cards.

Communicate constantly

Adopt an open, clear and frequent communication policy. Inclusion in company decisions and happenings will foster feeling of trust in your employees and helps make company expectations known. Keeping an open door between management and workforce lets employees know that they have someone they can go to with questions.

Health Benefit Options

Offer enticing and complete benefits packages. This includes salary and a comprehensive health care plan. Today’s employees are looking for medical, dental, prescription and life insurance coverage. Include financial packages that will assist employees with their future security.

Paid off time

Work on becoming family-friendly. Employees are responsible for family care that is no longer limited to their children. They are also taking on the care of their spouses and parents, and flexible schedules can assist them in meeting these obligations. Try flex-time scheduling, job sharing, compressed hours and telecommuting.

Financial Security

Invest in your employees’ futures. When you provide opportunities for advancement, employees will be less likely to look for a fulfilling career elsewhere and will offer their loyalty to you. Implement on-the-job training and leadership opportunities and tuition reimbursement.

Pension System

The purposes of pension it is aimed to provide additional income in the retirement period by directing the accumulations of the individuals for the retirement to investment and thus to create an increase in their prosperity; to give rise to employment by providing long term resources for economy and to contribute to the economic development.

Attendance Incentives

It’s likely that your best employees are high performers who come in even when they’re feeling a bit under the weather and don’t hesitate to come in on the occasional day off to take care of an emergency. These are the employees who deserve attendance benefits.

For example, for every month without an absence, give employees an extra vacation day, a gift certificate, or a bonus of some kind. It’s that simple. The reward they received for their perfect attendance will make them happy they worked so hard for you throughout the month.

 

2.3. The Significant Study

Organizational reward allocation processes are one of the main tools for maintaining andincreasing work motivation (Erez & Earley 1993). Organizations have great discretion about the specific aspects they can consider and reward when making decisions about highly valued resources such as pay raises or promotions, or making negative decisions such as those about dismissals. As Meyer (1997) points out, HRM policies and practices are likely to have an impact on organizational commitment. An advantage of using HRM practices compared with other antecedent variables such as task characteristics or leadership is that they are under more direct control of organizations (Meyer 1997). One study by Gaertner and Nollen (1989) showed that reward practices (promotions) had a stronger effect on subsequent commitment than other concepts normally studied as antecedents of commitment, such as supervisory relations or participation. Therefore, organizations interested in keeping a loyal and committed workforce could communicate this to employees by explicitly rewarding levels of loyalty and commitment of employees. Schein (1990) argued that HRM practices have a strong communicative component because they tell employees what is important and rewarded in an organization. Organizations could use HRM practices, such as rewards, to increase and maintain high levels of commitment and loyalty. Perceptions of fairness also communicate that organizations are committed to their employees(Meyer 1997). Research on perceived organizational support (Eisenberger, Huntington, Hutchison & Sowa 1986; Eisenberger, Fasolo & Davis-LaMastro 1990; Eisenberger, Armeli, Rexwinkel, Lynch & Rhoades 2001) demonstrates that an organization’s commitment to employees is important for maintaining higher levels of commitment. Eisenberger et al. (1986) highlighted that indiscriminate praise or approval by agents of the organization is likely to lead to lower perceived organizational support. On the other hand, increases in material and symbolic rewards that show a positive evaluation of the employee, and that are attributable to deliberate and voluntary decisions by the organization, are likely to increase perceived support. Supporting those individuals who are loyal and committed will strengthen the bond between the organization and employees. Therefore, it would be interesting to investigate whether organizations actually reward loyalty. Previous arguments in the literature indicate that organizations might consider loyalty and the implication is that rewarding loyalty would strengthen commitment. This will be tested in the present study. Previous justice research on HRM practices has primarily focused on allocation criteria such as equity, equality or need (Deutsch 1975; Fischer & Smith 2003). Equity or the consideration of work performance is supposed to be the most relevant criterion for organizations (e.g. Adams 1965; Fischer & Smith 2004). However, research has demonstrated that managers can consider a number of different criteria such as seniority, need or various forms of equality (e.g. Chen 1995; Fischer 2004). The important question is whether individuals perceive such decisions as fair. Employees evaluate their experiences at work in terms of whether they are fair and whether organizations show concern for them as an individual (Tyler & Lind 1992). If individuals perceive a decision as being fair, they are more likely to reciprocate with higher commitment, greater job satisfaction and engage in extra-role behavior. (Colquitt, Conlon, Wesson, Porter & Ng 2001). However, it is unclear whether rewarding loyalty would be more strongly related to distributive or procedural justice. First, considering loyalty is a criterion that is used to determine an outcome (e.g. pay raise, promotion). Therefore, it should be related to perceptions of distributive justice. However, rewarding loyalty also has a strong symbolic message. It indicates that an organization is concerned with the well-being of employees who are loyal and committed. Therefore, rewarding loyalty might also be related to procedural justice. The study will, therefore, examine how employees perceive allocations where organizations considered loyalty in the decision process.

3. Research Questions

Main Questions

  • What are the priorities for building Employee Loyalty?
  • How do the segments evaluate each area?

Sub Questions

  • What changes need to be made to improve Employee Loyalty for each area?
  • Is the organization willing to make these changes?
  • What impact of loyalty on performance?

3.4 Sources of Data

I have used Questionnaire for data collection method.

Questionnaire on Employee Loyalty

Name ______________________                                 Gender: Male / Female

Designation ________________________________

 

1: In what age group are you?

       19 and under
       20 – 29
       30 – 39
       40 – 49
       50 – 59
       60 +

 

2: Income Level

  • A: 1000-2000 PKR
  • B: 5000-10000PKR
  • C: 15000-20000PKR
  • D: 25000-30000PKR
  • E: 35000-50000PKR

 

3: Regarding the statement, “I am aware of Company ABC’s overall strategy,” would you say you …

  • A: Strongly agree
  • B: Agree
  • C: Neither agree nor disagree
  • D: Disagree
  • E: Strongly disagree
  • F: N/A

 

4: Overall I am very satisfied with my job and at Company ABC.

  • A: Strongly agree
  • B: Agree
  • C: Neither agree nor disagree
  • D: Disagree
  • E: Strongly disagree
  • F: N/A

 

5: The Non-financial benefits provided by your company are satisfactory and meet your expectations.

  • A: Strongly agree
  • B: Agree
  • C: Neither agree nor disagree
  • D: Disagree
  • E: Strongly disagree
  • F: N/A

6: My supervisor is actively involved in my development/work group.

  • A: Strongly agree
  • B: Agree
  • C: Neither agree nor disagree
  • D: Disagree
  • E: Strongly disagree
  • F: N/A

 

7: I am generally able to balance my work and personal life.

  • A: Strongly agree
  • B: Agree
  • C: Neither agree nor disagree
  • D: Disagree
  • E: Strongly disagree
  • F: N/A

 

8: The financial benefits provided by your company are satisfactory and meet your expectations.

  • A: Strongly agree
  • B: Agree
  • C: Neither agree nor disagree
  • D: Disagree
  • E: Strongly disagree
  • F: N/A

 

9: The training provided by management is desirable and satisfy your needs.

  • A: Strongly agree
  • B: Agree
  • C: Neither agree nor disagree
  • D: Disagree
  • E: Strongly disagree
  • F: N/A

 

10: I receive the recognition I deserve for my work contributions.

  • A: Strongly agree
  • B: Agree
  • C: Neither agree nor disagree
  • D: Disagree
  • E: Strongly disagree
  • F: N/A

 

11: Overall communication to employees is effective. Overall   communication to employees is effective.

  • A: Strongly agree
  • B: Agree
  • C: Neither agree nor disagree
  • D: Disagree
  • E: Strongly disagree
  • F: N/A

 

12: I would want to be a customer of this organization.

  • A: Strongly agree
  • B: Agree
  • C: Neither agree nor disagree
  • D: Disagree
  • E: Strongly disagree
  • F: N/A

 

13: I fairly paid for the job I perform.

  • A: Strongly agree
  • B: Agree
  • C: Neither agree nor disagree
  • D: Disagree
  • E: Strongly disagree
  • F: N/A

 

14: I receive adequate training to do my job effectively.

  • A: Strongly agree
  • B: Agree
  • C: Neither agree nor disagree
  • D: Disagree
  • E: Strongly disagree
  • F: N/A

               THANK YOU VERY MUCH FOR TAKING THE TIME

       TO COMPLETE THIS QUESTIONNAIRE

4.  Frequencies Table and Histograms

Age

FrequencyPercentValid PercentCumulative Percent
Valid19 and under33.33.33.3
20-297178.978.982.2
30-39910.010.092.2
40-4966.76.798.9
50-5911.11.1100.0
Total90100.0100.0

Best Practices for Building Employee Loyalty

 

Gender

FrequencyPercentValid PercentCumulative Percent
ValidMale7280.080.080.0
Female1820.020.0100.0
Total90100.0100.0

Best Practices for Building Employee Loyalty

 

Income

FrequencyPercentValid PercentCumulative Percent
ValidMatric55.65.65.6
Intermediate3033.333.338.9
Graduation4448.948.987.8
Master1011.111.198.9
511.11.1100.0
Total90100.0100.0

Best Practices for Building Employee Loyalty

 

Satisfaction

FrequencyPercentValid PercentCumulative Percent
Validstrongly agree1921.121.121.1
agree2932.232.253.3
neither agree or disagree2628.928.982.2
disagree1415.615.697.8
strongly disagree11.11.198.9
N/A11.11.1100.0
Total90100.0100.0

Best Practices for Building Employee Loyalty

 

Non-financial benefits

FrequencyPercentValid PercentCumulative Percent
Validstrongly agree3437.837.837.8
agree2022.222.260.0
neither agree or disagree1718.918.978.9
disagree1314.414.493.3
strongly disagree33.33.396.7
N/A33.33.3100.0
Total90100.0100.0

Best Practices for Building Employee Loyalty

 

Coordination

FrequencyPercentValid PercentCumulative Percent
Validstrongly agree2224.424.424.4
agree2527.827.852.2
neither agree or disagree2224.424.476.7
disagree910.010.086.7
strongly disagree22.22.288.9
N/A1011.111.1100.0
Total90100.0100.0

Best Practices for Building Employee Loyalty

 

Work balance

FrequencyPercentValid PercentCumulative Percent
Validstrongly agree2730.030.030.0
agree2527.827.857.8
neither agree or disagree1213.313.371.1
disagree1415.615.686.7
strongly disagree11.11.187.8
N/A1112.212.2100.0
Total90100.0100.0

Best Practices for Building Employee Loyalty

 

Financial benefits

FrequencyPercentValid PercentCumulative Percent
Validstrongly agree3033.333.333.3
agree2527.827.861.1
neither agree or disagree1516.716.777.8
disagree1213.313.391.1
strongly disagree44.44.495.6
N/A44.44.4100.0
Total90100.0100.0

Best Practices for Building Employee Loyalty

 

Reward and recognition

FrequencyPercentValid PercentCumulative Percent
Validstrongly agree2932.232.232.2
agree1718.918.951.1
neither agree or disagree1921.121.172.2
disagree1314.414.486.7
strongly disagree55.65.692.2
N/A77.87.8100.0
Total90100.0100.0

Best Practices for Building Employee Loyalty

 

Communication

FrequencyPercentValid PercentCumulative Percent
Validstrongly agree2628.928.928.9
agree2022.222.251.1
neither agree or disagree2325.625.676.7
disagree1617.817.894.4
strongly disagree22.22.296.7
N/A33.33.3100.0
Total90100.0100.0

Best Practices for Building Employee Loyalty

 

Loyal customer

FrequencyPercentValid PercentCumulative Percent
Validstrongly agree3336.736.736.7
agree1617.817.854.4
neither agree or disagree2022.222.276.7
disagree1415.615.692.2
strongly disagree55.65.697.8
N/A22.22.2100.0
Total90100.0100.0

Best Practices for Building Employee Loyalty

 

Management training

FrequencyPercentValid PercentCumulative Percent
Validstrongly agree2628.928.928.9
agree2123.323.352.2
neither agree or disagree2224.424.476.7
disagree1516.716.793.3
strongly disagree33.33.396.7
N/A33.33.3100.0
Total90100.0100.0

Best Practices for Building Employee Loyalty

 

Expectations

FrequencyPercentValid PercentCumulative Percent
Valid11516.716.716.7
1.5910.010.026.7
22730.030.056.7
2.51617.817.874.4
31011.111.185.6
3.588.98.994.4
444.44.498.9
4.511.11.1100.0
Total90100.0100.0

Best Practices for Building Employee Loyalty

5. Hypotheses Development

  • Correlates of Satisfaction

   H1:  Employee Loyalty will have a positive association with satisfaction.

   H1: Employee Loyalty will have a positive association with satisfaction and   Coordination.

  • Correlates of Non-financial benefits

H1:   Employee Loyalty will have a positive association with Non-financial benefits.

H1: Employee Loyalty will have a positive association with satisfaction and Non- Financial Benefits.

  • Correlates of Coordination

H1: If there is coordination level among the employees then Employee Loyalty will have a positive association with Coordination.

H1: Employee Loyalty will have a positive association with satisfaction and Coordination.

  • Correlates of Work balance

H1: Employee Loyalty will have a positive association with Work balance.

  • Correlates of Financial Benefits

H1: Employee Loyalty will have a positive association with Work balance.

  • Correlates of Rewards and recognition.

H1: If the company provides reward and recognition to their employees then it will have a positive association with work balance.

  • Correlates of Communication

H1: Employee Loyalty will have a positive association with Communication.

  • Correlates of Set of expectations

Ho: Employee Loyalty will have a positive association with set of expectations.

  • Correlates of Management Training

Ho: Employee Loyalty will have a positive association with Management training.

 

Also Check the related links below::

Project Report On Organizational Commitment

Impact of Employee Retention on Performance of a Company

Impact of Human Resource Practices On Organizational Performance In Education Sector

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