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.

 Reevaluating loyalty

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 needs.

 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.

 Balancing career 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:

1. Align career 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.

2. Design work 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.

3. Focus on 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.

4. Highlight the 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 company's mission.

5. Hire quality 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.

6. In summary, 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 loyalty by:

1. Aligning career growth with company goals.

2. Designing work with variety and autonomy.

3. Focusing on relationships.

4. Highlighting the link between employees' values and the company's mission.

5. Hire quality personnel.

1. 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.

2. 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 benefited.

3. Fostering supportive 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.

4. 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.

5. 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.

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            Bob De Contreras                                                  
            Rich Kramarik