Dr. Chris D’Souza
“Train people well enough so they can leave; treat them well enough so they don’t want to”. Richard Branson.
As business leaders, we have heard the mantra’ many times that employees are our most valuable assets.
We are told that they should have the feeling that our organisation wants the best for them and that, as a result, they will continue to do their best and not look for another job. After all, we are asked to recognise that they are the people who work, day in and day out, to boost our business and help us reach our goals, and loyal employees can do absolute wonders for the future of our brand.
Is Loyalty a Virtue?
Most of the time, people do view loyalty as a virtue, including friends, family, and cricket fans.
But employee loyalty is a more nuanced issue. It involves additional transactions. Friends do not terminate one another for financial reasons or offer one another performance reports. Less reciprocity exists. A worker may have an attachment to their employer, but an employer may have no feelings at all. This explains why people frequently feel more devoted to their individual manager and other team members than to their organisations.
However, too much of it may be expensive for an employee’s hip pocket.
People changing professions are the foundation of careers and wage spikes. Those who switched jobs were paid 7.6% more in April 2023 than they were a year earlier, while job stickers were paid only 5.6% more, according to the Federal Reserve Bank of Atlanta, which monitors pay growth in the United States.
Those who want to stay loyal to their companies can also benefit from the job switching of others. According to a research paper written at the Australian Treasury, higher rates of job-hopping in local Australian labour markets were linked to quicker wage growth for both workers who moved jobs and also those who did not (Deutscher, 2019).
Clearly, there is negotiating strength in loyalty.
However, ‘excessive loyalty’ can have negative effects on employees.
Stanley (2023) examined employers’ perceptions of devoted employees. Researchers surveyed managers to find out if they would be open to asking a fictitious worker named John to put in extra hours without getting paid. Bosses were happy to throw extra work at John if he was deemed loyal. Conversely, employees who put in more effort without receiving compensation were more likely to have their superiors characterise them as devoted.
Recall that dogs are renowned for their loyalty rather than their intelligence.
Employers are usually unbiased when it comes to what inspires loyalty. Retention bonuses are an acknowledgement that sometimes top performers require a little prodding to stay on board. Genuine loyalty usually results in insignificant benefits, like an extra week off after 25 years of work.
Nonetheless, businesses might be overcommitted to the concept of loyalty. In fact, if there is an abundance of employee loyalty, society may suffer.
Dungan, et. al., (2015) researching ‘whistleblowing’ found that employees were less likely to report misconduct if they were more motivated by loyalty and more likely to report wrongdoing if they were concerned about fair treatment of people outside the organisation. According to other research, loyal members of one group may feel pressured to cheat in order to outperform members of another in a competitive setting.
Despite these societal impacts, there is no doubt that employee loyalty has certain advantages. Employers desire employees that have a strong sense of loyalty to them, are willing to go above and beyond, and will not jump ship to work for a competitor. Employees want to feel that a company is worth a portion of their limited time on Earth, and they want to feel like they belong there. Employees who remain with their company because they feel involved in it rather than because they have not received a better offer will perform better overall in terms of job satisfaction and performance.
The link between employee satisfaction and productivity is long established (Wallop, 2015). Some have attempted to measure the link, with one study finding that happy workers are 12% more productive than their less satisfied counterparts (Revesencio, 2023).
Here are 10 tips to help you nurture loyal employees:
- Strong leadership inspires strong loyalty.
If you demonstrate a strong measure of loyalty to your team, you’ll find that same measure of loyalty being returned to you.
- Connect with your staff.
Demonstrate that you are taking strides to connect with your staff regularly.
- Show you trust your employees.
When people feel they are trusted and valued, they tend to reciprocate those feelings.
- Provide honest feedback and two-way communication.
By offering something actionable yet honest, it allows you to build trust and a certain level of openness with your employees, thus eliminating any negative workplace hierarchy that has slowly developed over time.
- Develop a Millennial mindset:
Graduates are likely to want the perfect work-life balance from their employers just as much as they want good career prospects. Millennials prefer a positive social atmosphere at their workplace than a higher salary.
- Reward your employees appropriately.
Employees expect to be paid as much as they could earn doing the same job elsewhere, and they feel “devalued” when they are paid less.
- Remove unnecessary uncertainty.
There’s no question that today’s workplace contains more uncertainties than in the past. While no single company can fix an uncertain economy, a company can make working more predictable simply by keeping its employees briefed and giving advance warning when changes are imminent.
- Be fair and neutral.
It is difficult for employees to feel loyal to a company that tolerates individuals who make the workplace miserable for everyone else. Ensure that you treat everyone fairly and are known as a manager who has integrity.
- Be supportive and show you genuinely care.
By offering a supportive environment, employees can work more comfortably without the fear of making a mistake. This encourages experimentation and allows staff to push themselves.
- Offer training and development.
You want your employees to be the best they can be, and to do that, you need to provide them with the resources and tools they need to get there.
A Final Note on Employee Loyalty
Business leaders must understand that employees are career-wise. Not every employee has a clear career path in mind, and some have high expectations but not a clear road map. By sitting down and understanding where an employee expects to go, business leaders have the ability to help co-pilot the journey with training and development opportunities.
Employees, on the other hand, must recognise that choosing loyalty at work is a self-serving rather than a moral choice. It ought to be a condition of receiving good treatment, not an increasingly difficult habit to break.
Employees must recognise that it is not unethical to stay where they are because they enjoy their job, not because they think it is unethical to leave.
References
Deutscher, Nathan (2019), “Job-to-job transitions and the wages of Australian workers”, Working/Technical Paper, Australian Treasury, November, pp 1-23.
Dungan, James; Waytz, Adam; and Young, Liane (2015), “The Psychology of Whistleblowing,” Current Opinion in Psychology, Vol. 6, December, Pages 129-133.
Revesencio, Jonha (2023), “Why Happy Employees Are 12% More Productive”, Fast Company & Inc., https://www.fastcompany.com/3048751/happy-employees-are-12-more-productive-at-work
Stanley, Matthew L.; Neck, Christopher B.; and Neck, Christopher P (2023), “Loyal Workers are Selectively and Ironically Targeted for Exploitation”, Journal of Experimental Social Psychology, Jan. 6, DOI: 10.1016/j.jesp.2022.104442
Wallop, Harry (2015), “Are happy workers more productive?” The Telegraph, April 22. https://www.telegraph.co.uk/news/shopping-and-consumer-news/11553473/Are-happy-workers-more-productive.html
Dr. Chris D’Souza is Deputy CEO and CFO of ICMA(ANZ).