By Alan Graner
Most employers and managers believe—or at least pay lip service—to the concept that employee loyalty is essential to company success.
But unlike profit and loss statements, there are no hard numbers measuring employee loyalty.
As a result, all too often company executives expect loyalty from their employees without giving loyalty in return.
They ask employees to make sacrifices “for the good of the company” and then think nothing of laying them off.
They accept large bonuses while giving employees small or no raises.
They operate a top-down management style while forgetting some of the most valuable insights for improving company efficiency and profit come from the men and women in the trenches.
Many executives refuse to further employee education and/or training with the excuse they’ll spend all that time and money and the employees will take those new skills elsewhere.
Many executives are unaware of poor middle managers who discourage and denigrate their subordinates or even bully them.
And then management acts surprised when their company experiences a high turnover rate.
They wonder why employees won’t go the extra mile but, instead, leave at 5 o’clock on the dot.
They’re dismayed at the lack of innovation, the absence of good ideas to help the company become more profitable.
And they’re appalled when employee lack of enthusiasm results in an increase in customer dissatisfaction.
The true rewards of employee loyalty
As Timothy Keningham and Lerzan Aksoy wrote in “Workforce Management” http://hiring.monster.com/hr/hr-best-practices/workforce-management/employee-performance-management/why-loyalty-matters.aspx: “Benjamin Schneider, professor emeritus at the University of Maryland, has shown conclusively that the employee’s loyalty-related attitudes precede a firm’s financial and market performance. And there is a much greater payoff in working on improving the human factor than people think. Researchers at University of Pennsylvania found that spending 10 percent of a company’s revenue on capital improvements increased productivity by 3.9 percent. But investing that same amount in developing the employee capital more than doubles that amount, to a whopping 8.5 percent.”
Loyalty to employees isn’t just the right way to do things. It’s often the profitable way.
Agree or disagree.
Image: Ivan Bogdanov via Wikimedia Commons http://commons.wikimedia.org/wiki/File:Bogdanov_001.jpg
Alan Graner is Chief Creative Officer at Daly-Swartz Public Relations, an Orange County, CA business marketing content and distribution firm. For content that makes you stick out from the crowd, email Jeffrey Swartz at firstname.lastname@example.org. Or visit www.dsprel.com.