Wednesday, December 26, 2012

Why Managers Should Care about Employee Loyalty

The long-term success of any company depends on the quality and loyalty of it’s employees. Yet, the landmark Ipsos Loyalty Study, the largest study of loyalty ever conducted, found less than 30 percent of US employees say they are loyal to their company. Only about 25 percent of US employees think their employer has earned their loyalty. An article posted on and written by Timothy Keiningham and Lerzan Akso explains why employers should care about this pecentage. 

Most companies treat the economic value of employees as “soft” numbers. The problem with that particular thinking is that when the going gets tough, managers tend to zero in on the hard numbers. The result is numerous downsizings and restructuring. Most organizations that downsize fail to realize any long-term cost savings or efficiencies, which necessitates even more restructurings and layoffs.  

The impact on an organization’s culture is also severe. Downsizing results in rumors and paranoia. There are well documented examples of companies becoming so overwhelmed with far-fetched stories during restructuring processes that top executives have needed to intervene to set the record straight. If companies are going to grow their way out of difficult times, as well as good times, they need an organization of committed loyal employees.

The place to begin at your company is by asking, "How loyal are our employees really?" Doing this requires that you obtain feedback from all employees (management included). And you have to be willing to ask tough questions. For example:     
  • How do our managers' relationship styles impact the organization's service climate and employee loyalty?  
  • Does the company provide the necessary tools and training for employees to perform their jobs well?  
  • Is a commitment to serve customers rewarded and encouraged by the organization?  
  • Does the company demonstrate that it deserves the loyalty of its employees?  
There will of course be other areas that are of concern. The goal is to identify those few, vital dimensions that are most essential for your success. Once you have identified these dimensions, you must measure them in a clear, objective, and rigorous manner. 
The reality is that employees are only as loyal to the company as they believe the company is loyal to them. So in the end, building an organization of committed, loyalty employees ultimately comes down to demonstrating to employees that the company deserves their loyalty.

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