04/ 13/ 2007
by Charles R. McConnell
Company loyalty, the once traditional bond between an organization and its employees, is rapidly becoming an obsolete concept. As the employment scene becomes more volatile, with manufacturers shrinking and folding and rapid technological change driving endless change in the business world, company loyalty is a thing of the past to many people in the workforce.
A company's loyalty to employees was commonly regarded by workers as their perceived job security and the extent to which they believed the company cared about them. Traditionally, the loyalty of employees was measured in terms of how long they remained with the company.
American industry enjoyed an extended period of relative stability during which an employee could spend an entire career with one employer. Loyalty in both directions was easy; companies enjoyed stable, long-term markets, and employees benefited from often generous conditions of employment, both union-driven and otherwise. But times changed. Production bowed to foreign competition, jobs fled to other countries, and the economy began its continuing shift from manufacturing to service.
Present-day employees are regularly affected by mergers and acquisitions as well as by the economic problems of business. Layoffs are common, further eroding any employee loyalty that might have remained.
Also, many of today's employees who have been educated for specific occupations tend to be more strongly loyal to occupation than to organization. Thus today, we have the "free-agent" employee who readily moves between organizations for what's perceived as a "better deal."
Loyalty is a two-way street along which employer and employee can each influence the perceptions of the other. The relationship of loyalty to employee retention is clear; the worker who sees the company as loyal to employees is more likely to develop a sense of loyalty to the company.
The strongest factor ever affecting employee loyalty was the perception of guaranteed employment. Guaranteed employment is now an unrealistic expectation, so the most important step managers can take is finding a substitute for guaranteed employment. And the best substitute is a safety net of employability. Managers who provide employees with the means to learn skills and expand their capabilities will positively influence turnover and increase employees' opportunities for rewarding careers.
To determine whether a genuine retention problem exists, gather information from various sources including:
- Records of actual turnover rates, frequency of grievances and transfer requests
- Exit interview comments, if available
- Performance evaluations
- Coaching and counseling interviews
- The input of those who locate and screen job applicants
As far as retention incentives are concerned, companies that are able to afford additional economic rewards have used merit or incentive pay, additional premium pay for consistently long hours or special effort, regular pay adjustments (so-called "cost-of-living" increases), tuition assistance programs and periodic bonuses. However, material rewards go only so far; in the long run they won't help retain people who are unhappy with other aspects of their employment.
There are also a number of important retention incentives that don't involve putting more money directly into employees' pockets. These include:
- A job posting program by which current employees get the first look at positions that open up
- The opportunity for internal job transfers
- A clear, well publicized and honestly implemented policy of promotion and growth within the organization
The individual manager is in a unique position to positively affect turnover. The manager can:
- Ensure that each new employee is thoroughly oriented and properly trained before being left to work alone. This is critical; a sure contributor to short-term turnover is the feeling of being overwhelmed and in over one's head.
- Be honest with employees about plans and circumstances that may affect their jobs. Even if unwelcome news may be coming, the unknown is usually more upsetting than the known.
- Make expectations crystal clear through orientation, training, job descriptions and performance standards. Employees who are in doubt about what's expected of them are usually unsure of themselves on the job.
- Be consistent, fair and impartial, treating all with respect and consideration.
- Be seen as a supporter and facilitator rather than a judge or a critic.
- Practice honest participative management and show that you value every employee.
Finally, make up your mind that a certain amount of turnover is to be expected. People retire, people resign for valid reasons, and now and then, someone who represents a welcome departure goes out the door voluntarily. No one can say for certain what constitutes "too much" turnover. It's clear, however, that many people leave their jobs because they're discontented and unfulfilled. And whether employees do or don't become discontented and unfulfilled rests largely with the immediate manager.
