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Employee Loyalty OR Customer Loyalty

July 8, 2006 01:23 AM 1
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Employee Loyalty OR Customer Loyalty

The article below focuses on the term “Employee Loyalty” which has long been forgotten considering the thriving importance being given to “Customer Loyalty”  these days. I quite agree with the issue raised below which has once featured in the Financial Express and seeking for that “Loyal Employee” in your company.

What do you, as HR professionals feel about the concept of “Employee Loyalty”, Don’t you feel that “Customer Loyalty” has taken over “Employee Loyalty” these days ? I’m sure it really has but I need your views on this, which I am waitin for ??

Consider this :

The Ties That Bind - Management Ver 2.0 The Financial Express

For all the fuss about customer loyalty and customer relationship management, when was the last time you heard someone talk about employee loyalty? It’s as if suddenly the whole idea of having employees who are loyal to the organisation has become so preposterous that people have stopped thinking up strategies on the subject, aren’t working on practices in this area and frankly, can’t even be bothered writing a book on it.

The rapid attrition rate of the dotcom boom finally drove home the point that employee loyalty — really, long-term, come-what-may kind of loyalty — is outdated, and just not in sync with the human resource management tools needed in the networked economy. Or did it?

Before you deluge me with the amount you spent last year trying to keep employees happy, let me clarify. I am talking neither about employee retention strategies nor employee satisfaction. Sure, they are interlinked and interdependent, but employee loyalty is a motherhood that stands distinct from both. It’s about building a culture where employees care deeply about the company and are focused on its best interests. It’s about employees who have a long-term perspective about an organisation and whose loyalty does not swing with the stock. It’s about employees who are not afraid to stand up and point out the faults of an organisation because there is an environment of mutual trust, and constructive criticism is welcomed. It’s about building an organisation where employees are not just aware of their rights, but their duties as citizens of the organisation.

If you consider it carefully, employee loyalty is not about employee retention. The concierge services, the perks, the personalised message on their birthdays, career planning and training programs, the loans for cars and houses — these do act as the silken ties that bind, but they don’t necessarily evoke loyalty. In a relationship based on lucre, the company doesn’t buy loyalty — only time. It only needs another employer to gild the lily a little more — and employees will be willing to switch. Employee loyalty is also not always directly correlated to employee satisfaction. There is no guarantee that perfectly satisfied employees are also loyal and functioning in the best interests of the company. On the other hand, despite working in totally unsatisfactory circumstances, employees sometimes display the most intense loyalty to an organisation.

That begs the question: why does a company need loyal employees? They stay longer, are a stable influence, and more importantly, are not deadwood. These are people who choose to work at their best levels for your organisation. Employee loyalty is also the best word-of-mouth promotion for your company — with customers and suppliers. It enhances your ability to attract the best talent in the industry. And, as the Enron debacle has shown, it’s a loyal employee who blows the whistle fearless of the consequences.
In a strategy focused more on enhancing employee retention, the focus of employees tends to be short-term: prevent the boat from rocking as long as I am here. A loyal employee who plans to stay with the organisation long-term, looks out for the long-term interests of the organisation. It’s no coincidence that the concept of quality circles in a total quality management system that worked so well in Japan. Since the whole concept is based on finding faults — and of course, then fixing them — it was easy to put teams together who would brainstorm on issues in Japanese companies where job security was assured. It’s also the reason why quality circles failed miserably in American companies where employees were scared of working themselves out of a job if productivity increased.

Frederick F Reichheld, in his recent book Loyalty Rules! How leaders build lasting relationships in the Digital Age, finds that in a national sample of over 2,000 employees working in American companies, only 45 per cent agreed that their organisation deserved their loyalty, 32 per cent were neutral and 23 per cent actively disagreed. Reichheld has developed a Loyalty Acid Test — you can take it at — which hints at some of the factors that encourage loyalty: a win-win organisation, rewarding the right results, open and honest communication, and leaders who behave with fairness and integrity. Perhaps that explains why loyalty is such a lonely word! If nurturing employee loyalty requires leaders who are fiercely loyal to the organisation — rather than their own personal goals — it’s no wonder no one talks about loyalty anymore.

I hope you strike back with your views…



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