In today’s business world, employee loyalty is a very powerful concept.
David Javitch, president of Javitch Associates and an expert on the topic, emphasizes the concept in “Creating Loyal Employees” at entrepreneur.com.
What Does Employee Loyalty Mean?
“Loyalty is the relationship between an employer and an employee—an abstract, often unwritten contract in which the employer agrees to provide the materials and resources the employee needs to get the job done, matched by the employee’s agreement to work at an optimal level to fulfill the goals of the company,” Javitch writes.
Loyalty is a key reason many employees remain at their jobs, he adds. But if the contract—hard to build in the first place—gets broken, it’s very hard to rebuild the trust.
Why is Employee Loyalty Critical to Business Success?
Javitch explains it this way:
“Loyal staffers help create a history and a culture of stability; people who’ve been around awhile know the road, the rules and the ‘how it’s done around here.’ Loyalty reduces costly turnover rates … Loyal employees are usually also satisfied, productive employees.”
The Bottom Line Impact
In “The Top 11 Ways to Increase Your Employee Loyalty,” Kyle LaMalfa, senior business insight analyst at Allegiance, offers sobering statistics on the costs of lost loyalty.
- Each year the average company loses 20-50% of its employee base – Bain & Company
- Replacing a lost employee costs 150% of that person’s annual salary – Columbia University
How Do You Instill Employee Loyalty?
Citing Stephen Robbins, the author of Organizational Behavior, Javitch says it’s all about how you, the employer:
- Treat your employees
- Perform as a manager
Keys to Loyal Employees
First, Javitch writes, know what you’re doing. If you aren’t competent, you’ll get no respect. The other keys are:
- If you don’t know the answer to something, be honest and ask for help. Don’t make excuses or blame others.
- Demonstrate integrity in your actions and beliefs.
- Behave consistently with your staff; show that you’re reliable and predictable, and that you use good judgment.
- Display a willingness to protect your employees and help them save face.
- Be as open with your employees as possible.
Employee Loyalty In Action
Arthur T. Demoulas, beloved CEO of privately owned supermarket chain Market Basket, was summarily ousted by his rival cousin, Arthur S. Demoulas. After six weeks of employee protests and customer boycotts, “Arthur T.” was reinstated. What drove employee loyalty to Arthur T.? Even when their jobs were on the line?
In PBS News Hour’s “The Labor Day lessons of Market Basket,” Christopher Mackin breaks it down.
“From a pickup truck in Tewksbury, Massachusetts, side-by-side with a large, stuffed giraffe (which striking Market Basket employees had adopted as their mascot), Artie T. told employees Thursday that he loved them. “You have demonstrated to the world,” Artie. T. continued, “that it is a person’s moral obligation and social responsibility to protect the culture which provides an honorable and dignified place in which to work.”
To say that Arthur T. has earned the respect of Market Basket “associates” and the public at large would be the understatement of Labor Day 2014. Business schools and Hollywood will be eager to hear more about him in the months ahead.”
With jobs on the line, why are Market Basket employees so loyal to Artie T?
Market Basket employees aren’t union employees, and white collar managers are striking alongside the blue collar workers they supervise, rallying for Artie T.’s return, notes Simone Pathe in another PBS piece, “With jobs on the line, why are Market Basket employees so loyal to Artie T?”
Artie T. cares, protesters say, not just about “his employees” in the abstract, but about individuals.
“From Arthur T.’s personal touch—the phone calls to workers, [visits to their hospital rooms,] and his attendance at their relatives’ funeral services—to the company’s profit-sharing system, employee scholarship program and generous wages (starting salaries for full-time clerks are $4 higher than Massachusetts’ minimum wage), it’s not hard to see why employees have been loyal to management under his leadership,” Pathe writes.
Instilling loyalty is mostly about treating employees like you’d want to be treated—the golden rule: Do unto others … it’s common sense and also good business sense.
Employee loyalty thrives in a culture of gratitude. For a step-by-step guide with practical tips to get you started on building a vibrant culture of gratitude, download our FREE e-book, “Transform Your Workplace with Gratitude.” Click the image below and start sharing your workplace gratitude today!
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