Management Myth # 6—A Loyal Employee is an Asset to the Business

“These three employees have demonstrated outstanding loyalty to our company, ” claimed Jim. “They’ve been working here for 25 years. I think we should reward them at the Christmas party. ”

“What did you have in mind, Jim?” asked Chris, Jim’s boss.

“I thought we should buy them each a flat-screen plasma TV and present it to them at the Christmas party. What do you think?” said Jim with enthusiasm.

Chris looked at Jim pensively and paused. “What signal will this send the troops, Jim?” “It’ll send a signal to staff that we value them; we care about them. It demonstrates that we value loyalty in our staff,” Jim replied with a confident tone in his voice.

There was a longer pause and Chris asked, “What about commitment? Does it show that we value commitment?” “What do you mean, Chris? Aren’t they the same thing—loyalty and commitment?” Jim asked, with a puzzled look on his face.

What the agile enterprise needs is a committed employee more

than a loyal


© The Author(s) 2017

T. Baker, Performance Management for Agile Organizations, DOI 10.1007/978-3-319-40153-9_9

“No, I don’t think so. You can be loyal without being committed and committed without being loyal, ” Chris replied. “What do you mean?” came Chris’s response.

“You have a university degree, don’t you, Jim?” “Yes, I do,” Jim replied “Well, you must have shown a certain level of commitment to complete that qualification, right? But that doesn’t necessarily mean you remain loyal to the university that issued you your qualification, does it?” “Iguess not, ” said Jim.

“Similarly, a university student can be loyal to a partner in a short-term relationship, but that doesn’t necessarily mean there is a long-term commitment for life, ” Chris continued.

“Remember this, Jim, the only rats that leave a sinking ship are the ones that can swim. Sometimes we don’t want or need people to stay with the company for a long time. It’s what people do that’s important, not how long people decide to stay. ”

After another long pause, Jim posed the question, “Should we be rewarding loyalty or commitment?”

“I’m not against recognizing these three employees for their length of service. But I think we should balance this by recognizing those employees who are committed to assisting our company achieve its business goals, ” Chris replied

“Okay, I get your point. I’ll rethink this and get back to you, ” Jim said, like he’d been hit across the back of the head with a lump of wood.1

Many business leaders still believe that loyal employees are one of the keys to business success. After all, loyal employees stay with their current employer longer, while others move on, looking for greener pastures. This interpretation of loyalty—the willingness to remain with their current employer—is commonly considered a positive. The argument goes something like this: A long-serving employee contributes to performance over the long term, steadies the ship in turbulent times, reduces turnover and the costs associated with that, and so on. These loyal workers invest a greater portion of their career with one, or a few, companies.

But a loyal employee isn’t always a high performer. An employee loyal to a company is generally bound to the systems and processes used in the organization. But they may not always “see the forest for the trees.” Often a loyal employee is intent on pleasing their boss, not “rocking the boat.” They can be reluctant to embrace and support new ideas.

What the agile enterprise needs more than a loyal employee, is a committed employee. A committed employee may be a short-term prospect; they may decide to leave sooner than a loyal employee. But while they’re employed, they’re committed to helping the business achieve its goals. What about both; a loyal and committed worker? Isn’t that the ultimate answer to high performance?

Although this sounds perfect, a loyal and committed employee think differently. A loyal employee values the status quo; they like things the way they are; they don’t like change. Whereas, a committed employee welcomes change; they are more inclined to look for new ways of doing things, faster, better and quicker; they are open to new ideas, if they believe it’ll improve things. So given a choice—with all other factors equal—the committed employee is more suited to the agile enterprise.

I should also point out that being organizationally committed is not necessarily the same as having one’s human spirit tied to work (Chap. 8). To be clear: Human spirit describes the emotional connection to the work, while having a sense of commitment is based on the organization’s purpose. It’s of course quite possible to have an attachment to both the work and the organization.

To illustrate: Jackie’s work as a nurse is very stimulating and meaningful; she finds nursing, and particular her interactions with patients, engaging. Her human spirit is nurtured by the work she does. But she feels no sense of commitment to her employer—the private hospital she works for. Jackie thinks the hospital is more interested in making money than saving lives. She has difficult working relationships with most of the hierarchy. Jackie doesn’t feel any obligation to the hospital because of this.

This idea can work in reverse too. Consider Kane. Kane is an apprentice chef in a large and busy restaurant. He doesn’t find his work the least bit stimulating. Being a junior chef, Kane is left with the jobs no one else wants to do; for example, washing the dishes or sweeping the kitchen floor. But he loves his boss who is tolerant, kind, and understanding; for example, Kane’s boss is very accommodating with his need to take care of his elderly mother, who is incapacitated. Also, Kane has the opportunity to learn his trade in the presence of some very successful chefs. Kane feels obligated to the business, even though he finds his work meaningless.

The loyal employee of the twentieth century received a comfortable salary and retirement plan in exchange for remaining with an employer for their entire working life—or at least a sizable chunk of it. The productivity of loyal employees varied, as it still does. But the key point is that loyalty and performance weren’t—and aren’t—inexorably linked. Taylor believed the remedy for the non-productive worker was the systemization and management of work to guarantee at least a minimum acceptable workload, carried out in a set way. He didn’t believe the path to productivity was about seeking out the extraordinarily committed worker. Loyalty was the prevailing value.

Gary Hamel in his article, Three Forces Disrupting Management, explains the evolution of loyalty:

This transition from an agrarian and craft-based society to an industrial economy required an epical re-socialization of the workforce. Unruly and independent-minded farmers, artisans and day laborers had to be transformed into rule-following, forelock-tugging employees. And 100 years on, this work continues, with organizations around the world still working hard to strap rancorous and free-thinking human beings into the strait- jacket of institutionalized obedience, conformance, and discipline.2

It’s hardly surprising then that this management myth—that a loyal employee is an asset to the business—is still in practice today.

Displaying loyalty to an employer is not what it used to be, and understandably so. The employee of today needs to constantly upgrade and renew their skills-set to maintain their employability. To keep current, the employee needs to take charge of their own career; leaving their career in the hands of their employer is no longer—if it ever was—a wise move. Relying upon their employer to sponsor the career development of an employee is dangerously misguided.

As I’ve pointed out, commitment is now a more realistic value than loyalty. The employer has an opportunity to strengthen—or weaken—this sense of commitment to the company. Business leaders can implement several practical strategies to generate more commitment from employees to the organization and its mission. These approaches consciously align employee career aspirations with the company’s goals, wherever this may be feasible. We’ll cover some specific strategies shortly.

However, most business leaders still overrate employee loyalty, despite the fact that it’s misguided to do so. The lifetime contract between individual and organization expired more than 30 years ago. People today rightly are more inclined to display loyalty to their careers ahead of their current employer. Employees aren’t planning to work for decades for one company. Not only are employees not expecting to work for a single employee their whole career, they don’t want to either. What’s more, most employees are disillusioned with the idea of displaying blind loyalty to their employer.

But, at the same time, people don’t like the idea of changing jobs and shifting from business-to-business every six months, for their entire working life. It’s not attractive for companies either; they would grind to a halt if they had to replace large portions of the workforce every six months. So if long-term loyalty is dead and buried, how can organizations and employees happily coexist in turbulent times?

Is there an avenue for employees and employers to strike a new working agreement; one that isn’t based on long-term loyalty? This arrangement would be one that offers businesses the focus and expertise needed to compete in the marketplace, on the one hand. And on the other hand, it would be an arrangement that provides employees with attractive career benefits they need to survive and prosper. The answer is yes—a new working arrangement can be struck—but only if companies let go of this misguided belief that a loyal worker is a good worker.

Obviously businesses need a committed and competent workforce. And the employee needs the opportunity to remain employable. A new contract—a new psychological contract—can be achieved for mutual benefit around these needs.3 This new psychological contract promises to be a very appealing exchange, particularly when the skills a person masters further their career and are the capabilities that are also required by the company that sponsor them.

But we must let go of the notion of sentimental loyalty. The new psychological contract is supported by commitment, not loyalty. Commitment is a more pragmatic exchange than loyalty. A person can be committed to something or someone without necessarily displaying long-term, sentimental loyalty. As I mentioned earlier, in the opening scene of this chapter, a graduating student requires a certain amount of commitment to completing their university degree, without necessarily being loyal to the institution conferring the degree. Similarly, a person can display a sense of loyalty, without being committed.

For example, someone can be faithful and devoted to a person without committing to a particular course-of-action. A person may claim loyalty to someone, but can at times break their promises to them, in other words. This of course occurs frequently in all walks of life. It therefore follows that feeling a sense of loyalty doesn’t always translate into a dogged commitment to perform at a high level. Equally, if an employee demonstrates commitment to achieving the goals of the business, it doesn’t always follow that they are bindingly loyal to the enterprise. Given a choice between loyalty and commitment, business leaders should opt for commitment every time.

At the same time, it’s in the best interests of the employee to seek commitment from their employer to support them to achieve their personal objectives. The mistaken assumption is that loyalty means forever. But even when a company loses a star performer to a competitor, it doesn’t mean the departing employee wasn’t committed in the short term; they probably were; that’s why they are considered talent. As a university student expressed it to me recently,

It’s like dating: You can be faithful to the person you’re seeing now while you’re involved with them, but that doesn’t mean you won’t move on and date someone else later.

A company shouldn’t—and increasingly cannot—strive to keep all their top talent forever; as appealing as that might sound. So instead of loyalty, modern corporations ought to cultivate mutual commitment between employer and employee, albeit, on a shortened timeframe.

I therefore define commitment as the employee’s psychological attachment to the organization, as distinct from the work they are employed to perform. However, there is conceivably some cross-over with job satisfaction and organizational identity; that is, the degree to which an employee experiences a sense of oneness with their company. Although they are all different concepts, there is some relationship between commitment, satisfaction, and identification. Organizational scientists have developed many definitions of organizational commitment, and numerous scales to measure it.

One of the most notable models of commitment is John Meyer and Natalie Allen’s; their model was developed to bring together the various definitions of commitment.4 According to Meyer and Allen, there are three thought processes that characterize an employee’s commitment to an organization. These dimensions are labeled as affective, continuance, and normative commitment. Let’s briefly consider each and then look at what an enterprise can do to improve (or reduce) an employee’s commitment.

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