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The new loyalty compact: organization-employee loyalty is reborn

The new loyalty compact: organization-employee loyalty is reborn

The following article is condensed from Carol Kinsey Goman's book,

This Isn't the Company I Joined (new edition due January 2004).

1. Introduction

If your definition of loyalty requires patriarchal companies offering lifetime job security to a workforce pledging steadfast allegiance -- then loyalty is indeed dead. Workers today face the reality that whether they work for a large conglomerate or a smaller entrepreneurial firm, there are no employment guarantees. And management, in turn, is dealing with a workforce whose values differ tremendously from those of their predecessors.

With traditional loyalty, everyone knew the rules: Management gave employees a sense of "family," of job security. Even if old Joe wasn't pulling his fair share, he could expect the company to take care of him by allowing him to stay in his current position or by finding him another job within the organization.

In exchange, workers gave up the right to question authority, to criticize the company, or to do their jobs in any way but the "one right way" approved by the organization. They wore the company uniform, used the company product or service, and supported the organization's position on community matters. Orders were handed down the bureaucratic chain of command, to be followed precisely, and then released to the next level.

Today, the traditional view of loyalty no longer applies. Recent changes in the business world and in the workforce require a different approach. Workers can no longer expect lifetime, or long-term, employment. Nor can they expect stability. Change has become a fact of corporate life to be accepted and dealt with.

Employers, on the other hand, are encountering a far more skeptical workforce, with a different set of expectations and demands. Employees today no longer believe that top management will guide their career progression. Workers are creating their own career paths, and, in most cases, consider job-hopping a normal route to professional success. Today's employees are educated to expect that they may work for as many as twenty different companies - in perhaps four or five different careers - over the course of their professional lives.

Yet opportunities abound for organizations that take the initiative in creating compelling and realistic guidelines for mutual loyalty in the workplace. But this requires a new definition of corporate loyalty and new expectations on the part of workers and leaders. The death of old traditional loyalty opens opportunities for a new, enlightened form of loyalty based on shared values and goals, and mutual caring and respect. Organizations can benefit by tapping into the commitment of their workers. Employees yearn to feel emotionally connected to their work. It is the right time to address these mutual needs and to redefine loyalty in ways that will serve both organizations and employees.


2. The two dimensions of loyalty

Loyalty has two dimensions:

# 1 The internal or emotional level:

Internally, loyalty is a feeling of bonding, mutuality, affiliation, or trust. Various dictionaries define loyalty as:

"True, constant, or steadfast in allegiance;"

"Faithful to a person, ideal, custom obligation, duty or organization;" and

"Devoted attachment and affection."

For our purposes, the key to defining loyalty starts here:

Loyalty is first of all an emotion that manifests internally as caring and concern for another person or entity. Loyalty is basic to our nature as human beings - a potent force that can be brought forth for the good of all.

# 2 The external or behavioral aspect:

Externally, loyalty may manifest itself in a variety of ways. Since emotions are obviously invisible, it is through the behavioral dimension that we evaluate another's loyalty to us. In organizations we often have expectations of loyalty behavior that are implied rather than explicit. The "loyalty compact" is an implied set of mutual expectations regarding the manifestations of loyalty by both the organization and the workforce. These behaviors have changed on both sides, but many of us continue to judge loyalty by old, outdated standards. It is time for the old standards to be questioned, and for the loyalty contract to be stated openly so that employees and management can make enlightened commitments.

3. The new loyalty compact

In progressive organizations across the country, a new kind of relationship grounded in mutual trust and respect is emerging between employers and employees. This new compact is developed out of realistic expectations on both sides. It is a path that reflects the new reality for business and society in a global market, as it attempts to align the interests of the organization with those of its employees, to share both the risks and rewards of doing business.

As leaner companies rely on fewer employees to shoulder more of the work, the developing relationship between company and worker is changing from paternalism to partnership: Companies owe it to their workforce to aggressively pursue new ideas, products, services, markets, and customers. Employees expect to be treated fairly, to develop professionally, and to have meaningful, challenging work. In return, employees owe the organization their willingness to participate in business growth, idea development, customer service, and organizational transformation.

Balancing the employee-employer compact is not a matter of adding more items to one side of the balance sheet or eliminating some from the other side. Increasingly, it is a matter of finding items that are of value to both the employer and the employee. Robert Haas, CEO of Levi Strauss has said, "We are at the center of a seamless web of mutual responsibility and collaboration. . . a seamless partnership, with interrelationships and mutual commitments."

4. Partnerships for an emerging workplace

An example of how one company approached the new compact is Royal Bank of Canada. RBC took a 93-person cross-section of their workforce offsite for a week-long conference to create the basis for their changing employee-employer relationship. The group drafted this outline of the new understanding, to be presented to all employees: "If you buy into the organization's values and goals, contribute energy and ideas, grow and develop personally, and take care of our customers -- then together we will create a good work environment, provide all the challenge you can handle, help you develop new skills and broaden your experience, and offer support and guidance for career and professional growth. And, you'll be a part of a company setting the pace in its industry; you will enjoy working here, manage the pressure, and see how the pieces fit together."

As a result of this offsite meeting, Royal Bank of Canada laid out its new Loyalty Compact - a sort of contract through which the organization and its employees hoped to form a mutually beneficial and effective partnership.

Royal Bank of Canada agreed to strive to provide employees with:

>> Training, learning, development opportunities

>> Rewards, recognition, pay for your contribution

>> Challenging job and growth opportunities

>> Technology support

>> Support for employability, marketability

>> Support for personal and family needs

>> Professional HR support

And employees agreed to strive to provide the organization with:

>> Commitment to work, teamwork, and customer

>> Work skills in keeping with changing jobs

>> Contribution focused on business objectives

>> Personal ownership of development and growth

>> Flexibility

>> Effective people management

>> Attitude

In our post-industrial world, it is not capital assets that will determine the success of an organization, but rather the intensity of motivation of its employees to continually change and improve to meet or set the next standard. Employees who are emotionally involved with the organization are far more productive than those who have emotionally withdrawn. Companies need loyal employees who are enlightened and willing to participate in a vital, competitive business environment.

5. Conclusion: employees need loyal employers.

In an environment of mutual commitment, employees need honest communication from management, challenging and empowering work responsibilities, recognition and appreciation for their efforts, personal/professional development opportunities, and equitable treatment. It is important for managers and leaders of an organization to realize that In addition to needing these tangible benefits, employees want to commit to companies -- because doing so satisfies a powerful and basic human need to connect with and contribute to something significant.

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Gary Watkins

Gary Watkins

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