Employee Loyalty Argumentative

Introduction

Human assets are an indispensable resource of every business organization. For a company to succeed, it must attract and maintain a highly efficient workforce through human resource programs and policies that could motivate employees’ skills, talents, and potentials. In this highly competitive corporate environment, every business organization needs to focus on and develop their human assets. However, it is not enough to attract and recruit competent employees without any specific motivational factors that can make them stay. For this reason, it is important to look at the essential role of employee loyalty in a business setting. Thus, the goal of this paper is to determine the underlying reason why it is important for business leaders and managers to focus on employee loyalty and to find out what are the different variables affecting workforce loyalty.

Importance of employee loyalty

A lot of studies confirm the importance of employee satisfaction and loyalty in any business organization (Reichheld & Teal 92; Walden & Thoms 150). Business leaders and human resource specialist usually expect employees to stay for a long period of time. This is because it would be highly disadvantageous to organizational interests and wellbeing if employees keep on quitting their jobs for various reasons. Due to their long-range tenure with the organization, employees can build up a high level of confidence and sense of belongingness which would make them more efficient and more productive.

The continuous hard work and efficiency of employees has positive impacts on the company’s growth and development. If an organization were able to provide employment security, employees would be more enthusiastic to discover new skills, share ideas and opinions with business managers, and be concerned about quality and efficiency. According to Walden and Thoms (151), companies that usually conduct downsizing tend to lose workers’ confidence and efficiency. If employees are dissatisfied with new company policies and regulations that highly affect their status and interest, they could not possibly develop good work attitude.

Loyalty cannot be earned overnight. It takes a long process and motivational programs and policies before an employee could be able to develop loyalty to his company. One of the situations that can affect employees’ level of loyalty is high turnover due to downsizing, layoffs, acquisitions and mergers. Levin (28) argued that lack of employment security and distrust of the company has negative impact on worker satisfaction and loyalty. This situation is confirmed by Durkin (43) who stated that loyalty is something that must be earned. This means that loyalty can be achieved through competitive employee benefits, low turnover, reward and recognition, and regular salary increases.

Apart from the fact that loyal and motivated employees impact organizational development and wellbeing, employee loyalty also has positive effects on the company’s image and reputation, which is one of the proven ways to attract costumers. On the other hand, good company image may also develop worker loyalty by raising their eagerness to collaborate with the company’s programs and goals (Fombrun 22). Motivating employees to gain their loyalty has consequential costs, which usually discourage employers and managers. According to Reichheld and Teal (96), employee loyalty can affect retention and new-consumer volume. Several studies also showed the close relation between employee loyalty and consumer loyalty (Heskett, Sasser & Schlesinger 10; Beemer & Shook 114). This means that through investing in workforce loyalty, a firm may be able to increase its profits, improve productivity, and heighten its reputation not only through increased employee commitment but also through consumer loyalty.

Variables that affect employee loyalty

If there are factors that can reduce employee commitment and satisfaction, there are also variables that can affect or increase the same. Business leaders and managers have wide discretion about reward allocation processes. Human resource management practices and policies tend to have a high effect on workforce satisfaction (Meyer 175). It is important to know the different variables that can heighten workforce commitment and satisfaction so that business leaders and managers may be able to implement them properly. Thus, some of these underlying variables are the following: 1) Opportunity for growth; 2) organizational justice and reward distribution; and 3) work-life practices and policies.

Opportunity for growth: This variable tends to not only satisfy employees but motivate them as well (Arthur 21). If employees perceived, through organizational programs, that they can improve their employment status, they would be encouraged to improve their performance and develop loyalty to the company. Workers themselves have the duty to uplift their employment status through hard work, commitment and good performance, however progressive organizations usually provide career development programs that help workers recognize and improve their potentials (Zitiober 66).

There are programs that can help develop employees’ efficiency and loyalty like promotion (Berry et al. 377)), open communication channels with the management (Stuart & Sarow 337), and team building, among others. Companies that seek to gain employee loyalty also need to focus on maintaining a workplace setting conducive to their development and wellbeing. Brook (129) argued that a forward-thinking employer can support his employees’ professional growth by offering seminars and educational programs.

Organizational justice and reward allocation: According to Fischer (487), this variable is one of the primary instruments for preserving and expanding commitment and loyalty in the workplace. One study showed that practices that tend to reward and recognize the potentials and performance of employees had higher impact on employee commitment than the usual workplace programs, such as employee involvement and manager-employee relations (Gaertner & Nollen 975). This means that companies that seek to keep a dedicated and faithful labor force could relay this concept to workers by unequivocally satisfying degree of dedication and loyalty of workers.

Human resource management practices play an important role in communicating with employees as they inform the latter what is significant and rewarded in the workplace. Thus, companies could utilize HRM programs in order to heighten and preserve high degree of employee loyalty and satisfaction (Schein 109). On the other hand, organizational justice also shows that companies are honest and committed to the interests of their workers. Previous studies indicate that organizational fairness plays an vital role in developing employee loyalty (Eisenberger, Fasolo & Davis-LaMastro 51; Eisenberger et al. 500). Therefore, organizational policies and practices that support loyal and committed workers are likely to reinforce the bond between workers and the management.

Work-life practices and policies: Organizational policies and practices have positive impacts on employee satisfaction and commitment because they affect the employees’ interests and wellbeing. A study conducted by Roehling, Roehling and Moen (141) showed that organization’s work-life policies generally affect employee loyalty. A lot of business organizations now offer both work-related and non-work related support to employees in order to increase their level of loyalty. In this study, it was found that informal support has the highest impact on workers’ commitment and satisfaction. Work-life policies are additional expenses incurred by employers to improve their employees’ quality of life. Turner and West (346) argued that companies need to consider the long-range advantages of work-life policies that concentrate on employees’ requirements and family needs. These benevolent programs and policies could heighten employees’ morale and loyalty that could make them more efficient and more committed to the organizational goals.

Conclusion

While it is true that loyalty-motivating programs and policies are costly, organizations need to look at their long-term value and positive consequences. Apart from capital assets, human resource is one of the most important organizational assets in the corporate world. In this highly competitive market environment, business leaders and managers need to look at the ways to maintain and increase employees’ level of loyalty. This is because a motivated and loyal workforce could bring more profits and capital to the company through employees’ improved performance, competence and productivity.

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