Staff loyalty is not always a good thing

How many bosses could bank on their employees threatening to quit en masse if they were abruptly ousted? Sam Altman received such a show of support from more than 700 staff after he was fired from Open AI that he was swiftly reinstated by the board.

But this level of loyalty is not typical – and may not always be a good thing.

Loyalty is associated with being “moral and upstanding”, particularly when it comes to family, friends and romantic partners. In the workplace it is more complicated. It can be rational (I work here because I’m paid a decent wage and the commute is not awful); emotional (I believe my work is valued, my opinions are listened to and I want to contribute to the future of this company); or more likely a bit of both.

Management experts say staff who are loyal to their employer are inclined to invest more time and effort in their jobs, helping to create an engaged and higher-performing workplace. In turn, they receive promotions and pay rises. They have a greater sense of belonging and potentially a longer career at the same organisation.

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But it is not all rosy. People who are too loyal are more likely to take actions that are deemed unethical to keep their jobs and protect their employer, according to a 2021 academic paper. Others might overlook wrongdoing and be less likely to expose corruption by whistle-blowing. Loyalty is sometimes seen as such a force for good that it can be used to justify bad behaviour.

Exploited

Often companies and senior bosses are the real winners of employee loyalty. Research led by Matthew Stanley at Duke University’s Fuqua School of Business published this year found that managers were more likely to exploit loyal individuals.

Stanley recruited almost 1,400 managers to read about a fictional 29-year-old employee called John, who worked for a company that was trying to keep costs down. They had to decide how willing they would be to ask John to work longer hours and take on more work without more pay. Researchers created various scenarios including branding John as loyal versus other traits such as honest and fair. Managers were more willing to ask loyal John to take on the burden of unpaid work.

“Employers take advantage of loyal and passionate workers because they believe that for [them], the work itself is its own reward,” says Neil Lewis, associate professor of communication and social behaviour at Cornell University and an author of the 2021 paper. “It’s a double-edged sword: loyalty has benefits for both employees and firms, but it can also keep us from seeing and doing things that need to change ... It is useful to periodically step back and reflect on why we are loyal to particular people, things or ideas.”

Companies try to boost loyalty among staff to help offset a shortage of skilled workers, reduce churn and cut recruitment costs. Consultancy Gallup’s latest state of the workplace report showed that half of the 122,416 employees who took part in a global survey were looking out for new work. “You can’t guarantee anyone will stick around these days,” says a consultant who advises boards.

This is particularly true of younger generations, many of whom think differently about tying themselves to one company for decades. A headhunter told me the corporate bosses she works with tend to believe new graduates are less “dutiful” than previous generations and not as willing to tolerate perceived abuse. They trust their bosses less and are not as patient when it comes to career progression, seeing little benefit in keeping their heads down and following orders if they do not see results quickly.

It is useful to periodically step back and reflect on why we are loyal to particular people, things, or ideas

—  Neil Lewis, associate professor of communication and social behaviour at Cornell University

Not every company can hand out financial rewards – such as equity, higher pay and bonuses – so they are turning to other tactics. But wellbeing offerings such as meditation apps do little to combat burnout. Discount shopping vouchers pale in comparison to a pay bump.

There are more meaningful ways to inspire loyalty, such as recognising good work, empowering staff, eliminating toxicity and communicating better. This can go a long way to make employees feel appreciated and motivated.

Still, tracking loyalty is tricky beyond looking at crude metrics such as staff turnover. Some companies obsess over employee engagement, a broader measure that includes the emotional and psychological involvement a person has with their work.

“Emotional loyalty is longer term. The rational loyalty is fickle,” says Jeremie Brecheisen at Gallup, which helps companies track engagement.

Academics such as Lewis at Cornell note that it is also important for employers to ask themselves whether they have earned the loyalty of their staff.

“Why should your employees be loyal to you? What are you doing on a regular basis to make sure they are having a meaningful and rewarding experience while working for you?”

He adds that staff often respond to more co-operative relationships. “If I see that you’re trying to help me, I will do my part to help you too. That effort on the employer side can cultivate a sense that ‘we’re all in this together’.” – Copyright The Financial Times Limited 2023