September/October 2005
Loyalty Revisited
If you think employee loyalty is passé and high turnover is just a part of the corporate world, think again. Research shows that companies that spend more time and resources to cultivate loyalty see a big difference in their health and profitability. Loyalty has a long-term impact on a company’s reputation, productivity, brand development, and business growth. How so? Loyal employees believe in the worth of their company, and they are more likely to pass that positive message on to customers.
“Employee loyalty drives customer loyalty, which drives brand loyalty,” according to one business consultant. It’s a simple formula, and one that is too often taken for granted or just ignored. So let’s take Loyalty out of the attic and dust it off. Take it from your web-footed buddy: It’s time to give it a second look!
The Value of Smart Hiring
Today, the ideal job candidate holds more than a stack of degrees and a long list of references. The ideal job candidate ultimately matches a company’s culture and core values. Organizations are increasingly realizing that when they match an individual’s values to their own, everyone wins. The employee feels connected to the organization, and therefore tends to perform better and stay longer. For many years, companies have concentrated more on filling the spot than doing it the right way. Doing it the wrong way results in spending about one and one-half times the employee’s annual salary to undue the damage of a bad hire. What should companies do to improve their hiring scorecard? In addition to matching candidates to the company culture, here are some other suggestions:
- Accurately define the position. Companies don’t always spend the necessary time to create a proper job description. Experts say many organizations are now making sure that job descriptions accurately define the position and the ideal candidate.
- Try behavior-based interviews. One of the most effective ways to match a candidate with your core values is to use behavior-based interviews. For example, an organization may ask a candidate how he responds under pressure. His answers about past approaches to stress will help you determine whether his behavior mirrors your organization’s core values and culture.
- Ask pointed questions. Smooth talkers often win interviewers over, but they are not always ideal employees. To get a more accurate picture, ask pointed questions about candidates’ past performance, their job ethics, and what motivates them.
Start by Earning Trust
You could call it a trust deficit. A new survey finds that more than half of U.S. workers (58 percent) believe that most top executives look out only for their own interests, even when it harms the company. The survey results suggest that trust is sorely lacking in the workplace. And without trust, employee loyalty is next to impossible.
To keep employees from flying the coop, employers need to ask them what they really want from the job and whether the company needs to make changes in the organization, technology, processes, or even people. One trap that some employers fall into is believing that loyalty can be bought—with higher salaries, bonuses, and lifestyle perks. While monetary considerations are important, there’s more to it than money. All people long to be proud of their work and their companies, to contribute to an organization’s well-being, and to be respected and appreciated. And employees who experience those positive feelings are far more likely to be loyal to their companies.
To achieve real loyalty, says one management consultant, “everyone in your organization, from salespeople to cashiers, has to believe in what they’re doing. This is true even of the people who aren’t in classic customer-facing positions—those in marketing, operations, or even finance—because in order to do their jobs well, they need to ‘sell’ their ideas and needs up and down the chain of command.”
Engaging Employees
You’ve hired employees with superior skills. You’ve trained them. Now how do you make sure they stick around? By getting them involved at the highest level and keeping them interested and challenged. Here are some suggestions for enhancing employee involvement from Robert Pater, founder of Strategic Safety Associates:
- Foster creativity. In order for today’s organizations to succeed, they must compete at the highest level. Managers should encourage creativity and the generation of ideas at all levels, at all times.
- Involve them in change. The quickest way to lose valuable employees is to exclude them from organizational change. When managers allow employees to participate in all levels of change, employees are much more likely to support and understand the changes.
- Focus, focus, focus. Managers should continually help employees concentrate on their tasks and understand how their work fits into the mission of the organization.
- Tailor learning. Determine the most effective way to teach employees. While most workers respond best to kinesthetic teaching (questions, ideas, and examples), others respond to auditory methods (stories and explanations), while still others do best with visual teaching (charts and videos).
People First
Cal Darden worked his way up at UPS, from part-timer on the loading duck—er, pardon me, loading dock—to senior manager serving on the board of directors. He says UPS invests in training and development because it believes in putting employees first. That attitude has helped turn UPS into the world’s largest package delivery company and one of the most recognized and admired brands in the world. How did this company grow into a $33 billion corporation that has endured for nearly a century? Darden says there are four main reasons:
- Commitment to employees. UPS invests in its people for a lifelong career. The company demonstrates its commitment by offering equitable pay and benefits, tuition assistance, and learning opportunities.
- The duck stops here. UPS operates on the principle, “Walk a mile in the customer’s shoes.” Its goals are to serve the customer, accept responsibility, and never drop the ball. If a vehicle breaks down or a driver calls in sick in any UPS district, it is not uncommon for a manager to don a brown uniform and deliver the package himself. You won’t hear anyone say, “But it’s not my job.”
- Process. UPS doesn’t just ask, “How can we do the same things better?” It asks, “How can we change the way we do things so we can operate better?”
- Accountability. The package delivery company puts accountability into practice. It makes good on promises, or it pays the price. To that end, UPS pays close attention to meeting targets. It measures things like customer satisfaction so the company will know where it stands and what necessary adjustments need to be made.
Managing Values
Managing, motivating, and rewarding employees, in theory, are nearly impossible, because different employees respond to different management techniques. Understanding the basic, natural values of all people can lead to a more productive, content workforce. While many values are learned, at least seven are innate. Knowing which values are most important to which employees can help managers retain and motivate their staff.
- Empathy. Workers in this group want to feel connected to the whole. Group activities will be their greatest incentive.
- Sensuality. Offer rewards that appeal to physical experiences, such as dinner certificates and sports outings.
- Wealth. These workers respond best to things that offer value, such as stock certificates and financial management advice.
- Power. Here’s where titles, special privileges, increased responsibility, and other things that center on recognition work best.
- Aesthetics. These workers enjoy the finer things in life, including offices with a view and opportunities to redesign their office.
- Commitment. Give these workers an opportunity to work for a cause or benefit.
- Knowledge. The more they know, the happier these employees are. Offer them books, seminars, coaches, and classes and they will feel like a lucky duck, indeed!
Foster Continuous Learning
To foster loyalty, employees need to stay interested and be challenged in their work. Encouraging continuous learning and growth are critical to keeping employees interested and involved. Margareta Barchan, the CEO of a successful Swedish organization, outlines six conditions necessary to foster learning:
- Open dialogue. Employees should feel free to contribute ideas and make recommendations.
- Values. Solid values should help shape the company and its culture. Embracing the values provides trust and camaraderie.
- Sharing. Create an open atmosphere where sharing knowledge occurs spontaneously and is a part of the culture.
- Flexibility. Barchan seldom “fills a position” when hiring. Instead, she hires people based on their experience.
- Trust. Being trusted imparts feelings of motivation and job satisfaction.
- The right people.The right employees let you attract and retain customers. Look for people who willingly share knowledge, have the right skills, and match the organization’s values and beliefs.
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