Contemporary Company Loyalty Takes a Leap over Traditional View of Loyalty

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Home > Articles > Contemporary Company Loyalty Takes a Leap over Traditional View of Loyalty

 Contemporary Company Loyalty Takes a Leap over Traditional View of Loyalty

Tan Chee Teik | General
July 21, 2017
​Workers today don’t aspire to work for the same company for life. They will job-hop to gain experience or better remuneration. Managers must take time to promote company loyalty.

IN March 2017, Toshiba Corporation won approval to delay its fourth quarter earnings till 11 April 2017. Earlier, the firm had multi-million dollar losses in its United States nuclear unit Westinghouse Electric. There were also reports of accounting fraud by senior managers at Westinghouse. In end March 2017, the nuclear energy firm filed for Chapter 11 bankruptcy protection. It is believed that top executives pressured staff to cover up weak results for years after the 2008 financial crisis. For the nine months ended December 2016, Toshiba posted an operating loss of S$7.3 billion.

IMAGE: 123RF
Analysts say that unwavering company loyalty, the backbone of Japanese corporate culture, resulted in Toshiba’s scandal. Together with lifelong employment, Japanese workers in many corporations are greatly loyal to their companies.  

In “Rethinking Company Loyalty” in Harvard Management Update, Ms Lauren Keller Johnson says that since the lifetime contract expired long ago, your employees are more likely to display loyalty to their careers than to the company. Workers today don’t aspire to work for the same company for life. They will job-hop to gain experience or slightly better remuneration.

Reputable companies with famous brand names are more attractive to recruits. Many don’t have to think twice if they are offered a post at Google, Alibaba.com, or Uniqlo Company Ltd. Firms win workers’ loyalty if they are generous with providing new skills and support for their professional advancement. The new management concept of loyalty is still unchanged but today they don’t expect workers to remain with the firm forever.

Ms Johnson throws out some ideas for executives and managers to balance career and company loyalty. Companies should align career growth with the company’s goals. To achieve this alignment, managers can help their people identify the links between the workers’ professional goals and the company’s goals. Managers should discuss their direct reports’ career goals with them as often as possible.

She encourages managers to design work with variety and autonomy. She says: “Jobs that provide variety and freedom to make decisions and mistakes engender extensive loyalty, the experts note. Allowing people to take ownership of projects gives them the opportunity to develop new skills and the chance to show what they can do.”

It is good to focus on relationships as loyalty is cemented through relationships with supervisors and colleagues.

Job Involvement
Job involvement approaches place an emphasis on designing work in ways that will motivate and enhance job performance. Job enrichment focusses on creating individual tasks that give people feedback; increases their influence on how to perform a particular task; require them to use several skills; and allow them to complete the project.

Another job involvement strategy calls for the creation of self-managing work teams. It tries to create work group tasks and group performance measures and to make every group member feel responsible for its performance. Another name for such groups is “autonomous groups”. With the team approach, interpersonal skills and group decision-making skills have to be developed. The reward system is also altered with teams receiving skill-based pay.

Teams can usually make certain decisions that individuals cannot. Both individual and teams can control the way work is done. They can practise inventory, quality management, and other related activities but teams can also make personnel management decisions about hiring and dismissals, and they can select their supervisors.

Job involvement requires a big change in mindset of management and workers as it represents a huge change in the fundamental operations of an organisation.

Focus on Expertise
Loyal employees seldom want to say “no” to the supervisor when assigned with a new job. They have invested in the company, and they want to impress their bosses. But always asking them to do more, and letting them take on added responsibilities, will make them reach their limits.

Managers should allow employees to focus on their expertise and on projects that can make full use of that expertise. Other projects can be delegated to other people. By assigning too many projects to a particular employee, other workers can be construe this as favouritism. 

Sometimes company loyalty can be seen as complacency. A worker with a comfortable job with few responsibilities will naturally not quit for another firm. While it is good for employees to feel comfortable, ensure that they have a goal to aim for, otherwise they stagnate in their posts.

Some employees continue to stay with the company because the older employees enjoy more days of annual leave. They may also not want to take the risk of joining another firm where they have to struggle up the corporate ladder. When I see a worker with more than 20 years of service resign I wonder what the reason is. There must be some dissatisfaction in his/her work. It is good for managers to conduct an exit interview rather than leaving it to human resource.

Explore other loyalty benefits such as work-life balance or paid annual vacation with the family every three years.

It takes time and effort to build up company loyalty. Loyal workers form the backbone that leads to the success of the company.



Mr Tan Chee Teik is a freelance journalist. He is a regular contributor to M360 and Today’s Manager.


Copyright © 2017 Singapore Institute of Management

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