Jeffrey Saltzman's Blog

Enhancing Organizational Performance

New School Employee Loyalty

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Being a “company man” used to mean that once you left school you joined the organization where you were likely to remain for your entire career. The typical stereotype was of someone toiling away at the various tasks assigned, while seated at a gray metal desk, in a sea of gray metal desks, wearing a dark suit and white shirt, an old fashioned adding machine with a crank handle residing in one corner. When the whistle blew the company man would take his lunch out of the paper bag that his dutiful wife had prepared, pour a cup of coffee out his thermos and relax until the end of the lunch period at which time he would return to his assigned tasks. Uncomplaining, literally cranking out work, working in relative obscurity, the company man put the company first, ahead of family, friends and personal interest. Today if that concept still existed we would also have “company women” or perhaps the more politically correct “company persons”.  There are a lot of good people who were a “company man”.

What did the company person get in return for subsuming their personal interests and desires for those of the company? They got a stable job, good benefits, yearly salary increases, and the comfort of knowing that they could provide for their families. And while comfortably anchored into the middle class, they also got the carrot dangled in front of them that should they continue to work away, performing well, demonstrating that they put the company ahead of all else, future opportunities and rewards (the promise of Valhalla), possibly a promotion, might be there for them, but perhaps just slightly out of their reach.

The company man died in the 1970’s and 1980’s amid business process re-engineering, layoffs, mergers, reorganizations and general turmoil. Was it an illusion all along, an illusion that could be maintained as long as companies continued to prosper? I don’t think so. Cradle to grave employment and the culture around it were firmly ensconced in our society. The death toll of the concept resounded loudly when the vernacular of “company man” went from a term indicating positive characteristics of loyalty and faithfulness to one with negative characteristics. The “company man” became known as a “yes” man, a “brown-noser” or a “toches lecher”. (If I translated that for you this piece would have to be given an “R” rating so let’s just leave it in the Yiddish.)

Years went by. Many pieces were written and much thought given to the concept of employee loyalty. Companies still wanted their employees to be loyal, but could not or were not willing to pay the traditional cost. The employment contract that had existed had been broken. The carrot of job security and all that it implied was found to be bitter and employees when offered it in its new form to chew upon spit it out.

Consider the concept of Employee Confidence©.  Employee Confidence is made up of Organizational Confidence© and Personal Confidence©. Each of those two dimensions has an internal and external component. Organizational Confidence is measured by asking employees questions about the way the current organization in which they work operates and Personal confidence is about their own personal future within or external to that organization.

Let’s focus on internal and external Personal Confidence and its implications for employee loyalty. Personal Confidence Internal is measuring the employee’s perceptions of their job security, how bright their future is with their current employer and is their current employer developing or grooming them for future assignments. These are the traditional rewards that were offered in exchange for loyalty from the employee. Work hard, stick around, do what you are told, toe-the-company-line and we offer job security and your future will be bright.

Personal Confidence – Internal is specifically measured by asking the employee such items as:

  • I currently feel confident that I will not be laid off from my job.
  • I feel there is a promising future for me at my organization.
  • My organization is helping me develop the skills that I will need in the future.

Personal Confidence – External is measuring the employee’s perceptions about having transportable, up-to-date skills, resulting in equivalent job opportunities being available to them elsewhere and is specifically measured by asking such items as:

  • If I left my current job, my skills would allow me to find a similar job.
  • If I left my current job, my skills would allow me to find another that paid me similarly or better than what I earn now.
  • Other organizations are hiring people with skills and experience like mine.

Personal Confidence – Internal, as I mentioned, is the traditional offering that was supposed to generate employee loyalty and I would propose that Personal Confidence External is the new offering that would create new school employee loyalty. Personal Confidence is all about helping to provide employees a sense of security about their lives. Traditionally, that security was generated internally by a company – you get to keep your job and can prosper by not leaving your current employer. You may transfer around, you may take new assignments in new divisions but you stayed with your current employer. Your opportunities lay within.

But that compact was broken, so replacing that internal security, dependent on a company’s ability to succeed financially long-term and its good will is an external source of security. Providing employees with an external source of security means keeping them sharp, so that should something happen that causes them to leave their current employer (for whatever reason) that they are very attractive to other employers – that they are a marketable commodity. Opportunity that is external to your current employer must be considered.  If I am a marketable commodity, attractive to other employers I have a higher level of Personal Confidence. If a company can no longer offer internal job security, Personal Confidence – Internal, it needs to offer security of another sort to generate employee loyalty and that loyalty can be generated by offering Personal Confidence – External, or external job security.

As I have written elsewhere, while it may sound counter-intuitive an employee that is more attractive to your competition is also more attractive to you and less likely to jump to the competition with the first phone call they receive from a headhunter– unless other conditions are truly onerous. They are less likely to jump because they know that if they stay the only thing they may lose is some time. They are being kept sharp, their skills current and they will receive additional opportunities to move down the road. If by staying I am losing my skills, the first phone call I receive from a headhunter, even if the offer is not the perfect fit, I will be leaving my current employer for I am losing much more than simply time.

In a study on Employee Confidence that was done across 16,000 full-time employed people, of at least 18 years of age, in companies of at least 100 people in size, across 12 countries, we found some interesting results when contrasting Internal and External Personal Confidence. In response to the item “There is a promising future for me at my organization”, 32% of the unfavorable respondents indicated that they were going to leave within one year, 61% within two years.  Meanwhile 79% of those who responded favorably indicated that they were going to stay at least three years.

A similar pattern was found in response to the item “My organization is helping me develop the skills that I will need in the future”, with 24% of the unfavorable respondents indicating they will leave within one year, 52% within two years and 74% of those responding favorably indicating that they would stay at least three years.

Other work that I have done shows a very high correlation with stated intentions to leave within a specific time frame and actual employee behavior. These two findings lend support to the notion that a lack of Personal Confidence – Internal can drive people out of the organization.

Will increasing an employee’s Personal Confidence – External, making them marketable, increase the likelihood also that they will leave? Would it be a waste of the company’s money if an organization were to provide training and developmental experiences to its employees so that they had higher skill sets, higher levels of Personal Confidence – External?

In response to the item “If I left my current job, my skills would allow me to find a similar job”, 11% of those who respond unfavorably indicate that they will be leaving within a year and that number changes to only 13% for those who respond favorably. In other words there is very little difference on intention to leave between those who feel that their skills have been kept sharp and those who feel that their skills are somewhat dated. Investing in people and keeping their skills current does not make it more likely that they will jump ship. Those numbers move to 29% and 35% respectively for those who say they are leaving within two years. And for those who are sticking around for more than three years, 71% of those who feel that their skills are diminished, who possibly feel trapped, say that they are not going anywhere while 65% of those who feel good about their skills say they are there for the long haul. So those more likely to stay longer term are those who feel less current in their skills.

© 2010, 2011 by Jeffrey M. Saltzman. All rights reserved.

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Written by Jeffrey M. Saltzman

November 8, 2009 at 11:14 am

One Response

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  1. I believe we are also seeing a new wave of learned helplessness amongst employees: the confluence of the economic shift, the anxiety that thing can stay bad or get worse, the incremental removal of loyalty triggers within companies, and the media hype of how bad it is everywhere else have create a strong sense of ‘just keep your head down, stay under the radar and hang on’. Ironically I see many people who claim things are getting better because they are not as painful as they were 1-2 years ago – so much so that ‘a bad working situation’ has become the new ‘good working situation’!

    Somewhere between loyalty and eagerness to leave is a wide span of experience – call it disengagement, apathy or reengineered expectations of the workplace.

    No this isn’t true for all companies and all employees, but true for more today than I can recall in years past.

    Marc Sokol

    February 8, 2011 at 6:33 pm

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