Employee Loyalty in the New Millennium

By Powers, Edward L. | SAM Advanced Management Journal, Summer 2000 | Go to article overview

Employee Loyalty in the New Millennium


Powers, Edward L., SAM Advanced Management Journal


As the 20th century winds down, predictions about the nature of the workplace in the new millennium have increased as anticipated (e.g., Boyett & Conn, 1991; Boyett with Boyett, 1995). Some aspects of the future workplace, e.g., change (more rapid), self-managed teams (more common), organizational structures (flatter), seem to be straightforward extensions of the 90s. However, for one workplace dimension, employee loyalty, the future is somewhat less predictable.

Status of Employee Loyalty

A typical observation during the last decade was that employee loyalty has eroded and is "continuing to slide" (Jackson, 1997). Downsizing, rightsizing, and reeingineering have resulted in layoffs, a concomitant reduction in employee loyalty (see The Economist, 1993; Moskel, 1993), and an urgency for organizations to "win back employee loyalty" (Osborne, 1991).

Conversely, however, there appears to be significant skepticism about the actual demise of employee loyalty. In "The Employer-Worker Bond May Still Be Quite Strong" (The Wall Street Journal, 1998), a Sibson & Company (Raleigh, NC) study reported that nearly 80% of U.S. workers are committed to their employers and 66% believe their employers are supportive of their work efforts. Only 16% plan to leave their job within the next year.

Marcia Stepanek (1997) reports that a poll commissioned by Marlin Consulting of North Haven, CT "finds workers secure, loyal." Nearly all survey respondents -- 94% of full-timers and 91% of part-timers said they feel some loyalty to their company. Sixty-four percent of full-timers said they feel "very loyal." One of the most comprehensive studies of employee loyalty was conducted in 1997 by The Loyalty Institute of Aon Consulting. The study was conducted among a nationally representative sample of 2,020 employees, and it, too, found that the American workforce is basically loyal. And in Industry Week (1989). John Sheridan summed up the skepticism by addressing the question "Loyalty crisis: just a myth?"

When reviewing the literature, however, an important underlying problem becomes apparent: much of the disagreement about the future of employee loyalty results from confusion about the concept itself. Employee loyalty does not have a universal definition, in many respects reminiscent of the classic "Management Theory Jungle." Harold Koontz (1961), in explaining the "management" semantics problem, said:

But what is rather upsetting ... is that the variety of approaches to management theory has led to a kind of confused and destructive jungle warfare ... In order to cut through this jungle and bring to light some of the issues and problems involved in the present management theory area... it is my purpose here to classify the various "schools" of management theory, to identify briefly what I believe to be the major source of differences, and to offer some suggestions for disentangling the jungle. It is hoped that a movement for clarification can be started so ... we will not be a group of blind men identifying the same elephant with our widely varying and sometimes viciously argumentative theses.

Consequently, it is important to first disentangle the semantic "loyalty jungle" and develop a conceptual framework in which to analyze employee loyalty in the 21st century.

* Loyalty

"Loyalty, as a general term, signifies a person's devotion or sentiment of attachment to a particular object, which may be another person or group of persons, an ideal, a duty, or a cause. It expresses itself in both thought and action and strives for the identification of the interests of the loyal person with those of the object" (Encyclopedia Britannica, 1998). Synonyms include constancy, devotion, fidelity, faithfulness, allegiance, service, and deference. Loyalty may be connected to a variety of contexts, as indicated in Table 1. In each context, loyalty has an essentially different connotation. …

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