Encyclopedia of Business and Professional Ethics

Living Edition
| Editors: Deborah C Poff, Alex C. Michalos

Employer Loyalty

  • Kemi OgunyemiEmail author
Living reference work entry
DOI: https://doi.org/10.1007/978-3-319-23514-1_334-1

Introduction

Loyalty is a quality by which one party upholds the interests of another whether the other party is present or absent. At the very minimum, it means fulfilling what one owes to others explicitly or implicitly. While loyalty is not always acknowledged when present, the lack of it is quickly tagged as disloyalty. A loyal building contractor would work to fulfil the terms of the construction. A loyal employee would maintain confidentiality about the company’s trade secrets even if offered money by the competition. Going beyond the minimum, loyalty means standing by the other person even when it is not a duty or when it means going out of one’s way. Beyond the minimum, it often includes some form of affective commitment, or adherence and devotion (Coughlan 2005). A loyal friend would try to avoid publicizing negative information about his or her friend even if it is true. A loyal customer might buy a particular company’s products or services even when they are more expensive than a competitor’s. Whether from the perspective of employers or from that of employees, loyalty would ordinarily be expected at both levels (Ogunyemi 2014).

Notwithstanding the foregoing, it must be clarified that loyalty is not necessarily a good thing especially when it is blind; rather it is a quality that needs to be qualified by the extent to which its cause or its recipient is noble. Thus, for example, being loyal to a gang of thieves could only be admired in an abstract manner. And loyalty that prevents an employee from blowing the whistle to the appropriate authorities, when all internal resources have been exhausted to counter a harm being done to the common good by a company, is questionable. Similarly, the loyal agent’s argument remains unacceptable as an ethical position when proffered in the defense of criminal or unethical actions, as shown in the famous example of the Nuremberg trials where the justification of “I was only following orders” was found inadequate and could not absolve an individual of personal responsibility. These considerations clearly indicate that loyalty has limits and that senior administrators especially cannot escape being held responsible for wrongdoing by appealing to a duty of loyalty to their employer.

In general, however, and keeping in mind these restrictions, employees have usually been called upon to display loyalty to their employers. If their loyalty fails, the business usually suffers. Yet, possibly the most effective spur for employee loyalty is employer loyalty. Employers who exhibit no loyalty to their employees should not be surprised if their employees are not loyal to them. In this entry, loyalty is discussed with an emphasis on employer loyalty and ways to demonstrate it, to identify and address its vulnerable points, and to build it by bridging gaps in communication. Toward the end of the entry, some costs of employer disloyalty are flagged. The more familiar concepts of employee disloyalty and loyalty serve as a starting point for the discussion.

Employee Loyalty

Among the most commonly found instances of employee disloyalty are deliberately not cooperating with their work teams, leaving the employer in the lurch, refusal to be creative at work, information hoarding, reluctance to go the extra mile, apathy in the face of a crisis, non-dependability, lack of interest in self-development, lack of willingness to develop subordinates, lack of dedication at work, and choosing personal over organizational goals when faced with situations where the two interests conflict.

Employees who quit without notice, who only do their routine jobs and would not apply their minds or their imagination to the task at hand in order to avoid extra work, who show no concern when the company is going through a tough crisis, who cannot be relied on to do their best for the company if there are customer complaints or if a query comes from regulatory authorities, who deliberately dampen the mood of others at work, who are sent to training programs and avoid learning, who try to keep down their subordinates as if these were competing for their jobs, and who have their own agenda to carry out and spend company time and resources pursuing it – all these are identifiable as cases of disloyalty that could hamper organizational progress.

Yet, it is difficult to encourage employees to take care of the interests of the company at possibly their own cost, if they are not reasonably sure that their own interests are also the company’s interests. The above is one of the reasons why it is important that employers are loyal to their employees.

Loyalty from Employers

Instances of disloyalty of employers to their employees are as common if not more common, yet much less attention is given to them. These incidents undermine employee morale and productivity. Employer loyalty, as explained in the introduction, should mean going beyond merely fulfilling contractual obligations and should extend to some understanding of shared value, in a long-term transaction which leads to mutual adherence and devotion (Coughlan 2005). The following 11 subtopics depict ways employers should show loyalty; their headings could also serve as a list of the characteristics of employer loyalty which show the employer’s concern for the legitimate interests of the employee.

Solidarity: Employees expect their employers to back them up when there are problems with customers or with suppliers. Whether these stakeholders are internal or external to the organization, they expect “dirty linen to be washed at home.” Even when they may be at fault, they count on the boss’s loyalty not to upbraid them publicly, much in the same way as employers expect employees not to whistle-blow without exhausting all internal remedies before resorting to a public disclosure. Employees are happy with superiors who support them in front of clients or clarify issues on their behalf when there are disputes with clients.

Fairness and Consistency: Employees expect their employers to provide adequate resources for the tasks to be done and, if these are not available, to tailor their expectations of the output in proportion to the input and not ask the employees for a miracle. Employees also expect that loyalty to them will make the employers acknowledge and appreciate it when they have actually wrought a miracle by producing output with less than ideal input.

Goal Alignment and Fit: Employees expect their employers to be interested in promoting a fit between their personal goals and the organizational goals. When one person is out of alignment, it could affect that person’s engagement with the job and, consequently, others who work with him or her as well as the organization’s goals are negatively affected. Employees would find it difficult to continue to invest themselves in organizations that do not invest in them in return.

Recognition: Employees expect their employers to acknowledge effort even when the results do not come. When organizations reward only results and never the effort put in, it can lead to a perception of injustice. Organizations that measure effort as well as results find ways to be fair to all their workers. When people’s contributions are not acknowledged or rewarded for long, they could become bitter and indifferent to the organizational goals.

Honesty: Employees expect their bosses to be honest with them when communicating. For example, they expect employers to admit mistakes when appropriate and not blame their subordinates instead. Also, employees expect their bosses to acknowledge, where appropriate, great ideas that have come from employees rather than themselves. Nothing undermines trust in this relationship more than situations when an employee comes up with a brilliant solution to a problem and the boss takes all the credit (and glory) for the idea without acknowledging its source. Berkley and Watson (2009) speak about accountability as owed to employees by the organization and the need to have it reinforced by legislation.

Sincerity and Directness: Employees expect their employers to tell them things directly, to be straight with them, and to tell them the truth. If an employer gets at the employee through a third party rather than directly, the employee may feel betrayed.

Development and Freedom to Create: Employees expect to be treated as intelligent beings, to have their ideas listened to, acknowledged as good when they are, implemented when reasonable, and appreciated as their contribution to the firm. Employees expect to grow on the job, that is, to be given opportunities for professional and personal development. They sometimes also expect to be given an opportunity to be moved from one job to another, so as to avoid the monotony of repeating the same operations year in year out. Thus, a global leading firm goes so far as to regard enjoyment of work as an “actionable right of every employee” (Simon 2009, p 262), and Rosanas and Velilla (2003) suggest that employers should be interested in employees’ career progress and personal development.

Respect: Employees expect their employers to address them respectfully. Non-respectful language is noise to communication and obstructs it. Everyone knows how critical clear and unambiguous communication is in a relationship. Mutual respectfulness, both verbal and nonverbal, breeds cordial interaction, and this is good for the climate of the organization. The more acrimonious a relationship is, the more difficult it is to elicit loyalty from the employee.

Representation: At meetings or other interactions with higher-level officials of the company, employees expect their bosses to be their voice, so that, whether it is resources, responsibilities, or culpabilities that are being allocated, they have someone to represent their interests. Similarly, they expect loyalty from those who represent them at the top-level meetings where promotions or protection may be at stake.

Discretion: At times, employees may say something to their employers in confidence. Even when they lack the temerity to indicate that such communications are confidential, they do expect their bosses to be discerning enough not to later use such communications to the employee’s disadvantage.

Dependability: Employees expect their employers to be there for them in times of crisis, much in the same way their employers expect them to remain committed during the company’s difficult moments. When the employer does not support an employee when there is a problem, it may strengthen turnover intentions if the employee has some alternatives.

The above 11 points provide some insights as to ways in which employers can show loyalty to their employees. Through each one of them, a basis is established for the employee to reciprocate with loyalty.

Reciprocity: The Need to Recognize and Resolve Loyalty Risks and Conflicts

The importance of having a reciprocal link between the expectations of employers and employees cannot be overemphasized. While knowledge of how employer loyalty fuels employee loyalty is essential (Ogunyemi 2014), awareness of the converse is also instructive. Employer disloyalty fuels employee disloyalty, and, therefore, employee loyalty is difficult to sustain when it is not reciprocated. Realizing the importance of meeting employee loyalty expectations, employers should be quick to recognize opportunities to display loyalty and make use of them. Loyalty risks and conflicts resulting from gaps in employer loyalty should therefore be quickly flagged and resolved, thereby reassuring employees. For example, a football coach should look out for potentially difficult relationships between him or her and the team members and attend to things immediately. A leader does not allow wounds to fester.

Clarity and Consistency in Communication: A Tool to Foster Mutual Loyalty

Communication is belied by action when the two are inconsistent. Employees that do not observe behavior that they would ordinarily expect in a climate of trust and loyalty will adjust to what they find in reality with reservations about the degree of loyalty they should owe to the firm in return. In order to communicate the clear and unambiguous message of employer loyalty, employers may need to smoothen out any inconsistencies that may inadvertently exist in their current messaging patterns within the organization. They need to confirm whether they are saying what they want to say.

Moreover, employees expect their bosses to be loyal not only to them but also to the company’s avowed culture, values, and principles. Any perceived betrayal of loyalty expectations due to incongruence in verbal and nonverbal messaging leads to cracks in employee loyalty. Some instances of such messages are discussed below:

The “we are customer-focused” message. Companies sometimes insist on the need for employees to have an “internal customer” focus, meaning that they should attend to their co-workers as if they were their customers. However, this concept is usually emphasized horizontally but not vertically, such that among themselves, employees are pushed to see their colleagues as customers to whom they owe good service, but bosses are not asked to look at their subordinates as customers whom they have to serve. The message become increasingly ambiguous if the leaders fail to walk their talk.

The customer feedback is important to us” message: The customer or employee should be asked – how did we serve you today? If employers pass the test, the benefit of having well-served employees will be transferred to the customer. If they do not, it becomes clear that the top management are not role models and that employees are somehow expected to have split personalities: wolf for their colleagues/subordinates and lamb for the customers.

The “when something has gone wrong, admit it” message: Seldom do managers admit their mistakes boldly without fear of losing face. If they are unable to articulate statements such as “I was wrong...” then it is also difficult for employees to reciprocate.

The “everyone is equal; it does not matter who you know, we judge on merit” message: Bosses who try to pass across this message and yet fill the company’s vacancies based on personal recommendations can also create an atmosphere of distrust and disloyalty in the organization. When nepotism becomes the norm, once a new employee comes in, the old ones try to find out “who does he or she know?” in order to know how to treat him or her. The grapevine fills in communication gaps with gossip, while bootlicking and backstabbing flourish and undermine mutual loyalty.

The “we are fair minded” message: It is important to watch out for lapses of fairness or incidents of discrimination, e.g., in workload distribution. It is also good to watch out for the temptation to label employees and not give them second chances after a first impression is made. Every effort should be made to limit subjectivity in appraisal systems even if it cannot be eliminated.

The “we care about you” message: This message is underscored by making available the tools and other resources that each employee needs to get his work done, and by giving explanations whenever this is not possible. It also involves active interest in the employee’s development. If employees never hear of a plan for their development, they will find it difficult to believe that the company cares about them. Companies that take the trouble to give feedback to people who are not hired after a recruitment process already stand out as companies that empathize and go an extra mile. These companies are more likely to find loyal employees that will go an extra mile for them.

In the same vein, the manner in which layoffs are done can show both to outgoing employees and to those left behind how much the company cares. For example, a certain company invited targeted employees for a meeting outside the office and informed them that they were being let go. As they talked, codes and passwords were already being changed and, shortly after, their personal effects would be handed to them at the front gate. This approach showed little respect for the persons involved and little or no sense of loyalty toward them. The dismissed employees felt they had been used for as long as they were useful. Furthermore, their colleagues, who did not receive this treatment, were nevertheless affected. A loyalty poll taken before and after would have gauged the effect empirically. Badly handled layoffs have adverse effects on knowledge management resources, on the perception of how ethical the organization is, and on the loyalty of those left behind.

The “people are our most important assets” message: Over time, people tend to experience greater adherence to leaders whose actions reflect their words and therefore command respect and commitment. Employers can earn the commitment of employees by taking concrete steps to show that they care for employees rather than only saying it.

Costs of Employer Disloyalty

The costs of employer disloyalty are real though not easily quantified. Cases abound of disgruntled employees using company resources for their own private practice and stealing clients from the company. Sometimes employees abstract cash and materials, as happens in beauty salons, pharmacies, household help, or cooking in institutional kitchens. Other times employees take away customers, either selling their own wares within the employer’s premises (e.g., CD shops) or outside the premises (e.g., photographers; opticians, tailors). The latter option is often also accompanied by stealing the employers’ materials. These acts are not always or solely caused by employer disloyalty; however, it is easier for an employee to dispense himself from putting his employer’s interest above personal preferences when he perceives that the employer does the same to him. It is also easier for badly behaved employees to excuse their bad behavior and to persist in it when they feel badly treated by their employers.

Time spent off the job is also time lost to the organization: employees selling goods to colleagues during worktime, doing online jobs, answering unnecessary emails, browsing for general information or visiting online social networking sites, chatting on social media with friends for hours, searching for jobs, rewriting their CVs, etc. At a less tangible level, brand theft could happen when the employees use official connections for personal purposes, e.g., to get preferential treatment for themselves or their families. It would be difficult, however, to accuse such an employee of disloyalty in cases where the office also uses the employee’s personal networks for selling their products and/or services.

When employers steal employees’ private hours with the use of intrusive devices such as smartphones and tabs, weekend work schedules, and late closing hours, employees may rebel, consciously or unconsciously, by frittering away the actual working hours and taking sick leave as often as possible. Consequently, employers have to spend time and energy scaling the walls of internal resistance thrown up by non-loyal and disloyal employees, and this can be a significant cost to the company.

Employees may leave the organization without being guilty of disloyalty, much the same as employers may terminate the employment contract without such an accusation being levelled. The critical factor may lie in the way the severance/separation is effected. If the manner of disengagement does not reflect employer loyalty, the employee leaves bitter, takes with him knowledge acquired in the course of employment, and does not care about transmitting it to the next person. Moreover, he may transmit it to a competitor, without a thought about the possible harm to his previous employer. Recruitment, on-boarding, and retraining expenses also matter. They affect productivity, continuity, customer loyalty, and many other variables that have a direct impact on the company’s bottom line.

These are some of the costs that a company incurs when it chooses, strategically or negligently, to be disloyal to its employees.

Conclusion

Within this entry, the employer-employee relationship has been acknowledged as one where mutual loyalty is expected, and that can be enhanced by experiences of loyalty or damaged by experiences of disloyalty. In the latter situation, many problems may ensue. Employees may have good ideas and conceal them. Knowledge sharing, transfer, and management become difficult, especially in knowledge-intensive companies such as those in the consulting industry. People may shirk work when they can get away with it. Staff foment may have difficulties within their areas of control and obstruct the work of other team members, other teams, or the whole company. Some may leave the organization, causing recruitment and comprehensive training to become necessary. The organizational culture may be negatively affected.

In conclusion, loyalty expectations are not a one-way road to be traversed only by employees; reciprocity in loyalty is beneficial to both parties. Since employer disloyalty can have a negative impact on productivity, it is useful to be able to identify the types of employer actions which may be perceived by employees as disloyal and which may reduce employees’ loyalty to the organization. Organizations could also assess their levels of loyalty as employers and take action to raise these levels. For more general purposes, a code of conduct for employers can serve as a professional guide to the forms of loyalty that all employers could identify with, while perhaps giving specified guidelines for what would constitute best practice within each industry.

Cross-References

References

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  2. Coughlan R (2005) Employee loyalty as adherence to shared moral values. J Manag Issues XVII(1):43–57Google Scholar
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Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  1. 1.Lagos Business SchoolPan-Atlantic UniversityLagosNigeria

Section editors and affiliations

  • Cristina Neesham
    • 1
  1. 1.Swinburne University of TechnologyMelbourneAustralia