The Hindu Business Line : Loyalty: An over-rated virtue?

"Modesty is an over-rated virtue" said the famous economist, John Kenneth Galbraith, with a touch of his own imitable brand of sardonic humour. The same seems to apply to loyalty which, whether over-rated or not, has become an endangered virtue in the fiercely competitive, dogeats-dog, milieu of the business world today.

It is the experience of most customers that just when they think they have developed an understanding with a sales person, service engineer or a customer relations executive in attending to problems connected with a product or service, they find that the person they had been dealing with has left the firm. The by now common refrain, when you ring up anyone you had known in any company after an interval of four to six months, is, "He is no longer with us"! People seem to be job-hopping, ever in search of fields fresh and pastures new.

I have before me the results of some surveys according to which, in the US, the percentage of employees who seek new openings elsewhere within two years of joining their present job has risen from 31 to 36 between 2005 and 2007. It would further seem that 25 per cent of the employees in the US suffer from a feeling of being trapped.

The conditions in Europe have been described as `devastating', with the number of employees itching to switch being as high as 65 per cent. The contented percentage in both contexts is made up of workforce well past its prime and, for that reason, may not be in demand in the job market.

As if the number quitting on their own is not enough, inter-company cut-throat poaching goes on because of scarcity of qualified persons, especially in areas critical to a company's growth and diversification strategies.

The matter has assumed such proportions that corporates and consultants are casting about for containing the crisis. The most important consideration for finding a speedy solution is that the continuous process of departure of personnel who were just settling down to their responsibilities and the furious efforts required to be put in to get their replacement in a situation marked by both mobility and volatility are proving to be a debilitating distraction, telling on the performance of companies.

NO ONE-WAY STREET

Also, employee loyalty has a direct impact on customer loyalty as well. A customer who is driven every six months or so to establish new equations with personnel at various levels of service-delivery is soon apt to be alienated from the company and turn somewhere else for a more dependable means of having his requirements met. No business can treat lightly the dent in earnings resulting from lost customers.

There is as yet no agreed formula for securing the long-term loyalty of employees, because the causes of the malaise are varied and differ from enterprise to enterprise.

However, available research points to job satisfaction and organisational culture as the two frontline factors influencing employees' state of mind. For instance, the correlation between loyalty and pay, perks and incentives is found to be 24.2 per cent while that between loyalty and organizational culture is nearly double at 46.3 per cent.

Loyalty is not a one way street. Employers too have a duty cast on them to show loyalty to employees. If employees are uncertain about where they stand with the employers, and gnawed by the looming fear of lay-off, stagnation in career prospects, disruptive relocations and the like, they cannot be expected to be loyal to the organisation, especially if they can better their lot elsewhere with higher emoluments, a more enticing career path and greater security. Yes, loyalty has lost its sanctity, and so have other old world maxims.

So what?

B.S.RAGHAVAN

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