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Employee Loyalty: Importance, Ways, Signs, Pros & Cons


Loyalty of the employee brings a great revolution in the entire organization. This loyalty will help the organization to achieve its goal on proceeding in right direction. Loyalty in terms of business depicts the reward points from the customer. It promotes behavioral loyalty. It also enables the organization’s productivity and hospitable establishments with the third parties.

Employee Loyalty Importance Benefits

Concept of Employee’s Loyalty:

Loyalty is the state of being attached and devoted to something. It also reveals the quality of being loyal to something.

Here at the workplace, loyalty can be defined as the money spent on personal sacrifice to achieve and strengthen relationship.

It is a virtue that is perceived even though the person is intrinsically committed to work. It creates a strong link between the employee satisfaction productivity, company profitability.

Cost Involved in Replacing a New Employee:

If the company wants to hire a new employee as to replace with a disloyal employee, then the cost involved in it will be calculated. They can be calculated as follows:

  • Cost spent on the person leaving
  • Cost involved in hiring a new person
  • Training given
  • Lost productivity cost.

Image of Employment Loyalty:

This image of employment loyalty has become downsizing for the employees which in turn contributes to globalization. The employee tends to break the rules and with the mutual obligation it is reconsidered.

Life time is spent with no longer expectation. Here people will constantly strive towards higher salary and even opt for better working environments.

Two Dimensions of Loyalty:

Loyalty and trust are the most increasing quality to become harder. This helps in finding whether the employee is loyal to the company or the customer is loyal to the product produced by the company. It has two dimensions. They are:

1. Internal loyalty.
2. External loyalty.

1. Internal loyalty:

Internal loyalty can be defined as emotional attachment towards work. It indulges caring, love, behavior etc. It also deals with the commitment towards work with the emotional background. It depicts the internal feelings of a person with the display of emotional component towards work.

2. External loyalty: 

External loyalty can be manifested as the way loyalty is. The organization will get support from the customer to place the policies incase to reflect or understand the loyalty behaviors. Here the management must deeply analyze what the employee is trying to bring the best out of him/her. The commitment towards work matters a lot in external loyalty.

Context of Employee Loyalty:

Nowadays employee loyalty is disabled because the employee does not understand what the management is trying to do. Rather than commenting, the employee should try to show their commitment towards their work through the efforts. Here are few clarifications on employee loyalty. They are:

a. Loyalty towards profession.
b. Loyalty to co-workers.
c. Loyalty to the organization.
d. Maintaining the company’s deal as confidential.
e. Stay back to complete the project.
f. Following the orders.
g. Not abusing the company’s properties.
h. Standby and help the co-workers during their struggle.

Trends of Employee Loyalty:

Customer satisfaction and employee loyalty brings huge benefits to the organization. There is a strong bond between loyalty, productivity and profitability. The relationship between profit and growth can be handled by adjusting customer loyalty which depends on customer satisfaction.

Now the customer satisfaction depends on service value whereas the service value is totally dependent on employee productivity. Here the employee productivity is interrelated to employee loyalty. Again the employee loyalty is linked with employee satisfaction. This provides:

  • Business value.
  • Helps in attaining success of the company.
  • Money and compensation will be provided.
  • Positive image about the company can be maintained.

Importance of Employee Loyalty:

In order to run the organization smoothly and profitably, currently working employees has to be loyal and dedicate themselves to their profession. Investing on a business requires the mutual support of the employees and the company.

As mentioned earlier employees are the pillars of each organization. Employee loyalty contributes to the productivity in each regulated system. The company has to unite all its employees to build a bigger image in the corporate world. Few techniques are:

1. Speaking about the interest towards work.
2. Collecting information about the profession.
3. Aims at involvement in work.
4. Independence in the assigned task.
5. Increase in feasibility and visibility.

Ways to Build Employee Loyalty:

Employee loyalty can be built largely by the organization to satisfy its customers. It draws attention of gaining exceptional value and gets the attention of every customer. Here are few steps to build employee loyalty within the employees. They are as follows:

a. Try to connect with employees.
b. Make the employee understand the reasons to be loyal.
c. Organization must play a vital role.
d. Acts as a best example for the employees.
e. Enhance employees to enjoy the benefits.

a. Try to connect with employees:

The organization must connect with the employee through communication. This communication should be in a clear and concise manner and it should also be done periodically.

Even if an employee fails to attend the meetings, the conductor of the meeting should ensure that the message discussed in the meeting has reached that particular employee as discussed. This method enhances bonding between the employees and the organization.

b. Make the employee understand the reasons to be loyal:

The organization must focus on the empowerment of employee loyalty. Each enterprise should come up with a new idea that will make the employee understand the management care for them.

Most followed way to make the employee understand is providing them stress free working environment. Employee should understand the gesture of the welfare that the organization is providing.

c. Organization must play a vital role

Organization should counsel the employees about loyalty and the outcome of it. Employee should be trained to take right decision even at the toughest situation.

Once the employee gains trust about the organization then it will be easy for the organization to make them understand the counseling given

d. Acts as a best example for the employees:

Few of the employees will understand and learns to be a loyal employee. Here loyalty aims at taking efforts to achieve the success of the company. The organization must stop criticizing employees in front of third parties.

The organization must understand the importance of acting as role models. Gossips and rumors should be avoided to attain a peaceful working environment.

e. Enhance employees to enjoy the benefits:

An organization must focus mainly on giving support to the existing employees rather than recruiting new employees and spending money on training them. For certain tasks right person should be allotted. This confidence has to be given by each organization to the employee so that employee loyalty will be built automatically.

Keeping the employee enthusiastic:

The organization has to maintain the enthusiasm of the employee so as to maintain the employee loyalty. The organization must provide bonus to the employees. There should be an amount of investment in the ongoing training of the employee. The work schedule must be flexible for all the employees.

The working environment should be friendly for the employees to share their internal loyalty and to explore new ideas with the consultation of higher authorities.

Loyalty management:

Building superiority in the customer value proposition will help in finding right customers. An organization must try to earn the customer loyalty for which right employees are required. Earning employee loyalty will help in gaining superior productivity.

If the organization has to focus on superior productivity then it requires right investors to earn loyalty of the management. Employee of the organization must be confronted by the following tests. They are:

  • Personality test
  • Strong assessments
  • Technical assessments
  • Psychological test

Employee loyalty with positive management:

A positive management will consists of manager with a positive attitude. The commitment towards work makes the employees raise the moral values and self-esteem.

On the other hand there will be reduction in turnover. All these will enhance the employee service and customer satisfaction. It enhances the bottom line and reduces the litigation.

Organizational performance with employee loyalty:

Employee loyalty plays a major role in increasing the overall performance of an organization. From the facts it has been proved that employee loyalty aims at producing more number of capital goods for the improvement of the resources. This clarifies the economic recession of the company.

Motivating the employees helps in gaining loyalty. In fact loyal business can be dictated by the management. This helps in the performance of the organization that will help in gaining competitive advantage.

Test of measuring employee loyalty:

It can be measured as the result of overall performance. Even though loyalty cannot be linked with profits and earnings, it acts as a bottom line. It can also be measured with the priority issues.

Pros and Cons of Loyal Employees:

Loyal employees are considered as an asset of a firm. Though they are loyal employees in an organization there are few pros and cons of having them in an organization. They are:

Pros of loyal employees:

1. Lesser the personal problems, greater the work done will be.
2. Stability versus turnover.
3. More commitment towards the work .
4. Less absenteeism.
5. Business will be more successful.

Cons of having loyal employees in the organization:

1. Costs and investments made for loyal programs.
2. More experience will make the employee less motivated.
3. Less productive employees and no new ideas.

Signs of a Loyal Employee:

One can identify a remarkably loyal employee in the following ways. Here are few qualities that a loyal employee possesses.

1. Treat the boss like a person:

Loyal employees work hard to get paid and focus more on the company’s success. They may leave the job someday but until they are in the organization they will work hard to attain success of the organization.

As we all are aware few of the employees see their bosses like enemies. But a loyal employee maintains employer employee relationship in the organization.

2. They suggest the least ideas that the boss would hear:

At entry levels all the employees will report directly to the bosses and after few days or months, they may not. But a loyal employee will keep track of the achievements and remarks and try to report it to the bosses every time.

3. They never gossip infront of others:

Few of the employees will play rash games by using the names of others. But a loyal employee will overcome criticism, gossiping, mocking, sniping and even from spreading rumors. They respect the hard work of the other employees and act accordingly.

4. They open up their thoughts in private:

Debate and disagreement are healthy in working environment. But the decision made by the higher authority will be followed by the other employees.

A loyal employee even after agreeing in the meeting will go and meet the concerned person and disagree with the thoughts and will explain his/her thoughts about that particular job.

5. They totally support the boss and his decisions:

Even if the boss goes wrong, a loyal employee will make the boss understand his/her mistake rather than back biting. They will have proof for everything to prove that they are right.

6. Asks permission while leaving even if the work is done:

They will ask for opinion whether to leave now even if the assigned task is completed by them. They always trust their boss because they are loyal to their work as well as to their boss.


Thus loyalty of the employees is more essential for the success of the business. A loyal employee will try to support even the customers, which will help the management to produce proper evidence.

If the employees aren’t satisfied with the management then the management has to take the responsibility to bring the effect of loyalty in each employee. Even if the higher authority doesn’t then the human resources department can do it.