The Myth
Loyalty between employees and their employer is -- and should be -- dead;
companies that are loyal to their employees are less successful as businesses
The Finding
The authors argue that loyalty is dead -- and must be -- if it derives
from the old parent-child model of paternalistic organizations; that model cannot
survive in today's highly competitive environment. However, the paternalism of the
past does not have to be replaced with a value-neutral transactional relationship
where, in essence, employees "are owed nothing but a paycheck" and are removed from
the payroll as soon as they are no longer needed. (In fact, if at all possible, they
are not put on the payroll and are instead employed as "independent contractors.") The
gains from a transactional relationship are usually temporary, in part because such
organizations receive from most of their workers little beyond what is absolutely
required and monitored. For example, can a company expect its employees to treat
customers with individual care and concern -- the care and concern that create loyal
customers -- when the employees themselves are treated as invisible, interchangeable
and expendable parts? A transactional relationship is therefore often a prescription
for short-term success (in terms of cost reduction) and long-term mediocrity.
The authors therefore maintain that neither a paternalistic nor a transactional relationship is the most effective way to create high levels of long-term organization performance. The policies and practices they describe in their book represent, in their sum, a third alternative, which they call partnership. The loyalty in a partnership relationship is not the kind that parents and children have toward each other, but rather the bonds that develop among adults working collaboratively toward common, long-term goals and having a genuine concern for each other's interests and needs. As the authors use the term, partnership is a business relationship plus -- the plus being the human dimension, the trust and goodwill, that allows people to perform above and beyond what is required by monetary calculations, formal contracts, and very short-term interests. It is characteristic of the most enthusiastic, high-performing organizations.
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