Employee Loyalty

Paper Summary:

This paper examines how, as a result of management practice, employees are likely to demonstrate loyalty or disloyalty and, although loyalty is not a formal management practice, nevertheless, it is necessary for determining business success in the form of profitability. It shows that where there is low loyalty level prevalent in an organization, the cost to profitability is high, as management not only has to be conscious of employees' performance, but also see that employees do not divulge information within the organization to competitors, meet company objectives, meet standards set by the industry, and meet customer satisfaction requirements.

From the Paper:

"Experts like Abbassi (2000) are of the opinion that employee disloyalty results in low profitability. Firms with little technological developments, career opportunities or have few provisions for equal employment opportunities, racial discrimination, rewards for performance and allowance for benefits are likely to face employee disloyalty issues. And hence, it would not benefit the organization to invest in high tech machineries or equipments, or develop sophisticated supply chain management programs unless they first address employee loyalty issues. Employees are not motivated to achieve organizational objectives neither would they be interested in fulfilling customer demands or concerned about the customer satisfaction. Eventually, organizations would have to face reduction in sales and hence profitability."

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