Why is Managing Employee Commitment

& Loyalty Important?

Firms compete for competitive advantage
through their employees. Attracting & retaining
highly committed employees is key
Difficult task because job changes are more
frequent:
* highly skilled employees have lots of options
* dual career pressures
* corporate decisions to expand and contract
because of technological & economic changes

Why is Managing Employee Commitment

& Loyalty Important?
If mobility is the name of the game, we must
learn to create commitment quickly (i.e., expect
shorter employee cycle times within our firms)
AND maintain commitment among stayers"
who see people come and go
Commitment entails feelings of loyalty, duty
and psychological involvement to various
targets: organizations, jobs, careers, unions,
teams, even the work itself

Why is Managing Employee Commitment

& Loyalty Important?
Take an accountant: Loyalty could be to:
ones employing organization (Deloitte)
ones career (loves being a CPA)
ones job (likes being audit manager)
the work itself (derives pleasure from
completed audit)
Managerial focus tends to be on organizational
commitment but commitment to other targets
can also be successfully managed

Putting Commitment Back

in the Workplace
Why should organizations be concerned with
employee loyalty?
Why has commitment declined in recent years?
What can we do to restore commitment?

Why should organizations be

concerned with employee loyalty?
Loyalty has declined. In a recent survey,
only 45% said they felt strong, personal
attachment to their employer and 34%
felt any obligation to stay with current
employer
Many undesirable consequences
associated with low commitment work
environments

PROBLEMS IN LOW WORK

COMMITMENT ENVIRONMENTS
Organizational Performance
Absenteeism
Turnover

(Customer Sat)
* Half leave < 3 years
Effort expenditure
* Quality initiatives
Theft
Job dissatisfaction
Willingness to be relocated

Financial Outcomes of Work Commitment

Strategy to
enhance 1996 ROI
Performance

Used

Did not Use

TQM

15%

15%

Downsizing or
Re-engineering

15.4%

13.4%

Employee
Involvement
(Commitment)

19.1%

13.4%

N=216 Source: Lawler

REASONS FOR DECLINE IN COMMITMENT

1. Corporate America has not met its obligations to employees
a. Downturns: layoffs, hours & compensation cut
b. Mergers & Acquisitions: employees terminated
c. Experiments with two-tiered pay systems
d. Increased use of temps & contract employees
2. Societal values have changed &
organizations have failed to
accommodate these changes
a. Importance of work ethic
b. Work/family balance issues
c. Diversity issues

MYSTERY VALUE EXERCISE

Response options:
Strongly
disagree Disagree
(1)
(2)

Neutral
(3)

Agree
(4)

Strongly
agree
(5)

1. Hard work makes a man or woman a better person.

2. Wasting time is as bad as wasting money.
3. A good indication of a persons worth is how well he or she does
on the job.
4. If all other things are equal, it is better to have a job with a lot
of responsibility than one with little responsibility.

REASONS FOR DECLINE IN COMMITMENT

3. The experience of paid employment has not met
expectations of post-boomers
a. Standard of living
b. Flatter orgs and lower rate of advancement
c. Career is not progressing according to plan
(disillusioned by practice, employer
impediments)
4. Growing numbers of jobs do not
foster commitment
a. Low challenge
b. Few opportunities for growth
c. Rising education levels
among U.S. citizenry

How Can Commitment be Restored? It depends

on what type(s) of commitment are deficient
1. Corporate America has not met its obligations to employees
People are no longer loyal to employers? (low org. commitment)
2. Societal values have changed & organizations
have failed to accommodate these changes
Self-worth is no longer derived from paid
employment? More value attached to family or leisure
time than paid employment? (low work ethic & org commitment)
3. The experience of paid employment has not met
expectations of post-boomers Disappointment with employment
or career? (low career & org commitment)
4. Job does not foster commitment? (low job involvement)

Affective
Organizational
Commitment

Work
Ethic
Endorsement

Continuance
Organizational
Commitment
Job
Involvement

Career
Commitment

FIVE BASIC FORMS OF WORK COMMITMENT

CONTINUANCE
ORGANIZATIONAL
COMMITMENT

SIDE-BET
Need to
APPROACH
continue
CONGRUENCE
(exchange
working for an
model)
organization
(limited alternatives)

AFFECTIVE
ORGANIZATIONAL
COMMITMENT

Desire to
continue

GOAL

working for an
APPROACH
organization
(goal congruence)

Continuance Commitment vs. Affective Commitment

ORGANIZATIONAL COMMITMENT
I.

Continuance Commitment
Definition: Loyalty to an organization based on accumulated
investments that will be lost upon leaving
Sample
Measure:

Too much of my life would be disrupted if I left my

present organization.

A changeable Attitude
II. Affective Commitment
Definition: The extent to which individuals identify with and have
goals consistent with the organizations
Sample
Measure:

I feel like Im part of the family at my organization.

A changeable Attitude

WORK ETHIC ENDORSEMENT

Definition:

Extent to which one intrinsically values

work as an end in itself

Sample
Measure:

The most important things that happen in

life involve work

May be a Value or Personality Trait

May vary with age or cultural group

CAREER/PROFESSIONAL
COMMITMENT
Definition:

The importance of ones career

Sample
Measure:

I like this occupation too well to give it up

May be a Deep-Seated Attitude

Resistance to change because of
life-long dream to pursue and
educational investment

JOB INVOLVEMENT
Definition:

The degree of absorption in work activity an

individual experiences.

Sample
Measure:

I live, eat, and breathe my job.

May be a Very Changeable Attitude

Can be affected by task assignments

Job Involvement

Continuance Organizational Commitment

Work Ethic
Endorsement
Career Commitment

Affective Organizational Commitment

Interrelationships Among Forms of Work Commitment

Restoring Work Commitment

Work
Ethic
(difficult to change)

Career
Commitment
Organizational
Commitment

Job
Involvement
(easiest to change)

Handle via selection

Lengthy socialization to instill/reinforce
values
Sponsoring continuing education
Mentorship programs
Pay-for-skill reward systems
Development of career plans with HR staff
Increase side bets
Promote identity with firm; more we
Training to improve (a) communication, team
building, etc. (b) employee skill sets
Policies to reduce home/work conflict
Job design, enrichment
Use of teams, participative decision-making
More job autonomy