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Employee Loyalty Life Cycle

BY: Soumen Nath | Category: Issues | Submitted: 2010-08-27 23:16:00
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Article Summary: "Unlike Product Life Cycle and Customer Life Cycle Employee loyalty also have got a Lifecycle (Employee Loyalty Life Cycle or ELLC). ELLC integrates different factors/attributes responsible for employee loyalty such as Relationship Focus, Organizational Climate, Career Advancement, Management Effectiveness, and Reward System..."

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INTRODUCTION : In today's turbulent business environment companies are concerned about to increase the loyalty of customers and other stakeholders to met or surpass the corporate objectives. Different studies have shown relationship between customer satisfaction and employee satisfaction.

A typical example is Loyalty Business Model :quality of product or service leads to customer satisfaction, which leads to customer loyalty towards the organization, which leads to profitability and employee satisfaction. But it is difficult to measure employee satisfaction than employee loyalty. Traditional employee satisfaction survey results indicates that most of the companies implement survey results to gain competitive advantage found its ineffectiveness to offer positive direction to corporate and HR objectives. As customer life cycle is gaining importance and topic of discussion, I started thinking- is there an Employee Loyalty Life Cycle ?

Unlike Product Life Cycle and Customer Life Cycle Employee loyalty also have got a Life Cycle (Employee Loyalty Life Cycle or ELLC). ELLC integrates different factors/attributes responsible for employee loyalty such as Relationship Focus, Organizational Climate, Career Advancement, Management Effectiveness, and Reward System.


There are five phases/stages in Employee Loyalty Life Cycle:
• Relationship Focus
• Organizational Climate/Environment
• Career Advancement/Growth
• Management Effectiveness/Policy
• Reward System

Phase 1 : Relationship Focus : New employees are introduced to meet needs of the organization via orientation, training etc. As the time passes by new entrants get themselves accustomed with the organizations vision, mission, rules and regulations, culture etc. Now the question is with whom employees are developing relationship?
With the organizational structure or the people working in the organization. The answer is definitely people. A two way communication among the all team members including superiors creates an positive impact on new employee and lays the foundation for mutual trust and understanding which gives birth to loyalty.

Phase 2 : Organizational Climate : When new employees are exposed to the work environment climatic factors puts both direct and indirect impression on their mind. Both ethical/unethical functions of organization create a replica values among new employees.
Any change in the existing system will call resistance and the moral confrontation will decide high/low loyalty among new employees. Another problem for new entrant is boss management. In this phase superiors act as a catalyst to loyalty building.

Phase 3 : Career Advancement/Growth : In this stage employees loose newness and treated as semi-skilled/skilled workers. Expectations from both employer and employee is at all time high. In this phase employees expect a proper succession planning from management side. Loyalty of high performers depends on degree of succession planning and career advancement opportunities available in the organization. Loyalty of low performers rests on motivational factors as well as on organizational climate.

Phase 4 : Management Effectiveness/Policy : In this stage employees become conscious about the leadership styles, delegation, return on investment, conflict management, considerations and motivation in the organization. High performers remains loyal with the organization if management effectiveness/policy is moving on the positive direction else they started looking for new avenues. Low performers remain with the organization without adding much value in terms of both productivity and loyalty.

Phase 5 : Reward System : unexpected reward (both monetary and non-monetary), appreciation of performance, business games etc. helps to develop high loyalty among employees. In this stage employees are trying to identify their association with the organization as either compulsion or willful contribution.

About Author / Additional Info:
Soumen Nath is an enthusiastic author from India. Contact Him at :

Comments on this article: (1 comments so far)

Comment Comment By Comment Date
Very interesting and informative article .. Author should continue to share his knowledge with others. Phil 2010-08-30 14:03:42 317

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