#175 from R&D Innovator Volume 4, Number 9          September 1995

What Price Company Loyalty?
by Harvey Gittler

Mr. Gittler, of Oberlin, Ohio, is a retired manufacturing executive who writes and lectures on management issues. 

Several years ago, I received a call from a friend who had been fired from his company after 20 years of service.  (This was well before the days of restructuring and downsizing, today's super-trendy corporate strategy of self-destruction.)

I wrote my friend a letter which somehow found its way into several newspapers, and became an early voice questioning the dogma of absolute loyalty to the employer.

In light of the continual upheavals in today's corporate world, I feel the need to quote myself.  Here’s what I wrote my friend:

Dear Dave,

I’ve been mulling over your comments about feeling deeply hurt at being fired (I don’t like the euphemism "laid off"), after being a loyal employee for 20 years.

Loyalty isn’t a good term for describing the relationship between an employee and an employer in an industrial organization.  When did your company ask you to take a loyalty oath?  When did your company pledge loyalty to you?  I think you’re confusing terms.  Integrity, honesty, and compassion are noble attributes that you and your employer have every right to expect, but not loyalty.

My dictionary defines loyalty as “being faithful in allegiance to one’s lawful sovereign or government; faithful to a private person to whom fidelity is due; faithful to a cause, ideal or custom.”  Your company or any other company is neither sovereign nor government.  Nor is it a person, a cause, an ideal, or a custom.

You and I go to work each day, and we are expected to put out our best efforts and use our talents to their fullest.  Perhaps we are even expected to serve above and beyond the call of duty (or at least beyond what we feel our current pay justifies!).  In turn, we expect a fair wage, or at least an agreed wage.  That is where loyalty begins and ends; we give our service, and the company pays us for it.

When any employee works through a whole weekend to repair a machine so the factory can open on Monday, this is not an act of loyalty to a company.  When an individual or group works arduous hours to prepare a persuasive presentation to a prospect, this is not an act of loyalty to an employer.  When a lawyer works nights to complete a brief, it is again not an act of loyalty to a firm.  Rather, these are acts of loyalty to ourselves, to us as individuals who are making the sacrifices.

People work hard and extend themselves because they expect something in return.  They expect to be paid for their efforts and eventually to receive a promotion, a bonus, or even just a pat on the back.

I would not be disloyal to my employer if I failed to do my best; I would be disloyal to myself.  And if a company retained an employee in spite of mediocre performance just because he or she has 20 years' service, supposedly out of loyalty, it would actually be disloyal to other employees and the stockholders.

Remember when you and I worked with Ed What’s-His-Name, who had been with the company 10 years longer than we had and was earning ten percent more than we were?  You and I wondered why we weren’t all paid the same salary since we were doing the same work.  We questioned the fairness of a seniority system that resulted in Ed’s higher rate of pay.  We never did resolve that question of fairness, but you and I both ended up with better jobs than Ed.  So in the long run, what good did Ed’s loyalty do him?

Loyalty to or from a company isn’t something to give or expect.  Loyalty is an act each person gives or shows to himself or herself.  When an employee says he or she has been loyal to a company, I hear this: "I haven’t changed jobs or sought another job.  I have (without being asked) devoted my time to this organization.” 

"Loyal" employees want to avoid the pain in cutbacks, but was this deal in the original hiring agreement?  Did the company ever promise that "X" years of service would ensure a job until retirement?

A while back, The Wall Street Journal reported that a 12-year veteran with a soft-drink company was leaving to become executive vice-president of a competing company.  Was Mr. X disloyal for leaving his company for a better job?  Was I disloyal to our employer when I left 10 years ago?  Were you loyal because you stayed on for another 10 years?  Would someone who stayed there 40 years have been twice as loyal as you, who were there 20?

If we must be loyal to our employers, then any new company must be composed of employees who were disloyal to their last employers.  After all, they left that job to work for the new company.

I've had several employers, and I would like to think I gave to each above and beyond the call of duty.  But I was acting out of loyalty to myself.  I was striving for advancement, for rewards, and for the security that comes only from being valuable to my employer.  I’ve left companies to take new jobs that offered advancement in responsibility and money—but not out of an act of disloyalty to my employer.  It was an act of loyalty to myself, to my cause, to my ideals.

None of this is to say that long service shouldn’t be recognized or protected. But companies must be explicit in saying that long service will be recognized or protected, and not have it as an assumed policy—an assumption made by employees.  From my vantage point, compassion and understanding usually aren’t a part of the human resources development program.  (The term human, in industry, does not imply humane.)

You will find another job, Dave.  And you will succeed.  But this time, remember that what you owe to your employer is honesty, integrity, and hard work. 

Best regards,

Harvey

P.S.  Dave did find another job.  But he doesn’t expect loyalty from his employer, nor did he take an oath of loyalty to the company.  Rather, he recognized that enlightened self-interest was the ultimate act of loyalty to both his employer and himself.  He keeps his resume current and follows up on job leads he hears about.  That is loyalty to himself.  But he gives his employer all he can by way of performance.  No more, no less.