Employee Loyalty Effect on Consumer Loyalty and Company Performance - Coursework Example

Employee Loyalty Effect on Consumer loyalty and Company Performance Name: Institution: Employee Loyalty Effect on Consumer loyalty and Company Performance Introduction The main objective of any business enterprise is to ensure there are employees who have the ability to deliver quality services and products to the customers. It is however important to note that the quality of services or products that are delivered to employees is highly dependent of the degree of employee satisfaction in their areas of specialization it is important to note that employee satisfaction is enhanced by among other things the employment packages such as training, wages, and work life balance that a company provides to its employees (Durkin, 2005). A satisfied employee is considered to be loyal to the ideals of the company and such loyalty is essential because it will be a determinant factor in the delivery of services to customers. Proper service delivery infers customer loyalty and this will not only increase the market share of an organization but also increase on its sales in terms of the organization’s profitability (Reichheld, 2001). The main purpose of this report is to provide an understanding in the link between employee loyalty, its effects on customer loyalty and the performance of a company. Factors that help increase employee loyalty Compensation It is the objective of accompany to retain its best employees to ensure it delivers on its values and mandate. One of the most significant ways through which a company can ensure the retention of cu employees is thorough the provision of just wage (Durkin, 2005). The ability to compensate an employee with financial resource equitable to the work that they have executed is considered as an essential motivating factor in the execution of their responsibilities in accordance to their job description (Reichheld & Teal, 2001). It is important to note that the ability of the said company to remunerate whenever employees are engaged in extra work or overtime, it considered a guarantee that the company is concerned of the employees’ wellbeing (Reichheld, 2001). Through such initiatives a company ensures that employees are dedicated to delivery of services as this also protects employees from the desired of the company’s competitors (Reichheld, 2001). Compensation can also be provided through the delivery of additional packages that are considered motivational to employees. These include the provision of a proper work-life balance, which is considered essential because employees are able to satisfy their job requirements and their family requirements (Durkin, 2005). A company such as Google in an attempt to compensate its employees fro the time dedicate in the execution of their responsibilities provides its employees, especially female employees with children, with childcare centers that are financed by the company. This helps in the reduction of responsibilities and costs incurred in employing additional childcare services (Reichheld & Teal, 2001). Benefits These are material and non- material incentives that a company offers to it employees as a way of committing them to the company and ensuring their loyalty. Fringe benefits, for instance, are those incentives that a company provides to its employees in addition to their salaries and wages. These can be benefits that are provided during active job duty or during the retirement years (Durkin, 2005). These include the obvious benefits, foregone and hidden benefits. Obvious benefits are often considered as the most popular form of benefits and most companies offer it to their employees (Reichheld & Teal, 2001). These include social security and retirement insurance among other benefits. Forgone benefits are often considered as the time employees spend away from work on their companies’ permission. They include personal days, parental leave, paid maternity and bereavement time among others (Reichheld, 2001). Hidden benefits are often considered as extra forms of benefits that help employees in executing their responsibilities better. It is important to note that hidden benefiter not stable form of benefits and they are varied across companies. In addition, this form of benefits can be tailored in accordance with the objectives and policies of a company (Reichheld, 2001). It is important to note that a company the employees the effective use of fringe benefits will not only realize an increase in the loyalty of its employees as this is essential in the profit levels of the company (Reichheld & Teal, 2001). It is a common belief that fringe benefits, especially those that are associated with the improvement of the wellbeing of a company’s employees have profound impact on commitment of employees on their responsibilities (Reichheld, 2001). This is because such employees are 3ess destructed with factors that affect the relationship between their work and their independent lives. Fringe benefits therefore play the role of motivating factors which help in the improvement of employee performance and the reduction of employee turnover (Reichheld & Teal, 2001). Working environment This is inclusive of all the factors that facilitate employees in the execution of their responsibilities. They are the facilities that are available, comfortable workplace in terms of the levels of sanitation, ventilation, the level of destructing factors such as noise and safety of the workplace (Durkin, 2005). It is important to note that these factors have a strong influence on employee satisfaction considering that every employee has the desire of working in a place that ensures personal safety. In addition, the condition of the workplace will also have an impact on employees’ level of satisfaction and in turn loyalty to the company considering the desire to works with equipment that enhances the execution of their responsibilities in the company (Reichheld, 2001). When a company provides efficient and effective machinery including a safer working environment then such a company is guaranteed of an increase in the level of employee satisfaction (Durkin, 2005). The relationship between working environment, employee satisfaction and employee loyalty has been a subject of numerous researches. These studies have proved the critical nature of the working environment in ensuring satisfaction and improvement of employee loyalty (Phillips, 2005). Working conditions are also inclusive of the level of teamwork among employees. The ability of an employee to feel included or excluded in the operations of the company will be essential determinants of an employee’s level of satisfaction and loyalty to the company (Phillips, 2005). Teamwork in an organization ensures some level of cooperation. Through such collaborative and shared activity, the company is able to direct its employees towards a common goal. It is important to note that effective team work can be essential in motivating employees in terms of the improvement of their performance and self-efficacy (Reichheld, 2001). Teamwork in an organization not only provides a free environment that enhances employee relationship but also plays a major role in the promotion of the levels of employee autonomy and significance to the realization of a a company’s goals (Reichheld, 2001). Employee training and promotion Employee training is considered as an initiative that provides employees with opportunities of broadening their knowledge and abilities in the execution of their responsibilities (Durkin, 2005). This means that through the facilitation of employee training a company has the advantage of not only improving employee capacity in the execution of their responsibilities but also improving on the ability of the company to realize higher levels of profits due to an improvement in the efficiency and effectiveness of the organization (Phillips, 2005). Employee training is also a motivating factor that helps the employees in gaining confidence in the company considering the concern of the firm in ensuring that there is an improving in their skills. Whenever employees receive personal development training, there is often an increase in the levels of job satisfaction (Durkin, 2005). In addition, employees’ level of job satisfaction and loyalty to the organization increases with the availability of opportunities of advancing individual competencies through internal or external training programs (Phillips, 2005). The attendance of training programs helps employees in gaining confidence in the execution of their responsibilities in addition it enhances their ability to pursue career development initiatives as this enhances the thought that the company is making an investment in the improvement of their knowledge and capacity (Kazanjian, 2013). The procedures that accompany uses in the promotion of employees to senior positions in the company are also a determining factor in the level of job satisfaction and employee loyalty to the company (Phillips, 2005). The provision of training and career development programs is considered essential in boosting the confidence of employees towards an organization (Kazanjian, 2013). However, employee loyalty is enhanced by the ability of the company to provide employees with a platform for exercising their skills and abilities will also play an influential role in the promotion of employees’ levels of loyalty towards an organization (Paharia, 2013). The relationship between employee loyalty customer loyalty and the performance of a company The ability of a company to engage its employees on different activities that not only influence the level of job satisfaction but also their loyalty to the company are essential determinant of the level of customer loyalty which also affect the performance of an organization (Keiningham et al, 2005). It is often important for a company to ensure that it attains the confidence of its employees considering that these employees play the role of providing services to the customers (Paharia, 2013). Customer service is not only an essential marketing tool for a company but also helps customers to gauge the level of performance of a company against that of its competitors. Customer service therefore plays a role in the realization of organizational goals in terms of the levels of profitability (Paharia, 2013). A company has the responsibility of clarifying business objectives to its employees. The ability of employees to understand and undertake their responsibilities in relation to the objectives will be determined by the structures that the organization has instituted to ensure their loyalty (Kazanjian, 2013). In the marketing, every organization is struggling to improve in terms of its market share and its levels of profits. This means that organizations have the responsibility of developing marketing strategies for the target market. It is important to note that the development of an effective marketing strategy does not rely on the apparatus and the financial resources that are invested in the market but on its efficiently in the realization of goals (Keiningham et al, 2005). An organization that considers employee loyalty in the development of its goals is guaranteed of a marketing strategy that not only communicated the values of the business to the market but also one that ensures customer satisfaction (Kazanjian, 2013). For example, such an organization will develop a strategy that seeks to satisfy varied interests of the target market. One of the ways through a company can ensure that the strategy developed is the work of loyal employees is through the evaluation of the profit levels after the implementation of the strategy. In addition, the company can also be engaged in the determination of the number of customers (Keiningham et al, 2005). This can be realized through an evaluation of three matrices which include the level of awareness, the levels of sales and advocacy. It is important to note that customer referrals are essential determinates of customer loyalty which is facilitated by loyalty of employees towards the organization (Kazanjian, 2013). Every company has the responsibility of ensuring that it provides innovation platforms for its employees. This is one way through which such an organization not only ensures high levels of customer loyalty but also one way through which the company ensures customer loyalty by providing new and innovative products that motivate the customers towards accessing services and products from the company. Loyal employees are often able to work in teams and a company has the responsibility of using innovative teams to help in the identification, evaluation and activation of emerging opportunities (Kazanjian, 2013). Employees and the management of a company have the responsibility of monitoring markets as a way of identifying different opportunities in the marketplace that can be exploited to realize customer satisfaction and an improvement in the performance of the company (Kazanjian, 2013). Loyalty among employees can be realized through constant engagement of such employees in the management of the affairs of the company. Loyal employees can also improve on customer loyalty by constantly engaging in them in the affairs of the organization especially on matters related to the areas of improvement (Keiningham et al, 2005). This is a necessary but not sufficient move in the realization of customer satisfaction considering that the ability of a company to engage in the implementation of employee concerns (Branham, 2000). Through such an initiative, the company through its employees will be able to improve on the confidence of the customers towards the company and this will have a positive effect on the improvement of the company’s performance in the market (Durkin, 2005). It is therefore necessary and sufficient for a company to engage employees in the process of identifying emerging markets, running test on new products or service initiatives as a way of evaluating the true potential of these initiatives in satisfaction of customer demands (Durkin, 2005). It is possible for the company to fail in some of its initiatives. However, the determination and commitment of loyal employees will be able to use their innovative skills in the development of more programs to ensure they implement he one that is best fit for the relaxation of company goals and customer loyalty (Branham, 2000). The main objective of any marketing attempt is to ensure that a company is actively engaged in the creation of compelling adverts that will not only capture customs attention but also initiate customer interest (Branham, 2000). Marketing theory asserts the relevance of creating an appealing advert especially when the product or service that is to be offered is in accordance with the demands of the customer (Keiningham et al, 2005). It is important that a company can determine customer loyalty through proper advertisements once potential customers are aware of the existence of the products or services. Such customers will promote participate in the promotion of the product through customer referral and by engaging in direct sales of the company’s products (Kazanjian, 2013). Satisfied employees will also reveal their levels of loyalty by their ability to engage customers through different marketing sites such as the internet, roadshows and word of mouth among other strategies. It is important to note that the failure of a marketing strategy is dependent on the initiatives that an organization has put to motivate its employees and the ability of the employees to prove loyalty to the company by engaging customers in various activities that increase the company’s market share and profitability (Durkin, 2005). Conclusion The ability of a company to engage its employees on different activities that not only influence the level of job satisfaction but also their loyalty to the company are essential determinant of the level of customer loyalty which also affect the performance of an organization. A company has the responsibility of clarifying business objectives to its employees. The ability of employees to understand and undertake their responsibilities in relation to the objectives will be determined by the structures that the organization has instituted to ensure their loyalty. It is the responsibility of a company to motivate its employees and the ability of the employees to prove loyalty to the company by engaging customers in various activities that increase the company’s market share and profitability. Recommendation Companies can improve on employee loyalty by valuing tenured employees. Such a strategy will make such employees feel important in the execution of their responsibilities. This is also way of improving on retention of valuable employees. A company can also increase bonuses and benefits associated with working for the company. Despite its superficial nature, it can be effective in ensuring high levels of employee loyalty. It is important for a company to build teams within the organization. This is one way of ensuring that all employees are involved in the management of the organization. References Branham, L. (2000). Keeping the people who keep you in business: 24 ways to hang on to your most valuable talent. New York: AMACOM. Durkin, D. M. (2005). The loyalty advantage: Essential steps to energize your company, your customers, your brand. New York: AMACOM, American Management Association. Kazanjian, K. (2013). Driving loyalty: Turning every customer and employee into a raving fan for your brand. New York: Crown Business. Keiningham, T. L., Vavra, T. G., & Aksoy, L. (2005). Loyalty Myths: Hyped Strategies That Will Put You Out of Business--and Proven Tactics That Really Work. Hoboken: John Wiley & Sons. Paharia, R. (2013). Loyalty 3.0: How big data and gamification are revolutionizing customer and employee engagement. New York, NY: McGraw-Hill Education. Phillips, J. J. (2005). Investing in your company's human capital: Strategies to avoid spending too little--or too much. New York: AMACOM. Reichheld, F. F. (2001). Loyalty rules!: How today's leaders build lasting relationships. Boston,Mass: Harvard Business School Press. Reichheld, F. F., & Teal, T. (2001). The loyalty effect: The hidden force behind growth, profits, and lasting value. Boston, Mass: Harvard Business School. Read More