Employment Loyalty at Rhythm - Essay Example

Working Employment Loyalty at Rhythm I. Rationale I have selected employment loyalty at Rhythm as the of this study because the company belongs to the IT-creative industry. It is a small-sized company and in a way, it can be considered a startup organization. According to Schein (2009), the nature of changes, culture and values depends upon what stage of growth an organization is in. (p.123) With this in mind, I expect that the dynamics of the relationships within the Rhythm is different from bigger and established companies. I feel that that the company represents the growing number of new companies that may not follow the traditional organizational structure and cultivate a different cultural profile. I am very interested to find out what drives employee loyalty and commitment considering the fact that the company and its sector are at a disadvantage in the areas of stability, resources, among other advantages that bigger companies enjoy. II. Literature Review Rabin (2003) extensively discussed loyalty and its effect on organizational behavior. According to him, along with the identification with an organization, employee loyalty represents an individual and psychological bond between an employee and an organization. (p. 867) That is why it is pivotal in overall strategy of companies to produce value for consumers, achieve competitive advantage and, eventually, achieve profitability. Needless to say, such fact has driven numerous studies and research. As a result, the corpus of literature on the subject is quite extensive and comprehensive. Specifically, the subjects include works about how employee loyalty contributes to an organizations’ competitiveness, how it reflects the organization, measurement and evaluation of employee loyalty, among other issues. Some of the studies undertaken in regard to employee loyalty that are relevant in this paper’s objectives are outlined below: 1. Swayne, Duncan and Ginter (2006) explained how employee loyalty could determine the kind of culture and values an organization has. According to him, this aspect helps consumers determine whether the firm has an outstanding quality in service delivery because loyal employees mean companies who know how to value people. (p. 185) Loveman (1998) used the service profit chain framework in his effort to link employee satisfaction and loyalty to customer satisfaction and financial performance. The author underscored that the framework hypothesized relationships between employee, customer and financial outcomes. The emphasis on these three elements makes this framework an interesting resource for this paper. 2. Durkin (2005) wrote a comprehensive work on loyalty and how it achieves for a company several benefits, which include competitive advantage, cost efficiency, and marketing benefits, among others. In one of the case studies cited, for instance, Durkin used Dell’s experience, among other case studies, and stressed that, bolstered by a management that honors their contributions and cultivates loyalty, majority of Dell employees, in a recent survey, would prefer to stay at Dell if they were offered a similar position elsewhere. (p. 62) In what Durkin called as the Loyalty Factor, loyal employees are supposed to have three key beliefs: the belief in themselves and their ability to do their job well; the belief in the company they represent as well as in the quality of its leadership and goals; and, the belief in the quality of the products and services they are selling/developing/supporting. (p. 69) 3. The relationship between job satisfaction with employee loyalty and commitment is the focus of an extensive examination of Mathis and Jackson (2007). One of their important arguments is that many employees want security and stability, interesting work, a supervisor they respect, and competitive pay and benefits and that without these elements, employees may feel a diminished need to contribute. (p. 70) In line with this theme, Pina (2002) conducted a case study wherein he examined the interplay between culture, structure, and leadership and how they are managed so as to build control and employee loyalty. The author’s thesis is that a high-profile culture combines with low-profile leadership, with minimal structuring is the best practice in achieving employee loyalty because these factors reinforce each other. (p. 481) Finally, a related comprehensive study was completed by Roehling. Roehling and Moen (2001). It investigated the relationships among work/life policies, informal support to employee loyalty. The difference here from the two previously mentioned research was that investigation was done over the life course of individuals. In the study, the authors maintained that our understanding of the impact of policies pertaining to work and lifestyle is extremely positive on employee loyalty because it considers both non-work and work dimensions. Policies such as “flexible time”, according to the researchers, have a consistent, positive association with employee loyalty, especially those who are parents. 4. Martin (2005) outlined the factors that erode employee loyalty. In his work, several surveys and empirical evidence were cited that reveal how employee loyalty has been on a decreasing trend for companies today. In one of the factors outlined, for instance, Martin maintained that turnover of top management erodes loyalty wherein top executives are not concerned about employees’ welfare, respect and compassion while putting more emphasis on the value-to-me-right-now attitude towards the rank and file. (p. 104) Along with this aspect, Tourish and Hargie (2004), specifically identified one factor that erodes loyalty today – company downsizing. The interesting part of their study is how to counter this negative development through communication. For example, they stressed that companies should pursue positivist agenda in their communication strategy to maintain trust and loyalty among their employees. 5. An interesting work in regard to the legal foundations of employee loyalty was that of Shan’s (2008). In his argument, he pointed to the fact that the legal imperatives for employee loyalty can be derived from contract law, wherein loyalty is the employees’ duty – an accessory obligation of employment contracts that embody the value of good faith. (p. 219) The author especially referred to the experiences of Common Law countries, which apply this principle in their modern contract law. Here, employee loyalty is implied by law rather than by the consent of parties involved. Aaron and Finkin explained the relevant statutes and legal foundations of employment loyalty in the United States. Their discussion on the legal aspects of loyalty covered: competition by the employee against employer, employee criticism of the employer; violation of employer confidentiality, and lawsuits by the employee against the employer. (p. 321) A related subject is the so-called psychological employment contracts, the subject of Thompson and Bunderson’s (2003) research. In their investigation, they concluded that there is a need for the inclusion of “ideological currency” in the employee contract in order to broaden the range of employee-organization exchanges that the perspective can accommodate. This ideological currency and psychological underpinnings to employment contract are supposed to reinforce employee perceptions in regard to their perceived obligations to an organization – ideally, those that are not grounded solely on personal entitlements but also in the promotion of a cause they highly value. (p. 571) This aspect in employee relations underscores the highly diverse dimension of securing loyalty and commitment. This reveals the number of available options, models and framework for organizations and its management in order to ensure loyalty from its human resource. In this case, specifically, rituals and symbols are seen as potent influences in fostering loyalty, as much as emotions and affections. The corpus of literature emphasizes the importance and relevance of employee loyalty to the successful achievement of organizational objectives. For example, there are studies that prove that there is a link between employee satisfaction and loyalty and a company’s financial performance. (Cook 2004, p. 6) It is not surprising, hence, that there are numerous frameworks and methodologies currently available that suggests approaches and best practices in the areas of evaluation, assessment, examination, analysis and measurement of loyalty. The following outlines some of the available references about this aspect of this paper’s content: 1. Valerie Anderson is an excellent resource of models and research methodologies in evaluating and measuring employee loyalty. Her work is important especially with her use of numerous case studies, a number of which similar and applicable to the subject of this paper. For instance, there is the case illustration about local bargaining in the National Health Service, which demonstrates several approaches in examining employee relations. (p. 107) Here, a step-by-step outline of the research design and process were provided, highlighting how the combination of quantitative and qualitative methods could yield a comprehensive, balanced and credible data gathering and analysis especially on intangible concepts such as trust, commitment and loyalty. Anderson also provided extensive explanation on research design for students. Particularly, her work on the classifications of research is helpful in the identification of the right approach in order for this paper to achieve its objectives. Since this study concerns only one subject, which is Rhythm, the section on the Case Study research design is invaluable. 2. Ralph Hall (2008) provided several arguments why case study research could be effective, successful and even groundbreaking. He maintained that, in the context of determining specific, cause-effect relationships, this approach is one of the best. He is particularly helpful in validating and affirming Anderson’s definition of the case study, the case study inquiry and its research processes. At one point, Hall emphasized that the case study’s key feature is the real-life focus of the research where the object of the case is examined in its naturally occurring context. (p. 109) 3. Finally, an important resource that this paper finds relevant is the work of Zambon and Marzo. Their book, Visualising Intangibles, offer valuable insights in regard to measuring, reporting, evaluation and management of intangibles. (p. 3) It must be underscored that loyalty forms part of the so-called intangible assets of organizations today, along with reputation, knowledge, competencies, innovation and leadership. III. Related Research It is difficult to find a similar piece of research on the same size and type of company as Rhythm. However, there had been studies that have examined, evaluated and measured employee loyalty across all industries. The structure, research design and processes resemble the framework that this paper wants to take, although it explored different organizations in terms of breadth and industry. An example of related research was that found in Hall’s case studies. The research design is similar to this study especially in regard to the methodology employed. An important feature therein was the use of multiple sources of data and data collection procedures as it draws on a range of methods of data collection including direct observation, interviews, documentary analysis of administrative or statistical records, and even questionnaires and ratings scales. (Hall, p. 109) Because the sampling was relatively small, there was the requirement for diverse sources of information in order to evaluate and measure employee loyalty comprehensively. A more specific similarity in regard to the methodology used in determining employee loyalty can be seen in Silverman’s (2009) work. He decided to choose a mixed method approach because he realized that quantitative methods might provide very interesting data about how much or how many questions, but that they missed some of the real story. According to him: The analogy I used was that of people in poverty. A determination can be made as to how many, where, when, and the like, but what is it like to be in poverty? So when it came to my topic, employee loyalty, it was a matter not simply of determining who might have been loyal or not, but also of what underlying interpersonal dynamics were at play, how they factored, and what conditions had to be met for loyalty to exist. (p. 8) Another related research was the one undertaken by Griffin and Lowenstein (2001). They found through interviews and documentary evidence that employee loyalty is reflected in what is going on with customers. For instance, in one of the cases they examined, a highly ineffectual regional director caused the high incidence of defections by both the customers and the employees. It turned out that the staff problems ultimately become customer problems. In the staff loyalty study conducted it was found that the employees under the ineffective director rated teamwork and staff communication dramatically lower that the staff in other regions. I would also like to cite Johnson’s (1995) work on family-friendly programs. Her emphasis on this variable is in line with the heightened interest and need today for work-family dimension to policies especially those that foster employee loyalty. Her work investigated the costs to businesses that do not take steps to address employee loyalty, and, the measurable business benefits of supporting people’s personal lives. IV. Objective The main objective of this study is to evaluate and, if possible, measure employee loyalty in Rhythm. In order to achieve this primary objective, the following secondary goals would be pursued as well: 1. define and explain the concept of employee loyalty and determine the indicators as well as elements that lead to its achievement; 2. identify the best possible approach, method or research design to examine its incidence in Rhythm; 3. explore the related literature and similar studies undertaken in order to validate as well as compare the data gathered; 4. examine employee loyalty in Rhythm and, in the process, highlight the and strengths and weaknesses of the company strategy in this context; and, 5. propose the best possible practices in employee relations in order to ensure the achievement of loyalty among Rhythm’s employees. V. Methodology This research would use the Case Study approach, as outlined in Anderson’s book. This has been chosen because, employee loyalty at Rhythm, as a single issue could be studied in depth, access to the organization is easier, and there would be a focus on one group in the research process. All research depends on interpretation that is why it has many pitfalls. This problem would be addressed by employing quantitative methods of collecting data, primarily with the use of a questionnaire and a set of interview questions. With standard quantitative designs there is a conscious effort to limit the role of personal interpretation for that period between the time the research design is set and the time the data are collected and analyzed. (Stake p. 41) On the other hand, I also believe that inductive method is essential to the study and that this is especially true in the case of sample selection and data interpretation. VI. Sample Selection Because the sample is small, randomization is problematic. However, since this is a case study research, the sample selection approach will essentially be essentially ad hoc. While the result may not representative of the result across the industry, it must be underscored that the objective of the research is to determine employee loyalty in the case of Rhythm alone. This leads to the use of inductive approach. The model emphasizes the observing aspects of social life and then proceeds with discovering patterns that could point to relatively universal principles. (Babbie 2009, p. 56) This leads to the use of qualitative method as well because it calls for the persons most responsible for interpretations to be in the field, making observations, exercising subjective judgment, analyzing and synthesizing, all the while realizing their own consciousness. Particularly, wrote Anderson, the qualitative method would allow a researcher to gain a proper “feel” and “understanding” of the culture of the organization and the sentiments of the employees even if the sampling, as with the case of this study, is small. (p. 51) VII. Data Access The data would be collected from interviews, questionnaires and documentary analyses of the company records as well as the available related literature. According to Anderson, in the case study framework, generalization is not possible. (p. 53) But this weakness or disadvantage is not very relevant here because there is only one subject at hand. All in all, a systematic framework of gathering data would be developed, combining fundamental methodologies in varying degrees of emphasis. For this paper, I have secured the permission of the management of Rhythm to undertake the study within the company. I was given permission to interview employees as well as examine company records that are pertinent to my objectives. I believe, that they readily agreed because the outcome of my research might have some bearing on their relationship with their employees. VIII. Work Plan June 16-30: Drafting, submission, revision and approval of research proposal. July 1-15: Drawing up of sample and research questionnaire. July 15- September 30: Start to conduct interviews, survey of the sample and research of other pertinent data. October 1-15: Start and Complete Data Analysis. October 16-November 14: First dissertation draft would be completed and sent out for comments. November 15-30: Revisions and submission of final dissertation. References Aaron, B and Finkin, M 1999, "The Law of Employee Loyalty in the United States". Comp. Labor Law & Policy Journal, vol. 20, p. 321. Anderson, V 2004, Research methods in human resource management. CIPD Publishing. Babbie, E 2009, The Practice of Social Research. Cengage Learning. Cook, S 2004, Measuring customer service effectiveness. Gower Publishing, Ltd. Durkin, D 2005, The loyalty advantage: essential steps to energize your company, your customers, your brand. AMACOM Div American Management Association. Griffin, J 2001, Customer winback: how to recapture lost customers and keep them loyal. John Wiley and Sons. Hall, R 2008, Applied social research: planning, designing and conducting real-world research. South Yarra: Palgrave Macmillan Australia. Johnson, A 1995, "The Business Case for Work-Family Programs". Journal of Accountancy. Vol. 180. Loveman, G 1998, Employee Satisfaction, Customer Loyalty, and Financial Performance." Journal of Service Research, Vol. 1:1, p. 18-31. Martin, C 2005, Tough management: the 7 ways to make tough decisions easier, deliver the numbers, and grow business in good times and bad. New York: McGraw-Hill Professional. Mathis, R and Jackson, J 2007 ,Human Resource Management. Mason, OH: Thomson Learning. Pina e Cunha, M 2002, "The Best Place to Be" The Journal of Applied Behavioral Science, Vol. 38: 4, p. 481-495. Rabin, J 2003, Encyclopedia of public administration and public policy, Volume 2. Marcel Dekker. Roehling, P, Roehling, M and Moen, P 2001, "The Relationship Between Work-Life Policies and Practices and Employee Loyalty: A Life Course Perspective”. Journal of Family and Economic Issues. Vol. 22: 2, p. 141-170. Schein, E 2009, The Corporate Culture Survival Guide. John Wiley and Sons Stake, R 1995, The art of case study research. London: SAGE. Swayne, L, Duncan, W, and Ginter, P 2006, Strategic management of health care organizations. Malden, MA: Wiley-Blackwell. Thompson, J and Bunderson, J 2003, "Violations of Principle: Ideological Currency in the Psychological Contract". Academy of Management Review. Vol. 28:4, p. 571-586. Tourish, D and Hagie, O 2004, "The communication consequence of downsizing trust, loyalty and commitment". Aberdeen Business School Review. p. 17-36. Zambon, S and Marzo, G 2007, Visualising intangibles: measuring and reporting in the knowledge economy. Ashgate Publishing, Ltd. Read More