Employee Loyalty

Introduction

The performance of any organization depends heavily on its employee’s loyalty. Therefore, organizational loyalty is considered as a key factor that determines organizations’ success. Organizations have to foster greater commitment and understand the way by which employee’s loyalty is developed if they are willing to reduce turnover and improve employees’ on-the-job behavior.

Definition

A three-tiered psychologically based definition consists of:

“the variety of obligation types that loyalty can imply and anticipates the potential for asymmetrical loyalty configurations between employers and employees”.

In other words, without reciprocity, it is difficult to expect loyalty.

Loyalty is a psychological state which describes the relation between employees and their organizations; this relation has its implications on their decisions to stay or not with their organizations.

Loyalty is considered a strong desire to continue being a membership with an organization.

Loyalty is a psychological attachment that is felt by employees toward their organizations; the effort done by an employee to achieve the objectives of the organization; the degree to which an employee is involved with the organization and is not willing to leave it.

Concept

There are four main approaches to conceptualizing and exploring employee loyalty namely, the attitudinal approach, the behavioral approach, the normative approach and the multidimensional approach. According to the attitudinal approach, loyalty is regarded as “an employee attitude or as a set of behavioral intention”. The most widely used attitudinal conceptualization of loyalty is that identified three characteristics of loyalty:

1. a strong belief and acceptance of the goals and values of the organization;
2. a willingness to exert considerable efforts on behalf of the organization; and
3. a strong desire to continue working with the organization.

The factors associated with loyalty in this approach include work experiences, personal characteristics, along with job characteristics while the results include effective performance, reduced absenteeism and employee turnover. Furthermore, loyalty can be divided into two groups: the first group view it as an attitude and the second group view it as a behavior. The attitudinal approach considers loyalty as the way people feel and think about their organizations, while the behavioral approach reflects the nature and quality of the relation between the employee and the organization. It is worth mentioning that the supporters of the attitudinal approach have started to view loyalty as a multidimensional concept that has different factors associated with it, i.e. outcomes and implications for HRM.

Loyalty has been conceptualized and measured in different ways; the view of loyalty explained in this report is based on the three-component model that incorporate the major conceptualizations described in the international researches. The model presents three types of loyalty namely, affective commitment (AC), continuous commitment (CC), and normative commitment (NC). Therefore, employees stay with an organization because of their desire to stay “AC,” recognition that the costs related to leaving would be high “CC” and/or feelings of obligation to stay “NC”.

It is worth to mention that the researchers have opted to disregard NC and focus only on CC and AC. The reason is being based on findings from previous studies such as the one undertaken by Suliman and Iles (2000) which was conducted in Jordan and other Arab countries. The study resulted in having a need to re-conceptualize this component of loyalty from cultural perspectives of Arab nations. The studies found that there is a strong relationship between NC theoretical backgrounds and the Islamic work ethics.

Measurement

The two dimensions that can be used to measure loyalty are namely, affective commitment (AC) and continuous commitment (CC). Both factors can be measured using a multidimensional scale that comprises of 15-item scale based on previous research by Meyer and Allen (1991).

Reliability

The recommended measurement was created and tested by Meyer and Allen (1991) and has a great Cronbach’s α of 0.827. It includes a total number of 15 questions. The first part of questions cover various aspects of AC with a Cronbach’s α 0.753 while the second part of questions are related to CC with a Cronbach’s α 0.755. The same measurement was used to measure the employee loyalty in UAE Public Sector in 2014. It proved its validity for UAE culture in general and the public sector specifically.

The Questionnaire

The following are the fifteen questions of the measurement. The first 7 questions measure the Affective Commitment, while the next 8 questions measure the Continuance Commitment.