Featured Research

from universities, journals, and other organizations

Sharing the wealth with loyal workers

Date:
July 29, 2013
Source:
Michigan State University
Summary:
Workers who are loyal to their employers tend to be paid more, according to the first broad-scale study of worker loyalty and earnings.

Workers who are loyal to their employers tend to be paid more, according to the first broad-scale study of worker loyalty and earnings.

Michigan State University researchers surveyed 10,800 employees in former socialist countries that introduced capitalist economies in the 1990s. While previous research has found that worker loyalty bolsters companies' bottom lines by lowering labor turnover costs and enhanced customer service, this study shows that employees benefit as well -- by making more money, said Susan Linz, lead author and professor of economics.

"We know that firms realize financial gain from loyal workers, but we wanted to know if they share those benefits with the workers," Linz said. "And among the more than 650 workplaces included in our study the answer is yes, they are sharing the wealth."

The researchers surveyed employees from 2005 to 2011 in six culturally and economically diverse countries: Armenia, Azerbaijan, Kazahkstan, Kyrgyzstan, Russia and Serbia. The employees came from a wide range of sectors including manufacturing, retail and financial services, health care, education, public sector, construction and transportation.

Loyalty was measured in three ways: by workplace seniority; whether the employee would turn down an offer of slightly more money to change jobs; and whether the employee was committed to and engaged with the company -- i.e., did they buy into the company's mission even when it was outside their job responsibilities.

Linz said she was surprised to find such a strong link between worker loyalty and higher earnings. In three countries, the contribution of loyalty to earnings was equivalent to the contribution to earnings of an additional year of experience.

Workers were more likely to be loyal if they expected to earn a bonus or learn new skills. In addition, loyalty was higher among employees who expected that doing their job well would result in job security and the feeling that they were accomplishing something worthwhile.

Contrary to previous studies, however, praise from supervisors was not always positively linked to worker loyalty.

The findings have implications in the global economy. Western-based companies looking to set up shop in countries such as Azerbaijan or Russia, for example, need to know how to train their managers to motivate workers. Knowing which strategies promote loyalty is crucial.

"If Western managers come in and start offering them praise, telling them they're doing a great job and so on, it might not have that big of an effect," Linz said. "Managers might have more success by offering the workers a chance to learn new skills, which can contribute to their sense of better job security or desire for more job autonomy, all of which were positively linked to loyalty in our study."

In the United States, where it's common for workers to switch jobs and where companies and entire sectors are downsizing, popular perception is that it doesn't make sense for employees to be loyal. But what if firms do reward loyalty? Linz said it would be interesting to conduct the employee survey here to see if the findings are similar.

Linz conducted the study with Linda Good, professor of advertising, public relations and retailing, and Michael Busch, a doctoral student in economics.


Story Source:

The above story is based on materials provided by Michigan State University. Note: Materials may be edited for content and length.


Cite This Page:

Michigan State University. "Sharing the wealth with loyal workers." ScienceDaily. ScienceDaily, 29 July 2013. <www.sciencedaily.com/releases/2013/07/130729133126.htm>.
Michigan State University. (2013, July 29). Sharing the wealth with loyal workers. ScienceDaily. Retrieved July 23, 2014 from www.sciencedaily.com/releases/2013/07/130729133126.htm
Michigan State University. "Sharing the wealth with loyal workers." ScienceDaily. www.sciencedaily.com/releases/2013/07/130729133126.htm (accessed July 23, 2014).

Share This




More Health & Medicine News

Wednesday, July 23, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Courts Conflicted Over Healthcare Law

Courts Conflicted Over Healthcare Law

AP (July 22, 2014) Two federal appeals courts issued conflicting rulings Tuesday on the legality of the federally-run healthcare exchange that operates in 36 states. (July 22) Video provided by AP
Powered by NewsLook.com
Why Do People Believe We Only Use 10 Percent Of Our Brains?

Why Do People Believe We Only Use 10 Percent Of Our Brains?

Newsy (July 22, 2014) The new sci-fi thriller "Lucy" is making people question whether we really use all our brainpower. But, as scientists have insisted for years, we do. Video provided by Newsy
Powered by NewsLook.com
Scientists Find New Way To Make Human Platelets

Scientists Find New Way To Make Human Platelets

Newsy (July 22, 2014) Boston scientists have discovered a new way to create fully functioning human platelets using a bioreactor and human stem cells. Video provided by Newsy
Powered by NewsLook.com
Gilead's $1000-a-Pill Drug Could Cure Hep C in HIV-Positive People

Gilead's $1000-a-Pill Drug Could Cure Hep C in HIV-Positive People

TheStreet (July 21, 2014) New research shows Gilead Science's drug Sovaldi helps in curing hepatitis C in those who suffer from HIV. In a medical study, the combination of Gilead's Hep C drug with anti-viral drug Ribavirin cured 76% of HIV-positive patients suffering from the most common hepatitis C strain. Hepatitis C and related complications have been a top cause of death in HIV-positive patients. Typical medication used to treat the disease, including interferon proteins, tended to react badly with HIV drugs. However, Sovaldi's %1,000-a-pill price tag could limit the number of patients able to access the treatment. TheStreet's Keris Lahiff reports from New York. Video provided by TheStreet
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:
from the past week

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins