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 September 20, 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 September 20, 2014).

Share This



More Health & Medicine News

Saturday, September 20, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Could Grief Affect The Immune Systems Of Senior Citizens?

Could Grief Affect The Immune Systems Of Senior Citizens?

Newsy (Sep. 19, 2014) The study found elderly people are much more likely to become susceptible to infection than younger adults going though a similar situation. Video provided by Newsy
Powered by NewsLook.com
Jury Delivers Verdict in Salmonella Trial

Jury Delivers Verdict in Salmonella Trial

AP (Sep. 19, 2014) A federal jury has convicted three people in connection with an outbreak of salmonella poisoning five years ago that sickened hundreds of people and was linked to a number of deaths. (Sept. 19) Video provided by AP
Powered by NewsLook.com
How The 'Angelina Jolie Effect' Increased Cancer Screenings

How The 'Angelina Jolie Effect' Increased Cancer Screenings

Newsy (Sep. 19, 2014) Angelina's Jolie's decision to undergo a preventative mastectomy in 2013 inspired many women to seek early screenings for the disease. Video provided by Newsy
Powered by NewsLook.com
The Cost of Ebola

The Cost of Ebola

Reuters - Business Video Online (Sep. 18, 2014) As Sierra Leone prepares for a three-day "lockdown" in its latest bid to stem the spread of Ebola, Ciara Lee looks at the financial implications of fighting the largest ever outbreak of the disease. Video provided by Reuters
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