1. Why is Managing Employee Commitment & Loyalty Important?
Firms compete for competitive advantage through their employees. Attracting & retaining highly committed employees is key
Difficult task because job changes are more frequent:
* highly skilled employees have lots of options
* dual career pressures
* corporate decisions to expand and contract
because of technological & economic changes

2. Why is Managing Employee Commitment & Loyalty Important?
If mobility is the “name of the game”, we must learn to create commitment quickly (i.e., expect shorter employee cycle times within our firms) AND maintain commitment among “stayers" who see people come and go
Commitment entails feelings of loyalty, duty and psychological involvement to various targets: organizations, jobs, careers, unions, teams, even the work itself

3. Why is Managing Employee Commitment & Loyalty Important?
Take an accountant: Loyalty could be to:
one’s employing organization (Deloitte)
one’s career (loves being a CPA)
one’s job (likes being audit manager)
the work itself (derives pleasure from
completed audit)
Managerial focus tends to be on organizational commitment but commitment to other targets can also be successfully managed

4. Putting Commitment Back in the Workplace
Why should organizations be concerned with employee loyalty?
Why has commitment declined in recent years?
What can we do to restore commitment?

5. Why should organizations be concerned with employee loyalty?
Loyalty has declined. In a recent survey, only 45% said they felt strong, personal attachment to their employer and 34% felt any obligation to stay with current employer
Many undesirable consequences associated with low commitment work environments

6. PROBLEMS IN LOW WORK COMMITMENT ENVIRONMENTS
 Organizational Performance
Absenteeism
Turnover (Customer Sat)
* Half leave < 3 years
Effort expenditure
* Quality initiatives
 Theft
 Job dissatisfaction
 Willingness to be relocated

7. Financial Outcomes of Work Commitment
Strategy to enhance 1996 ROI Performance
TQM
Downsizing or Re-engineering
Employee Involvement (Commitment)
Used
15%
15.4%
19.1%
Did not Use
15%
13.4%
N=216 Source: Lawler

8. REASONS FOR DECLINE IN COMMITMENT
1. Corporate America has not met its obligations to employees
a. Downturns: layoffs, hours & compensation cut
b. Mergers & Acquisitions: employees terminated
c. Experiments with two-tiered pay systems
d. Increased use of temps & contract employees
Societal values have changed &
organizations have failed to
accommodate these changes
a. Importance of work ethic
b. Work/family balance issues
c. Diversity issues

9. MYSTERY VALUE EXERCISE
Response options:
Strongly Strongly
disagree Disagree Neutral Agree agree
(1) (2) (3) (4) (5)
1. Hard work makes a man or woman a better person.
2. Wasting time is as bad as wasting money.
3. A good indication of a person’s worth is how well he or she does
on the job.
4. If all other things are equal, it is better to have a job with a lot
of responsibility than one with little responsibility.

10. REASONS FOR DECLINE IN COMMITMENT
3. The experience of paid employment has not met
expectations of post-boomers
a. Standard of living
b. Flatter orgs and lower rate of advancement
c. Career is not progressing according to plan
(disillusioned by practice, employer
impediments)
4. Growing numbers of jobs do not
foster commitment
a. Low challenge
b. Few opportunities for growth
c. Rising education levels
among U.S. citizenry

11. How Can Commitment be Restored
How Can Commitment be Restored? It depends on what type(s) of commitment are “deficient”
1. Corporate America has not met its obligations to employees People are no longer loyal to employers? (low org. commitment)
2. Societal values have changed & organizations
have failed to accommodate these changes
Self-worth is no longer derived from paid
employment? More value attached to family or leisure
time than paid employment? (low work ethic & org commitment)
3. The experience of paid employment has not met
expectations of post-boomers Disappointment with employment or career? (low career & org commitment)
4. Job does not foster commitment? (low job involvement)

12. FIVE BASIC FORMS OF WORK COMMITMENT
Affective Work
Organizational Ethic
Commitment Endorsement
Continuance
Organizational
Commitment
Job Career
Involvement Commitment
FIVE BASIC FORMS OF WORK COMMITMENT

13. Continuance Commitment vs. Affective Commitment
CONTINUANCE AFFECTIVE
ORGANIZATIONAL ORGANIZATIONAL
COMMITMENT COMMITMENT
SIDE-BET Need to Desire to GOAL
APPROACH continue continue CONGRUENCE
(exchange working for an working for an APPROACH
model) organization organization
(limited alternatives) (goal congruence)
Continuance Commitment vs. Affective Commitment

14. ORGANIZATIONAL COMMITMENT
I. Continuance Commitment
Definition: Loyalty to an organization based on accumulated
investments that will be lost upon leaving
Sample Too much of my life would be disrupted if I left my
Measure: present organization.
A changeable Attitude
II. Affective Commitment
Definition: The extent to which individuals identify with and have
goals consistent with the organization’s
Sample I feel like I’m part of the family at my organization.
Measure:

15. WORK ETHIC ENDORSEMENT
Definition: Extent to which one intrinsically values
work as an end in itself
Sample The most important things that happen in
Measure: life involve work
May be a Value or Personality Trait
May vary with age or cultural group

16. CAREER/PROFESSIONAL COMMITMENT
Definition: The importance of one’s career
Sample I like this occupation too well to give it up
Measure:
May be a Deep-Seated Attitude
Resistance to change because of
life-long dream to pursue and
educational investment

17. JOB INVOLVEMENT
Definition: The degree of absorption in work activity an
individual experiences.
Sample I live, eat, and breathe my job.
Measure:
May be a Very Changeable Attitude
Can be affected by task assignments

18. Job Involvement
Continuance Organizational Commitment
Work Ethic
Endorsement
Career Commitment
Affective Organizational Commitment
Interrelationships Among Forms of Work Commitment

19. Restoring Work Commitment
Handle via selection
Lengthy socialization to instill/reinforce
values
Sponsoring continuing education
Mentorship programs
Pay-for-skill reward systems
Development of career plans with HR staff
Increase “side bets”
Promote identity with firm; more “we”
Training to improve (a) communication, team
building, etc. (b) employee skill sets
Policies to reduce home/work conflict
Job design, enrichment
Use of teams, participative decision-making
More job autonomy
Work
Ethic
(difficult to change)
Career
Commitment
Organizational
Job
Involvement
(easiest to change)