4: Loyalty
Consider the phenomenon of patriotism. In times of peace, men profess a love of their country - but this is never put to the test until they are called upon in times of war to leave behind their lives of comfort and prosperity and enter into the service. Some eagerly take to the task, others find any means to avoid it. "Patriotism" is loyalty to a country, but loyalty of any kind is much the same: it shows itself only in an emergency.
Scott gives the example of a large crew of union laborers, infamous for being inflexible and self-serving, demonstrated their loyalty by on a civic project by lobbying the city government for a deadline extension, working long hours without overtime premium, and otherwise going beyond the documented limits of their union contracts to ensure that the work was completed. This, too, is an act of loyalty.
However, he also notes that this employer had done much for his workers in not merely accommodating the union's demands, but undertaking initiatives to treat them better than required in terms of work scheduling, workplace safety, and pay and bonuses. What is often conveniently ignored by those who demand loyalty of their workers is that those businessmen who benefit from acts of employee loyalty have done much to earn the loyalty of their employees.
He mentions the note of cynicism with which many businessmen regard employee loyalty - in much the same way many politicians disparage the patriotism of people who will not do his bidding. Those who demand others make sacrifices do not understand loyalty - those who have earned loyalty will have it without asking. No businessman who has earned the loyalty of his workers ever has need to make such a complaint: in his hour of need, he will find that his workmen show their loyalty, in reciprocation for the manner in which they were treated before the crisis arose.
And back to his original point, the loyalty of men to a cause - country or company - is latent under normal circumstances and does not show itself until a crisis arises. To disparage loyalty in times of peace is to discourage it in times of crisis.
(EN: I recall reading in other sources that loyalty can be detected by considering how employees behave on a day-to-day basis. Tardiness, absenteeism, careless work, abuse of equipment and facilities, and other "minor" sins that employees commit on a daily basis show contempt for an employer, and signify a need to restore pride and commitment to the workplace.)
Loyalty Begets Loyalty
Loyalty is expected in times of crisis, but it is earned during times of stability. The manner in which employees are treated on a day-to-day basis is a reliable predictor of the lengths to which they will go to see their employer through a crisis.
Loyalty is also shown in a more subtle way on a day-to-day basis in the respect with which employees regard their employer and the diligence and effort they put into their work on a regular basis. It is shortsighted and foolish to take the daily levels of production and efficiency as granted: men give their effort in equal measure to the reward (including non-monetary reward) they receive for it - hence an employer who regards his men as shiftless and lazy has likely done little to earn dedication and devotion from them.
Hence the employer who earns the loyalty of his workers benefits not only from their dedicated service during a time of crisis, but also their dedicated service on a daily basis. Their "normal" level of production already includes and extra measure that reflects the "latent" loyalty that workers feel for their employer.
Thus loyalty is not earned by unusual actions from their employer, but those that are a matter of course: fair wages, reasonable hours, good working conditions, respect and esteem, and a measure of protection against unusual circumstances are the ways in which an employer shows loyalty to his workers on a daily basis. He can expect no more loyalty than he shows, and should be confident he will receive no less.
It is often the non-financial rewards of work that cause a man to feel loyal to his firm. This can readily be seen in the differing levels loyalty and productivity of workers who receive the very same wage. The worker who feels his work is meaningful takes a personal stake in the welfare of his firm. The worker whose manager has provided him with advice and assistance with some "private difficulty" is one who will give additional effort to his work every day, and who will provide devoted service in time of need.
A common criticism of employers is that they treat their men like machines, but this implies that a man treats a machine poorly. A machine that is misused and poorly maintained will certainly break down if pressed to operate beyond its normal capacity - and so will a worker. A machine that is well maintained and well used will not only perform well under normal circumstances but can be pushed well beyond its normal capacity - and so will a worker.
Personal Relations and Personality
There is a (false) need for "professionalism" in working relationships. Particularly between superiors and subordinates, in which the superior remains aloof and impersonal to those in his charge. While this is traditional, there is no rational explanation for it, and it can be harmful to developing loyalty in the workplace.
A worker does not feel he is part of a company if he is treated in an impersonal manner, nor feels any sympathy for superiors who are cold and remote. By contrast, one who feels that his coworkers are close friends will work harder to serve the interests of his firm, will be attentive in his daily duties, and will readily lend an extra or even exceptional effort in times of need.
For the employer specifically, "taking care of his men" is necessary to earn their loyalty. Such an employer retains aged workers even though they are less efficient, provides for workers who are sick or injured and unable to work, counsels those who are in trouble, and otherwise acts in a way that demonstrates he values his people as people, not merely as productive units.
(EN: Many employers fear doing this because they do not trust their people - and this show of mistrust creates a reluctance to trust in an employer who is self-interested and uncaring. Part of earning trust is being vulnerable and trusting others, and many wish to avoid the embarrassment of being taken advantage of, and so keep others at arm's length, and never earn their trust or loyalty to begin with.)
Personality is also a major factor, and can be considered to he "the wellspring of loyalty." Most men will follow a rational leader for the sake of accomplishing a goal, but unless the leader engenders in them feelings of security and belonging, their loyalty will be thin. That is, we understand concepts but we relate to people - and those who are cold and rational but unfeeling are not trusted or given loyalty.
In truth, the worker is not loyal to a company, but to certain individuals within a company. He may be loyal to the head of the house, to his supervisor or foreman, or to his colleagues. To him, these people with whom he has immediate contact are "the company" and his relationship to them is his relationship to the firm.
However, it is noted that personality can be overdone. Workers will give allegiance to a strong and balanced man, but are disgusted by displays of egotism, particularly when there is no evidence to substantiate the reputation a man seeks to preserve. A weak man pretending to be strong is not admired, but held in contempt. (EN: To go a step further, trust is the foundation of loyalty, and trust depends upon honesty.)
The Effect of Human Sympathy
Expressing sympathy is a significant factor in developing loyalty. Sympathy is a reciprocal emotion: if you express sympathy for another person's interests, they will be inclined to express sympathy for yours. (EN: "express" is less significant than "demonstrate" - particularly in the present day, when employers will readily pay lip-service but their actions do not fall in line with their words. Disingenuousness of this nature undermines loyalty rather than building it.)
Sympathy consists of paying attention and expressing approval or concern. A manager must first be aware of the efforts of his workers, in a way in which they feel that he is watching over them, not seeking opportunities to punish but to praise and express gratitude. A manager who says nothing unless something goes wrong is generally considered to be indifferent and unconcerned with his workers. Or worse, a manager who says nothing when there is a problem is obviously not paying attention to his workers - which means he does not care.
If a workman knows that his immediate supervisor has not interest in him, then he feels there is little value in his service - he is not valued as a worker or as a person - and as a result he does not value his firm or his supervisor. But those who have a sense of being watched, and will be praised for success as well as punished for failure, will put more effort into their work, not merely for financial rewards, but as a method of reciprocating for the sympathy that they are being shown.
It's finally mentioned that sympathy cannot be faked, but it must be genuine.
The Effect of Personal Relationships
The effect of personal relationships is most evident in small operations. Where workers interact directly with the proprietor of a business, their loyalty to the business is no different than their loyalty to the man - whether they regard him as a kindly benefactor or a cold and unfeeling task-master has a great deal to do with their loyalty and fervor for their work.
This is not limited to the small organization. The author asserts that many men who have employed thousands have succeeded in winning the loyalty of the workers in their companies, though in such cases the relationship men feel to the founder is more removed than the relationship they have with those with whom they have daily contact (their superior and their coworkers).
In some instances, the owner or chief executive of a large firm is a celebrated personality - the captains of industry are, like great military generals, admired by their men and there is a sense of pride in serving under a great leader. The men who work for the United States Steel Corporation will say that they work for Andrew Carnegie, because they have a sense of admiration and connectedness to their leader.
To return to the analogy of patriotism, many people who devote themselves to service of their country do so out of respect and admiration for a president, or even a dictator, whom they admire.
The same is true within a business unit: where men identify with the personality of their foreman, they will feel dedication to their work. It is partly for this reason that factions form within some firms: the loyalty to one's immediate team is greater than the loyalty to the firm. And in this way people will remain employed under horrible conditions if they have sufficient loyalty to their immediate team.
It is also noted that relationships are valued because of the value one receives from the other party. People are not dedicated or loyal to those who are indifferent to their needs, and especially not to those who are exploitative of them. They believe that they benefit from the relationship and are not merely being used as a means to achieve someone else's goals. They give their loyalty and service to those who are loyal to and serve them in return.
There are instances in which employees feel a personal relationship to the firm, and become emotionally invested in being part of a company that serves a noble goal. In these instances the firm takes on the character of a person, and has the same responsibility to reward loyalty with loyalty.
He mentions that employee stock rewards are highly effective in getting workers to see the benefit of the firm as a benefit to themselves. Profit-sharing plans and routine bonuses have a similar effect, in receiving a share of the fruit of one's own labor as a token of gratitude from their employer.
Loyalty to Principles
There's a brief mention of people who are loyal to principles. Once they have been indoctrinated to uphold an ideal, their behavior will follow. It is a foundational method of philosophy to educate others about the value of virtues, with the expectation that their loyalty to these principles will govern their actions - and it's quite effective.
Consider the number of Americans whose patriotism is rooted on the ideals on which the nation was founded. They are loyal to the concept of liberty, as described by the nation's founders, and maintain that loyalty in spite of the behavior of politicians in the present day. This is the reason that people remain patriotic, transferring the loyalty to principles even to a despot who fails to uphold them.
It is in the same manner that employees are indoctrinated to the culture of an organization, to secure loyal service in spite of the evidence that the company fails to uphold the ideals on which it is founded. Such loyalty is directed to the firm as a whole, rather than to individuals within it - one's coworkers, immediate supervisor, and even senior management may behave as they will, but a person loyal to a set of principles will remain a devoted servant to a firm that upholds them.
It's briefly mention that people give their loyalty more often to winners than losers. The performance of a firm may supersede its moral code - such that people will be loyal to a firm that achieves success (industry leadership and profitability) in spite of the fact that the firm has abandoned its morality to succeed.
The difference can also be seen in the indoctrination of new employees. Whether an employer claims its success or its values to attract candidates and secure their services is a reliable indicator of the firm's actual values. This practice has been widely adopted as part of employee orientation by many firms.
The "house organs" (company newsletters) seek to maintain this impression on existing employees, as a periodic reminder of the character and culture of their firm, presenting it in a positive light by whatever means possible.
Capitalizing on Loyalty
There's a brief mention of the practice of delegating authority to employees to make decisions. Large retail stores will often treat their department managers as independent businessmen, giving them great latitude on merchandising and inventory decisions, but requiring of them a certain level of profit.
This is similar to the military model in which officers may run an operation such as a base or a ship with great authority, tasked with a mission and given the resources needed to accomplish it but otherwise not hindered or imposed upon by their own superiors.
This latitude and trust earns great loyalty from workers, and results in significantly better production and efficiency than merely treating them as drones to carry out orders.
The Influence of Disloyalty
A great many firms demand loyalty from their workers, but a very few demonstrate loyalty to them. To many assume that merely hiring men to do a job gives them the right to absolute fidelity even when they neglect or take advantage of their workers.
Here's a brief cautionary tale of a new sales manager who made a serious mistake in firing salesmen who failed to produce an abundance of orders. The salesman in question had been doing "missionary work" with potential clients, which involves little selling and more relationship-building, such that the salesmen was not making much in short-term sales but expected greater sales in the long run. The result of this was to undermine loyalty in the entire sales team, who were terrorized into switching to sales tactics that would win immediate orders but fail to secure long-term clients, and this damaged the reputation and profitability of the firm in the long run.
(EN: This seems a bit oblique to the topic, but what's implicit here is a matter of trust in the salesmen to do their work well even if they are not producing immediate financial results. A second point is that distrust spreads - treat one worker badly and others will lose faith in the firm's treatment of them.)
Loyalty is thus based not only on the way men are treated, but the way they expect to be treated. If an employee feels he has no assurance of fair treatment - that his firm is not loyal and is not expected ever to be loyal - his attitude toward the firm will surely be negative.
Getting a "square deal" - fair work for fair wages - is indispensible, but alone is insufficient to secure the loyalty of workers. Fair wages, reasonable hours, healthy working conditions, and continuous employment are requisite. They are the bare minimum a firm must do for its people, and can expect from them the bare minimum in return. More than this must be done to secure loyalty and devotion.
Moreover, it is not each worker's personal situation alone that influences his expectations, but the manner in which his firm treats others - including his coworkers, the firm's customers, the firm's suppliers, and anyone else who interacts with the firm. Per the case of the underperforming salesman, mistreatment of one causes others to expect mistreatment, and it saps their loyalty.
Conclusions
The author reiterates some of the various ways in which loyalty is earned and maintained by a firm - nothing new - and an insistence that "This could be accomplished at little expense and with great profit."