Loyalty in the Age of Downsizing

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Companies appreciate loyal employees because they are highly committed and reliable, further organizational goals, and are unlikely to seek jobs elsewhere. But, as companies downsize and restructure, managers are becoming more loyal to their careers than to their employers.

In research beginning in 1989, Stroh and Reilly found that loyalty is diminishing, but that managers who are free agents or take responsibility for managing their own careers are more loyal to their new employers than they were to their former employers. Many managers who left their employers in 1989 recognized that better career opportunities were available outside their industries. They also saw their organizations as less political than those in which they worked in 1989. The managers who stayed with the same organization were significantly less loyal and perceived few career opportunities in their organizations. The attitudes of those who stayed with their 1989 organizations became less favorable relative to those who found new jobs elsewhere.

Stroh and Reilly's conclusions:

1. Managers who are free agents fare better than those who are not.

2. Women managers are particularly sensitive to a perceived supportive corporate climate.

3. Maintaining a strong employer-manager relationship is essential.

A manager who is willing to risk changing employers in order to further career development may contribute as much or more to a new employer as a long-term manager. And companies must meet employees' needs for career development and growth.

Linda K. Stroh is associate professor, Institute of Human Resources and Industrial Relations, and Anne H. Reilly is associate professor, Management Department, both at Loyola University Chicago.

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