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Posted: March 29, 2012

You want loyalty?

What are you giving to get it?

Todd Ordal

“It is not from the benevolence of the butcher or the brewer or the baker that we expect our dinner, but from their regard to their self-interest.”
                                                                                                                                                                                        — Adam Smith, The Wealth of Nations

I’m always amazed at how many leaders expect people to work against their own self-interest. Some examples: Pitch in on an extra project for no possible reward. Sell new accounts when being paid handsomely for existing revenue. Show initiative when constantly second-guessed. Care about the company’s financial performance when treated like a mule and sharing no gain.

Some of these leaders complain that there’s no loyalty anymore. There may be some truth to that, but I see it more as an algebraic equation. L (Loyalty) = PR (Perceived Rewards). PRs, however, can mean different things to different people. Several of my kids who are in their 20s are extremely loyal to their employers, but they also get high PRs. One daughter’s PR is working with other talented artists, even though her monetary rewards are low.

My other daughter gets to work on environmental issues that she’s deeply committed to. My son’s PR is monetary. If my daughter who works with artists had to work with capitalists like me, she wouldn’t be as loyal. (I’m still working on her…) If my other daughter had to work for a smokestack industry, she’d be home on the couch at 5:15 p.m. If my son didn’t receive good tips as a bartender, you wouldn’t catch him volunteering for another shift when he has an 8 a.m. class.

A few years ago, I met with a CEO who didn’t understand why he couldn’t get people to come in early or work past 5 p.m. He “couldn’t find any good people.” He tried mandating longer hours (you can imagine how that went over). He tried hiring new people… repeatedly. He tried tightly monitoring employees’ work. However, he didn’t try positive feedback, allowing them to come up with their own solutions or sharing any of the large amount of money he made every year — heck, every week! He expected big L with very little PR. In algebraic terms, L  PR.

Some people have a natural reservoir of L because they expect rewards. They have a positive outlook and bust their tail. I love working with people like that! However, they still need PRs to stay engaged over the long haul. Others tend toward the “show me the money” end of the spectrum and only put out good energy if they see the reward plainly and quickly. If handled correctly, they can be great assets as well.

The invisible hand of self-interest (apologies to Adam Smith) can either guide your actions as a leader or slap you across the face. Make your choice.

Todd Ordal is President of Applied Strategy LLC. Todd helps CEOs achieve better financial results, become more effective leaders and sleep easier at night. He speaks, writes, consults and advises on issues of strategy and leadership. Todd is a former CEO and has led teams as large as 7,000. Follow Todd on Twitter here. You can also find Todd at,  303-527-0417 or

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Readers Respond

Good examples Fred. You're spot on that the little things can be very significant. Your message about the danger of taking things away is also important. By Todd Ordal on 2012 04 11
We have experienced high turnover in the past for various reasons. We have found some of the simplest things are reward as well as financial increases on an employees opaycheck. A parking space in the underground garage was huge for our manager - a shut down the office lunch at the creekside is one they won't stop bringing up - buying lunch & bringing it in goes over well as well. We recently purchased everyone new headsets, gave them dual monitors, & brought in new ergo chairs. These moves all went over very well. Sometimes it's just rthe little things. By Fred Schubert on 2012 04 11
David, Teri, Brendan--Thanks. Good comments. Just had breakfast with a friend who has a 24 year old daughter who is totally engaged in her job/career. She works for some people who "get it." By Todd Ordal on 2012 04 04
Great article. I've spent the last 7+ months as a visiting professor at a university in Turkey. Alng with 2 other Americans, I was hired full-time to teach courses in Theater; none of us are coming back next year. In various ways, we've all experienced the lack of 'PR' that you describe eloquently above. And apparently, our experience is not uncommon: this University has a problem retaining any foreign or full-time faculty for more than 1-2 years. Seems many employers across the globe want dynamic innovation and success, without them having to change their management style whatsoever; instead demanding employees who are grossly underpaid for their labor to do all the work, and receive none of the reward. By Brendan McCall on 2012 04 04
Thanks for the great article. It goes back to creating the company culture where people get excited about coming in and positively reinforcing it. By Teri Karjala on 2012 03 31
Todd, Great article and spot on! In today's free agent workforce, loyalty is being redefined, but is nonetheless a key to sustainability. Merging the work ethic of Boomers with Gen Xers and Ys and Millennials is really a challenge, but somehow you sense it when you walk into certain companies. The marketing angle on all this is that employee loyalty is one of the most clearly defined indicators of customer loyalty. Employee churn = custoer churn. By David Heitman on 2012 03 31
Bonnie--Yes; those are good words! Actions will, however, speak louder than words. Tom--I agree; it is not complicated, but simple is not always easy. Too often people at the top of the pyramid forget to ask, "What is in it for them?" By Todd Ordal on 2012 03 30
It isn't very complicated. Employers that are respectful, honest, follow the golden rule, etc. will have loyal employees. Employers that "position", manipulate, delay rewards, flaunt their power, etc. will have high turnover and less qualified applicants. By Tom Farney on 2012 03 29
Your points are accurate, and as you say, we all are looking for a range of different rewards (some monetary and some intrinsic). The question is how do you begin to get both employers and employees to see that they are interdependent? There is no job security in a failing organization and there is little organizational success without loyalty. We have helped many organizations develop that interdependence. First, we must eliminate the silos where leaders and employees have different views of success. Jim Rohrer. Http:// By Jim Rohrer on 2012 03 29
What about the words, sincere, specific & written? By Bonnie Blakesley on 2012 03 29
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