The benefit of building and maintaining the satisfaction and loyalty of employees to the

According to GuideStar model(2005), criteria for evaluating satisfaction (or contentment) of the employees include the followings:

(1) Overall satisfaction in the job and the company

(2) Satisfaction in influence of the company’s managers on the organization and individual.

2.2.2 Employee loyalty to the organization 2.2.2.1 Concept

“Loyalty of the employee is that when the employee commits to attach to the success of the organization and believe that working for the organization is his best choice”. (The Loyalty Research Center, 2004)

2.2.2.2 Criteria for evaluating “ Employee loyalty to the organization”

Like leadership style, the employeeloyalty is not measured or quantified directly. It must be expressed through measured variables. They will be the behaviors and attitudes that people often see in loyal employees.

According to the measurementscale of the employeeloyalty by Man Power (2002), criteria for evaluating the employeeloyalty include:

(1) Being willing to refer the company as a good place to work (2) Being willing to introduce products and services of the company (3) Intending to make long-term commitment to the company

2.2.3 The benefit of building and maintaining the satisfaction and loyalty of employees to the organization

The value of employee loyalty is tremendous. Minimizing the cost of changing staff is just a visible example. The benefit of retaining experienced and reliable staffs is invaluable. It is also noted to administrators who are over the age of forty that things made loyal employees today are very different from what made us loyal to the organization yesterday. Seniority, work experience, organization’s stability will be first things at first thought. However, beyond personal experience, we will look at the complete prospect of the benefit of building and

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maintaining satisfaction and loyalty of the employee in the current context.

• In terms of revenue, satisfied and loyal employees tend to do better than what the customers do expect and they always remain in their best morale and ability. Both traits are very important in retaining loyal customers as well as bringing in high revenue.

• In terms of cost, loyal and satisfied employees will work for the company for a long time; reject offers from the company’s competitors. They do not actively seek new jobs and they always introduce the company as a good place to work. These four attitudes positively affect the section of expenses in the balance sheet of the company because the company will avoid significant expense in replacing staff.

In other words, instead of focusing on retaining the employees (trying to retain employees who decided to quit), administrators must be more active and proactive in recognizing the benefit of understanding, managing and enhancing the loyalty and the satisfaction of employees.

Thus, although the employee satisfaction and loyalty are acknowledged as two of the most crucial factors to the success of an enterprise, it is not a surprise to realize that companies and organizations are facing severe challenges in developing an enthusiastic and dedicated staff.

2..3 THE RELATIONSHIP BETWEEN THE NEW LEADERSHIP STYLE IN QUALITY AND THE EMPLOYEESATISFACTION AND LOYALTY

Survey results of Aon research institute (2004) show that 13% of employees donot trust their owner at the basic level. They feel insecure of fears, threats, and harassment. From the survey of over 2,000 employees, only 45% of which agree that “the organization deserves my loyalty”; 32%

remains neutral and 23% disagreed. In this same survey, 54% employees do not believe that their leaders have a high level of integrity.

Administrative experts admit that the commitment, loyalty, and trust of the employees are being eroded because of the restructure, merger, and acquisition of enterprises as well as things the fast change nowadays. The research results of Aon show that trust is the basic requirement. Without trust, any benefits, programs of the company will not increase significantly commitment of the employees. Watson Wyatt (2004) pointed out the relationship between faith and profit. In companies that the employees trust leaders, profit increases more than 42%. Apparently, faith is the key of loyalty, especially in the tight labor market. The global study of Watson Wyatt (2004) revealed that 7,500 of their researched employees believes half of their leaders.

Therefore, what do we have to do to promote and consolidate the satisfaction, loyalty, commitment and faith of employees in a constantly changing environment nowadays? The answer is

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surprisingly simple. There are real leadership behaviors that affect the employee loyalty. Leaders that practice those behaviors constantly will earn satisfied and profoundly loyal employees.

This has been tested in some researches at some countries. The result of the study of influence of leadership style on the satisfaction and performance of employees in banking industry at the United Arab Emirates (2005) showed that administrators who practiced the new leadership style in quality have positive influences on the satisfaction and performance of the employees. The study on the influence of the organizational culture, leadership behavior to the cohesion, job satisfaction, and job performance at small and medium enterprises of Taiwan (Li Yen Chen, 2004) also concluded: new leadership behaviors in quality have positive influences on the cohesion, job satisfaction, and job performance of employees.

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