Loyalty . . . to what?

I’m reminded, from time-to-time, of the inequality of expectations between employees and employers with respect to employment. Especially in the small to mid-sized businesses, the owners are often frustrated with employees who do not seem to put effort into the business. They don’t have a sense of “ownership.” Well, that’s because they aren’t owners, and usually aren’t treated as owners.

On the employee side, they feel that it’s quite alright for them to give two weeks notice if they get a better offer elsewhere, but at the same time seem to think that as long as they want to stay, they should be able to do so. If the employer lets them go (for whatever reason), they feel that somehow it is unfair. Of course, this is not true of all employees nor do all business owners despair over employees not acting as if the company is their own. However, there does seem to be anecdotal data to back up my perceptions.

This situation first came to my attention many years ago as I worked in the semiconductor industry. We had facilities in Silicon Valley (Sunnyvale and San Jose). I often heard managers complaining that employees were more than willing to leave for a slight raise and join another company. It seemed to be easy to do in the valley and it seemed to be true; and it made me wonder. So I started asking some questions of the engineers, marketers and sales people who left our company and those still with us. The picture became a bit clearer. It seems that there was a lot of loyalty – but the loyalty was to a particular product line or architecture rather than a company. So if I considered myself a Complex Instruction Set Computer (CISC) kind of guy, I would go where all the exciting things were happening in that field. Likewise if I considered myself a Reduced Instruction Set Computer (RISC) person. If I was skilled and excited about one architecture and the company began to emphasize the other, I eventually left to find another employer in line with my talents and passions. This kind of “loyalty to a concept” was even more prevalent in the software and Internet companies.

So managers needed to change the context in which they interpreted the content of their experience with respect to “loyal employees.” If an engineer or sales person believed in a certain product or architecture and we began to de-emphasize that particular product, then we could expect to see folks leave for greener pastures. On the other hand, if we kept pushing the envelope and introduced new products and improvements to existing products, then our employees were “loyal” and mostly content.

Discovering this different view of loyalty led to some insights that served some divisions very well. As long as they were able to stay at the leading edge of product development, they kept the best employees. They found that salary and other monetary rewards were not the biggest motivators. They had to be competitive, but by and large, it was an exciting environment in product development that the employees appreciated and which kept them happy and inspired.

So as we work our way out of this recession and employees begin feeling as though employment changes are possible, how will you hold on to your key players? Do you know what your employees are loyal to? Since they don’t own the company, it likely isn’t the company itself that inspires them. They may be grateful for the company and the employment it provides, but what are they really passionate about?

Is your culture one of team work and does everyone in your company agree? Have them take our Company Cultural Assessment. CLICK HERE to download your assessment.

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About the author

Dave Kinnear is a sought after Business Advisor and Mentor. He works with highly successful executives through one-to-one mentoring and coaching meetings. Individuals who are presently running successful businesses and executives in transition work with Dave to ensure meeting corporate and/or career goals. Through his affiliation with Vistage International, Dave convenes and facilitates Advisory Boards comprising Business Owners, Company Presidents and Chief Executives dedicated to becoming better leaders who make better decisions and achieve better results.

In search of benefits . . .

You have to wonder what the insurance companies were thinking. Many, maybe most, small businesses are struggling with cash flow issues; and we all know that. One might expect the insurance executives to be sending out the word to agents and brokers that in light of the “predatory government regulatory atmosphere,” there shall be no premium increases for small business clients. Apparently that hasn’t happened. Instead, monumental premium increases are hitting small businesses.

One small business owner I know, a staunch conservative and very pro business, was adamantly against ANY government intervention in health care. The only thing she felt was useful was to have government remove the interstate barriers to competition among insurance companies. Then the bill came to renew the insurance benefits for her employees. The increase was 32%. She is now all for some kind of intervention, not just more competition; maybe not too much public option, but something to help drive down costs. Many small businesses are finding that they cannot afford to be in the insurance benefit program.

On the other hand, you might think that in light of the administration’s goals of putting in place more regulations and also initiating a “public option” for insurance, that they would try and keep any perceptions about government interference with health care out of the headlines. Again, the word hasn’t gotten to the committees making recommendations on women’s health. And so we get the news that one of the more effective programs for breast cancer screening is to be deemphasized. The public, helped by the media, interprets this new recommendation as proving that indeed big government wants to get between you and your doctor.

In similar fashion to the business woman above, another woman with whom I have had conversations around the health care issues was pretty much convinced that a public option was the only sensible way to contain health care costs. Otherwise, the insurance companies will continue to reap huge profits at the expense of policy holders. And, she claimed, the government isn’t really who we need to worry about. It’s the insurance companies who hang us out to dry with fine print and denial of coverage due to trumped up pre-existing condition claims. Needless to say, she’s having second thoughts now based on the mammogram flap.

So neither side on this argument seems to be paying attention to the public sentiment or the “customer’s issues.” Arrogance is a word that comes to mind.

The major reason that companies are in the benefit business is to have something other than salary on which to compete for good employees. With the increasing cost of drugs, medical insurance and other mandated insurance such as worker’s compensation now going through the ceiling, it may be time to look for some other kind of benefits with which to attract employees. I know this is heresy, and I’m sure I’ll get a bunch of “hate mail,” but I’m thinking it’s time to hope that the government does take the health insurance monkey off the backs of our businesses and we can go find other benefits to supply our employees. It’s a chance to maybe level the field again – if costs are really reduced for employees.

The “big boys” will be able to afford the usual benefits for employees. If small businesses can’t, then they won’t be able to attract top notch employees; unless they can offer something else. One idea has surfaced in a new book called the Dream Manager. I’m sure we could come up with other ideas, including paying higher salaries so our employees can take care of their own insurance (if effective, low cost insurance becomes available). Wellness programs are much needed. The trick will be to greatly reduce the amounts spent on employee health insurance by business and use the savings to fund other innovative benefits.

How about you? What will you do about employee benefits? Are your health insurance premiums sky-rocketing? Will you have to cut back on benefits this year? Do you have other benefits, or plans for new benefits?

Download a Cost Of Hire Calculator to help you know the true cost. CLICK HERE to get it.

About the author

Dave Kinnear is a sought after Business Advisor and Mentor. He works with highly successful executives through one-to-one mentoring and coaching meetings. Individuals who are presently running successful businesses and executives in transition work with Dave to ensure meeting corporate and/or career goals. Through his affiliation with Vistage International, Dave convenes and facilitates Advisory Boards comprising of Business Owners, Company Presidents and Chief Executives dedicated to becoming better leaders who make better decisions and achieve better results.