Loyalty : Part 3

Increasing Efficiency In Business: A Contribution to the Psychology of Business
by Walter Dill Scott, Ph.D.

(Page 6 of 16)

Many successful merchants and manufacturers, however, disdain agents and intermediaries in this relation and are always accessible to every man in their organizations; holding that, since the cooperation of employees is the most important single element in business, the time given to securing it is time well spent.

Even though human sympathy may well be regarded as the most important consideration in increasing loyalty, it is not sufficient in and of itself. The most patriotic citizens are those who have, served the state. They are made loyal by the very act of service. They have assumed the responsibility of promoting the welfare of the state, and their patriotism is thereby stimulated and given concrete outlet. A paternalistic government in which the citizens had every right but no responsibility would develop beggars rather than patriots.

Similarly in a business house ideally organized to create loyalty, each employee not only feels that his rights are protected, but also feels a degree of responsibility for the success and for the good name of the house. He feels that his task or process is an essential part of the firm's activity; and hence is important and worthy of his best efforts. To cement this bond and make closer the identification of the employee with the house many firms encourage their employees to purchase stock in the company. Others have worked out profit-sharing plans by which their men share in the dividends of the good years and are given a powerful incentive to promote teamwork and the practice of the economies from which the overplus of profit is produced.

Loyalty may be developed by Education in House History and Policies

The stability of a nation depends on the patriotism of its citizens. Among methods for developing this patriotism, education ranks as the most effective. In the public schools history is taught for the purpose of awakening the love and loyalty of the rising generations. The founders, builders, and saviors of the country, the great men of peace and war who have contributed to its advancement, are held up for admiration. From the recital of what country and patriotism meant to Washington, Jefferson, Lincoln, Grant, and a host of lesser heroes, the pupils come to realize what country should, and does, mean to them. They become patriotic citizens.

Grounding the New Employee in Company Traditions and Ideals

In like manner the history of any house can be used to inspire loyalty and enthusiasm among its employees. Business has not been slow to borrow the methods and ideals of education, but the writer has been unable to discover any company which makes adequate use of this principle. That this loyalty may be directed to the house as a whole, and not merely to immediate superiors, every employee should be acquainted with the purposes and policies of the company and should understand that the sympathy which he discovers in his foreman is a common characteristic of the whole organization, clear up to the president. The best way to teach this is by example - by incidents drawn from the past, or by a review of the development of the company's policy.

To identify one's self with a winning cause, party, or leader, also, is infinitely easier than to be loyal to a loser. For this reason the study of the history of the firm may well include its trade triumphs, past and present; the remarkable or interesting uses to which its products have been put; the honor or prestige which its executives or members of the organization have attained; and the hundred other items of human interest which can be marshaled to give it house personality. All this would arouse admiration and appreciation in employees, would stir enthusiasm and a desire to contribute to future achievements, and would foster an unwillingness to leave the organization.

Some companies have begun in this direction. New employees, by way of introduction, listen to lectures, either with or without the accompaniment of pictures, which review what the house has accomplished, define its standing in the trade, analyze its products and their qualities or functions, sketch the plan and purpose of its organization, and touch upon the other points of chief human interest. Other companies put this information in booklets. Still others employ their house organs to recall and do honor to the interesting traditions of the company as well as to exploit the successful deeds and men of the moment. An organized and continuous campaign of education along this line should prove an inexpensive means of increasing loyalty and efficiency among the men. To the mind of the writer, it seems clear that the future will see pronounced advances in this particular.

Personality can be overdone, however. Workers instinctively give allegiance to strong, balanced men, but resent and combat egotism unchecked by regard for others' rights. Exploitation of the employer's or foreman's personality will do more harm than good unless attended by consideration for the personality of the employee. The service of more than one important company has been made intolerable for men of spirit and creative ability by the arrogant and dominating spirit of the management. The men who continue to sacrifice their individuality to the whim or the arbitrary rule of their superiors, in time lose their ambition and initiative; and the organization declines to a level of routine, mechanical efficiency only one remove from dry- rot.

How Efficiency and Loyalty of Workers may be Capitalized

Conservation and development of individuality in workers may be made an important factor in creating loyalty as well as in directly increasing efficiency. Great retail stores put many department heads into business for themselves, giving them space, light, buying facilities, clerks, and purchasing and advertising credit as a basis of their merchandising; then requiring a certain percentage of profit on the amount allowed them. The more successful of Marshall Field's lieutenants were taken into partnership and, as in the case of Andrew Carnegie and his "cabinet of young geniuses," were given substantial shares of the wealth they helped to create.

Some industries and stores carry this practice to the point of making specialized departments entirely independent of the general buying, production, and selling organizations whenever these fall short of the service offered outside; while the principle of stock distribution or other forms of profit sharing has been adopted by so many companies that it has come to be a recognized method of promoting loyalty.

About the Author

Walter Dill Scott (1869-1955) was one of the first applied psychologists. He applied psychology to various business practices such as personnel selection and advertising. In 1900 he was appointed instructor of psychology and education and director of the psychological laboratory at Northwestern University. In 1905, Dr. Scott was made professor of psychology and head of the department of psychology.