Strategic Human Capital Insights

Is Being Loyal to an Employee a Good Thing?

Both employee and manager loyalty has always been considered a good thing. So what’s changed? When does being loyal long-term, at all costs, go from a virtue to a liability?

Hand with marker writing the word Its All About RelationshipsThe concept of "change" has changed everything. When companies grew at normal rates, and change was incremental and predictable, manager and employee loyalty could keep pace with each other and with the direction of the organization. Now, however, when organizations are growing fast and adapting to new technology, new processes and methods, increased customer demands, and additional new employees, the predictable static environment that many employees are comfortable with, have morphed into chaotic, change-driven, unpredictable frontiers where the old rules and controls have evaporated. Increasing, the latter describes today’s work reality. 

Here are some important questions to consider when thinking about manager loyalty:

  • What does it mean for the employee who is attached to the old rules and controls and is having real issues adapting to the new work reality? 
  • What does it mean for new employees who don’t know the old rules and controls and don’t really need to work under those constraints since that work environment has shifted?
  • What does it mean for the manager who must manage these two conflicting and competing employee needs?

The New Employee Dilemma

The easiest solution is to ask new employees to deal with the old employees. But is this really the new employee’s job? And, why would they want to do that? Do they have the skills to do that? Is this the optimal approach? In effect, we are asking new employees to do the manager’s job without the manager’s authority or influence. In their early stages, we are asking new employees to ‘box by tying one hand behind their back’. At best, it is a workaround with no good resolution. At worst, it is management abdication. In a zero-unemployment environment, why would new employees want to do that without extra ‘battle pay’ for having to do their manager’s job? 

No doubt about it, as a manager, being loyal to employees is a good thing. But in the dynamics of a growth organization, when new employees are brought on for their expertise and motivation, a manager’s over-tolerant loyalty to a dysfunctional long-term employee will create problems on many levels. Below is an organizational impact assessment. 

Organizational Impact: Consequences of Not Addressing Issues with Existing Employees

The dysfunctional, long-term employee wins because they can’t or won’t change to meet the growth needs of the organization. What impact does this have on corporate culture that allows dysfunction to exist with maximum management tolerance and minimal management intervention?

New employee onboarding and growth acceleration can be compromised or decelerated by the passive behavior of the dysfunctional employee and the absent manager.

New employees need to engage in ‘work arounds’ to accommodate the ‘nuances’ of the tolerated dysfunctional employee, which should never be the case.

New employees wonder about the management ability of the manager, who in reality, is not managing but is denying the situation and relying on a management strategy of hope and luck. This is never a great management strategy.

What Can Develop from Well-intentioned Loyalty? 

Business growth is compromised by the long-term and now dysfunctional employee who blocks the optimization of business goals to accommodate personal work preferences.

The long-term employee is stuck in an old reality. While the new work environment is the current reality, the long-term employee is allowed to ‘barely function’ with skills that are fast becoming stale and depreciating. The manager is allowing that employee to depreciate by not developing an employee with relevant skills needed in the new work environment.

The new employee, hired for their current skills, will likely become demoralized, demotivated, sub optimized and eventually leave. From a business perspective, the manager will have created a suboptimal business environment, not by design but by management default.

Today, manager loyalty is a good thing, but loyalty exists in a multidimensional world where true loyalty must be evaluated as it applies to all employees, to management, to business goals, and to owner, shareholders and investors. Managers, it may be time to consider manager loyalty and rethink how you define it.


If you're interested in learning more about the importance of strategic leadership and change management as it relates to new and existing employee development, I invite you to download our recent eBook, The Multifunctional Approach to Transformative Leadership. The eBook focuses on employee transition, aligning employees and the change process, personality profiling, and much more.

Download the Leadership eBook


Topics: Change Management, Leadership, Human Capital, Human Asset Management

Posted by Joanne Flynn

Joanne Flynn

In 2014, Joanne Flynn founded Phoenix Strategic Performance, a strategic human capital advisory firm. Prior to this, Joanne was Vice President at Goldman Sachs for 10 years responsible for global learning and development. She then led the consulting practice of Phoenix Group International, a consulting firm specializing in global financial service. Joanne is now taking best practices from the people-intensive financial services industry and adapting those best practices to startup and growth businesses. She is a thought leader in the areas of strategic organizational alignment, organizational agility, human capital gap analysis, leadership challenges for the new workplace and transformation leadership.

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