Employee loyalty in the traditional sense is losing ground. Promising job security and high salary in exchange for employee engagement is not strong enough to create lasting attachment in today’s changing work climate. A sense of belonging, having meaningful work and identifying with an organisation and one’s colleagues are paramount to workplace commitment, as well as performance in today’s workplace.
An end to loyalty, but not to commitment
Investigating the psychological relationship between the individual and the organisation has been an important contributor toward understanding how human capital affects performance. Organisational commitment is a psychological concept that serves as a foundation for work relationships and organisational development and is a core mechanism in HR management to increase employee engagement and retention.
However, due to dynamic market forces affecting the labour market and the increase of remote work setups, it is becoming increasingly difficult to guarantee a balanced work relationship based on social exchanges alone. There is an end to loyalty as we once knew it, which is why new approaches to enhancing employee attachment to organisations are required.
Most organisational commitment models were developed about 30 years ago. The traditional model to enhance employee loyalty in business is based on a social exchange relationship, reflecting promises of job security in exchange for employee effort and commitment. This is done through the provision of transactional commodities like salary and benefits as well as social ones like recognition, support and trust in exchange for the employee’s hard work and loyalty. This is still the foundation upon which most HR managers today seek to enhance organisational commitment and employee performance. However, for businesses, creating a truly committed workforce in today’s rapidly changing and digitalised environment requires the development of a new social contract which doesn’t only include pay and benefits, but also provides pride, purpose, mastery, and a sense of belonging.
New mechanism to foster psychological attachment: Social Identity
My research in this area has identified one psychological mechanism in particular that effectively increases employees’ commitment: social identity. Social identity within companies is often referred to as organisational identification and reflects a sense of oneness and belongingness through one’s identification with the organisation. This means that being part of a company helps individuals understand who they are and allows for the internalisation of group values, norms and other characteristics into one’s self-concept, which promotes individual behaviours favouring the business. Social identity helps to connect people in organisations – even when employees don’t work in the same location – and helps direct behavior in a common direction.
Employees who identify strongly with a company are able to better deal with uncertain situations, are more intrinsically motivated to pursue organisational goals and have a better understanding of what is happening within the firm. Organisational identification also helps develop a cognitive form of attachment, which results in a sense of belongingness and commitment. Core values, shared goals, a sense of purpose and meaningful work are therefore important tools to use to connect and engage employees. Organisational identification, therefore, helps to build a more resilient form of employee commitment, which improves individual performance and overall retention.
A new model of organisational commitment
My research has led to the development of a new model of workplace commitment, incorporating not only organisational exchange factors but also social identity as a way to enhance psychological attachment in a fast-moving and changing environment. I call this the Employee Connect Model. Social exchange and social identity factors together enhance employee loyalty in today’s dynamic working environment. They create a committed mindset through different psychological pathways, which can either strengthen existing cognitions and feelings of attachment toward the organisation or even buffer negative work attitudes and behaviours.
The importance of organisational onboarding
One of the key findings from my research is the susceptibility of employees to new work experiences or uncertain conditions, such as when starting a new job or being promoted. The findings indicate that formative work experiences and work socialisation, such as the on-boarding of new employees, should be carefully designed as effective employee onboarding is fundamental to developing the strong identity- and exchange-based relationships which promote attachment and engagement. Additional attention to employee experiences, in the beginning, can have long-lasting positive effects to organisational performance.
My research has restablished organisational commitment as a key attachment device in businesses today by uncovering underlying mechanisms within the psychological – performance link. Companies that effectively develop commitment in the workplace using both social exchange- and social identity-based factors will be in a better position to strategically drive performance through people. This not only contributes to the value creation process and effectiveness of the organisation but also helps achieve a firm-level competitive advantage. These findings have important implications for organisational practice and provide managers and HR leaders with new and effective approaches to talent management and business continuity in a rapidly changing and diversified business environment.
About the author
Dr Ali Fenwick is a behavioural scientist at Nyenrode Business University [specialising in strategic talent management and organisational behaviour. His research work focuses on how to utilise psychological concepts to improve performance in the workplace. Dr. Fenwick is also a University Professor, Consultant / Advisor, Keynote Speaker and Author.]