Workers 'loyal to employers, paid more'

Workers, who are loyal to their employees, tend to be paid more, a study has suggested.

Michigan State University researchers surveyed 10,800 employees in former socialist countries that introduced capitalist economies in the 1990s.

Susan Linz, lead author and professor of economics, said that while previous research has found that worker loyalty bolsters companies' bottom lines by lowering labour turnover costs and enhanced customer service, this study shows that employees benefit as well - by making more money.

She said that it is a known fact that firms realize financial gain from loyal workers, but we wanted to know if they share those benefits with the workers.

Linz asserted that among the more than 650 workplaces included in their study the answer is yes, they are sharing the wealth.

The researchers surveyed employees from 2005 to 2011 in six culturally and economically diverse countries: Armenia, Azerbaijan, Kazahkstan, Kyrgyzstan, Russia and Serbia.

The employees came from a wide range of sectors including manufacturing, retail and financial services, health care, education, public sector, construction and transportation.

Loyalty was measured in three ways: by workplace seniority; whether the employee would turn down an offer of slightly more money to change jobs; and whether the employee was committed to and engaged with the company - i.e., did they buy into the company's mission even when it was outside their job responsibilities.

Linz said she was surprised to find such a strong link between worker loyalty and higher earnings. In three countries, the contribution of loyalty to earnings was equivalent to the contribution to earnings of an additional year of experience.

The findings have been published in Evidence-based HRM.