Find out the definition of employee loyalty and examples of how to maintain it.

Employee loyalty definition, formula and examples

A loyal employee is the one who is devoted to the organization, is faithful, bonds, cares and feels responsible for it. Therefore, employee loyalty definition implies that employees are willing to make a personal sacrifice for the benefit of the organization. Loyal employees do not intend to leave the organization, but when they do, they give the employer ample time to replace them.


Having loyal employees is beneficial to any business since it helps increase productivity as well as reduces costs associated with employee replacement. How can you ensure employee loyalty?

Formula for ensuring employee loyalty

As an employer, you need to make efforts to enhance employee loyalty. While some employees may be naturally loyal than others, it is your role to keep those who have loyalty tendencies and get rid of those who aren’t. However, you still need to ensure that the loyalty is maintained in the organization. This is by:

  • Reciprocating loyalty. If you show employees that you are loyal to them, they are also likely to be loyal to you. For instance, reward them with praise, respect, promotions and awards for a job well done. Listen to them when they offer suggestions, opinions or comments of which you can get great ideas in addition to enhancing loyalty.
  • Give employees benefits. While competitive compensation is essential, employees also value benefits such as insurance, free gym membership, retirement funds, stock options and tuition reimbursement. These can help to enhance employee loyalty.
  • Communication with employees. When you let employees know what you expect from them, make it clear what their job is and give them feedback, they are likely to be loyal. Keep the line of communication with the employees open.
  • Check employee satisfaction. Employee satisfaction often contributes to employee loyalty. You should conduct employee satisfaction surveys to gauge how satisfied your employees are. This should cover areas such as compensation, growth opportunities, team work, communication, required resources, company goals and mission, respect accorded to employees, fairness and work-life balance. Share the survey results with employees and plan on how to increase the satisfaction in case the results are wanting.
  • Review managers. In some cases, employee loyalty is influenced by the relationship they have with managers. One manager can cause employee disloyalty. By reviewing managers, you can find out how they relate to employees and if it has a negative effect on employees’ loyalty.

Employee loyalty can be linked to productivity, revenues, customer loyalty and employee turnover. By studying these performance drivers, you can gauge the loyalty of your employees since they are linked to attitudes related to loyalty.