New Loyalty

Lawler III, Edward E.
March 2005
Leadership Excellence;Mar2005, Vol. 22 Issue 3, p14
The article reports that for decades, organizations maintained a tacit agreement with their employees. As long as they performed adequately and followed orders, their jobs and a reasonable pension plan were guaranteed. This value proposition is often referred to as the "loyalty contract." However, global competition, new technologies, and off-shore knowledge workers have made the loyalty contract obsolete. One alternative to the loyalty contract is to develop a skills and performance-based agreement that encourages selective retention, motivates high performance, bases continued employment on performance, and rewards people for performance.


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