Does worker loyalty pay? Evidence from transition economies

Abstract

Purpose Does worker loyalty benefit workers? This paper aims to address this question. Design/methodology/approach Using data collected from over 10,880 employees in more than 655 workplaces in six transition economies, the authors first document the nature of worker loyalty using three alternative measures. They use ordered probit regression analysis to investigate links between loyalty, expected rewards, and performance. Second, they use OLS regression analysis to identify the association between earnings and loyalty. Findings Among participants in this study, loyalty is positively associated with expected rewards and performance. Loyalty also is positively associated with earnings. In three cases, loyalty has larger influence on earnings than an additional year of experience. Research limitations/implications Country samples are not nationally representative; data are cross‐sectional rather than longitudinal. Practical implications What strategies might firms adopt to install or enhance worker loyalty? Originality/value This paper uses multiple loyalty measures and comparable data collected from culturally and economically diverse countries. It undertakes explicit consideration of benefits to workers associated with loyal behavior.

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