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Employee Loyalty and the Factors Affecting It: A qualitative study comparing people with different working experience on their view of employee loyalty
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Business Administration.
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Business Administration.
2019 (English)Independent thesis Advanced level (degree of Master (Two Years)), 10 credits / 15 HE creditsStudent thesis
Abstract [en]

Having high employee loyalty is something which most organisation strive to obtain. Not only because of the morals of it, but also because of the fact that high levels of employee loyalty have been proven in many studies to increase operational performance. However, the literature on the concept provides many different definitions on it, and also suggest many different factors that affect how loyal an employee feels towards their organisations. The studies conducted previously on the topic has mainly been quantitative studies researching the connection between levels of loyalty and performance, and at specific companies or industries. As soon to be newly graduated students, the authors of this study also found the lack of comparison between people with different working experience interesting. Due to these reasons, the purpose of this study was to dig deeper into the concept of employee loyalty, how it is defined and which factors that affect the level of loyalty an employee feels towards an organisation. The sub-purposes of this study involve comparing one group of people with 1-3 years of working experience to another group with more than 15 years of working experience. The research question that was developed to be answered in this thesis is as follows: How does the view upon employee loyalty and the factors affecting it differ between people whom have been working for more than 15 years versus 1-3 years? 

In order to answer the research questions and fulfil the purpose, a comparative qualitative study was conducted through semi-structured interviews. In line with some previous studies, the Social Identity theory and the Social Exchange theory were used in order to explain the factors affecting employee loyalty. The first focuses upon the level of identification the respondents feel towards different components of the organisation, while the other focuses on factors of exchange between the organisation and its employees. These theories, and theories connected to what employee loyalty is, was used in order to develop a conceptual model which served as a foundation for the data collection, empirical findings, and the analysis. 

The empirical findings of this thesis showed that while some definitions of employee loyalty and the factors which are affecting it are similar between the groups, there were also some differences. Employee loyalty was defined by most as someone whom has a behaviour and attitude which is positive, does what is expected from them and whom represents the company in a good manner. The difference between the groups regarding employee loyalty were that the group with more experience seem to have higher demand to classify someone as a loyal employee than the group with less experience has. Moreover, the most evident difference of what affects employee loyalty was that the factor competence development was by far most important for the groups with less experience, while a responsive organisation was what the group with more experience found important in order to keep employees loyal. 

Conclusions drawn from this study is that “softer” factors like the relationship’s employees have between each other, the organisational culture, and sense of opportunity for personal growth seem to be far more important for employees than physical benefits. Furthermore, there seem to be some differences regarding employee loyalty between groups with different levels of working experience which is why this thesis recommends organisations to be responsive to its employees’ needs and adapt their management to all employees. 

Place, publisher, year, edition, pages
2019.
Keywords [en]
Employee Loyalty, Social Identity Theory, Social Exchange Theory
National Category
Business Administration
Identifiers
URN: urn:nbn:se:umu:diva-161047OAI: oai:DiVA.org:umu-161047DiVA, id: diva2:1331517
Educational program
Master's Programme in Management
Supervisors
Examiners
Available from: 2019-06-27 Created: 2019-06-26 Last updated: 2019-06-27Bibliographically approved

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