by Matt Bloom, University of Notre Dame
NOTRE DAME, Ind., May 8 (AScribe Newswire) -- The forced resignation of Don Carty, former CEO of American Airlines, has brought with it timely reminders of how important notions of fairness and justice are to employees. Most assuredly, tremendous damage can be done to the morale and commitment of employees any time managers let their self-interest run amok.
But I am also concerned about another, perhaps more insidious, crisis that Carty's resignation points to, and that is the demise of true loyalty among many managers and employees in America's companies.
Carty claimed he needed to pay "retention bonuses" to his most senior and most important managers, which suggests he was building, at best, a kind of mercenary loyalty among them. Mercenary loyalty is based fundamentally on a "what's in it for me" attitude, and it is easily redirected when another organization is willing to give more. But more importantly, this kind of loyalty never will produce the passion, commitment, and excellence that companies need from their managers.
Innovation, dedication and high performance are born out of a deep excitement and fervor for what one is doing and not simply from being offered enough extrinsic rewards. Economic rewards matter, to be sure, but they are never enough by themselves.
Herbert Simon, a Nobel laureate in economics and luminary in the field of management, once wrote that, "although economic rewards play an important part securing adherence to organizational goals and management authority, they are limited in their effectiveness. Organizations would be far less effective systems than they actually are if such rewards were the only means, or even the principle means, of motivation available." He goes on to assert that it is through pride in one's work and true loyalty to the organization that companies are able to obtain the performances, creativeness and work hard they need to be successful.
We cannot continue to listen to the simplistic and incomplete economic arguments that if we just pay people right they will be as creative and committed and hard working as we want them to be. What Carty and CEOs of all types must do is create organizations where people find meaning, purpose and belongingness.
People become deeply committed when their organization pursues a vision to make real and important differences in the world. Making a profit, by itself, is not enough. Most of us want to make a lasting and positive difference in society. Making money may play a part in this process, but for most people there must be something more.
People also need a place where they can find purpose, where they have ability to make meaningful and important contributions to that vision. When we feel like a small cog in a great big machine it's hard to muster pride in one's work and true loyalty to the machine.
And finally, most of us want to work with group of people who are all striving to achieve big, challenging and significant goals. We need to be a part of such a group where we can find a sense of belonging. We need to know that we are valued, honored, and cared for. We need a place where we really matter.
The essence of true organizational leadership is creating meaning, purpose and belongingness. And, you cannot simply pay for this. Carty's claim that he needed the bonuses and pensions to retain his top managers suggests he did not understand how to build real loyalty. It suggests that he missed the opportunity to help all of his employees find and live out their passions at work. Yet when we examine companies that have achieved and sustained the highest levels of performance, the common denominator is that they were places where true loyalty was the cornerstone of their success.
- Matt Bloom is an associate professor of management at the University of Notre Dame.
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