Tenure versus Loyalty

by Mike Myatt

Are chimps running your company?If your organization confuses loyalty and tenure there is trouble on the horizon. If your business highly values tenure as a measure for employee evaluation, it is time for you to consider updating your talent management practices and procedures. So, what’s wrong with tenure you ask? In principle very little; but in practice virtually everything. Think of any organization that has mediocre talent, where management has frustrated you with consistent under-performance, or where cavalier attitudes and a sense of entitlement overshadow a focus on productivity and performance, and I’ll show you an organization that embraces tenure.

An old business saying that sums-up my feelings about tenure goes like this:

“The only thing worse than an employee who quits and leaves is an employee who quits and stays.”

You see tenure is not synonymous with loyalty, but rather is a more often a measure of compliance and survival. Ask yourself this question: Who is more loyal – an employee who has been with the company a long time but is an under-performer, or a less tenured employee who always goes the extra mile and consistently exceeds expectations? The following are the top reasons why tenure as business practice simply constitutes flawed business logic:

1.Tenure is Outdated

  • In case you haven’t checked your calendar lately it isn’t 1950, it’s almost 2010. Outside of government and academia (this should be more than enough proof that tenure is a bad thing) most people don’t work for 30 years for the same employer.

2.Tenure Suppresses Talent

  • Just because ‘Employee A’ has performed a task longer than ‘Employee B’ doesn’t necessarily mean that ‘A’ is more skilled than ‘B’. Furthermore, just because ‘A’ has been with the company longer than ‘B’, doesn’t necessarily mean that ‘A’ possesses more talent, upside, knowledge, or adds more value than ‘B’. When an organization promotes based upon tenure, and not based upon recognition of talent, merit, performance, etc., the company is not leveraging its true talent base. Not recognizing, developing, and rewarding talent is the fastest way I know of to drive talent out of your organization and directly into the hands of your competition.

3.Tenure Breeds Obsolescence and Mediocrity

  • The sad reality is, that with very few exceptions, if you have someone on your payroll who has been with the organization in a similar role or capacity for an unusually long period of time, you likely have a mediocre employee producing mediocre work. Here’s an example. Even in this day and age it is still not that uncommon to find large corporations and government agencies with IT silos built upon mainframe computing solutions. These silos are staffed with legions of ‘tenured’ COBOL and C++ programmers, as well as ‘tenured’ IT managers overseeing the operation. Walking into these organizations is often like traveling back in time 20 years. These companies have placed themselves far behind the technology curve because tenured managers hire employees with obsolete skill sets and together they create mediocre solutions.

4.Tenure Inhibits Change and Cripples Innovation

  • Organizations that favor tenure also tend to be prone to majoring in the minors. The mandates for compliance along with the accompanying maze of bureaucratic processes and procedures, will often take precedence over doing the right thing. Tenured organizations also tend to embrace comfort zones and are often built upon the “DITWLY” (Did It That Way Last Year) principle. All of these traits preclude the advancement of change initiatives and cripple innovation.

5. Tenure Kills Brands

  • As an organization expands and continues to promote mediocre talent up through the ranks, you’ll notice that growth will eventually slow, quality and customer service suffer, and eventually these negative attributes will be reflected in declining brand equity. Think of any negative brand connotations you have, and you’ll likely find an organization that embraces tenure. The Costco experience isn’t what it used to be, US auto manufacturers continue to struggle, the Comcast brand has been hammered, the banking industry has been crippled, and government agencies (pick one – IRS, DMV, etc.) often evoke feelings of hatred at the mere mention of their name.

The bottom line is this…as an employer you need to possess an extreme bias toward performance. Reward talent, innovation, loyalty, attitude, creativity, work ethic, contribution, and leadership ability…not tenure.

Mike MyattMike Myatt, is a Top CEO Coach, author of “Leadership Matters…The CEO Survival Manual“, and Managing Director of N2Growth.

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