Should Companies Reward Loyalty in Contract Negotiations?

by Vault Careers | November 09, 2010

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Whither loyalty, in this day and age—and what price do we attach to it? In a world where we're all about getting ahead and moving around to secure the best possible deal for ourselves—and in which companies are increasingly viewing labor as replaceable—the lifelong employee is becoming a thing of the past.

But every once in a while you come across an individual who is synonymous with the organization they work for—whose past deeds are responsible for building the legacy and shaping the outfit as we now know it. Think Apple, for example, and it isn't too long before you start thinking about Steve Jobs. Zappos's and Tony Hsieh is a similar example—a company where one person sets the tone and identity.

While the world of sports is increasingly adopting the same pattern as the corporate world—players moving on regularly for better deals, or organizational "fit"—there are examples there too. One notable is Derek Jeter: having been with the New York Yankees his entire career, he has come to epitomize the franchise for many fans. He's also out of contract, with serious questions being raised over whether or not he'll be offered a new one—a strange position for someone who remains one of the most marketable names in the business, despite a recent slump in form.

The question the Yankees face, then, is whether or not to offer a new contract to a player who may well be past his best. With most players, it wouldn't be an issue—they'd be sent on their way. But in this case, the Yankees are at least paying lip service to the notion of loyalty—both with Jeter and Mariano Rivera, another legend newly out of contract.

"Derek and Mo, obviously we want them back. They're hopefully lifelong Yankees. They're great leaders." So said Yankees owner Hal Steinbrenner recently. All well and good, one might think—until Steinbrenner uttered his next sentence: "They've been great Yankees, but we're running a business here."

Therein lies the reality for both the players and the club. Neither man's services are likely to come cheap, or be available for much longer. Meanwhile, there are younger—albeit unproven—players who could be filling the talent pipeline if the club decided not to renew with Jeter and Rivera. But both are legendary employees who potentially still have playing time in them; seeing them ply their trade elsewhere would feel as wrong as if Steve Jobs took over at Microsoft, or if Zappo's got rid of Hsieh and started charging return postage.

So again: what price loyalty? And what role do the employees have in this? Should they be prepared to make concessions to stay with an organization where they've enjoyed great success, or are they entitled to an expectation that—having delivered so much—they'll be taken care of? Let us know your thoughts in the comments field below.

--Phil Stott, Vault.com

Filed Under: Workplace Issues

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