Study Shows Leaders’ Sincere Social Values Has Influence on Employee Retention

Actions speak louder than words according to a new study of CEOs and middle management. The study clearly demonstrated that the values and actions of company leaders had a direct influence on employee contentment and employee retention.

The Chinese study spanned five years and involved CEOs and middle management at 42 companies in China. Both groups were asked about the CEOs “perceived values.” The researchers calculated the subordinates’ commitment to the company based on the responses.

Findings concluded that walking-the-walk, rather than just talking-the-talk made a big difference in employee loyalty. Employees picked up on whether a company leader’s personal social values coincided with his verbal statements.

The tell-tale-marks of a lack of sincerity didn’t have to be overt; how a leader handled work related situations, his response to everyday work, and his remarks were enough for an employee to perceive if his social values were rooted.

The consequence of a leader being perceived by middle and lower management as insincere or all about the short-term bottom line is an unhappy and mistrusting staff. This type of dissonance can lead to lower employee loyalty and retention rates for the company.

Anne S. Tsui, Business Management Professor and lead researcher, told CNN, “In this very competitive world where the middle managers are a scarce resource and they are subject to prey by other companies, you are going to lose your middle management. That is where the potential cost to the company is.”