venerdì, maggio 16, 2014

Employee Loyalty: a Story of Storytelling

Issued on February the 20th 2014
for the Course of Economics of the Performing Arts
Master's Cultural Economics and Entrepreneurship

Definitions and Determinants of Employee Loyalty in Cultural Organizations.
The Eighteenth Century Orchestra as a Case Study.

Research on the artistic labor market has increasingly remarked on the project-based pattern of artistic careers. Throsby and Zednik (2011) note that artists tend to be multiple job-holders characterized by short-term hiring. According to Lingo and Tepper (2013), artists manage uncertainty by competing for different types of roles, and cultural organizations cope with volatile markets stimulating flexible employment. While in the framework of the creative city paradigm (Scott, 2010), the inter-firm mobility has been addressed as a possible driver of creativity and innovation (Vinodrai, 2006), marketing studies suggest that customer loyalty is triggered by employee loyalty (Martensen, Gronholdt, 2006). In addition, in the field of the performing arts, employees seem to have an ambivalent perception of the project-based environment. As Lindgreen, Packendorff (2007) highlight, performing arts employee perceive projects as stressful, achievement oriented activities stimulating selfish behavior, while organizations appear to them friendly caring places taking care of the whole group. In the non profit sector, cultural organizations sometimes enhance this perception, by putting an effort to “sustain a community, cultural economy of generosity, exchange and co-creation” (Bain, McLean, 2012, p. 94).

Such seems the case of the Eighteenth Century Orchestra ( that in January 2014 completed its 107th tour. The orchestra, established as a cooperative in 1981, plays eighteenth and early nineteenth Century music with the instruments of the time to provide the highest level of fidelity to the sounds of the composer's era. After more than 30 years, the fiftyfive members of the ensemble still mostly belong to the founding group. Directed by the conductor Frans Bruggen, the orchestra regularly goes on tour five times a year. A knowledge intensive context, twenty different national backgrounds, and the rise of several soloist careers have not altered the musicians' loyalty to the organizations.
What are the drivers of such a long term commitment? In order to provide some hints to answer the question, this paper investigates what are the main determinants of employee loyalty:

The Definition of Employee Loyalty
Several definitions of employee loyalty have been provided. Scholars have related the concept to the employee's engagement, the organizational culture, and the contribution to the broader society.
Focusing on the employee's standpoint, Eskildsen and Nussler (2000) draw a connection between loyalty and satisfaction. They define employee satisfaction (1) as “the gratification or prosperity that employees get from their job” (ibidem, 2000, p. 582), and they describe loyalty as a series of actions resulting from this satisfaction. According to Eskildsen and Nussler, employee loyalty “includes such things as whether or not employees are committed and assume personal responsibility for their work, and whether or not they feel inclined to work for another job” (ibidem, 2000, p. 582).

Stressing the role of the organizational culture, Gill (2011) relates employee loyalty to employee engagement. Elaborating on Harter, Schimdt and Hayes (2002), Gills defines engagement as “an individual's involvement and satisfaction with, as well as enthusiasm for, their work. (…) Employee engagement is associated with building an interactive culture between employee and employer resulting in staff being more willing to engage in discretionary efforts as a result of healthy relations with the management” (Gill, 2011, p. 24). As a result of this engagement, employee loyalty comes “as the commitment employees have to the success of an organization, and the recognition that working for an organization is their best option. Such connection and support is influenced by how the employee identifies with the combination of culture, structure and leadership support within the organization” (ibidem, 2011, p. 25; Pina & Cunha, 2002).

Extending the scope from organizational culture to ideals, Logan (1984) defines loyalty as a sense of purpose. “Loyalty can be defined as a strong tie that binds an employee to his company even when it may not be economically sound for him to stay there. A sense of purpose is a common understanding of a well-defined objective or end that is to be attained” (ibidem, 1984, p. 150).
This idealistic approach is reinforced by Elegido (2013) that articulates a definition of loyalty in terms of self-fulfillment. According to Elegido, loyalty is “a deliberate commitment to further the best interests of one's employer, even when doing so may demand sacrificing some aspects of one's self interest beyond what would be required by one's legal and other duties” (ibidem, 2013, p. 496). Elegido outlines the relevance of extra legal obligations, organizational memory, stable professional identity, and contribution to the community the employee belongs to. “Strangers grow into neighbors and collaborators” (Gilbert, 2001, p.5) and emotional support and practical assistance is guaranteed even when difficulties arise out of the working environment. According to Elegido, this community engagement is among the main benefit of employee loyalty in a society where traditional sources of community identity, such as religion and politics, are weakening.

In knowledge-intensive organizations and orchestras, this loyalty and sense of belonging seem to be positively correlated with specific organizational dynamics.

Determinants of Loyalty in Knowledge-Intensive Organizations
The determinants of employee loyalty have been investigated by Martensen and Gronholdt (2006). According to their model of internal marketing, employee loyalty is influenced by six main factors: leadership, human relations and values, personal development and competencies, job contents, creativity and innovation, and customer orientation.

Pina and Cunha (2002) argue that in the knowledge intensive organizations, ie those organizations where highly educated employee are engaged in intellectual activities, not all these factors are equally important. What really triggers loyalty is a combination of high culture and low leadership. Pina and Cunha label as “minimal structure” the set of guiding ideas, beliefs, emotions, and values that cluster employees around a common set of goals and deadlines with no need for formal control. “Minimal structures coordinate without constraining. They provide an unobtrusive means of coordination that fundamentally relies on goals, deadlines, and responsibilities” (ibidem, 2002, p. 490). In the minimal structure, hierarchy is as invisible as possible, family spirit and collaborative culture are enhanced, and leaders coordinate rather than control. “More than being bosses, leaders act as facilitators of sense making, whose function is to provide support and webs of meaning (ibidem, 2002, p. 492; Simon, 2006).

Covert Leadership and Minimal Structure in Orchestras
This form of covert leadership within a minimal structure seems to be even more relevant for orchestras. Covert leadership allows a cooperative communication between highly skilled professionals. In successful orchestras, conductors and musicians establish a relation of mutual dependence (Soila-Wadman, Koping, 2009). Explicit corrections by the conductor are uncommon and the mutual agreement is found by rehearsing several times the problematic passages of the composition. “Leadership is about creating an atmosphere of mutual trust and security in which all of the artists are able to contribute by relating to the world of art and to each other, through aesthetic communication” (ibidem, 2009, p. 39).

While covert leadership helps the relationship between musicians and conductor, the minimal structure supports the construction of a unique organizational culture. Along with other organizations, orchestras are indeed multiple-identities organizations where normative artistry elements coexist with utilitarian economic constraints (Albert & Whetten, 1985). Disruptive conflicts may easily arise between the performing members and the management staff when these two groups excessively aggregate around their professional identities (Glynn, 2000). On the contrary, the conflicts tend to be reduced when the musicians take over their responsibilities in the conducting (Seifter, 2001) and in the management (Bennet, 2007).

The engagement of the musicians in the conducting and in the management appear to be relevant to explain the long term commitment of the musicians to the Eighteenth Century Orchestra we are examining.

The Determinants of Loyalty in the Eighteenth Century Orchestra
The structure of Eighteenth Century Orchestra seems to ideally reproduce the combination of low leadership and minimal structure that the research has pointed out as a determinant of employee loyalty. In 1981, the orchestra was indeed established as a cooperative. Since the very beginning, therefore, the musicians have been actively engaged in the management of the organization, defining its strategy and sharing its revenues on a peer basis, with no exception for the conductor, the soloist, or the management. The management has always been reduced close to zero, to one person, Siewert Verster, who, according to the rhetoric of his speech, shares the artistic values as much as the musicians. And the musicians seem to be the active part in the co-creation of the music leadership, endowing the director Frans Brugger  with their trust year after year.

The revenue-sharing mechanism, the little management structure and the co-creation of the leadership have provided the foundation of the musicians' loyalty. The originality of the project has contributed as well. The Eighteen Century Orchestra indeed is not a symphonic orchestra, but a Baroque orchestra playing traditional instrument for a specific public. On top of that, a sense of spirituality must have followed the development of the orchestra.

People working in the non-profit art sector have a multidimensional utility function. Along with the salary, they value the cultural mission, something they believe in (Brooks, 2006). Mize Smith (Mize Smith et al., 2006) confirms that workers of the non-profit art sector frame their career in a “spirituality discourse”. They justify the lack of the traditional increase in compensation and status of their careers in terms of craftsmanship of meaningful work,  psychological fulfillment, and a sense of purpose. This spiritual rhetoric often works a framework for a multiple project trajectory, but, as the previous sections have outlined, this rhetoric of self-fulfillment represents as well one of the main reward for the employee loyalty (Elegido, 2013). This appear the case of Eighteenth Century Orchestra. The spiritual commitment to the cultural field in general has been translated to the organization in particular.

Supported by initial favorable organizational structure, the story of the Eighteenth Century Orchestra has developed into something that “stimulates a more meaningful understanding for the individual” (Gill, 2011, p. 23) and provides the feeling “to contribute to something of greater importance than themselves” (Mize Smith et al., 2006, p. 38). The need to reinforce and extend such a story is probably the driving force bringing every musician back every year at the beginning of the tour.

(1) The definition is based on Quoting Hellriegel (Hellriegel et al., 1999) and Moorehead and Griffin (1998).

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