September 9, 2014 4 min read

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It’s axiomatic that customer satisfaction is every business owner’s first and highest priority. When customers are satisfied they will return and bring others. More customers means rising sales and profits. Right? Close, but wrong.

The best companies understand that it’s the employees that are their lifeblood. When employees are happy, motivated and engaged, they deliver that extra bit of creativity, dedication and hard work that makes a product or service stand out from the competition. For proof, look no further than the financial performance and employee satisfaction at Starbuck’s or Costco.

Related: Methods for Building Employee Loyalty

If employees are disengaged and disconnected, it costs the company in lackluster service, production inefficiency or poor customer service. Most importantly, unhappy employees lack a key ingredient for company success – loyalty. High turnover is expensive, as the company loses knowledge, overworks its remaining staff and spends money hiring and training new people.

So how do you increase employee engagement, motivation and most importantly, loyalty?

The late Harvard professor and American philosopher Josiah Royce laid out the critical elements of building loyalty in his work, the Philosophy of Loyalty. Royce explained that loyalty requires a cause, a mission or purpose greater than the individual. Each of us, he said, wants to be part of something outside us.

This explains why so many people are loyal to their sports teams, political parties and religious affiliations. Millions of Americans spend billions of dollars each year to participate in, and feel a part of, something more.

Related: 6 Secrets for Creating Fierce Employee and Customer Loyalty

But Royce noted that, while a cause is greater than any one individual, “[T]he cause to which a loyal man is devoted is never something wholly impersonal.” If you want loyal employees, they need to feel personally connected. The job of a corporate leader is make the employees feel personally connected to it.

If you want your employees to be loyal, you need to show them that business is personal. In truth, everything is personal in that it stems from the person. People spend the majority of their time in the office, more than with their family, friends and hobbies.

As the leader, you need to set the tone that employees are not mere hired hands but people with needs, desires and dreams. You need to understand what inspires them and how you can make them feel personally appreciated for their service and connected to the overall mission.

One great way to accomplish this is through acts of kindness. One CEO who I know allocates around $5,000 a year just for employee gifts. He inquires about important events in his employees’ life, such as birthdays, anniversaries, graduations and births and then sends them small gifts: flowers, wine, sports tickets and spa vouchers. The gifts, while relatively inexpensive, send a clear message: I know about your life and I care.

Another company allocates a certain amount of money for interest-free loans for their employees. When someone needs extra cash for a legitimate reason, the employee knows he or she can discreetly get a loan to help. Can you imagine how loyal that employee will be to the company that is lending him money to help him through a tough time?

If finances are tight, there are plenty of ways to show the personal connection without spending a dime. Words are free, and very powerful when used correctly. Jack Welch, famed former CEO of GE, was known for handwriting letters of praise to his top employees. Those employees later recalled how happy they were after receiving a short thank you from their boss and how it impacted their performance.

Look for ways to compliment your employees. Tell them how much you appreciate them and how valuable they are to the company. Send them a quick email or voice message, thanking them for their efforts on a particular project or meeting. Words can build bridges that money can’t take down.

When your employees feel like you personally care about them, and that they are part of a collective team that is working towards a goal, they will feel like your company is more than just a place of work. You will be increasing their loyalty, enhancing their performance and generating greater success.

Related: Creating Loyal Employees