A Study on Employee Loyalty in Chinese Small and Medium-Sized Private Enterprises and Countermeasures

Abstract

Employee loyalty has long been a critical research topic in the field of human resource management, and its importance is even more pronounced for small and medium-sized enterprises (SMEs). High employee loyalty typically results in greater work enthusiasm and lower turnover rates, which not only effectively reduce labor costs but also enhance the competitive advantage of enterprises, contributing to their long-term stability and development. Therefore, understanding and exploring the factors influencing employee loyalty, especially within China's SME sector, holds significant practical and theoretical importance. This study investigates how Employee income, employee promotion mechanism, and corporate culture affect Employee Loyalty of SMEs in Chengdu. Drawing on the Employee Loyalty model and the Psychological Contract Theory (PCT), the research explores how these elements shape work behavior by influencing Job Performance, Employee Satisfaction, and Employee Innovation and Problem-Solving. The study is based on survey data collected from small and medium-sized enterprises (SMEs), examining the relationship between each factor and employee loyalty. By identifying the most influential factors, this study aims to offer both theoretical insights and practical recommendations for employee stability in small and medium-sized enterprises. The findings will also provide a feasible and practical method for enterprises to establish a scientific, reasonable, fair and efficient human resource management system and continuously improve the employee performance appraisal mechanism.