Generation X values flexible work arrangements, they want to be able to have a choice of when and where they work. This way they can have more time to spend with the family, which goes hand in hand with their value of prioritising family before work. They also distrust the loyalty of their corporations and government control over anything. Work-wise Generation X values having some form of input in the decision making process and they place importance upon developing additional knowledge or skills throughout their work (NAS Insights. 2006b).
3.3 Baby Boomers
Born between the years of 1946 and 1964 is the generational cohort known as the Baby Boomers. They are best described as hard working and tend to have a very high work ethic (Schiffman, et al. 2008). They value flexibility and acceptance of themselves and others in the workplace. They place importance on a peaceful work environment (Klaessy. 2005). Aiding in sustaining this ideal is their value of team work (Kasey. 2008), which helps build acceptance and a friendly working relationship among co-workers.
While they prefer a harmonious workplace, Baby Boomers also value peer competition in the workplace. They also value success and are committed to climbing the ladder of success. They will sacrifice weekends and holidays to get the job done and if needed take on extra tasks that are beyond their job description if it means achieving this goal (Colenso. 2006). Baby boomers are known as a live to work generation and work long hard hours at the office. They consider their work very important to their sense of self worth and net worth. They value money as, not only is it a reward for their labour, but also a measure of their success. Visible rewards such as plaques, certificates and rewards are also valued by Baby Boomers (Kimura, 2009).
Each generational cohort has their own different values and attitudes (see Appendix 10.1) towards work and managers must take these into consideration as it will have implications on the work environment and the running of their organisations in the 21st century.
4.0 implications on the 21st century organisation
A critical factor in today’s organisation is employee attraction and retention. In the upcoming years baby boomers aged 40 to 58 will be looking to retire. This leaves generation X aged 25 to 34 leading the work market closely followed by the fresh generation Y. The combination of generation groups and their distinct values sharing the work market demonstrates the importance of employee attraction and retention in order to ensure a healthy organisation and a happy employee discusses Heathfield (n.d). Human Resource Managers play centre field in creating a positive and loyal employee, this position holds great responsibility because if not done properly it can have a great impact on the company says Wadell, Cummings, Worley (2007). The ability to understand what values sets each generational gap apart and what they expect from their job will minimize problems in the work place and create a loyal employee.
4.1 Staff retention
Time, tools and training are the most common causes of failing at work. These factors are generally the easiest to solve yet the main ones affecting staff retention especially in regard to the baby boomers who aren’t as technologically advanced as generation X and primarily Y. The employee must have the tools, time and training necessary in order to be able to do their job well, if they aren’t provided they will more than likely move to a employer who can provide them says Murphy (2005) and Heathfield (n.d).
Baby boomers value knowing exactly what is expected from them each day at work this makes them content employees. Constantly changing what is expected from them will push them to the edge and create unnecessary and unhealthy workplace stress argues Driscoll (2006). This will eventually deprive the employee of the sense of security and will therefore influence the employee to feel unsuccessful at their particular job. Although Driscoll (2006) doesn’t go to suggest an unchanging job outline as this would create a repetitive work load leading to unsatisfied generation X and Y employees who value a variety of responsibilities, just the need for a specific task framework outlining the basic expectations of an employee.
Fairness and equitable treatment is very important in employee retention. For example a relatively new employee fresh out of university (generation Y) is given $10 000 in raises over a six month time period as part of a employee attraction deal, this would resulted in the self esteem and morale of other employees who have been with the organisation for many years (generation X and baby boomers) being affected. A staff member who brings years of experience to the organisation along with a great contribution record discovering that they are getting payed less than this youngster with little to no actual experience, they will be more than likely to start searching for another job says Heathfield (n.d). Murphy (2005) argued that although a salary increase might be the answer to attaining new staff, it also contradicts the position of the current staff.
Career orientated employees such as the generation X and Y’s seek new experiences and growth opportunities within their organisation. Depriving them of these new opportunities and the ability to sit on challenging committees and attend seminars may create the sense that they cannot grow within the organisation describes Heathfield (n.d). Heathfield (n.d) then goes on to describe that this could also be seen as a means of staff attraction, providing current employees with the opportunity to attend these industry professional associations and conferences opens the doors to meeting perspective candidates at these functions which might one day become a future employee.
Generation Y value the ability to speak their mind freely with in their organisation says Stowe J.D without being seen as arrogant. It is very important that an environment in which employees feel comfortable providing feedback, offering ideas and most importantly able to criticize is provided. The combination of these above factors will improve employee commitment and also give them a sense of control in the decision making process of their organisation much valued by the generation X and Y. On the other hand if this “free speaking” environment is not present in an organisation employees will tend to bite their tongues (a value of the baby boomers era) in fear of getting “into trouble” eventually this will cause them to leave the organisation explains Wadell et al (2007).
Generation X and Y seek the ability to utilize their skills and talents. Employees who want to be able to contribute to areas outside of their specific job description is a sign of a motivated employee. Managers need to take the time to become familiar with their employees skills, talents and experiences and decide how best to utilize them Murphy (2005) stresses. Murphy (2005) suggests that providing promotional opportunities to current staff first is recommended to boost morale and ensure that they feel that their capabilities, talents and accomplishments are being appreciated this positive reinforcement is greatly valued by the baby boomers who “live to work” and greatly value these visible rewards making them feel needed by the organisation.
The quality of supervision is important in staff retention especially when dealing with generation Y who value guidance and feedback. The managers and supervisors also play a strong role in staff retention, anything they do to make an employee feel undervalued will lead to staff turnover says Colvin (2006). Most employee complaints are centered on this area as employees leave managers more often than jobs. Some of the main complaints outlined by each generational gap include lack of earning potential, performance feedback, failure to hold meetings, lack of clarity concerning expectations and failure to provide a framework within which employees believe they can succeed explains Heathfield (n.d).
4.2 Staff attraction
To be an organisation of choice means the need to keep benefits above industry standards. Currently the number one most treasured benefit is flexibility which is popular amongst generation X and more so Y candidates, it is these future potential employees that make up the majority of the work market. Flexibility is usually associated with working hours and the ability to balance work with other responsibilities such as family, a social life and maternity/paternity packages. Flexibility also including retirement and super packages affecting the baby boomers and for some organisations salary sacrifice or stock market share ownership stresses Jorgensen (2003)
An organisation could be missing out on perspective employees of choice if it bases its work market primarily on hiring candidates who directly answer an ad in the paper or online says Colvin (2006). A good way to improve the future choices of potential candidates is to invest some time in developing a relationship with local universities just as Chartered Accountants have done with Murdoch University, establishing their organisation as a leading choice amongst graduates and also offering holiday training packages.
4.3 Organisational structure and culture
5.0 Managerial policies and implementation
In order to discuss ways in which managers and leaders can implement policies to deal with the generational shift of the workforce, the motivations of each generation in that workforce need to be known. Motivation theories assist management in formulating and implementing policies. The different work/life values and attitudes of the generations in the workforce would suggest that what motivates them may also be different. Systems and processes are required in order to align individual motivation requirements and organisational objectives.
5.1 Cognitive motivation theories
Cognitive theories are...
5.1.1 Equity Theory
According to Adams’ Equity Theory (as cited in Bartol, Tein, Matthews, Ritson and Scott-Ladd, 2006; Robbins, 2000; and Vecchio, Hearn and Southey, 1992), employees continuously monitor any inequities that exist in the workplace and attempt to restore equity. The inequities are those perceived by the individual not necessarily those which actually exist. Perceptions of inequity become even more complex when considering that members of each generation may occupy similar positions organisations while having different skill levels, experience and qualifications.
When an individual feels negative or positive inequity they may take some of the following actions (Wood, Zeffane, Fromholtz and Fitzgerald, 2006):
- Alter their level of input (eg, reduce effort);
- Change the outcomes received (eg, tell management what they want);
- Leave the situation (eg, resign);
- Compare themselves to someone else;
- Make an excuse for the inequity;
- Attempt to change the inputs/outcomes of the comparison person.
Workforces that consist of different generations are more likely to have perceived inequities since the generations work in different ways and have different attitudes and values. For example Baby Boomers may feel that they should be paid more because they work longer hours than their younger counter-parts even if the same objectives are met by each.
5.1.2 Expectancy Theory
Vroom’s Expectancy Theory (as cited in Furnham, 2005), states that the level of an employee’s motivation is the multiple of expectancy, instrumentality and valence.
- Expectancy - “Expectancy is a person's estimation of the probability that effort will lead to successful performance” (Lee, 2007, p789).
- Instrumentality – The individual assesses the probability that the expected performance will result in specific outcomes such as rewards (Bartol et al, 2006).
- Valence – The value that the individual places on the potential work reward outcomes (Bartol et al, 2006).
Summing up the individual must believe they are capable of a given task, expect some outcome for success in the task and value the outcome expected to have a high level of motivation (Lee, 2007).
5.1.3 Goal-setting theory
Closely linked to Expectancy Theory; Goal-setting theory “focuses attention and action, mobilising effort, increasing persistence, and encouraging strategy development to achieve goals” (Bartol et al, 2006, p292).
According to Wood et al (2006), the setting of goals is an integral factor in overall job design and can be highly motivational provided that the goals set are:
- Challenging;
- Specific and measurable;
- Attainable;
- Relevant to and accepted by stakeholders in the organisation;
Have a defined time frame.
5.2 Planning and change at a managerial level
Whilst an organisational goal is the desired outcome or result, a plan is the thought out process of how the goal is going to be reached (Bartol, K., Tein, M., Matthews, G., Sharma, B., Ritson P., Scott-Ladd B. 2008). Within the management process, according to Wood (2006), planning is the process of setting performance objectives and identifying the action needed to accomplish them. Applied to an organisation as a whole, this will incorporate learning to deal with organisational structural and cultural change as a result of certain generational differences that may cause conflict. This planning will aid in dealing with the lack of training managers have in regards to the different needs and wants of each generation. If this training can be accomplished at a professional level, managers will better understand what motivates different generations and what it is each generation wants to receive from the company during their time as an employee. Planning will also help managers deal with the shortage of time that is needed to pass on valuable information and skills from one generation to the next before the Baby Boomers retire.
Human resource departments must plan for the need and continuous supply of adequate resources to ensure the company is not left with a major lack of skilled staff. Skilled staff are a key resource, lack of attention and adequate planning of this issue will contribute to undesirable outcomes (Rowe 1994). In order to aid in staff retention and therefore retain skilled staff, it is suggested that challenging committees and knowledge seminars be available to those who want them. This can be seen in generation X and Y and their want to expand their knowledge and these needs to be incorporated in to planning processes of the organisation.
Due to the opposing value that the generations have in terms of speaking their mind, a cultural change must occur within the workplace environment. Due to the fact that the Baby Boomer generation has been raised to keep their thoughts to themselves and no speak up about their problems, concerns and ideas within the organisation, it has created conflict with the younger generation. This is because generation X and Y desire a workplace environment where they feel comfortable to have their say and input into the organisation decision making. In order to compensate for this clash in values, managers need to alter their organisational culture to create an environment that encourages older generations to share their ideas as well as let younger generations feel that their input (although different) is just as important and values. It is this communication and ideas sharing that will produce innovation organisations and informational human resource decision making (Barron’s Educational Series, 2007).
Managers need to acknowledge that each generation desires different outcomes on the completion of a given task or goal. Through the knowledge of these outcomes, managers can plan to give the necessary positive reinforcement at the correct time and in accordance of the law of cognitive reinforcement and the law of immediate reinforcement. The law of cognitive reinforcement is the view that for a reward to have maximum value, it can be delivered only when the desired action is exhibited (Wood et al 2006). This means that the goal or tasks must be accomplished to professional expectations before being rewarded for it. The law of immediate reinforcement states that the more immediate the delivery of the reward after the completion of the task/goal, the greater the reinforcing effect on behaviour. However, whilst generation X and Y prefer reinforcement rewards such as a day off or extra lunch hour, Baby Boomers will prefer a more verbal and direct reinforcement such as direct compliment or praise or even positive feedback. Managers will need to recognise these differences and plan for them when it is time for reinforcement.
Due to the fact the workforce is decreasing, managers need to start planning toward staff retention and what values and attitudes of each generation will need to be satisfied in order to retain their labour. This can be done through utilising flexible work arrangement for all generations so that youth can focus on their values such as their social life and family and baby boomers can ease into retirement and decrease their work load therefore releasing workplace stress. As a retention bonus, managers can offer paid maternity/paternity leave for younger generations and retirement/superannuation packages for baby boomers. Paid maternity leave will also aid in increasing the workforce for the next generation after Y which will be sustainable for future organisation. This will need to be incorporated into the planning phase of the organisation when this time (maternity leave and retirement) comes as well as incorporated in individual contracts. It can also be suggested that organisations begin to form relationships with universities and other learning and educational institutions through planning. This will attract staff from the educational source as well as companies being able to have their input into educational programmes in regard to what skills graduates are lacking.
5.3 Management by objective (MBO)
In all organisations there are specific objectives to be met in order for the organisation to succeed therefore managers and leaders will be focussed on the facilitation of these achievements. Management by Objectives can be viewed as a practice which can incorporate most of the desired criteria for all generational groups. Management by objectives is a process used by organisations in which specific goals are set collaboratively for each individual, unit and the organisation as a whole (Bartol et al, 2006). Provided the objectives or goals are planned and set correctly MBO allows for a great deal of flexibility. For example the tech-savvy generations X and Y may be able complete their tasks in a short number of hours allowing more leisure/family time, thereby creating a mutually beneficial situation.
5.3.1 Goals and Plans
As stated in section 5.1.3, Goal-setting is an important part in the motivation of employees. Further, the goals must be part of the overall organisational plan to ensure good outcomes. The goals themselves should also be tailored to the individual eg. Long-term goals for the loyal Baby Boomer and short-term objectives for the immediate-results focussed generation Y. From the identified goals an action plan should be formulated; the setting of this plan is where the flexibility of MBO is most apparent. These plans are usually developed cooperatively between management and staff (Bartol et al, 2006). This is a plus as far as generation X is concerned as they value inputting into the decision-making process. The Baby Boomers will also enjoy planning as they take on tasks outside of their job description if it means they may achieve a promotion.
5.3.2 Equity theory and MBO
The setting of these goals for the individuals and units has the added benefit of increasing the knowledge of individuals’ tasks and functions. This can remove the negative effects of inequity at least where it is unfounded. The increase in the individuals perceiving equity will improve motivation across all units and the whole organisation. Keeping the inputs and rewards as transparent as possible is one way to manage the equity process (Wood et al, 2006).
5.3.3 Expectancy theory and MBO
One of the useful by-products of MBO is that it clarifies the expectations on individuals which satisfies values particular to the X and Y generations. Expectancy theory would apply here; the ‘expectancy’ will be high provided that the goals were set at an attainable yet challenging level. When the goals are set the outcomes for achieving those goals should be specified, if this is done the ‘instrumentality’ will also receive a high score. By tailoring the outcomes to the individual the ‘valence’ will have a high rating to produce an overall high level of motivation. This clarification of inputs and outcomes is something the Baby Boomers too require for good motivation levels.
5.3.4 Communications and MBO
Teaching programmes
Due to the collaborative nature of Goal-setting and of the ways in which the set goals are achieved, vertical communication is encouraged and required, as is horizontal communication. “The collection of individuals that make up an organisation remains an unfocused group until its members are in effective communication with one another”, (Wood et al, 2006, p454). The communication required for MBO is an integral part of organisations suggesting that no new processes would be required in order to communicate the objectives and outcomes. This would help to keep the Baby Boomer generation happy as they like the sense of security that some level of consistency provides.
6.0 Working towards a sustainable organisation
6.1 Skill shortage and labor shortage
The shift from the Baby Boomer generation to generation X and Y in the workforce represents a possible skill shortage for corporate businesses as a large sector of the workforce is preparing for retirement. Skill shortage is the situation business face when firms have buyers waiting, but cannot produce enough to satisfy the demand because they cannot recruit sufficient skilled workers (Richardson 2009). This is then interpreted as a failure of the skill development system of the organisation and societies educational programmes. Bridgers and Johnson (2006) suggest that the root causes of skill shortages and an ageing workforce come from demographic trends that have affected the size and age of the available workforce, the attraction of both the industry and the positions available and hiring freezes. The demographic trends have resulted in a workforce that is growing at a much slower rate than previously experienced and also one that is aging rapidly. The speed at which the baby boomer generation approaches retirement means that on-the-job training will not be efficient enough to transfer all knowledge required to attain necessary skills. With the average skill rate decreasing, it is a possibility that organisations will be dealing with a labour shortage. This is when there are not enough workers available with the right skills for the work that needs to be done (Wood et al 2006). Due to the current situation of labour shortage, corporations must place their focus on human resource sustainability. Dunphy et al (2000) explains that five factors must be the core focus in order to create and retain value in their organisation. These five factors are organisational change, work and life balance, employee consultation and involvement, career development and organisational learning and workplace institutions and systems (see appendix).
The predicament that currently faces organisations is the concern for their sustainability in regards to a skill shortage and labour shortage. If the necessary skills and cannot be achieved by the time the baby boomers retire, organisations will be incapable of performing at rate that is acceptable (Jensen 1991). It is a similar case with the issue of labour shortage. If these necessary workers cannot be sourced, production will not be able to grow and develop but rather will stagnate. In order to build towards a more sustainable future for human productivity, businesses must adopt a human resource development sector.
6.1.1 Human Resource Development and Corporate Sustainability
Ulrich (1998) suggests that there are four ways human resources (HR) can aid in human sustainability. Firstly, the HR function must become partners with senior line management to form a link between boardroom decision and the marketplace to ensure informed decisions are made in regards to human activity. HR has the ability to provide relevant enterprise in the way work is executed and organised, this therefore aids and insures organisational administrative efficiency and production towards a sustainable staff. Thirdly, HR has the ability to represent employees concerns towards management and consequently increase employee’s chances of influencing managerial decisions therefore improving the chances of retaining staff. Lastly, HR should be an agent of change towards a more sustainable corporate future. It should be able to shape processes and culture which together improve and enhance the businesses through taking a hostilic approach to the integration of people management.
6.2 Generational integration and job sharing
As organisations progress in the 21st century, it is predicted there will be a higher move towards the technique of job sharing (Ettorre 1994). This is the assessment of one full time job to two or more persons who divide the work accordingly to agreements made between themselves and their employer (wood et al 2006). Job sharing requires a high degree of communication between the two or more persons in regard to co-ordinating the set of tasks required by the job. If the tasks are shared between members of different generations, this will initiate communication between the age groups and will evidently pass on workplace values, attitudes and skills from one to the other (Gliss 2000). Internal integration is the creation of a collective identity and the means of matching methods of working and living together. This will enable organisational culture to be altered to reflect the feelings, attitudes and beliefs of all generations involved. Generational integration therefore means mixing generations to work together in harmony and share values and attitudes by having to work in unison with each other. This will allow employers to recognise the skill gap of employees from different generations and act on improving them before the baby boomer generation retires through educational programmes. It will also aid as a recruitment leverage as there will always be at least one person that has full or partial knowledge of the job.
6.2.1 The sustainable benefits of generational integration and job sharing
The benefits of having generations working together will enable information to be passed on from one generation to the next. This means that organisational memory will be retained within the current employees therefore prolonging the life of the organisation and its productivity. It is possible that memory loss will occur when the baby boomer generation leave the workforce leaving the younger generations that replace them with no identification to the events that occurred previous to their employment (Klein 2008). This could mean that when organisational problems occur, they will have no knowledge of if it had occurred previously and what did/didn’t fix it.
Generational integration and job sharing will also aid in increasing employer loyalty rates. From studying the values and attitudes of generations, there are clear values that are not collective. Baby boomers aim to start at the bottom line of a corporation and work their way to the top therefore showing long term loyalty. Generation X and Y on the other hand expect to start the top or at least be climbing the corporate ladder 6 months into their employment. If this is not achieved, they will seek this elsewhere. It is therefore predicted that loyalty rates will decrease as generation X and Y begin to move into roles of higher responsibility if the organisation cannot give them what is wanted/ expected (Siebert 2008). Training individuals from new generations is expensive and will be costly if they continue to move on taking with them corporate knowledge too, brain draining the organisation.
6.3 Retaining an older workforce
It is crucial that organisations aim at retaining the older workforce in order to hold onto skills that drive production. This is also important as pools of younger applicants are decreasing (www.abs.gov.au). If this can be achieved, there will be more time to pass on skills, values and attitudes to younger generations as well as retain organisational memory for longer. This will be sustainable in human resource development and organisational development too.
In order to sustain an organisations workforce, it is recommended that the generations be studied in isolation and offered different incentives (Wagner 2007). This is because they are very different in how they work and what they want from their work. By satisfying the individual requirements of each generation and not attempting to group the needs of all employees, the age of the workforce will be prolonged through their satisfaction.
6.3.1 Equity Theory and Sustainability
To sustain an older workforce they must be motivated to continue working. This can be done through Adams Equity Theory (see appendix?). Although different incentives may be given to different generations depending on their needs and wants as an employee, they must still be of equal value. If the baby boomer generation has a ‘felt negative inequity’ (Wood, eta al, 2006) they will no longer be motivated to work considering as their motivator is no longer as attractive. They would feel underappreciated considering younger generations receive higher rewards but for the same work input. This inequity can string from both reward systems as well as organisational opportunities, including the opportunity to advance in the corporate hierarchy.
6.3.2 Expectancy Theory and Sustainability
Considering that Vroom’s expectancy theory (see appendix) seeks to predict or explain task-related effort within a person, it can be used to measure what incentives may work for different generations enabling their wants to be satisfied and prolonging their working life. If organisations are able to provide incentives to work towards whether it be a promotion or increased monies towards superannuation, they will be able to motivate their elder staff past their certain retirement age. This can also be done by setting long and short term goals. This can motivate staff (including the older generations) to work towards a specific goal and not retire until accomplished.
6.3.3 Flexible work arrangements and Sustainability
Flexible work arrangements give employees a daily choice of timing of work and non-work related activities. This means they have more control over their work and life balance which is an attribute held highly by generations approaching retirement and has the ability to increase quality of their working life (Baines 1995). This is sustainable for the organisation because it not only improves the quality of their employees work life but is also known to have the ability of lowering absenteeism rates, reduce tardiness, reduce turnover rate, increase work commitment and produce higher performance. This aids in helping elder generations ease into retirement rather than abruptly at a certain age.
Job sharing, as discussed above, also gives employees more control over their working week. It enables a smooth transaction from full time to part time work and eventually retirement. It allows elder workers to trade income for additional leisure time that is packaged to suit their needs and the needs of the organisation. It also lightens the work load of elder generations to enable they do not feel overwhelmed with tasks as they approach retirement. Through giving elder generations this control in their working week and hours, it will result in them staying in the company for longer therefore protracting the sustainable life of the organisation and its human resources.
7.0 Recommendations
8.0 Conclusion
The problems that can arise from differences in generations attitudes and values can be solved using the equity theory, expectancy theory, gaol setting and planning as well as implementing change at a managerial level to incorporate both structural and cultural change. An organisation can become sustainable if they focus on retaining an older workforce and their values as well as attracting fresh young staff with new ideas and values to enrich the organisational culture. It is recommended that organisations become sustainable through utilising mentor programmes, implementing paid maternity/paternity leave and retirement and superannuation packages, the use of long and short term goals, integrating generations and altering the organisation structure and culture to better fit the needs, wants and expectations of each generational member.
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10.0 Appendices
10.1 Appendix One: Adam’s Equity Theory
Individual rewards/ individual input Comparison Others rewards/ others inputs
10.2 Appendix Two: Vroom’s Expectancy Theory
10.3 Appendix Three:
