Baby Boomers, Gen Xers, Millennials... does it really make a difference in the workplace?
It seems like we've been talking about this question for ages, and everyone has an opinion. While there are some common themes that transcend generation (e.g., everyone wants leaders who are credible, trust in the workplace is important, etc.), I think there are substantial differences between generations when it comes to core values. In "Meeting the Challenges of Tomorrow's Workplace", CEO Magazine summarized these differences as follows:
For the Traditionalists, stability is the name of the game. They tend to emphasize duty, tradition and loyalty. It's not uncommon for Traditionalists to prefer to stay at the same company for their entire careers.
Boomers value individuality. They tend to be idealistic and are relationship-oriented. To Boomers, working hard is a badge of honor.
Gen Xers are fiercely independent and tend to be entrepreneurial. Unlike the Traditionalists, Gen Xers are comfortable with moving from one organization to another, and their focus tends to be on building a portable career.
For Gen Y employees, it's all about collaboration. They tend to emphasize the power of collectivism, and value authenticity and autonomy.
These differences in core values lead to differences in the perception of work and what each group values the most:
For traditionalists, their greatest reward comes internally in the form of satisfaction of a job well done.
Boomers want external rewards in the forms of more money, a better title, and company recognition.
For Gen Xers the greatest reward is freedom - the freedom to prioritize projects, the freedom to choose when and where to work, and the freedom to balance work and life as they choose.
For Gen Yers, work that has meaning is the greatest reward. They want to feel like they're contributing, and are always looking for the larger meaning in what they do.
Differences in the perception of work and rewards, in turn, has implications for base salaries, pay increases, incentives and benefits.
When it comes to base salaries, there is one cross-generational truth: salary must be market competitive. Assuming that your base salaries are competitive within the marketplace, different generations emphasize different aspects of base salary and pay increases:
Because of their loyalty to their employer, Traditionalists are likely to be happy as long as their salary is competitive and they receive cost of living adjustments to their pay.
Boomers are concerned about their rank within the organization and therefore are concerned about where their base salaries stack up relative to their colleagues. For Boomers, seniority is something to be rewarded, and pay increases must be internally equitable.
Gen Xers see themselves as "hired guns"; because of this, market competitiveness is absolutely critical. Xers see job changes as an inevitable part of life. If they can get a better deal somewhere else, they will take advantage of it. Since Gen Xers are comfortable working on a project basis, they're comfortable with pay increases that are tied to performance on those projects.
Gen Yers are collaborative by nature, and are likely to share salary and increase information. Like Boomers, equity and fairness are important to them. But unlike Boomers, Yers may take action collectively if they feel pay is inequitable. There's a strong group dynamic within this generation, and it's possible that inequities in base salaries or pay increases could lead to a collective walk-out.
In my next post, we'll talk about how generational differences impact preferences in incentives and benefits, and how to incorporate generational differences into a comprehensive total rewards strategy.
Stephanie R. Thomas is an economic and statistical consultant specializing in EEO issues and employment litigation risk management. Since 1999, she's been working with businesses and government agencies providing expert analysis. Stephanie's articles on examining compensation systems for internal equity have appeared in professional journals and she has appeared on NPR to discuss the gender wage gap. Stephanie is the founder of Thomas Econometrics and is the host of The Proactive Employer Podcast. Follow her on Twitter at ProactiveStats.
This is great stuff, Stephanie! I just want to add one more thing that impacts the pursuit of a high salary:
Gen X'ers have mortgages and/or college age kids.
(I'm just saying.)
Posted by: Laura Schroeder | 10/06/2011 at 08:33 AM