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Generation X and the Art of Reward

November 1, 1999
Related Topics: Recognition, Featured Article
For all the pop-psychology surrounding Gen Xers as "slackers," thisparticular group of mid-20 to mid-30 year-olds has finally come of age in theworkplace. Yes, it’s true. Beavis and Butthead have gone corporate. Andwhether you care to admit it or not, members of Generation X with their"whatever" attitudes will doubtless continue to play a unique role inyour company’s future.

That is, if you can manage to keep them motivated.

Their numbers alone (roughly 16 percent of the United States’ 270 millionpeople) should warrant your careful attention to the pros and cons ofemployee-incentive programs. And while we all have similar needs and desires inthe workplace, Gen Xers carry the added burden of growing up during rampantcorporate downsizing, which turned the notion of job security into one BIG joke."Gen Xers grew up in a different world," says Claire Raines, co-authorof "Generations at Work" (Amacom, 1999). "They have differentdefinitions for leadership and loyalty and incentive rewards. Work isn’t theNo. 1 most important thing in their lives."

Instead, Gen Xers commit themselves to this whole notion of work/lifebalance. For example, while boomers (mid-40 to mid-50 year-olds) have gotteninto the habit of working that extra hour at the end of an eight-hour shift, GenXers tend to have someplace else to go -- whether it’s to night classes or toVail for extreme snowboarding. Unless, of course, you’re willing to pay themfor the overtime. Otherwise, as long as they get the work done, what does itmatter how and where it gets done? If they do it at home, in the car or on acell phone while telecommuting, they think that’s their business, not theirsupervisor’s. At least, that’s their attitude, say some experts.

Not to stereotype an entire generation. But when it comes to rewarding andmotivating Gen Xers for good behavior, even the experts suggest you considerthis particular generation’s nontraditional attitudes about time and space,freedom and flexible work schedules. "Anything that makes work lesscorporate resonates well with a generation that feels betrayed by corporateinterests," says Raines.

Read between the statistics
Generation X experts have noted all this already, and they’ve noted how --despite the media dubbing them slackers (as if they were too busy to do anythingmore than play computer games and watch television) -- Gen Xers are typicallyself-reliant and entrepreneurial in spirit. And this puts human resourcesmanagers at a slight psychological disadvantage because motivating employees whowould rather go into business for themselves than work for someone else canbecome a major challenge.

According to a cross-section study of generations at work by FORTUNEPersonnel Consultants (FPC), a national franchise network of executive searchfirms headquartered in New York City, even though there are importantsimilarities (work ethics, loyalty, work styles) among age groups that canreduce angst for HR managers, Gen Xers are much more likely than any othergeneration to leave for a more challenging job. They’re also the most likelygroup to leave a company for a higher salary and better "bennies,"such as flexible work schedules.

It’s little wonder, then, that Gen Xers tend to be financially engaged andwork-oriented, but they also want their flexibility and freedom, too. In fact,Gen Xers are gearing up for more heated professional lives. More than half saytheir jobs will be faster-paced in 10 years. A full quarter believe they’llhave their own businesses in 10 years, and another 16 percent say they’lleventually be doing consulting and freelance work.

So, in sum, human resources managers who can identify the motivationalfactors that vary by generation will be better-equipped to recruit and retainthe best candidates. "The workplace is accelerating. People are livingturbo-charged lives. It’s crucial employers know what drives employees to stayor leave," says Ann Piacentini, director of market research strategy atScudder Kemper Investments, a New York City-based global money management firm."The future of Gen Xers is more freelance work and telecommuting. Employersneed to accommodate the work and lifestyle changes of the younger generation inorder to retain talent. If we don’t shift to accommodate these needs, we’regoing to lose the talent we have."

This point is worth emphasizing. Gen Xers tend to describe themselves astechno savvy, aggressive, cynical and realistic, according to "Generations@ the Millennium," a survey conducted by Scudder Kemper Investments. Injobs, they embrace risk and prefer free agency over loyalty to a particularcorporation. And they would rather volunteer than vote. This helps build thefoundation from which HR managers can develop employee-incentive programs.

Who needs what, and why?
So the obvious "HR Insider"-type question is what do Gen Xersthemselves want by way of an incentive program that motivates productivity andgood behavior? This is a legitimately interesting question, although, given theextreme unpredictability of stereotyping a whole generation, it’s probablymore realistic to ask someone who’s been there. A member of Generation X, ifyou will.

Heather Neely is a Palo Alto, California-based consultant who specializes inthe working styles of Gen Xers, and is a member of Generation X. "Managersneed to realize we’re the first generation of workers who’ve come in afteryears of corporate downsizing," she says. "We’re going to havedifferent expectations in the workplace. We’re not expecting long-termemployment anymore. Rather, we’re looking for daily proof that our workmatters. It’s about creating a new type of security. Of course we want to makea good living. But if managers reward performance with only money, in many waysthey’ve lost the war because we also want freedom and flexibility in theworkplace."

John D. Willard is executive co-director of the Annapolis, Maryland-basedGeneration X Coalition Inc., and is a member of Generation X. He agrees that hisgeneration tends to focus on long-term rewards like opportunities for ownershiprather than on short-term rewards like cash bonuses. "I hear managementconsulting groups try to interpret us as greatly different from othergenerations, like we want nose rings and trips to Hawaii. But I don’t think we’remuch different," he says. "Sure, we want good benefits. It’s justthat the older generations were content with being part of the big company. We’vehad to deal with the ups and downs of getting hired and fired more rapidly thanany other generation. If you want to motivate us, get us more involved in thedecision-making process."

Then again, there are some needs and desires in the workplace that transcendgenerations. At the Dallas-based T.G.I. Friday’s, a chain of more than 500restaurants, the company’s top workers (whether they’re servers, cooks ordishwashers) can choose to work at any Friday’s restaurant around the world.The program not only addresses a generation’s desire to play -- it alsorewards work well done.

"Don’t get me wrong," says Willard. "Money works.Reassignment to a great location works. But these things aren’t unique to ourgeneration. It’s only by getting the buy-in with a company where we have ameaningful part of the decision-making process that we end up with a greatersense of security."

Recognize Gen Xers
If you think about it, the so-called nontraditional attitudes that make workfeel less corporate for Gen Xers -- ideas once considered arrogant or youthfulor rebellious -- have become, well, mainstream. Like it or not, they’re here.Gen Xers. And they’re here to stay.

Deborah Masten is communications and human resources development director forPlano, Texas-based JCPenney. She says her company first identified the need tounderstand the differences between generations about four years ago, when storemanagers started complaining about Gen Xers who lacked a healthy work ethic.

"We couldn’t figure out how to keep them motivated," she says."We quickly learned by working with a consultant that you don’t lead thisgeneration by example, you lead by interaction. They want to know what’sexpected of them, and they want accurate and timely feedback."

Gen Xers account for roughly 27 percent of the 200,000 JCPenney retail andcatalog workforce, says Masten. As a result, the need for new ways to motivatethis workforce became a priority. So the company set up a program where managerscan click an icon on their PC screen, log on using their Social Security numberand access the company’s knowledge-management system to learn more about howto motivate employees.

"For example, Gen Xers like to decide on their own how something shouldbe done," says Masten. "So we teach managers how to allow them alittle flexibility and creativity. You want to be a resource for them, but youdon’t want to detail everything for them. We also found that by providing themwith lifelong learning opportunities and after-hours education, they’re morelikely to be engaged mentally, as well as physically. Gen Xers tend to beself-reliant. They realize the only person they can rely on is themselves, so wegive them opportunities to develop their own skill-sets."

"Gen Xers have come of age during the most profound changes in theeconomy since the Industrial Revolution," says Bruce Tulgan, founder of NewHaven, Connecticut-based consulting firm Rainmaker Thinking, and author of"The Manager’s Pocket Guide to Generation X" (HRD Press, 1997) and"Managing Generation X" (Capstone, 1996). "All of the forcesshaping the economy and the workplace are the forces that have shaped GenerationX. Instead of trying to get people to pay their dues and climb the corporateladder, I urge companies to get creative at managing a fluid talent pool."

To that end, managers need to get over the misconception that Gen Xers aredisloyal and not willing to pay their dues. Doesn’t every generation clashwith the generation in power? Secondly, you have to realize that today’sworkers, in general, have more negotiating power than in the past, and the mosttalented people are going to drive a harder bargain. "If you want to retainGen Xers, you’d better be prepared to negotiate salaries and work assignmentswith them, and every day," says Tulgan. "The days of annual pay raisesare over."

So what can you do to motivate and retain Gen Xers? Tie rewards directly toperformance. Accelerate the timing of rewards -- immediate rewards are the mosteffective. Expand your repertoire of financial rewards, and consider things likeshort pay-increase cycles. Support work/life balance by increasing employees’control over their creative space. Fill the workplace with training resourcesand give Gen Xers the remote control. And no matter what you do otherwise, theNo. 1 factor for motivating your workforce is the relationship between managerand employee, says Tulgan. "Your day-to-day coaching style needs to beprompt and fast."

Tulgan has identified six non-financial rewards for Gen Xers and free agentsof all ages:

  • More control over their own schedules.
  • Access to marketable skills.
  • Exposure to decision makers.
  • The chance to put their names on tangible results.
  • Clear areas of responsibility.
  • The chance for creative freedom.

"Generations at Work" authorRaines suggests creating a culture that not only focuses on what needs to getdone, but also accommodating the various ways in which people approach work."The most important thing for human resources managers to remember is thatif you’re a boomer, these younger folks are just like you when you were inyour mid-20s to mid-30s," she says.

Sure, it’s different from generation to generation. Boomers, for example,may like the status symbol of promotions or first-class airfare. Gen Xers mayprefer rewards less tangible but no less important to them, like free time andflexible scheduling. If one company says, "This is the schedule. Take it orleave it," Gen Xers may just leave it.

You could call this attitude arrogant. But members of Generation X -- theso-called disenchanted, disenfranchised generation -- finally grew up and sought"real" jobs. And even though they feel as if they can’t rely oninstitutions to be the foundation for their success and security anymore, theystill want to hang on to something, anything. "You learn to feel like youhave to fend for yourself, and this independence goes along with our willingnessto walk away if we’re not happy in a situation," says Tulgan."Managers can’t manage by fear, anymore. Long-term rewards, 12-monthreviews and annual raises and bonuses are obsolete. So stop managing time andplace, and start managing people and performance."

Workforce, November 1999, Vol. 78, No. 11, pp.44-48 -- Subscribenow!

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