111030_Retaining the Gen Y Employee

7/31/2019 111030_Retaining the Gen Y Employee

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2012 RETAININGTHEGEN-YEMPLOYEE

Submitted To

Prof.Sunil Kumar Singh

Submitted By

P.Swetha

(111030)

INDIAN INSTITUTE OF MANAGEMENT UDAIPUR

HUMAN RESOURCE MANAGEMENT


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TABLE OF CONTENTS

The Generations...................................................................................................................................................... 2

Baby Boomers ................................................................................................................................................ 2

Generation X................................................................................................................................................... 2

Generation Y................................................................................................................................................... 3

Why Is It Necessary To Change For Gen-Y? ......................................................................................................... 3

Herzbergs Two Factor Theory................................................................................................................................ 4

Motivators For Gen-Y ............................................................................................................................................ 5

The Global Scenario Vis--Vis Asia-Pacific Nations ........................................................................................ 6

The Indian Scenario ............................................................................................................................................ 7

Gen-Y And Attitude Towards Their Job ................................................................................................................ 9

What Can Companies Do? ...................................................................................................................................... 9

Employee Engagement ....................................................................................................................................... 9

Organizational Ethics, Values And Brand Development .................................................................................. 10

Training And Career Development Opportunities ............................................................................................ 10

Promotion ......................................................................................................................................................... 11

Job Enrichment ................................................................................................................................................. 11

In A Nutshell ........................................................................................................................................................ 11

Conclusion ............................................................................................................................................................ 12

Works Cited .......................................................................................................................................................... 12

LIST OF TABLES

Table 1: Mercer Survey Results .............................................................................................................................. 7

Table 2: Global Gen-Y Motivators and Hygiene Factor........................................................................................... 7

Table 3: India Mercer Survey Report ............................................................... ....................................................... 8

Table 4: Hygiene Factors for World vis--vis India ................................................................................................. 8

Table 5: Motivators Ranked in order of importance .............................................................................................. 9


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THE GENERATIONS

Each generation of individuals bring with themselves particular traits and a specific set of

needs to the workplace. Corporates need to cater to the needs and demands of all the different

generations. The various generations interacting in the present workplace can be classified

based on the birth years as follows:

BABY BOOMERS

This generation consists of people born between the years 1946 and 1964. This generation

occupies the helm of the present workforce with the top management positions being held by

these people. The age range of the people in this generation is around 48 to 67 Years of age

(in 2012). This generation values social standing and status. They are the generation who had

first seen the advent of the digital age, they were born during the optimistic periods of the end

of the world wars and imperial regime. Thus, they tend to be optimistic and loyal.

GENERATION X

The Generation X consists of people aged 33 to 47 years of age. They are born between the

years 1965 and 1979 and presently occupy the mid to senior management positions in the

corporates. This generation is also known as the Latchkey generation as they were the first

to be exposed to corporate culture with both parents working. They are highly educated and

tend to be independent, self-reliant and oppose authority. They are not as loyal as the Baby

boomers and tend to shift jobs more often. They tend to give importance to maintaining good

relationships at the workplace, but will quit a job if they are unhappy. They are also known as

the Me generation.


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GENERATION Y

The generation born after 1980 and before 2000 are known as the Millenials. They are aged

between 18 32 years of age. They are presently occupying the entry level positions at theworkplace. They are the generation born into technology and so they are comfortable with

technology, virtual groups and ethnically diverse groups. They are optimistic, confident and

have high ethical standards. They are not loyal to their company and expect to work in a

flexible workplace. They are not afraid to change careers if they are dissatisfied with their job

(Ethics Resource Center, 2009)

The Gen-Y was parented by the Gen-X and so they are used to being closely monitored by

their parents. They are also the generation, who had easy access to technology, starting from

colour television to the tablet. Thus, they are always connected to technology. They are thus

also known as the Tethered Generation.

This generation is criticized for needing instant gratification and for wanting to earn without

actually working. The present HR practices formulated around the Gen-X and Baby boomers

by the baby boomer generation will not be efficient in retaining the Gen Y employee. As this

generation is the most ambitious and are presently entering the workforce, several studies

have been conducted to understand how to retain the Gen-Y employee.

WHY IS IT NECESSARY TO CHANGE FOR GEN-Y?

The worlds population is ageing and the Baby Boomers are fast attaining retirement. At the

same time, as globalization increases, competition is rising and the competition is not only

scouring for more market space, but also better talent. Poaching has become rampant as the

need for talent constantly outpaces the supply.


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With the global recession, cost reduction is what every HR head has to face. High attrition

and increased costs in bringing new employee on board, training them and inducting them

into the organization, just to see them leave due to hygiene issues is a nightmare for every

organization. Thus, it has become important that companies do everything possible to ensure

maximum employee satisfaction so as to retain them.

Using Herzbergs two factor theory and several surveys conducted throughout the world, we

shall try to understand the methods to retain the new-age employees.

HERZBERGS TWO FACTOR THEORY

Herzbergs Two Factor theory speaks about hygiene factors and motivation factors.

Hygiene Factors: These are the factors which are required for an employee to be satisfied in

an organization. However, the presence of hygiene factors does not ensure motivation, but the

absence of hygiene factors means that the employee would certainly be demotivated. Thus,

Figure 1: World Aging Population in 2025

Source: US Census Bureau


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hygiene factors are the needs that have to be met by any organization looking to keep its

employees motivated.

Motivation Factors: These are the factors which motivate a person to take up more

responsibility at work and to feel loyal to the company. Motivators are necessary to create

long term loyalty, and a feeling of belongingness to the company, in the employee.

Motivation factors are not the antonyms to hygiene factors. That is, if low pay is a hygiene

factor, high pay neednt necessarily motivate. These factors are instead very different from

the hygiene factors in the fact that they are intrinsic to the work and the organization. Some

factors like feeling of achievement, increased decision making and responsibility, engaging

or interesting work, career growth prospects, monetary or non-monetary rewards and

recognition are some motivation factors. Motivators give people a meaning to their work.

Absence of motivators does not cause dissatisfaction, but presence of motivators causes job

satisfaction.

Herzbergs Two Factor Theory can thus be described using the following grid:

MOTIVATORS FOR GEN-Y

Dissatisfaction Motivation

Frustration Satisfaction

Motivation

Factors

Hygiene FactorsHigh

High

Low

Low


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The present HR Policies have been formulated keeping the Gen X and the Baby Boomers in

mind. However, with the Gen-Y rapidly entering the work force, it is important to modify HR

policies so as to motivate the Gen-Y. To formulate such HR Policies, we need to first

understand the answer to the pertinent question, What do the Gen-Y want?

THE GLOBAL SCENARIO VIS--VIS ASIA-PACIFIC NATIONS

In a survey conducted by Mercer, the motivators for the Gen-Y on a base scale of 100 are as

below:

Global Singapore India Hong Kong China Australia

Being treated with respect 119 108 101 109 105 126

Work-life balance 111 106 98 104 98 115

The type of work that you do 110 102 117 99 102 111

The quality of leadership of the

organization107 108 104 109 109 117

Base pay 106 108 106 121 108 103

Working in an environment

where you can provide good

service to others

104 92 103 89 91 114

Long-term career potential 92 102 99 93 103 89

Having flexible working

arrangements91 89 90 86 77 101

Benefits 90 96 93 103 106 76

Promotion opportunities 89 95 101 100 104 77

Incentive pay/bonus 84 103 92 99 104 76

High Importance attributed to this factor compared to other countries

Some Importance attributed to this factor compared to other countries

Neutral towards this factor compared to other countries

Low Importance to this factor compared to other countries

Very low Importance attributed to this factor compared to other countries

Motivator


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Hygiene Factor

Table 1: Mercer Survey Results

Source: Mercer

A score of 100 is the base score or the Neutral score. A score less than 100 means that thereis less importance attached to the particular factor, while a score above 100 means a greater

importance attached to the factor.

From the survey, we can understand the motivators and hygiene factors on the basis that a

factor that scored below 100 would be a motivator. So, presence of these factors would

motivate, but absence would not necessarily demotivate a person. The factors scoring above100 would be considered a hygiene factor. That is, absence of these factors would cause

demotivation, but presence would not necessarily cause any motivation. Also, as people

across various countries differ in their expectations from work, the hygiene and motivation

factors differ across the countries.

Globally, the Motivation factors and hygiene factors stand as below

Hygiene Factors Motivation Factors

Being treated with respect Long-term career potential

Work-life balance Having flexible working arrangements

The type of work that you do Benefits

The quality of leadership of the organization Promotion opportunities

Base pay Incentive pay/bonus

Working in an environment where you can

provide good service to others

Table 2: Global Gen-Y Motivators and Hygiene Factor

Source:Author

THE INDIAN SCENARIO

The Indian scenario varies remarkably from the global scenario.

India Global

The type of work that you do 117 110


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Base pay 106 106

The quality of leadership of the organization 104 107

Working in an environment where you can provide good service 103 104

Being treated with respect 101 119

Promotion opportunities 101 89

Long-term career potential 99 92

Work-life balance 98 111

Benefits 93 90

Incentive pay/bonus 92 84

Having flexible working arrangements 90 91

Motivator

Hygiene Factor

Table 3: India Mercer Survey Report

Source:Mercer

If we compare the Hygiene factors in India vis--vis the world, it stands as below:

Hygiene Factors in India Hygiene Factors in World

The type of work that you do Being treated with respect

Base pay Work-life balance

The quality of leadership of the organization The type of work that you do


provide good serviceThe quality of leadership of the organization

Being treated with respect Base pay

Promotion opportunities


provide good service to others

Table 4: Hygiene Factors for World vis--vis India

Source:Author

While Indians give a high importance to the type of work, Gen -Y over the world considers it

most important to gain respect. This shows that Indians are more inclined towards

challenging jobs and roles which give them authority and responsibility. While the world

considers work-life balance a hygiene factor, people in India seem to not consider that as a


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requisite for satisfaction. This indicates that Gen-Y in India is ready to work while sacrificing

their family life. However, a promotion opportunity which is a part of the motivation factors

in the global scenario is a hygiene factor in India. This means that anyone who does not see

an opportunity for promotion would be dissatisfied, no matter which other motivators he/she

has at work.

GEN-Y AND ATTITUDE TOWARDS THEIR JOB

Overall, the ranking of various factors by Gen-Y in Asia-Pacific, stands as below

Table 5: Motivators Ranked in order of importance

WHAT CAN COMPANIES DO?

EMPLOYEE ENGAGEMENT


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In 2004, when Mercer conducted a similar survey, only 26% were seriously considering

leaving their job, but in 2011, 56% are seriously considering quitting. Of this 56%, 66% are

under 24 Years of age. This shows that allegiance to companies is declining as the new

generation enters the workforce. The Gen-Y employee considers work as a mutually fulfilling

transaction between the company and himself. Thus, he/she will consider leaving the

organization if he/she finds that he is not advancing in his career as planned. However, the

Gen-Y employee is not a slacker. He/she is ready to sacrifice work-life balance for a career

advancement and considers training opportunity as an important part of his career.

ORGANIZATIONAL ETHICS, VALUES AND BRAND DEVELOPMENT

Indians rate Working for a respectable organization at No 5 in their list of motivators.

Thus, it shows that youngsters aspire to join companies considered prestigious or ethical.

Thus, companies need to not only advertise to sell their products but also invest significantly

in Employer Branding. This will ensure that the company has a brand name to itself and so

attract talented employees.

TRAINING AND CAREER DEVELOPMENT OPPORTUNITIES

Career advancement is the most important element of the employment deal, with training

opportunities at number three. But scores have slipped: 71% say their organization does a

good job of developing its people, down from 80% in 2004; 71% say they are given the

information and assistance to manage their career, down from 79%. (Mercer, 2011) Thus,

Gen-Y employees are looking for better training and career development opportunities.

Flexible learning programmes, Management Development Programmes, Leadership

development programmes and succession planning will help retain employees. Also,

employees should be made aware as to what is expected from their work and what they

should do to improve their prospects of being promoted. Time bound promotions will NOT

go down well with the Gen-Y employee.


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PROMOTION

The Gen-Y employee is willing to work to earn his promotion. Time bound promotions and a

fixed promotion method which does not value his/her contribution to the job is not

appreciated by the Gen-Y employee. Thus, companies should make Goal setting,

Performance Evaluation and Promotions a transparent process. Each employee should be

judged on their performance alone and the employee should be allowed a say in setting goals

for him/herself.

JOB ENRICHMENT

The Gen-Y employees seek a job that provides them challenge and a good quality of work.

The Gen-X manager, however does not consider the Gen-Y employee mature enough to

handle responsibility, thus creating an imbalance. Companies should try to give more

responsibility to talented Gen-Y employees thus improving their job quality and motivating

them to prove themselves.

IN A NUTSHELL

Some practices for the HR Manager to follow while dealing with Gen-Y can thus be outlined

as below

Emphasis diversity in workplaces and create an understanding.

Give creative space in the workplace. Allow the work and workplace to get shaped

around the work as long as customers needs are met.

Constant feedback as well as reverse mentoring to improve communication and

transparency.

Personal influence should be used instead of positional power.

Know a person well before matching him to a team or assigning projects to an

individual.


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Do not discriminate based on age of work-experience. Instead evaluate the

performance and capability.

CONCLUSION

The Gen-Y is a new breed of employees having their own set of needs and wants. It is

important that the Gen-X managers understand the needs and create an environment for

active participation of the Gen-Y employee. Thus, it is important that Gen-X does not impose

itself onto the Gen-Y as resentment from either the Gen-X or Gen-Y employees can only

spell doom for the company. Some small changes in the processes and policies can indeed

produce a win-win situation for both the company and the employee.

WORKS CITED

Chakravarti, G. (n.d.). Challenge of Rewards for Gen-Y - Why Organizations Need to Change?Chennai: Mercer.

Ethics Resource Center. (2009). Ethics.org.Retrieved from Millennials, Gen X and Baby Boomers:Whos

Working at Your Company and What Do They Think About Ethics?: http://ethics.org/files/u5/Gen-

Diff.pdf

Gilbert, J. (2011). The Millenials - A New Generation of Employees - A New Set of Engagement Policies. Ivey

Business Journal.

Kumar, N. (n.d.). Getting the best out of Gen-Y: Innovation in HR Practices. Vishakhapatnam: Presentation to

Members of ISTD, NIPM, NHRD & VMA.

Mercer. (2011). What Matters Most?

Sapre, O. (2011). India Inc readies for Gen Y,transforming communication, style of management. Pune: The

Economic Time.

(n.d.). Understanding the Gen-Y: What You Need to Know About the Millennials. Princeton One.

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