7/31/2019 111030_Retaining the Gen Y Employee
1/13
0
2012 RETAININGTHEGEN-YEMPLOYEE
Submitted To
Prof.Sunil Kumar Singh
Submitted By
P.Swetha
(111030)
INDIAN INSTITUTE OF MANAGEMENT UDAIPUR
HUMAN RESOURCE MANAGEMENT
7/31/2019 111030_Retaining the Gen Y Employee
2/13
1
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
7/31/2019 111030_Retaining the Gen Y Employee
3/13
2
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.
7/31/2019 111030_Retaining the Gen Y Employee
4/13
3
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.
7/31/2019 111030_Retaining the Gen Y Employee
5/13
4
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
7/31/2019 111030_Retaining the Gen Y Employee
6/13
5
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
7/31/2019 111030_Retaining the Gen Y Employee
7/13
6
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
7/31/2019 111030_Retaining the Gen Y Employee
8/13
7
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
7/31/2019 111030_Retaining the Gen Y Employee
9/13
8
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
Working in an environment where you can
provide good serviceThe quality of leadership of the organization
Being treated with respect Base pay
Promotion opportunities
Working in an environment where you can
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
7/31/2019 111030_Retaining the Gen Y Employee
10/13
9
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
7/31/2019 111030_Retaining the Gen Y Employee
11/13
10
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.
7/31/2019 111030_Retaining the Gen Y Employee
12/13
11
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.
7/31/2019 111030_Retaining the Gen Y Employee
13/13
12
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.
[Word Count: 2592]