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Compensation Sense: How to Balance Total Rewards Expectations for Different Generations in the Workforce

February 10, 2018
Different Generations in the Workforce | Total Reward Solutions

With five different generations in the workforce, it can be challenging to understand and balance their diverse expectations when it comes to total rewards. These rewards include everything an employee values in the work relationship, including compensation, benefits, work/life balance, performance management, coaching, job satisfaction, and motivation. To address the needs of different generations in the workforce, you first need to define them as individual groups and understand their typical expectations. Let’s take a closer look:

 

Traditionalists (aka “The Silent Generation”)

Traditionalist are the oldest generation in our workforce today. According to the Pew Research Center, this generation was born during the period from 1928 to 1945, just after those labeled by news journalist Tom Brokaw as “The Greatest Generation”.

Traditionalists emphasize and value civic pride, loyalty, respect for authority, dedication, sacrifice, honor, and discipline. They are motivated by flexibility, autonomy in their work, and working on preferred jobs or projects.

Traditionalists often need creative compensation packages. They crave appreciation and recognition and enjoy the satisfaction of a job well done. They focus on flexibility, so they can spend time with their grandchildren, and will often stay on board to ease the knowledge gap. They desire traditional benefit packages, defined benefit retirement plans, and conventional vacation/time off. Certain standard health and insurance benefits are not appealing to them if they have Medicare. Traditionalists want coaching focused on improving their strengths.

 

Baby Boomers

The Baby Boomer generation is well-defined as those persons born during the period from 1946 to 1964. They were raised in an era of extreme post-World War II optimism, opportunity, and progress. Indeed, optimism is a defining trait for many Baby Boomers, and they like to be involved. They are determined to do better than their parents and to provide their children everything. Thus, they are motivated by money, strong title, recognition of hard work, and respect. Baby Boomers expect employers to let them know they are valued and needed.

You can count on Baby Boomers to go the extra mile as they invented the 60-hour work week. They crave recognition and they like status symbols – anything that differentiates them from others, such as a corner office. Internal equity amongst employees is very important to them. They desire individual rewards. Their coaching is best when focused more on improving their weaknesses than on improving their strengths.

 

Generation X

Generation X, defined by the Pew Research Center as those individuals born during the period from 1965 to 1980, are the offspring of Traditionalists and/or Baby Boomers. They have a chronic need for stimulation and instant gratification. They believe in doing things their way and forgetting the rules – which can potentially raise ethics issues.

Gen X workers are motivated by incentives tied to individual results, access to the best office technology rather than the corner office, and work/life balance that includes a flexible schedule. They work hard and play hard. They also want options in tasks, challenges, and new processes. They want freedom to use their own resourcefulness to achieve success, too. Gen Xers desire pay increases tied to their own performance, and personal rewards for results. They also expect coaching to be focused equally on improving both strengths and weaknesses.

 

Millennials (aka “Generation Y”)

Among the different generations in the workforce, Millennials already comprise the largest group, according to Pew. Born during the period from 1981 to the late 1990s, their representation will continue to expand in the workplace, comprising as much as 75% of the global workforce by 2025.

Millennials are well-traveled global citizens, and many speak a second language. They desire constant and immediate feedback and meaningful work. They like to work with their friends and bright, creative people. Work/life balance is highly desired, with surveys showing this as important to 88% of them, while 77% expect a flexible schedule.

Millennials like spot awards and non-financial incentives like group outings as well as charitable and travel rewards. They have real concerns about finance with many having large outstanding college loans. Immediate performance feedback is desired by Millennials and they want it to be bi-directional. In other words, they want to hear how you feel they are doing, and they want to tell you how they feel they are doing. Millennials want at least one touch point per week from their direct manager. Coaching for Millennials needs to be focused more on weaknesses than strengths. They will leave an organization when they don’t see enough opportunities for leadership development or if they feel the organization is neglecting improving their skills.

 

Generation Z (aka “The iGeneration”)

Perhaps overlapping with the final birth years of the Millennials, Generation Z workers are the youngest of the different generations in the workforce today. This is the most diverse generation and many Gen Z workers are bilingual/multilingual. They are true digital natives with short attention spans. They will not classify themselves. Nonetheless, they are eager to work, motivated by job security, and they want to contribute to meaningful work.

Gen Z members focus on their personal development and want opportunities for advancement. This is the first generation in decades that is open to skipping college and going directly into the workforce if it can provide education in their field of interest. They want coaching to be of the teaching style. To Generation Z employees, honesty is the most important quality in a leader. Solid vision from leadership and good communication skills are also important to these workers.

 

Balancing Total Rewards Expectations

So, how can a company balance generational expectations with so many different generations in the workforce? Here are some guidelines:

  • Communicate uniquely with each generation as they prefer
  • Accommodate employee differences in coaching
  • Create workplace choices in compensation and benefits where possible
  • Provide flexible leadership and adapt to what works with each generation
  • Respect and reward competence and initiative
  • Take necessary steps to enhance employee satisfaction and loyalty
  • Build and promote a learning environment to attract and retain a diverse set of individuals

Regardless of the generational mix in the workplace, create experiences that engage and empower individuals to achieve shared business objectives. It really comes down to establishing, implementing and maintaining a strategic vision to motivate, coach, and develop diverse employees.

To learn more about how your company can balance the total rewards needs of different generations in the workforce, contact us today at 317.589.8529.

 

Cassandra Faurote

 

About Total Reward Solutions:

Total Reward Solutions is your trusted partner for compensation and benefit services. Led by respected and professionally certified Human Resources expert Cassandra Faurote, Total Reward Solutions offers a broad range of compensation, benefits, performance management, and reward/recognition consulting services to help your organization attract top talent, motivate employees and retain top performers. We can partner with you on a project basis, on retainer, or as your total outsourced solutions provider for compensation services.

Call us today at 317.589.8529 to discuss how we can help your organization develop and implement competitive and effective compensation and total reward programs.

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