TM - February 2008 - (Page 34)

recruitment & retention assessment & evaluation compensation & benefits performance management learning & development succession planning FROM POSTGRAD TO PRERETIREMENT: COMPENSATING ACROSS THE SPECTRUM Adam Steinbrunner The challenges associated with managing a multigenerational workforce are vast and varied, but one major hurdle is the recognition that younger workers desire different types of compensation and benefits packages than their more senior counterparts. These varying expectations are caused by different approaches to the workplace. Veering from the “good soldier” mentality of baby boomers, generations X and Y take a more opportunistic view, willing to jump to new positions and roles at a different organization if they feel their contributions are not valued and rewarded appropriately. They tend to be less risk averse, due to their career stage; have confidence in personal ability and adaptability; and have a performance orientation. As a result, generations X and Y desire benefits that are more instantly lucrative, flexible and portable. Additionally, in today’s information age, creating superior service through knowledge and innovation is the most valuable contribution an employee can make to an organization. Demographic shifts, increasing life-expectancy rates and escalating health care costs have made defined benefits and extensive welfare packages costly and unattractive. For these reasons, pay for performance is an essential component of compensation for the younger workforce. Incentive plans that encourage individuals to deliver superior results (with less money for substandard performance) in order to take advantage of established financial opportunities are becoming increasingly accepted and attractive. To that end, many companies have shifted the focus of their benefits from fixed to flexible. Having companies match employees’ 401(k) contributions is replacing the deferred compensation of defined benefit plans. Further, benefits packages now consist of more than just monetary rewards and health care. Recognition awards and near-term performance bonuses February 2008 tend to offer an employee more motivation to excel than an opportunity for a senior management position in the distant future. Flexible hours, additional time off and telecommuting opportunities are increasingly popular because they address the younger generation’s desire for a fulfilling work-life balance. However, innovative benefits are only part of the equation. The new generation of workers also desires creativity in work opportunities, and this can become a very powerful reward in today’s service-oriented society. Special roles or projects awarded based on performance serve as strong incentives for workers with a performance orientation. The confidence and mobility inherent to this particular employee work style is predicated on having well-educated individuals with the knowledge and skills to adapt to new environments and learn new concepts and processes. A business environment that stimulates creativity and offers educational or developmental opportunities outside traditional work training is especially appealing to generations X and Y. Training, mentoring and tuition reimbursement offerings are attractive to graduates who are keen to continue learning. What mix of pay and benefits an organization offers often differs based on where individuals fall in their career path. As generations X and Y ascend the career ladder and take on leadership positions, it is important to continue to provide as much flexibility and growth opportunity as possible, within fiscal and administrative constraints. The appropriate mix of income opportunities, flexible work environments, educational opportunities, and portable retirement packages will continue to represent a very competitive offering for generations X and Y. Adam Steinbrunner is a consultant for Capital H Group. He can be reached at editor@TalentMgt.com. 34 talent management magazine www.TalentMgt.com http://www.TalentMgt.com

Table of Contents Feed for the Digital Edition of TM - February 2008

Talent Management - February 2008 Editor's Letter - Talkin' 'Bout My Generation Contents Human Performance - Achievement Motivation: Top Talent At Any Age Leading Edge - Who's On First? Foundations - Managing the Next Generation Workforce Viewpoint - Talent Strategies That Work Are Talent Strategies That Stick Those Who Have Left: The Value of Building Employee Relationships Alternatives to 360s: The Manager's Role Compensation and Benefits For X&Y Build A Multigenerational Performance Management Strategy Development's Role in Creating A Culture Of Inclusion Tomorrow's Leader: Identifying the Next Generation Integrating Talent Management Systems Strategically Seagate Uses Yearlong Evaluations to Help Integrate Talent Efforts Western Union: Connecting Strategy and People Globally Advertisers' Index Editorial Resources Full Potential - The Best Time to Change? Right Now!

TM - February 2008

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