Kathie Lingle's Work-Life Blog

Customizing Rewards in a Multigenerational Workforce
Guest Blogger: Courtney Sherwin, CCP, CBP, MA, PHR, HealthONE

July 17, 2008 — Better retention, lower absenteeism, improved recruitment and higher productivity may result from implementing total rewards programs targeted specifically for each generation. For the first time ever, four generations of employees are in the workforce — Traditionalists, Baby Boomers, Generation X and Generation Y. In order to foster an environment of employee satisfaction and engagement among all workers, which we know improves performance and results for businesses, companies should consider the varying needs of each generation and perhaps design reward systems accordingly. Members of each generation desire to have their efforts rewarded uniquely. Rewards that reflect a company's understanding of what each generation values the most will go a long way toward increasing employee engagement and satisfaction.

There will be a shortage of workers to fill tomorrow’s jobs: the U.S. Department of Labor estimates that there will be 165 million jobs in 2012, but only 162 million available in the workforce. By that time, 76 million Baby Boomers will retire and only 46 million younger workers will take their place. Generation Y is the fastest-growing segment in the workforce. If companies want to attract and retain Generation Y employees, special interest should be taken to better understand their traits and values in order to offer them the most meaningful rewards.

The needs and life circumstances of employees of each generation play a large role in the types of rewards companies might consider offering. The value employees place on certain components of the Total Rewards Model will fluctuate as people move through various stages of life. 
Here are a few ideas to get practitioners really thinking about this notion:

• A large bonus as a form of recognition for a Traditionalist may not be nearly as appealing as offering the financial equivalent in the form of paid time off so they can spend more time visiting with grandchildren. 
• Baby Boomers might brag about working for a company that gave them a hand-written thank you note from the CEO upon completion of a difficult project or tickets for a big sporting event at the employee’s alma mater.
• Nearly 50% of Generation X employees are working parents. Rewards targeted around flexible schedules to help provide broader work-life balance are important. Consider arranging schedules so that employees can take a large block of time off to spend with their children during times when school isn’t in session (i.e., June, July and/or August). An informal workplace can be appealing as well; consider break rooms with foosball, ping pong and pool tables, casual dress, exerballs vs. computer chairs, meditation rooms, etc.
• Members of Generation Y desire life-work balance — in that order. Companies seeking to attract them should focus on programs that encourage this. Consider letting employees choose their work location and hours, or maybe even allowing them to design their own incentive plan. A key component to retaining members of Gen Y will be for employers to design work schedules that really fit employees' needs.

What ideas do you have? Let us know.

The opinions expressed are solely those of the author and do not necessarily represent those of WorldatWork and its affiliate, Alliance for Work-Life Progress (AWLP).