Employee Engagement: Understanding the Impact of Generational Differences Within the Workforce

No Longer Your Dad’s Work Environment

Today’s workforce is more diverse than ever. Multiple generations often work together side-by-side. This blog provides insight into the generational differences in workplace values, differences in their engagement levels, and some of the practices that companies are using to improve engagement.

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Most organizations invest heavily in their brands to create a positive brand experience for customers. They also invest heavily in creating stronger workplace bonds to better engage their employees.

In today’s business environment high levels of employee engagement are considered a competitive advantage for many organizations because of the positive outcomes related to employees being invested and engaged in the success of the company.

Yet despite organizational efforts, studies show that many employees are more likely to be either disengaged, or not engaged, than engaged. In fact, employee engagement levels are declining overall.

The Current State of Employee Engagement

Ask three HR practitioners their definition of engagement and you may get three different answers. Is engagement a personality trait? A state of mind? A set of behaviors?

There is growing acceptance that employee engagement is a positive, fulfilling, work-related state of mind that is characterized by vigor and dedication. It is experienced cognitively, emotionally and expressed behaviorally¹.

Considerable research supports the positive outcomes associated with engaged employees. These include:

• Higher levels of job satisfaction
• Greater individual productivity
• Increased corporate profitability
• Higher levels of customer loyalty²

A culture of engagement is a valuable asset. This is why organizations are eager to influence the situational elements believed to enhance it. Despite large investments in interventions that are designed to create a more positive work environment, many employees are still more likely to be either disengaged or not engaged than engaged.

Some organizations are so focused on the engagement number that they don’t step back to understand some of the underlying factors such as work values that impact engagement. We believe that generational differences in work values weaken the effectiveness of the engagement strategies that many organizations currently embrace.

Generational Differences: A Theory and Difference Review

People are living and working longer. In no other time in history have organizations had employees ages 16 to 80 within the same workforce. Three or four generations may work together on the same team. Each generation has its own distinct experiences captured in childhood and early adulthood that impact their daily perceptions.

Therefore, each generation’s outlook, attitudes, and values, including those related to work, are different. These differences remain relatively stable throughout adulthood.

Common shared experiences include:

• Historical events
• Economic highs and lows
• Political and social conflicts
• Popular culture (i.e., fashion, music, movies)
• Leisure activities

The table below describes some key differences for the three generational groups most often found within the workforce:

The Challenge of Generational Differences in Work Values

Generational work values influence employee work expectations and, subsequently, general attitudes towards work, job satisfaction, and organizational commitment.

Several recent studies examined generational differences in the importance of five work values and their rewards: intrinsic, extrinsic, social, altruistic, and leisure rewards.^3,4,5

One of the significant trends observed in these studies was the increased importance of leisure values for both GenX and GenY generations.

• Boomers rated social (make friends), altruistic (directly helpful to others), and intrinsic (learn new things) work values as most rewarding. For Boomers, work is central, and the importance of these values speak to the meaning they derive within their jobs and their willingness to work long hours.
• Gen Xers rated extrinsic work values (quick advancement, high salary) highest. All generations rate these as important, just not to the same degree. Impacted by downsizing of the Great Recession, Gen Xers feel less psychologically safe in their work environment. They have low levels of organizational trust and commitment. Gen Xers will easily change jobs to earn more money to provide for their families and get more time for their personal interests.
• GenYers rated leisure values highest and significantly more important than intrinsic, altruistic, and social values. Leisure rewards include sufficient free time for other interests, little supervision, slower work pace, and much more vacation time.

Generational Differences in Engagement Levels and Organizational Practices

With multiple generations in the workforce, managing human capital is more complicated than ever. For leadership, a one-size-fits all engagement model may no longer be effective.

Distinct differences in generational work values and motivating rewards appear to impact differences in their engagement.

• Boomers have the highest levels of engagement (39%) ⁶ Most likely at a peak of their careers, Boomers’ higher positions provides the intrinsic rewards that are most important to them: meaning, challenge, and status^3,4.
• GenXers have the second highest levels of engagement (35%)⁶. With expectations of movement into senior level positions vacated by retiring Boomers, GenXers place a higher value on, and expect the extrinsic rewards associated with these roles: high salaries, prestige, and independence tempered with a better work-life balance.
• GenYers have the lowest levels of engagement (16%)⁶. GenYers may find their junior positions and short tenure fail to deliver the leisure and extrinsic rewards they want: lots of time off for personal pursuits, minimal job supervision, quick advancement, high salaries, and work that they enjoy, that matters and that commands respect^3,4.

Engagement Efforts: Next Steps and Some Gen Y Engagement Practices

Leadership needs to understand the nuances in work values and the associated motivational rewards of each generation within their workforce to better build a culture of engagement. Why? Work values influence work attitudes and engagement behaviors.

As Boomers approach retirement, organizations will need to replace these vacancies with younger generations. GenY workers, in particular, are a labor powerhouse. 1-in-3 workers are GenY.

Many organizations are improving the work-life balance and creating a more fun work environment to increase GenY engagement. Some of these practices include:

Work-Life Balance Enhancers

• KMGP provides its employees 5 weeks of paid time off in the first year.
• Netflix allows workers a full-year off with pay for the birth or adoption of a new child.
• Facebook allows employees to take a paid 30-day sabbatical every 5 years.
• Twitter offers employees time to perform charity work during at-work time.
• Google offers free use of laundry machines, dog-friendly offices, and on-site doctors. Google’s strategy is to have these services available during at-work time to provide more leisure time for employees after work.

Workplace Autonomy

• Many companies offer their employees flexibility in the choice of start/stop times, home offices, and compression of the 40-hour work week in four days or less.
• Google has an 80/20 program that allows employees to choose projects that interest them. 80% of a work week is devoted to their primary job responsibilities; 20% of time can be dedicated to passion projects they believe will help the company.

Fun in the Work Environment

• Google and Twitter provide free meals and leisure activities onsite (e.g., fitness classes, rock-climbing, massages, and basketball courts). Offering these onsite perks promotes more social interaction and idea sharing, stress reduction, and better fitness for greater productivity.
• Many tech companies provide a games room with pool tables, ping-pong, and pinball machines. These activities help tap into child-like imagination for greater creativity.
• Synapse offers organized fun team-building activities every Thursday for employees to get to know each other better. These practices leverage employee affective commitment. Events scheduled include cook-offs, intramural sports, outings to museums, and food bank volunteering.

Designing Engagement Strategies that Work for Different Generations

To summarize, today’s workforce is more diverse than ever with multiple generations working together. Engagement levels continue to decline with only one-in-three employees engaged globally (e.g., Gallup 32%, White 31%). Organizations need to recognize that work values among different generations of employees may differ.

Therefore, it is imperative that companies understand the needs of different generations and be more creative in designing their engagement strategies. Given the high proportion of neutral and disengaged employees, it is becoming more apparent that the same old engagement practices may not cut it anymore.

Organizations that figure out the right mix of motivational and situational elements to better engage employees will have a competitive advantage within the marketplace.

Sources:

(1) Kahn, W.A. (1990). Psychological conditions of personal engagement and disengagement at work. Academy of Management Journal, 33, 692-724.

(2) Kumar, R., & Sia, S.K. (2012) Employee engagement: Explicating the contribution of work environment. Management and Labour Studies, 37, 31-43.

(3) Schullery,N (2013). Workplace Engagement and Generational Differences in Values. Business Communication Quarterly, 76(2), 252-265.

(4) Twenge,J.M., Campbell, S.M., Hoffman, B.J. & Lance, C.E. (2010). Generational differences in work values: Leisure and extrinsic values increasing, social and intrinsic values decreasing. Journal of Management, 36, 1117-1142.

(5) Cennamo, L. and Gardner , D (2008). Generational differences in work values, outcomes, and person-organization values fit. Journal of Managerial Psychology,23, pp.891-906.

(6) Blessing-White, Inc. (2011). Employee engagement report 2011. Beyond the numbers: A practical approach for individuals, managers and executives. Retrieved from http://www.blessingwhite.com/eee_report.asp

Read more: The Importance of Employee Engagement for High Performance Results