Generational leadership - what the different generations want

 
Generational leadership - what the different generations want
Generational leadership

            what the different generations want

                                                                               and how they want it.

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Introduction

                                                                                                               Generation     Birth years   Characteristics
    When you type ‘Generation Y’ in Google more than 3,500 news messages are found that
    have been posted within the last month. Generations are ‘hot and happening’. HR managers
    recruiting the newcomers are struggling to find out: Who are they? What do they want? How                  Babyboomers    1946-1964     Optimistic, loyal, ambitious,
    can we motivate them? The existing team is wondering why the new-comers are getting the                                                 independent, personal gratification,
                                                                                                                                            consultative culture
    perks they have always wanted but never dared asked for. Like many companies, Robert Half
    International was interested in the “what-abouts” of the generations.

                                                                                                               Generation X   1965-1980     Global thinking, balance, informal,
    Two Masters students from Nyenrode University shared our curiosity and in 2010, a                                                       free agents
    collaboration was derived enabling them to carry out their thesis research. The task at hand?
    To investigate the differences between the generations, their psychological contracts and
    their preferences on leadership styles. Their research focuses on these three key areas since
    they could contain clues (and answers) as to what the generations expect and why.                          Generation Y   After 1980    Confident, achievement-driven,
                                                                                                                                            social, teamwork, work-life
    Through awareness, comes understanding. And by understanding, managers and hiring                                                       balance, culture
    managers can better utilise the unique skill set offered and provide tips to attract, retain and
    develop multi-generational teams for the years to come.

    The following information details the highlights and key findings of the research. A full copy
    of the Thesis containing the parameters, detailed results and analysis can be obtained by
    request to John Harinck via generaties@rhi.net.

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Thesis Research

    The goal of the research was to gain knowledge and insight into the preferred leadership
    style of the different generations present in the workforce today, namely the Babyboomers,
    Generation X and Generation Y.

    The thesis first discusses the generational values, then the psychological contract and finally,
    the preferred leadership style of these generations. This research was conducted mainly to
    see how the three components are connected and how they are influenced by each other. The
    primary research question posed was:
                                                                                                           Characteristics of
                                                                                                           generations
                                                                                                                                                          Preferred
         To what extent do different generations have different                                            • Babyboomers                                  leadership style
                                                                                                             (1946-1964)
   values and how does this influence the preferred leadership                                             • Generation X
             style with respect to their psychological contract?                                             (1965-1980)
                                                                                                           • Generation Y
                                                                                                             (Born after 1980)
    To be able to answer this question, several sub-questions were composed, a conceptual                                              Psychologial
    model and theoretical framework developed. The questionnaire, containing questions on                                              contract
    all three parts of the research was sent to a target audience of over 7,000 people of which
    about 910 responded (approximately 20% of responses were from the researchers’ own
    network including students). The people in the target audience consisted mainly of finance
    professionals across all age groups primarily from within the Robert Half Netherlands
    database. With 905 completed questionnaires and the help of SPSS, the connection between
    the different concepts was tested using regression analysis.

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Generational Values

    Generations have been the subject of many different research projects and have been
    discussed frequently. The Babyboomers are also called ‘liberated youth’, they tend to
    follow idols and think in group terms. Generation X is more individualistic and known as the
    ‘competitive generation’. Generation Y is the ‘global generation’, connected to everyone and
    everything, thinking in a non-linear way and quick to switch between topics. But do these
    values actually hold true? And how are they affecting business life? Now that Generation Y
    is entering the workforce these questions seem more important than ever before.

    There is an ongoing debate on the classification of generations. Classifications have been
                                                                                                                                  Employees want to be
    made based on age but also on life phases. The influence and behavioural patterns of                                             addressed based on
    generations on the work floor and in society at large are also subject to debate. Companies                                 their expectations, which
    are facing the changing needs and expectations of their workforce. The idea of
    a group of similar ‘workers’ is no longer tolerated by that workforce.
                                                                                                                                  are often similar within
                                                                                                                                             generations.
    (see Pages 2 & 3 for Analysis)

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Generational Values

                                                                                  Preferences on generational values (1 to 5 in order of preference)
    Analysis
    When analysing the generational values, a framework of constructs            Construct                   Babyboomers      Generation X       Generation Y
                                                                                 Status, power, and hierarchy n/a             n/a                n/a
    (see Table : Preferences on Generational Values) was used. From
                                                                                 Safety and security         3                4                  4
    the analysis it appeared that the different generations value some
                                                                                 Freedom                     n/a              5                  3
    constructs higher than others. The number one preference for all
                                                                                 Balance                     1                1                  1
    generations is a work-life balance. Generation Y values ‘having
    room for a private life’ higher than the Babyboomers. This is in             Challenge and development   4                3                  5
    contrast to what Van der Sluis mentioned in her research (Van der            Legacy                      2                2                  2
    Sluis, 2010) when she stated that the older two generations value
    work-life balance more that Generation Y. The same contradiction
    holds for the construct “legacy” - all three generations value this
    as their second most important attribute and Generation Y values
    legacy significantly higher than the Babyboomers. Within status,
    power and hierarchy Generation X and Generation Y value a high
    salary and bonuses and appreciation expressed in rewards and                                                              Safety and security proves
    promotion significantly higher than the Babyboomers.
                                                                                                                                to be most important for
    (continues on Page 3)                                                                                                    Generation Y, Generation X
                                                                                                                                    values this lower and
                                                                                                                               Babyboomers the lowest.

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Generational Values

    Analysis (continued)
    Safety and security proves to be most important for Generation Y, Generation X values this lower and the
    Babyboomers the lowest. This proves to be consistent with the theory of Howe and Strauss who state that
    Generation Y value security are less inclined to take risks than their parents from the Babyboomer generation (Howe
    & Strauss, 2007). The research of Van der Sluis is however contradicted here, for she states that Babyboomers find
    security more important than younger generations (Van der Sluis, 2010).

    Generation Y believes challenge and development to be significantly more important than Babyboomers. This is
    consistent with the findings of Van der Sluis (Van der Sluis, 2010). The construct “Legacy” is valued highest by
    Generation Y and lowest by Generation X and the Babyboomers. This is yet another inconsistency with Van de Sluis
    who states that Babyboomers value this higher than the other two generations.

    Based on the results it can be said that Generation Y values all 6 work values higher than the other generations.
    Generation X has similarities with both Generation Y and the Babyboomers. The Babyboomers value work values,
    the lowest. A pattern can be seen in which Generation Y values the constructs the most, followed by Generation X
    and then the Babyboomers. The younger the generation the more important the work values are.

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Psychological Contracts

                                                                                                                                                     expressive

                                                                                                                                                                                      flexible
    The psychological contract is based on the obligations of the employer and the employee, as
    perceived by the employee. Companies are now struggling to understand this psychological
                                                                                                                WORK-LIFE BALANCE
                                                                                                                respecting authority
                                                                                                                                                                  loyal
    contract in the minds of their employees. The way employees like to be addressed is also                    detail-orientated independent
    taking on greater importance. A large part of the employer obligations is thus transferred                                    technically competent

                                                                                                              commitment
                                                                                                                           multitask
    onto the shoulders of the manager/leader. The relationship with management plays a key                                                   finding solutions to problems
    role within the psychological contract.
                                                                                                                                                      productive
    Because psychological contracts differ from person to person and from generation to                                    conformity                 active involvement

                                                                                                                                                                                           teamwork
                                                                                                                              on-the-job training        long hours at the office
    generation, different perceived obligations are projected onto management. To be able to
    fulfil these obligations and guide the perceived obligations of the employee, the leadership                           getting everything immediately
    style should be adjusted to meet the expectations of the employee.
                                                                                                                           dislike conflict
    (see Pages 2 & 3 for Analysis)

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Psychological Contracts

    Analysis
    The results of the survey show that all three generations have a different concept of their Psychological
    Contract. In general the same trend, as for the other parts of the conceptual model can be spotted,
    namely Generation Y values all parts of the Psychological Contract higher than the other two
    generations. This may be due to unrealistic expectations or could have something to do with the level
    of ambition that Generation Y has at the beginning of their career. For the constructs “pleasant working
    conditions” and have “Internal job flexibility” Generation Y scores higher than Generation X but shows
    no significant difference to Babyboomers. Howe & Strauss argue that Generation Y values flexibility,
    work-life balance and involvement of the employer in their growth process (Howe & Strauss, 2007). This
    could link to a high validation of “career development” within their psychological contract but does not                              The top 3 values
    show in this analysis. Generation Y values “Social Atmosphere” first, then “pleasant working conditions”
                                                                                                                                           of Generation X
    and “good fringe benefits”. This is inconsistent with existing theories, except for the fact that Generation
    Y values “internal job flexibility” the lowest which could be interpreted as a high validation for security                          with regard to the
    which is not tested in the psychological contract.                                                                              psychological contract
    The top 3 values of Generation X with regard to the psychological contract are: “Social atmosphere”,
                                                                                                                                 are: “Social atmosphere”,
    “Career development” and “rewards”. All three constructs are valued significantly higher by Generation Y                         “Career development”
    and Generation X values them significantly higher than Babyboomers. In the theory, Generation X are                                      and “rewards”
    not as loyal to their employer as Babyboomers - they want to start out themselves someday and expect
    free agency within their working environment. Rewards are valued higher on the list of Generation X
    than is the case with any of the other generations. Their “internal job flexibility” is also ranked higher
    than with other generations. This could could be linked to the free agency position they try to achieve.

    (continues on Page 3)
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Psychological Contracts

  Preferences on the psychological contract                                            Analysis (continued)
                                                                                       Babyboomers have yet another ranking of the different constructs of the
 Construct                    Babyboomers        Generation X    Generation Y
                                                                                       psychological contract. They are close to both Generation Y and Generation X
 Work content                 n/a                n/a             n/a
                                                                                       as their number one priority is “pleasant working conditions”, which is closely
 Career development           3                  2               4
                                                                                       related to their second choice “social atmosphere”. Their third choice is the same
 Social atmosphere            2                  1               1
                                                                                       as for Generation X, namely “career development” which is interesting, given the
 Organisational policy        n/a                n/a
                                                                                       fact that most of the Babyboomers are close to retirement. The construct “career
 Pleasant working conditions 1                   n/a             2                     development” is however valued significantly lower than both Generation X and
 Good fringe benefits         n/a                n/a             3                     Y. The other construct, “no support of competitors”, questions this and is raised
 Rewards                      4                  3               5                     as part of “extra-role behaviour”. This question is the only one that Babyboomers
 In-role behaviour            5                  5               7                     value significantly higher than Generation X and Y. This could be because
 Professionalism              6                  4               6                     of their professional experience, however the survey does not give a clear
 Extra-role behaviour         7                  6               8                     explanation. In general it can be concluded that the generations place different
 Internal job flexibility     8                   7              9
                                                                                       priorities on importance for the constructs of the psychological contract.

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Leadership Styles

                                   Three main leadership styles were
                                  referenced in the research, namely
                                                                                                          Leadership style                 Main characteristics
                                      Transformational, Transactional                                     (including constructs)
                                                   and Laissez-faire.                                     Transformational                 •   Inspires others
                                                                                                          • Idealised Influence            •   Intellectually stimulating
                                                                                                          • Inspirational motivation       •   Challenging
                                                                                                          • Intellectual stimulation       •   Encourages innovation
    When generations are asked about their preferences for their ‘ideal leader’ both
                                                                                                          • Individualised consideration   •   Coaches & develops
    Babyboomers and Generation Y think being competent as a leader is most important while                                                 •   Maximise performance
    Generation X values honesty most. These preferences are based on the ideas a generation
    as a whole have about their environment, accepted behaviour and key assumptions about                                                  • Clarifies goals
                                                                                                          Transactional
    the world and business. These can be translated into work values and expectations                     • Contingent reward              • Rewards performance
    from leaders.                                                                                         • Management by Exception        • Monitors mistakes
                                                                                                            (MBE) -active
    Three main leadership styles were referenced in the research, namely Transformational,
    Transactional and Laissez-faire. There are attributes associated with each leadership style,          Laissez-faire                    • No clear goals
    based on which a dominant leadership style was used as a construct for measurement.                   • MBE-passive                    • Avoids involvement
    See table.                                                                                            • Laissez-faire

    (for results see Page 2)

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Leadership Styles

    Results
    From the results of the survey it becomes clear that Generation Y values all construct of leadership higher
    than the other generations except for leaders taking their conscience into account when making decisions and
    laissez faire leadership. The preference of all three generations clearly falls for “inspirational motivation” first,
    “individualised consideration” second and “Intellectual stimulation” third.

    For all three constructs, Generation Y places a higher value on Leadership than Babyboomers. Interestingly
    however, looking at the ranking, Babyboomers do value these constructs in a similar order. There is no
    significant difference between Generation X and the other two generations except for “intellectual stimulation”
    where Generation Y values this significantly higher than Generation X and the Babyboomers. These results
    indicate a clear preference for transformational leaders across all three generations.
                                                                                                                                               results indicates a
    The constructs “Contingent reward” and “MBE-active” belong to the transactional leadership style in which
                                                                                                                                             clear preference for
    the leader rewards achievements and monitors mistakes. These constructs are valued in fourth and fifth place
    respectively with Generation Y again scoring significantly higher than Babyboomers. No significant difference                       transformational leaders
    was found between Generation X and the other two generations.                                                                    across all three generations

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Recommendations

                                                             A manager should be                                       Inspire to motivate
                                                            inspirational, personal,
                                                          intellectually stimulating
                                                                   and be admired.
                                                                                                                       See the person
    The different generations value the different constructs in a similar way but with different
    intensity. Babyboomers value the work-life balance, legacy, safety and security, the social
    atmosphere and the style of leadership less than the other generations. Generation Y is                            Stimulate creative thinking
    just entering the workforce and has higher expectations than the generations that have
    already been working for some time. All generations are looking for the same type of
    working environment but the younger the generation the more important this is.

    Because the generations are so similar in their needs it is possible to satisfy their
                                                                                                                       Reward
    needs using one approach with different intensities. All generations value balance and
    legacy, also a nice atmosphere in the workplace is important and all generations prefer
    transformational leadership. A manager can anticipate this by adjusting work tasks and
    managing the company culture. Communication about mutual expectations is essential.                                Lead by example

    (for Babyboomers see Page 2, Generation X see Page 3, Generation Y see Page 4)

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Recommendations

    Babyboomers
    Babyboomers value balance, legacy, safety and security and challenge and development.
    They expect pleasant working conditions, a social atmosphere, the opportunity to develop
    their career, and rewards. In the workplace a transformational leadership style should be
    applied to motivate and inspire. Babyboomers want to leave something meaningful behind;
    a manager could anticipate this need by giving them projects to work on that will have a
    long term impact.

    Even though Babyboomers are the oldest group in the workforce they still value challenge
    and want to develop themselves and their career. It is therefore important to give
    Babyboomers tasks in which they can explore new territory and grow in competency and
    on a personal level. Managers are encouraged to challenge employees by stimulating them
    to think in new and innovative ways. Finally Babyboomers want to be able to admire and
    respect their leader. Babyboomers want to be able to trust and look up to their managers.

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Recommendations

    Generation X
    Generation X values balance, legacy, challenge and development, safety and security, and
    freedom (ranked in order of importance). They expect a social atmosphere, the opportunity
    to develop their career, rewards and professionalism. In leadership they find fairness,
    competence and straightforwardness important.

    In practice, this means that Generation X want to have a balance between their private life
    and their work life. Open discussion of these expectations should be encouraged and they
    should be linked to career development. Challenging and meaningful tasks are important
    when coupled with a degree of freedom to work in their own manner and be rewarded
    accordingly.

    Generation X-ers also value a good social atmosphere on the work floor and as managers
    can actively manage the culture and mood of the company whilst behaving in a way that is
    representative of the company.

    X-ers want to be inspired by their manager and be treated as individuals. A manager should
    mentor and coach the employees so they can grow both personally and professionally.
    Clear goals should also be set with contingent rewards attached.

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Recommendations

    Generation Y
    Generation Y values balance, legacy, freedom, safety and security, and challenge and
    development (ranked in order of importance). They expect a social atmosphere, pleasant
    working conditions, good fringe benefits, the opportunity to develop their career and
    rewards. As for the other two generations on the workfloor, a transformational leadership
    style should be adopted.

    In practice, this means that Generation Y want to be given room to combine their private
    and personal life. Y-ers want to be involved in solving problems and therefore they should
    be provided with work that is meaningful and has a long-term impact.

    Y-ers value freedom highly, they want to decide for themselves how and when exactly
    a task is executed. Results are important and Y-ers therefore want to be judged and
    rewarded on and for these results. Y-ers also look for safety and security. A manager
    should provide a sense of security about the position of a company - communication is
    key here.

    A manager should be inspirational and give feedback. Y-ers want to be coached personally
    by their manager in order for them to develop. Y-ers want to admire their manager and also
    be able to identify with their manager’s position.

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About us

    The Authors
    Danielle van Bakel & John Harinck had high expectations from their ‘soon-to-have’ first job. About to graduate
    from Nyenrode Business University with Master’s degrees in General Management Science, what could they
    expect from their colleagues and how would their manager lead them? In order to prepare for this upcoming life
    change they conducted their thesis research on the different generations and their preferred leadership style in
    cooperation with Robert Half.

    Danielle van Bakel has a Bachelor’s degree in Communication and Information Sciences and a Master’s in
    Management. She specialises in social media strategy and implementation. John Harinck has a Bachelor’s
    degree in Economics and a Master’s in Management. He is currently working for Robert Half Management
    Resources as a Consultant, specialising in the staffing of interim finance professionals.

    Robert Half International                                                                                                  Danielle van Bakel                      John Harinck
    Robert Half, specialist in financial & administrative staffing, has facilitated thousands of hiring and retention          click on icons above to view LinkedIn profiles
    programs across a range of companies over the years. A major challenge facing organisations today involves
    understanding the motives of the new generation entering the workforce and balancing it with the expectations
    of the existing generations on the work floor. Often, misinterpretations are experienced amongst line
    management and HR, sometimes leaving a question mark as to the ‘new generations’’ application. Whilst
    working with different generations can create conflict, shifting towards cross-generational diversity results in
    an opportunity for the organisation to leverage everyone’s unique contribution. Stemming from an Interview
    Simulation Day with the students of Nyenrode University, Robert Half seized the opportunity to collaborate with
    John & Danielle towards the common goal of understanding more about Generational Leadership expectations.

    (see Page 2 for more information on Workshops)

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About us

                                                                                                                                             www.roberthalf.nl/
    Workshops                                                                                                                                  generations
    Robert Half has developed the (free) workshop ‘Different generations on the workfloor’ to identify the
    distinguishing characteristics of Baby Boomers, Generation X and Generation Y as individuals and colleagues.
    Over the course of 2 hours, you will come to understand the motivations and aspirations of each generation and
    practical advice and recommendations will be given when you return to the work floor. A workshop can also be                       Robert Half Structure
    tailored to your organisation’s specific situation.

    Practical Information
    • Min. participants: 8
                                                                                                                                        Join the conversation
    • Location: In-house (your office)
    • Duration: 1.5 – 2hrs (depending on size of group)

    For more information, visit www.roberthalf.nl/generaties or email : generations@rhi.net
                                                                                                                                         Tools & publications

                                                                                                                                          Locations

                                                                                                                                   0800 0900 000
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