Bonus pay for performance reinforces to the Generation Y worker that his or her contribution to the team is valued by the company. Offering competitive wages gives them less reason to want to look outside the company for better financial opportunities. It may seem like a bad idea to pay too much in salaries but the costs of attracting and training new employees can very high.


5. Training


It goes without saying that employees must have the skills to do their jobs but training has additional benefits. It signals to employees that the company is making a long term commitment to their well-being. Pfeffer warns that companies should be careful to not focus solely on specialized skills but rather they should include training in more general skills and the company’s culture.


Generation Y workers are eager to advance their skills as they work towards their long term goals. They will have little incentive to stay with a company that doesn’t make this commitment to them if they will feel they could be learning more with another company.


6. Reduction of status differences


Pfeffer writes that employees must feel valued before they will contribute their ideas. If a company takes steps to eliminate those things that create different classes of employees, each employee will feel more like an equal member. These differences can be reduced by symbolic moves such as changing job titles or creating a dress code that applies to everyone. It can also be reflected in individual pay. It is important that employees don’t see the success that was gained by a group effort being given to a select number of executives in an amount they feel is unfair.


This appeals to Generation Y workers as they more clearly see themselves as equal members of the company’s workforce. This further reinforces that their effort matters to the company. It also upper management more approachable which is important because it allows for direct mentoring of newer employees.


7. Sharing information


Pfeffer finds that information must be shared throughout the organization, whether it be financial or production data. It shows employees that they are trusted with the company’s information and employees are more able to directly see the results of their efforts. If employees are trained to understand this information they can contribute ideas that will have a favourable impact on results. Sharing information also spreads power throughout the organization instead of having it concentrated in the hands of management.


This further enhances Generation Y’s need to be part of the action. It gives them more power and independence to make a meaningful contribution. Generation Y workers may be able to offer a unique perspective on this information due to their different outlook on the world.


There are no illusions that implementing a system based on Pfeffer’s practices will be easy. Very few companies have successfully implemented a management system like the one based on Pfeffer’s seven practices. Reasons for these failures vary from a lack of commitment by senior management to poor implementation of the practices.


However, those companies that have been able to implement these practices successfully have been able to create a sustainable competitive advantage. Maintaining competitive advantage is quite rare in an era where technology is relatively inexpensive and information on competitor practices is widely available. The very difficulty of implementing this system successfully is what makes it so hard for a competitor to copy.


This generational shift is coming whether companies like it or not. The company that starts making changes now to deal with the different attitudes of these new workers will have a leg up on its competition. Pfeffer’s practices are effective at creating the environment that Generation Y workers expect, but most importantly due to the competitive advantage this strategy provides, it just makes good business sense.


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