The ability to attract and retain the best talent has always been high on the list of priorities for an organisation. However, with the changing nature and profile of today's workforce, it is arguably a critical time to retest, refocus and maybe even rethink how this can be achieved most effectively.
Generation-Y comprises of those born between 1981 and 2001and are the youngest cohort within today's average workforce. Identifying the characteristics of Generation-Y is essential to frame the strategies within which you can motivate and incentivise them.
Research suggests Generation-Y approach a work/life balance in a different way to those before them and studies show this can lead to employers perceiving such workers to be 'demanding', 'pampered', 'entitled', 'fickle' or 'unmotivated'. However, perhaps this is simply a lack of understanding of how the latest generation expects to interact. As a group they are far more technologically-savvy and tend to be more creative with expectations in order to achieve results within a much shorter period of time.
Indeed Generation-Y places value on a high level of teamwork, flexible working and technology through which business can operate and thrive. Cold hard cash is not necessarily the main motivational factor for them. It is therefore necessary to explore ways in which organisations can build a system around which Generation-Y can feel fulfilled and empowered. A traditional straight-line career path will not necessarily achieve this. A more meritocratic system which harnesses their talents and through which they can be rewarded, incentivised and develop positions of leadership will almost certainly be more effective.
Of course sole focus cannot be given to Generation-Y. Generations before them are still, and will remain for some time, a significant and fundamental part of the workforce and businesses must devise a strategy that creates harmony and consistency for all employees, providing fair and equal opportunities. Marrying the expectations of and closing the gap between the different generations within a workforce is therefore a real challenge and requires thought and creativity in approach.
How employee incentive schemes can help
Participation in some form of employee share scheme has been for many years an effective way of motivating and incentivising employees. Designed correctly, this can align the interests of both key shareholders and employees so that everyone within an organisation moves in the same direction, with the same common goals and objectives. Numerous models exist through which incentive schemes can be structured, for example:
- Enterprise Management Incentive Plans
- Company Share Option Plans
- Save As You Earn
- Share Incentive Plans
- Long Term Incentive Plans
All of these give employees the opportunity to acquire shares in their employing company on favourable terms and often with associated tax advantages for both the employer and employee. The ultimate intention is of course to enable employees to share in the financial growth of the company.
The key to the success of such schemes will often be ensuring they are appropriately linked to suitable company and/or individual performance criteria. Therefore, when designing an incentive arrangement, considerable thought should be given to the strategy of the business as a whole, who you are trying to motivate and why. The profile of an organisation's employees will be a very important factor. Understanding the psychology of what makes employees tick will help shape the fundamental aspects of the plan.
Recognising that Generation-Y is not simply motivated by the financial aspects of an employment relationship, an employee share scheme can be a valuable tool to highly engage with employees and to weave them more closely into the fabric of the organisation. In this vein, an employee-owned (EO) model for businesses may be one that Generation-Y aligns itself more closely with. Most commonly referred to as the John Lewis model, EO can be a social and economic enabler, allowing employees (as part owners) the ability to be entrepreneurial and more committed to the company and its success. A key characteristic of EO is engagement throughout the organisation and allowing employees to have a voice to decide how the business develops and the direction it takes. For a generation that is not necessarily fulfilled with a traditional employee/employer relationship, an EO model is likely to help empower and enrich them in their working lives. Combining the benefits of EO and the more common employee share scheme structures mentioned above could provide a powerful alternative for Generation-Y and beyond.