an Attractive Organizational Culture for Millennials

HR Critical Issue Research Paper

An attractive organizational culture for Millennials The relevance of organizational culture in attracting and engaging millennial workers

Ewart Martijn 4/7/2015

The relevance of organizational culture in attracting and engaging millennial workers

Page 1

Contents 1 Introduction ............................................................................................................................. 2

2 Theory of organizational culture ............................................................................................. 3

3 Millenial desires and values .................................................................................................... 6

4 Attracting and retaining millennial knowledge workers ......................................................... 8

5 Conclusion and discussion..................................................................................................... 11

6 References ............................................................................................................................. 13


Page 2

1 Introduction The relevance of organizational culture in attracting and retaining Millennials knowledge workers is an important topic because Millennials, who now make up more than half of U.S.As workforce, are said to have different expectations from their work environments than the previous generations, who essentially built-up these organizations. These presumed new expectations are often based on generational stereotypes, such as disloyalty, neediness and entitlement; and which are often highlighted in the media. If Millennials entering the labor market hold different values than the current leaders, then a cognitive mismatch may be experienced by these entering Millennials. This could result in negative work attitudes, underperformance and higher turnover rates.

This topic will continue to be a challenge for HR executives in the future because Millennials are not only entering the labor market in high volumes, they are also getting opportunities to climb the corporate ladder at an accelerated pace as the demand for leadership increases. At least part of the control systems in organizations resides in the organizational culture; and leaders are in a unique position to drive organizational culture.

To provide a better understanding of the relevance of organizational culture in attracting and retaining Millennials knowledge workers, this paper will highlight key concepts of organizational culture and how the values and desires of Millennials fit within these concepts. The analysis will identify the key ingredients for a culture that is attractive and perhaps inescapable for Millennials.


Page 3

2 Theory of organizational culture In literature there are many definitions of organizational culture and these definitions have a common idea best described by Smircich (1983). The idea of culture focuses attention on the expressive, non-rational qualities of the experience of organization. It legitimates attention to the

subjective, interpretive aspects of organizational life. Corporate culture entails a set of taken-for-granted assumptions, shared beliefs, meanings, and values that form a kind of backdrop for action. According to (Schein, 1992), organizational culture has a number of components: the organizations relationship to its environment (that is, what business are we in, and

why); the nature of reality and truth (how do we decide which interpretations of information

and events are correct, and how do we make decisions); the nature of human nature (are people basically lazy or industrious, fixed or

malleable)); the nature of human activity (what are the right things to do, and what is the best

way to influence human action); the nature of human relationships (should people relate as competitors or cooperators,

individualists or collaborators). Taking (some of) these components into account, organizations define strategies, policies and processes in order to induce action and obtain satisfying results. The processes of repeated actions with shared meanings among individuals in an organization are a form of institutionalization. Institutions are composed of cultural-cognitive, normative and regulative elements that, together with associated activities and resources, provide stability and meaning to social life (Scott, 2001). Regulative systems are systems of rules, in which coercive mechanisms are active to effect

compliance to rules to obtain rewards or to avoid sanctions. Normative systems provide a moral framework, in which individuals are expected to show certain patterns of behavior, based on common values. In cultural-cognitive systems, this normative concept is further expanded beyond the individuals way of thinking and acting; collective action is supported by a common cognitive framework of shared symbols and beliefs. Professionals can use a mix of these institutional elements to attract and influence followers. Rules and regulations can be used to


Page 4

setup the basic structure for required action and corresponding rewards or sanctions, while norms and beliefs constructs can be used to influence followers at deeper cognitive levels. Therefore, next to power and authority, culture can be considered as a basis of control in organizations; and control is needed if an organization wants to guide its members and make effective use of available resources to achieve its predefined goals. The creation of a so called strong culture, in which individuals and teams are well-aligned to organizational values, can give organizations a competitive advantage. A strong culture consists of belief systems that define a general mission sustaining commitment to something larger than self, provide guidelines so that participants can choose appropriate activities, and create sources of meaning and identification such that participants not only know what they are expected to do for the good of the organization but also want to do it (Scott & Davis, 2007). When applied to the extreme, however, control by a strong organizational culture can result in an authoritarian system in which individuals are either expected to fully commit to the mission (including a certain degree of self-sacrifice) or get out of the organization. In response to very strong cultural influences, the individuals can realize that they are being manipulated and cognitively distance themselves from the projected ideologies. Cognitive dissonance (mental stress or discomfort due to conflicting simultaneous beliefs and values) can lead to the emergence of subcultures or competing countercultures, based on alternative sets of values and beliefs. It is therefore important for leaders to recognize and understand the dynamics of the cultural-cognitive institutional elements in order to control and guide the organization in the desired direction. Long-term sustained competitive advantage (relative to the industry competitors) may, however, not be achievable only by comprehension, skillful adaptation and consistent application of rules, norms and culture. According to Barney (1986), an organization culture must have three attributes to generate sustained competitive advantage. The culture must be:

1. valuable (enabling the organization to behave in ways that add economic value), 2. rare (having attributes and characteristics that are uncommon to the cultures of other

firms) and 3. imperfectly imitable (to avoid loss of competitive advantage due to imitation by other

firms).


Page 5

If firms can modify their cultures to improve their financial performance, then such modifications can, in the long run, only generate normal economic returns. For if one firm is able to modify its culture, then it is likely that others can as well. In this case, the advantages associated with this culture are imitable, and therefore only a source of normal economic performance. Only when it is not possible to manage an organizational culture in a planned way does that culture have the potential of generating expected sustained superior financial performance (Barney, 1986). The most successful organizational cultures are unique, difficult to describe and difficult to change.


Page 6

3 Millenial desires and values Echo Boomers, Nexus Generation, Net Generation, Millennials, Generation Me, GenMe,

Generation Y, Generation We, Global Generation, Generation Next. The wide variety of names used to categorize the 88 million people born in the U.S.A. between the years 1977 to 1997, as compared to the limited number of names used for other generations, is already an indication of its distinctive, diverse, personalized and dynamic character. It is a generation that wants, desires, expects and demands. According to various sources in literature, Millennials express the following wants, desires, expectations or demands in or from their work environment:

Personalized and development-orientation attention (Thompson & Gregory, 2012). They want a road map to success, and they expect their companies to provide it (Meister & Willyerd, 2010).

To be part of innovative and energetic organizations that will value their ideas and encourage their creativity (Lowe, Levitt, & Wilson, 2008).

To be treated like partners by their organization, which may mean flattening the hierarchical structure that forms the very foundation of most corporations (Lowe, Levitt, & Wilson, 2008).

Freedom, flexibility and fun; to spend their time in meaningful and useful ways, no matter where they are (Lowe, Levitt, & Wilson, 2008). To make new friends, learn new skills, and connect to a larger purpose (Meister & Willyerd, 2010).

To understand know how their work fits into the company (Lowe, Levitt, & Wilson, 2008).

Active involvement in receiving information (i.e. text messaging and blogging) (Lowe, Levitt, & Wilson, 2008). Coaching and straight feedback from their boss (Meister & Willyerd, 2010).

These are expressions of values that are important to this generation; the same values that are

important in determining their behavior and attitude towards work in organizations. Twenge (2010) empirically substantiated the generational differences in work values. In particular, Millenials scored high on leisure values (the opportunity for free time, vacation, and freedom


Page 7

from supervision) and extrinsic values (the consequences or outcomes of work such as status, advancement opportunities, salary and financial benefits). The investigation concluded that Millennials do not favor altruistic work values (e.g., helping others, contributing to society) more than previous generations and scored lower than previous generations on social values (e.g., making friends) and intrinsic values (that focus on the process of work, e.g. an interesting, results-oriented job, the learning potential, and the opportunity to be creative). Key values in order of importance:

1. Leisure

2. Extrinsic

3. Intrinsic 4. Altruistic

5. Social

The above results shed light on why Millennials may be perceived as having an attitude of entitlement, as they value both leisure and extrinsic rewards highly. The impact of the importance of leisure at work helps explain the rise in employers approach to providing fun at work, and the still-highly rated intrinsic value shows why Millennials want work itself to be rewarding, which is more fun (Schullery, 2013).


Page 8

4 Attracting and retaining millennial knowledge workers

The Workplace Engagement 2020 model (Meister & Willyerd, 2010) presents an attractive solution for the attraction and engagement of employees now and in the future, including Millennials.

The model is based on five principles and three practice areas necessary to engage employees. The five principles are:

1. Collaboration (both internal and external collaboration) 2. Authenticity (of primary importance in building the organizations values, brand and

reputation) 3. Personalization (personalized employee relationships, focused on personal career goals) 4. Innovation (enabling organizational and personal learning and sustainability) 5. Social connection (fun, vibrant and engaging environments, including use of social

media)

The five principles are the foundation for three key practice areas which are strong values, a strong brand and reputation (Corporate Social Responsibility).

The model was developed based on analysis of the top ten desired employer characteristics by the different generations. According to the presented results, Millennials share the same top 3 desires as the overall mix of all generations. The employer organization must:

1. have strong values (intrinsic) 2. develop employee skills for the future (intrinsic) 3. offer flexible benefits and rewards (extrinsic)

According to (Throckmorton & Gravett, 2007) , the top three ways to attract Millennials to an organization are:

An attractive salary

Friendly and casual work environment


Page 9

Growth and development opportunities

Similarities with the triggers and principles of the Workplace Engagement 2020 model are evident. Thompson (2012) argues that the key to Millennial commitment and retention is the relationship with the immediate manager. Managers who can adopt a leadership style rooted in the individual consideration domain of transformational leadershipone that promotes relationships and meeting individual needs are the managers who will most successfully attract, motivate, and retain their Millennial employees. Success is expected by Thompson, because this style caters to the personalized and development-oriented attention Millennials desire, by applying the management skills of coaching, mentoring, developing, and providing frequent feedback to the young employees.

These models of attraction are consistent with the desires of Millennials presented in the previous paragraph, but are not always consistent with the results of the extensive empirical study presented by Twenge. One explanation is that many researchers employ survey methods that do not take age differences into account. Twenge employed the time-lag method, which compares people of the same age at different points in time. This method shows differences (if any) that are caused by generation instead of age; and therefore informs managers how young workers now differ from young workers in the past.

The relatively high scores for extrinsic rewards show correspondence with the importance given to salary, benefits and rewards in the findings of (Meister & Willyerd, 2010) and (Thompson & Gregory, 2012). The empirical evidence shows, however, that Millennials value leisure time more than any other generation. Policies, such as compressed weeks (40 hours in 4 days), flextime (working hours outside the 8-to-5 routine) or other creative policies to increase leisure time should therefore be extended to include the younger generation (Twenge, Campbell, Hoffman, & Lance, 2010).

Considering that intrinsic rewards (such as a meaningful job, a positive contribution to nature, career growth, the opportunity to learn new skills and to make a difference), are valued slightly less by Millennials, recruitment and retention strategies heavily focused towards these values


Page 10

may not be as effective as expected based on previous successes. Intrinsic rewards are still highly valued by the younger generation, but are not the key area for emphasized focus. A similar conclusion is valid for altruistic rewards at work. Altruistic rewards have a similar motivating impact on workers across all generations.

The lower importance of social rewards for Millennials suggests that structuring work and organizational culture around teams in an effort to recruit and retain younger workers may not be fruitful (Twenge, Campbell, Hoffman, & Lance, 2010). Millennials build their social networks through advanced communication technology and across borders; they give less importance to the process of building social relationships at work. This implies that, while the provisioning of internal social rewards may not be particularly effective for attracting Millennials, the absence or restriction of external social rewards (freedom to electronically connect, communicate and build social networks outside the organizations) may repel Millennials.


Page 11

5 Conclusion and discussion

Corporate culture involves a set of taken-for-granted assumptions, shared beliefs, meanings, and values that form a backdrop for action in the organization. It can be considered as a basis of control that can be used to influence and guide its members to achieve organizational goals. The youngest generation of workers, the Millennials, show a distinctive set of values and expression of values. Values are important in determining behavior and attitude towards work in organizations. Therefore HR executives and organization leaders need to consider the Millennials work values when planning to attract and retain this generation of workers.

Empirical studies show that leisure values and extrinsic values are most important for Millennials followed by intrinsic values. Altruistic and social values do not score higher for Millennials as compared to previous generations. These studies show that HR attraction and engagement models heavily focused on values of social connection, team work, friendship on the workfloor and voluntary work, may not be as effective as expected. These cultural-cognitive elements are typically looked for by Millennials outside the boundaries of organizations.

On the other hand, attraction and engagement strategies based on leisure and extrinsic values such as opportunity for free time, flexible vacation, freedom from supervision, status, recognition, advancement opportunities, excellent salary and financial benefits, have a better chance of success. These values are intertwined with regulatory and normative elements and therefore provide better opportunities for influence by managers.

Once arranged, however, the leisure and extrinsic values offered at a superficial level to attract and engage the young and demanding employees, will gradually engrave new cultural elements at deeper cognitive levels; building new forms of collective action supported by (new) shared symbols and beliefs. It is therefore important that managers do not to lose focus on the intrinsic values.

In order to create a strong culture on the long run, managers need to adopt a leadership style in which a personal coach-student relationship is built with the young employees. Intrinsic values


Page 12

(such as constructive interaction, having an interesting, meaningful, results-oriented job in an environment promoting creativity and skill development) need to be given attention in this form of transformational leadership. In this personal coach-student relationship, managers can seize the opportunity to pass on the taken-for-granted assumptions, shared beliefs, meanings, and values from the established (older) workforce and that are of importance for effective action in the organization. Frequent and respectful feedback loops of communication are also important to resolve cognitive dissonance that may arise from conflicting simultaneous beliefs and values. In this process of mutual development, the imperfectly imitable attribute of effective organizational cultures (which cannot be rationally planned and managed), may take (new) shapes.

This paper has shown that organizational culture is important in the attraction and engagement of Millennials in the workplace. Leisure, reward, coaching and development seem to be the key ingredients in a culture that Millennials find attractive and hard to leave.


Page 13

6 References Barney, J. B. (1986). Organizational Culture: Can It Be a Source of Sustained Competitive

Advantage? Academy of Management Review, Vol. 11 Issue 3, p656-665. Jenkins, R. (2014, December 1). Creating Company Culture Irresistible To Millennials.

Retrieved April 2, 2015, from http://www.talentculture.com/: http://www.talentculture.com/leadership/creating-company-culture-irresistible-to-millennials/

Lowe, D., Levitt, K., & Wilson, T. (2008). Solutions for Retaining Generation Y Employees in the Workplace . Business Renaissance Quarterly, Vol. 3 Issue 3, p43-58.

Meister, J. C., & Willyerd, K. (2010). The 2020 Workplace: How Innovative Companies Attract, Develop, and Keep Tomorrow's Employees Today. New York: HarperBusiness.

Meister, J., & Willyerd, K. (2010). Mentoring Millennials. Harvard Business Review, Vol. 88 Issue 5, p68-72.

Schein, E. (1992). Organizational Culture and Leadership. San Francisco: Jossey-Bass. Schullery, N. M. (2013). Workplace Engagement and Generational Differences in Values.

Business Communication Quarterly, Vol. 76 Issue 2, p252-265. Scott, W. R. (2001). Institutions and Organizations. Thousand Oaks, CA.: Sage. Scott, W. R., & Davis, G. F. (2007). Organizations and organizing: rational, natural and open

system perspectives. Upper Saddle River, NJ: Pearson Prentice Hall. Smircich, L. (1983). Concepts of Culture and Organizational Analysis. Administrative Science

Quarterly, Vol. 28 Issue 3, p339-358. Thompson, C., & Gregory, J. B. (2012). Managing Millennials: A Framework for Improving

Attraction, Motivation, and Retention. Psychologist-Manager Journal, Vol. 15 Issue 4, p237-246.

Throckmorton, R., & Gravett, L. (2007). Bridging the Generation Gap : How to Get Radio Babies, Boomers, Gen Xers, and Gen Yers to Work Together and Achieve More. Franklin Lakes, NJ: Career Press.

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, Vol. 36 Issue 5, p1117-1142.

Documents

an Attractive Organizational Culture for Millennials