“X - Y - Z Organizational Structure, Motivation and Total Reward”

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The New Year is well under way, some things cycle predictably while others do not. Market forces, politics, regulations and shifting demographics all influence ultimate success, (or lack thereof). I have been working with organizations that are feeling the impacts of all of the above. And they do not function in isolation.

For example, Generation Y Millennials, those born between 1981 and 1995 are now the largest and fastest growing segment of our workforce. They are motivated by Flexibility, Social Impact, Mentoring, Work-Life Balance and Regular Feedback. Money is important but not everything.

Generation Z is composed of those born between 1995 and 2010. They represent about 25% of the US population. The oldest are about 24 and a large segment of them are entering the workforce.

      How well do our near term and longer-term organizational structures and pay philosophies position us to remain competitive within these changing demographics?

Unlike Millennials, Gen Z is motivated by security. They were kids during the Great Recession and may have seen their parents take big financial hits. A significant portion of their lives may have been defined by struggles related to that, not unlike Traditionalists who came thru the Great Depression.

They are also likely to be more competitive, more likely to start a business and multitask more than Gen Y. Gen Zers as true ‘Digital Natives’ understand that there’s a need for constant skill development to stay relevant.

Moreover, Gen Y and Z are more likely to be managed by Gen X, ‘Latchkey” kids, those who joined us between 1965 and 1980. Gen X Managers prefer Informality, flat organizational structures, Work/Life Balance, and great Cross-Generational Mentoring skills.

      So how do we keep X Managers from becoming bored and wandering off while   engaging and retaining Y employees who desire to make an immediate impact
      and Z employees who value security and financial reward?

Some observations to consider:

> Org Chart Flexibility – Build in career ladders and career tracks for Y and Z. Definitely build

X Managers ability to connect as leaders and mentors. This is a win-win-win trifecta. Flat is good overall as it presents opportunity to learn and apply skills while minimizing politics.

> Comp / Total Reward Philosophy – Even within relative flat organizations, build into Comp structure, job families that have real merit. Check your org chart for the number of Senior Manager or Director titles. If inordinately high, the comp system is being used for faux promotions, (not a good thing to attract and retain Y’s and Z’s.) Communicate Total Reward frequently. Retirement plans and healthcare coverage can be major hot buttons.

> Variable / Merit Pay – Consider a variable pay plan for Gen Z and to an extent for Gen Y.

Both are looking for opportunities to get ahead with Gen Zers more fully embracing the entrepreneurial spirit they share with their Gen X Managers. This may also assist in avoiding wage compression as a portion of Total Reward becomes performance based.

> Performance reviews - Equip Y Managers with a system that allows sufficient gradation in assessing Gen Y and Z performance. For example, a 3-scale system may turn Y and Z off as “not everybody can be a 3”, and “hey you are a solid 2” meets “you should be happy”.  Instead consider 4 or 5 scales that allow for personal growth and communicate frequently to Y & Z what is needed to achieve it.

There are many things to think through for sure when putting the pieces of the deployment success puzzle together. We have touched on a few. And before we know it, in 5-10 short years, the Gen X Managers will be retiring and Gen Alpha, (born since 2010) will begin to enter the workforce, while the first Gen Yers will be pushing 50! And so it goes.


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Lee Hubert is a Speaker, Facilitator, Trainer and founder of iTrainManagerforSuccess affiliate of Voltage Leadership, with over 20 years of experience in human resources development in healthcare, technology, financial and energy sectors.