HR transformation for the new generation in the work force.

Ray, Prantika ; Singh, Manjari

Introduction

As the baby boomers retire from the organizations and the Millennial generation steps in, there is a huge shift in the way the employees appreciate and respond to the organization values and norms. Since each generation has differences in the job expectations and workplace behaviors with the other, the organization faces new challenges to integrate the coming generations into the workforce. There are bound to be speculations and stereotypes about the new generation. Organizations have to manage the issues that arise due to these new challenges. One of the labels that are attached to Millennial generation is "entitled generation". This label is generally carrying a negative connotation of expecting more than what one deserves. Psychological entitlement is the term that has been used in the literature to reflect this feeling of unrealistic expectations and desires (Harvey & Harris, 2010). It is necessary to understand the psychological entitlement of the workplace in order to effectively manage their expectations and behaviors. Psychological entitlement of an individual would influence her/his interaction with boss, clients and colleagues etc. This also affects the internal equity in the organization and perceived justice by the employees. The understanding of the influence of entitled generation in the workplace is useful in designing and implementing organizational policies related to human resource management.

The organizations need to look at three critical functions of HR: recruitment and selection, performance management, and rewards and recognition. Many undesirable issues may arise in the organization hiring the "entitled" recruits who have unrealistic expectations from their employers. Recruitment and selection processes in the organization need to access the level of entitlement and screen out the undesirable ones (Harvey & Dasborough, 2015). Performance management systems (goal-setting, performance assessment and feedback) should be built in such a way that would provide an unambiguous appraisal for the performance. The assessors should keep in mind the various behavioral and technical characteristics of an individual and then appraise her/him. Also, the Generation Y believes rewards and recognition based on the fulfillment of tasks, competencies of the person etc. Also, considered an ambitious generation, they would prefer organizations that would break the chains of tenure-based promotions and move onto work-related rewarding systems. However, further studies are needed to determine, how an entitlement trait in an individual could bring about inflated unrealistic expectations and the methods to deal with the same.

Characteristics of the New Generation

Psychological entitlement has been defined as "the relatively stable tendency toward inflated self-perceptions and unrealistic expectations concerning praise and rewards." (Harvey & Harris, 2010: 1640). Klimchak et al. (2016) have utilized the Huseman et al's (1984) equity sensitivity literature and grouped the equity sensitives and entitleds into one category and have studied the psychological entitlement in that context. Huseman et al's (1984) entitleds and equity sensitives were respectively defined as the ones who expect a high outcome to input ratio and the ones who are said to feel contented when they find that they and the others have the same outcome to input ratio. The entitleds prefer to be on the receiving end than on the giving end, which in other words would mean they expect to be over-rewarded in all contexts irrespective of the amount of effort they put in the job (Huseman, 1984). This behavior would be irrespective of the context and the environment the individual is in. Though in some studies psychological entitlement has been considered to branch out of the narcissism trait of an individual (Campbell et al., 2004), but there have been other studies that have spoken about the relatedness rather than causality relation between narcissism and entitlement (Klimchak, 2016). In addition, Stronge et al. (2016) have shown that high self-esteem is not the sufficient condition for high entitlement.

Implications Psychological Entitlement

According to Naumann et al. (2002), employee entitlement has been talked of in terms of compensation, that is, financial outcomes and other tangible benefits. Despite receiving rewards and praise for their inputs in the job, the entitled employees feel they have not received the fair share of rewards and recognition and remain dissatisfied with the job (Robinson, 2007). Also, the inflated sense of entitlement makes the employees cynical about the performance analysis tools, training needs etc. If there are entitled members in a group, there could be cases where the entitled individual has a tendency of free-riding and thus disrupt the overall group-dynamics. Entitled individual often prefer jobs that have immediate returns and often avoid picking up tasks where the results take a longer time to surface or where their efforts would translate to comparatively smaller returns. Most employees would thus avoid taking up developmental activities as the activities have little/no returns for the employee and they would prefer to invest their efforts and time on something where the chances to procure praise and rewards are more pronounced. Also, the entitled employees often consider putting lesser efforts in the job and therefore there is also an increased absenteeism, late arrivals at the office, missing of deadlines etc. The dissatisfied individuals often create an environment of tension in the organization which further aggravates into inter and intra-team clashes and disrupts the normal functioning of the organization. This feeling of dissatisfaction in the other individuals due to the changes in the organizational dynamics often translated into turnover intentions and the organization ends up losing out on valuable employees. Figure 1 shows the HR Transformation Model for the new generation.

New Generation

The Generation Y, also called the Millennial generation (those born in the 1980s to early 1990s) are about to take up positions in the organization and according to studies, by 2020 they would be occupying a little less than half of the workforce (Brack, 2012). As they enter the workforce it becomes very crucial that one is clear about the expectations of the Millennial generation and their tentative behaviors in the workplace to be able to design a better place for them to work.

Expectations of the Millennial Generation

Accountability: Felt accountability has been defined by Hall et al. (2003:.33) as "an implicit or explicit expectation that one's decisions or actions will be subject to evaluation by some salient audience(s) with the belief that there exists the potential for one to receive either rewards or sanctions based on this expected evaluation". According to the study done by Laird, Harvey & Lancaster (2015), the entitled and the non-entitled individuals varied largely in their levels of job satisfaction in the low-accountability environments. But with increasing accountability, the satisfaction levels of the entitled individuals rose and almost became at par with the others. Though accountability is a desirable characteristic of an organization, it is difficult to interpret the desired amount of accountability that would be required for the parity in their behaviors. There are organizations where the managerial systems and procedures are complex and hierarchical, that it becomes very difficult to ensure full accountability. Also, there have been instances where the employees would want to understand the impact of their input into the job evident in the result. Even if their input is a very small part of the entire project, they expect to understand the whole project and how they would add value to it through their input. One of the very important reasons that they assert in this case is by getting to know the big picture; they are able to contribute better to the job. In the case of multinational companies, where there are projects off shored to other locations, employees expect the similar relationship with the client as the head office has, and would prefer to be considered for discussions about the project design and not only as the service provider. A sense of entitlement in the employee would inflate these expectations so much that it would cause an impediment in the work the individual does, and the cynicism would aggravate to excessive job satisfaction. Since people from the Millennial generation have been generalized as being entitled, the managers need to be aware of the expectations of the generation and the sense of entitlement in them.

Goal Congruence: The expectation of goal congruence has been always considered an important factor for a job, and this notion has strengthened across generations. Considering the Generation X, they have always sought for the congruence of their career goals with the organizational goals. But as the notion of career has changed over the generation, the expectation of goal congruence has shifted from person-organization goal congruence to person-job goal congruence. Compared to the traditional career, the Millennial generation prefers to take up a more fluid or flexible career that is also called boundaryless career (Lyons, Schweitzer, Ng, & Kuron, 2012). Boundaryless career has been considered completely different from the initial notion of traditional career where the advancement through the career was mostly vertical and that mostly occurred with increasing age (Lyons et al., 2012). In a boundaryless career, one could move across places, have different supervisors, various roles etc. The existence of option of boundaryless career has also led the Millennial to keep their career goals flexible and congruent to the current job goal they are performing rather than to the organization.

Work-life balance: Work-life balance is seen as the minimization of role conflict between work and home domains or absence of unacceptable conflicts in work and non-work domains (Clark, 2000; Greenblatt, 2002 as cited in Sturges & Guest, 2004). Another reason for the adoption of a boundary-less career by the Millennial generation is the attempt to strike a perfect work-life balance. Though Forbes in a recent study in September 2015 has compared the numbers with the earlier generation and found that 29% of the Millennials opt for work-life balance compared to 31% in Generation X (Shah, 2015). More control over decisions related to the job as well as flexibility to make choices that would enable better work-life balance and more influence at the community level may increase the psychological empowerment of employees, particularly women employees (Sarkar & Singh, 2012).

Unambiguous Workplace : They prefer being given clear guidelines and instructions from their supervisors. The objectives need to be clearly defined. When we consider about the roles, the Millennial generation prefers to have both low subjective role ambiguity and low objective role ambiguity (Schmidt, Roesler, Kusserow & Rau, 2014). Ambiguity in the workplace often leads to the formation of incorrect conceptions of one's contributions to her/his job. For example, in the absence of appropriate performance-analysis procedures, there could be cases where an individual could claim responsibility for the success due to someone else's contribution or passing blame in case of failures (Laird, Harvey & Lancaster, 2015).

Meaningful Work: Millennials aim to enhance their skills continuously because they see it as an enabler for remaining attractive in the job market (De Hauw & De Vos, 2010). Individual would consider their work meaningful if it holds particular significance and a positive meaning for them and the meaning could be due to values, motivation and beliefs in the workplace (Rosso, Dekas & Wrzesniewski, 2010). The Millennials prefer companies on the basis of the greater expertise and competencies than the pay they provide.

Rapid Career Growth: Millennials believe that capabilities and competencies should decide the hierarchy and not the tenure one serves in the organization. Since tenure is still a governing factor for promotions, the Millennials feel theirs and organisation's goals are not aligned. This leads to low engagement in the job. Also, since the Millennials look for a person-job goal congruence they would prefer to move out of the job if they could find a better fit in another organization.

Workplace Behaviors

Use of Technology and Multitaskers: With the progress in the technology, the newer generations have been more technology savvy than the older generation. This generation of Millennials have done multi-tasking from their childhood and actually apply that in the workplace (Brack, 2012) but they are perceived as "scatter-brained" and "technology-dependent" by other generations (Crumpacker & Crumpacker, 2007). In the fast progressing job environment, the easy adaptation of technology is seen as a desirable trait. When industries are moving more towards automated and service sector, technology actually plays a crucial part in the organizational transformation. The Millennial who mostly involve in online social interactions than face-to-face interactions as is preferred by baby-boomers, there is a conflict of interest. Also with the increasing reliance on emails to interact with each other, the older generation feels that the online interactions lack the personal touch (Glass, 2007). Another feared implication about the excessive dependence on technology by the present generation would actually reduce their abilities of manual computational and analytical skills in the generation. Job crafting would allow employees more latitude in terms of how to do the job effectively (Singh & Singh, 2016) and is better suited to the expectations and aspirations of the Millennial generation.

Risk Taking: According to a study by Harvard Business Review, it was found that the Millennial generation has shown a steady decrease in high-risk behaviors. Compared to the risk-taking behavior Baby-boomers and Generation X had at their age, the Millennial generation has been found to be more risk averse. So when it comes to benefits in terms of life insurance or long-term savings, Millennials have been found to be planning well ahead of Baby-boomers and Generation X (Howe, 2014). But a very different point comes up when Millennials are also leaving jobs to either join startups, which is contradictory to the risk-averse behavior that has been mentioned in the literature. One possible reason could be their quest for a meaningful work overrides the risk involved in the start-ups. Also, in the fast-paced world, this generation often expects acknowledgement of work, regular feedback, and quick gratification if they put in their hard work into the job. In the absence of that, they do not mind leaving the job to pursue higher education or join a start-up. Also, this generation is active on various online job portals. So they seemingly create back-up plans in case the start-up fails. However, there needs to be further research to understand the enabling factors for the so-called "risk averse" person to move onto a riskier environment.

Psychological Contract: Although the psychological contract differs from individual to individual, Festing & Scafer (2014) have related talent management with psychological commitment and studied the relation across generations. Since, the Generations X and Y are relatively considered more individualistic (Ng, Schweitzer & Lyon, 2010), they would have lower attachment with the organization and would thus have a transactional psychological contract rather than relational one. Employers have found that employees are more committed to the organization when the organization aims to engage talent (Festing & Scafer, 2014) by enhancing career opportunities. Socialization is assumed to play an important role in modifying the pre-entry expectations and thus before the potential employees join their jobs, their entitlement perceptions should be considered to understand how the psychological contracts change over time (Hurst & Good, 2009).

Workplace Interaction: The Millennial generation is considered self-absorbed, individualist according to several perceptions but they have been seen as collaborators (Brack, 2012). Millenials are comfortable to work in teams and they feel the interaction with the team members adds pleasure to the work (Alsop, 2008 as cited in Myers & Sadaghiani, 2010). Millennials do expect collaborative workplace, an environment that would encourage brainstorming and innovation (Meister & Willyerd, 2010).

HRM for New Generation

Recruitment and Selection: The recruitment process of a company as it aims to attract relevant candidates is an essential component of a hiring process. Though the aim is to target a large candidate pool, different individual preferences for job characteristics, networking with the alumni from graduate schools, the perception of the employer in terms of the brand and recognition often skew the population to a certain extent.

If the company fails to attract the right candidate pool, the recruitment fails both monetarily and non-monetarily. The earlier the shortcomings of the recruitment process are realized, the lesser are the losses. Now the job market consists of both active as well as passive job seekers (Cascio & Aguinis, 2010). With the availability of online job portals, where people upload their resumes even when they are passively searching for job opportunities or even try to estimate the monetary compensation with respect to the competencies, educational qualifications and the work experience they have. In the process, they often build a good bonding with various recruitment consultants and some company recruiters. Even before the employees leave the organization, they have some companies already in mind that they would join. So, the employers are actually facing difficulty in hiring quality employees due to the resultant unavailability of a sufficiently large candidate pool (Cascio & Aguinis, 2010). One should also consider that, individuals highly value their preferences of job characteristics by specifically mentioning them in the recruitment process, thereby ensuring a greater person-organization fit (Ehrhart, Mayer & Ziegert, 2012). To summarize, Figure 2 depicts some key characteristics that would help the organization to attract talent.

Also, a bigger challenge remains to screen the entitled employees from the non-entitled employees. Though studies have suggested for research in developing accurate screening techniques, there have not been studies that have specifically addressed this concern.

One feasible way to conduct the initial screening would be to design an entitlement detection test based on the PES (Psychological Entitlement Scale) nine-item scale designed by Campbell et al. (2004). The items include: Entitleds "honestly feel that they are more deserving than others", "should be given special treatment" and are "entitled to more of everything" (Ibid: 45). As is evident, there could be instances where the candidate might try to manipulate the answers to fake oneself as an "ideal candidate". In that case, there would be a requirement for a response distortion test. In subsequent levels of selection, the potential employees could be asked to give a written test that could be designed in such a way, which could bring out the "entitlement factor". An example could be a write-up based on oneself. And the final stages of selection could comprise the group discussion and interviews. It becomes essential for a moderator to pick up both verbal and non-verbal cues from the participants. Though this generation is competitive, there is a difference between an unnecessary aggression and assertion. If an individual cuts discussions in the middle with ambiguous points, turns aggressive when negated could be some possible signs of being entitled. However, the coaching institutes have now tried working on these parameters and the cues do not surface in the one-time interaction. So, there needs to be research to fine-tune the selection process so that the deserving candidate is chosen. Figure 3 shows the steps that could be taken in the selection process to identify the entitled.

Performance Management Systems: Performance management system is required to measure employee performance and employ mechanisms to develop employee competencies. A model performance management system enables an employee to align her/his goals and team's goals with strategic objectives of the organization (Aguinis, 2009). The first aspect before designing the performance management for the new generation is to consider accountability. Accountability is one of the expected characteristics by a Millennial in the organization. Also, with accountability, or the ownership of the job and being accountable for the task, one is also empowered and thus it seeks to attain the second desired characteristic--"meaningfulness". Also, an entitled individual would often try to claim credit for someone else's work and this could be avoided if the people are accountable for the job. It is especially useful for individuals who cannot assert themselves as achievers and when the assessor is located at a remote location. The second aspect is that it becomes very crucial to realize the exact purpose of the performance appraisal. Appraisal systems lose their effectiveness when the assessor and/or assessee considers the process as a judgment, rather than a process aimed at improvement. Supervisors often find it very difficult to demarcate the role of a judge from the role of coach or a mentor (Meyer, 1991 as cited in Cascio & Aguinis, 2010). In some cases, the technology skills that the Generation Y possesses are often trivialized and dismissed and as a result, the outdated skill sets are appreciated for instead (One, 2014). Also, this new generation expects a regular feedback, unlike the yearly feedback that was given to the other generations. Harvey & Harris (2010) found in their study that the entitled individuals exhibit greater levels of frustration on being given repeated feedbacks by the supervisors. It becomes very important for the managers to consider the differences in the individuals in the feedback process. Thirdly, it is very crucial for an organization to have a formal feedback system in place. This is to avoid the leniency or severity in the feedback received by the employees. Often people are hesitant to seek feedback due to stereotype threats and thus having a formal system in place could reduce the perceive d threat (Cascio & Aguinis, 2010). Biases in the performance appraisal processes could occur because of different reasons one of them being the inherent stereotypes in the minds of the assessor (Dhiman & Singh, 2007). It must also be made sure that generational stereotypes do not override the purpose of the performance appraisal. HR transformation has to be seen for all aspects of performance management system (Figure 4).

Rewards & Recognition: Generation Y believes in a meaningful work, regular feedback and rewards for good performance. Also, they believe that they should be able to climb the career ladder fast if they have the skills and competencies. But since the traditional promotion system creates the hierarchy based on tenure, there is a misfit in the minds of the Millennials. Owing to this, Millennials have been characterized as being entitled. As the Princeton studies point out there are myths about Generation Y's desire for rewards not equivalent to return for work (One, 2014). This entitlement myth has been generalized to the entire generation Y. Managers tend to tag the entire group of employees with the adjective and do not look at the individual characteristics. Irrespective of the generation, there is always an expectation of distributive justice by the employees in terms of rewards and recognition. Also, since Millennials have a collaborative trait, they should be rewarded on the basis of collaboration and knowledge sharing. With knowledge sharing and mutual interaction there will be an environment that would add to the meaningfulness of the job. One of the prime objective should be to encourage knowledge sharing in the workplace. Studies have shown that the employees who enjoy sharing knowledge are motivated to donate and collect knowledge with their colleagues (Bartol & Srivastava, 2002). Thus there is a need for motivation to share knowledge and also to enhance competence and confidence of employees. The motivation should not only be in terms of organizational rewards but also the facilitation of "social interaction culture" (Lin, 2007). The rewards and recognition system should accommodate for the differences in the competencies in different generations. Thus, if the technology savvy Millennials are encouraged to donate their knowledge to the other employees and reward them to motivate to boost their intention to share the knowledge (Figure 5).

Conclusion

The paper looks at the present generation entering the workforce. Also called the "entitled" generation, several Millennial potential employees have been judged through similar lenses and that has brought about issues in the critical HR functions. Although it has been seen in literature, that the Generation Y does have a greater sense of entitlement than the previous generations, generalizing it across all individuals is to make it difficult to evolve standard practices to develop an engaged workforce. Though, psychological entitlement has been seen through several angles of equity literature, Big Five etc., however, there have been very few research studies linking the transformation of HR functions with the entry of the new generation. We have identified the key expectations and behaviors of the Millennials in the workforce. We have further tried to link HR functions with each of the behaviors and expectations. We have attempted to suggest ways to determine the entitled individual in the process and thus design mechanisms accordingly. One limitation of the study is that the expectation and characteristics of any generation are determined by life events and socialization. We have restricted our approach only to the candidates who are joining the workplace fresh from college. When the Millennials interact with other generation they might exhibit different expectations and behaviors. It would be interesting to further research on the impact of the socialization on the characteristics and its implications for human resource management.

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Prantika Ray (Email:prantikar@iima.ac.in) is Doctoral Scholar & Manjari Singh (Email:manjari@iima.ac.in) is Professor, Human Resources Management Area, Indian Institute of Management, Ahmedabad 380015.

Caption: Fig. 1: HR Transformation Model for the New Generation

Caption: Figure 2: Transforming recruitment for the new generation

Caption: Fig. 3: Transforming Selection for the New Generation

Caption: Fig. 4 Transforming performance management system for the new generation

Caption: Fig. 5 Transforming Rewards and Recognition Systems for the New Generation