How-To Run A Better Team Business in 2010

How to … MANAGE GENERATION Y

As a challenging 2010 passes the mid-point, Team Insight once again turns to the experts for advice for not only running a small team dealer, but for operating a successful small business. Their advice is timely, so read on, learn a little bit, and feel free to refer to earlier parts of this series by logging on to http://www.TeamInsightMag.com.

How to … MANAGE GENERATION Y
By Bruce Tulgan

Help Generation Y Employees Keep Score at Work and Negotiate Special Rewards

You might think a generation raised on mantras like “we're all winners” and “everyone gets a trophy” wouldn’t be particularly competitive. But that is not the case with Generation Y, the new young workers born 1978-1990.

While the self-esteem movement was chipping away at Generation Yers’ competitiveness, the testing movement was building it back up. Still, testing breeds a different kind of competitiveness: competition against standards and benchmarks, against averages and means, and against one’s own past performance.

Think about a video game that a Gen Yer might practice and practice, beating one high score after another, set by himself. He wins every time, and nobody has a reason to feel bad. That’s the kind of competition Gen Yers are looking for: they want to compete against themselves in a safe environment where they can try over and over again to improve on their own performance benchmarks. When it comes to competitiveness at work, this is what one Gen Yer had to say: “I’ll do whatever they want me to do. Just tell me someone is keeping track of all this stuff I’m doing. Tell me I’m getting credit for it, that I’ve been racking up points here like mad. Tell me someone is keeping score.”

When Gen Yers know you are keeping track of their day-to-day performance, their measuring instinct is sparked and their competitive spirit ignited.

Keeping close track of their work tells them that they are important and their work is important. The process motivates them to perform because they want to get credit, score points, earn more of whatever there is to earn.

The Point System

One outstanding system is used in the warehouses of a large beverage wholesaler. Every day, hundreds (or even thousands) of boxes come in one end of a warehouse and hundreds more go out the other end. All day long, boxes are being moved from one end to the other, meticulously accounted for by bar codes scanned each time they are moved. Everybody in that warehouse is on a point system. One of the warehouse managers said, “The only way you get points around here is moving boxes. If you drive a delivery truck, you get points by delivering boxes. You break bottles, you lose points. If you work in the loading dock, you get points by loading boxes onto the truck.

Points are how everything gets done here. That’s how you make extra money. That’s how you get to leave early or get extra days off.”

How does the system work? The warehouse manager laughed: “Everybody is always trying to get points, especially the young guys. We’ve got a very young group in the warehouse. These guys are practically climbing over each other when a truck pulls in. The young guys want to get their points. Some of them want to work all day and make more money. Some of them just want to get their points and get out of here for the day. But they all want to get those points. I just sit back and let [the points] do most of the management work.”

Similarly, the founding partner of a small advertising firm started giving out “extra points” to associates “for above-and-beyond performance on very difficult projects.” She told me, “At first, I didn’t even know what I really meant by extra points. But I’d usually come back with a bonus check, so the points came to mean something.” The practice was so popular among the younger associates that the partner started attaching points to projects in advance. “After a while, just about any task, no matter how small, was eligible for extra points. If you get something done very fast, you might get extra points. If you really do a fantastic job on something, that’s extra points. It’s for above-and-beyond performance. And it’s worth money.”

If you can think of easy ways to convert the performance you need from your young employees into a point system, then maybe you should consider it. I promise you, a point system will get Gen Yers focused like a laser beam. If you want them to start showing up earlier for work, attach points for every minute they arrive early, and take away points for every minute they come in late. If you want Gen Yers to meet quality standards, give them checklists of every detail and specification, and give points for every detail and specification completed — and take away points for every one missed. If you want Gen Yers to speed up, set a realistic quota of tasks per hour and give points for every task done over the quota — and take away points for every task under the quota. And so on.


Negotiate Special Rewards in Very Small Increments

Today we live in a world in which relationships are governed by an increasingly short-term and transactional logic. That’s true for people of all ages. But Gen Yers have never known it any other way. Segmented as a market from birth and armed with credit cards, they have been taught to think of themselves as customers in virtually every sphere. Even in their roles as students, most Gen Yers think of themselves as buying and consuming the learning services sold by schools.

Meanwhile, their parents have been negotiating “choices” with them since they first uttered “I want” as toddlers, trading short-term rewards for short-term desired behavior.

By the time Gen Yers arrive at the workplace, short-term transactional thinking is second nature to them. They are still thinking like customers. Sometimes when I point this out to managers, they’ll say, “Yeah, well, they’re not paying us. We are paying them. So what currency do they bring to the transaction? They can do as they are told.” I agree with that 100 percent.
Of course, you want to get more work and better work out of every one of your Gen Yers. For their part, Gen Yers want to earn more of what they need and want. The best solution? Plug into Gen Yers’ transactional mind-set. Stop paying them and start buying their results, one by one. The more you trade results for rewards, the more reliable their performance will be. The smaller the increments you buy in, the more effective it will be. “I had this manager who would always say to me, ‘What do you need from me?’ a Gen Yer told me. “I’d always know she was going to get me back with, “Great. Here’s what I need from you.’ She did that with everybody. She knew I needed the money and went out of her way to help me make more money, which was really great of her.”

The critical element when it comes to rewarding Gen Yers is letting them know that rewards are tied to concrete actions within their own direct control. This might remind you of the old-fashioned pay scheme called piecework in which individuals are paid an agreed-on amount for each defined unit of work they produce. The seamstress might be paid per stitch or per finished garment. The accountant might be paid per tax return prepared. The computer programmer might be paid per line of new code written. And so on. The key to your success will be defining those measurable pieces of work and setting a price per piece.

Traditional Compensation Versus Short-Term Rewards

Perhaps if given the choice, many Gen Yers would actually opt for a safe lifelong employment relationship with secure, long-term vesting rewards. The problem is that you won’t find any Gen Yers who actually believe that this is a real option in today’s world. To them, it sounds like an absurd claim on its face — largely because it is. Therefore, most Gen Yers are concerned about all the rewards they might be able to extract from their immediate boss in the short term.

However, Gen Yers are also acutely aware that the compensation systems and language of their employers almost always revolve around the traditional elements of compensation and benefits — pay scales or salary, health care plans, eligibility for 401k or pension plans, and the like. They often ask about traditional rewards because they are aware that you only know how to talk about traditional rewards — they figure at least the conversation will make sense to you.

They also want you to think they care about the reward system you seem to care so much about.

Finally, they figure they might as well get everything they can out of that system, even as they are making their other more idiosyncratic requests.

The answer, then, is, sure, they want more of everything. But the real performance drivers for Gen Yers are the short-term, special rewards you negotiate in exchange for their short-term above-and-beyond performance. A senior engineer shared this story with me: “One of the engineers on my team, a young lady who talked about little else but flextime and work-life balance, pretty much dropped everything for two months and lived here around the clock working on a killer deadline for me. Why? I arranged for her to take six weeks off, two unpaid, in a row after the project was finished. That was all it took. She was here around the clock for two months, then she disappeared for six weeks and came back happy as could be. The other two guys on that team? They just wanted a bonus check.” He concluded, “They all want something different. But they all want something, and most of them are willing to work for it.”

Negotiating Rewards in Small Increments

So when that Gen Yer knocks on your office door and asks if you have a minute to discuss his special need or want, you could roll your eyes and think about beating your head against the wall — or you could realize that this need or want might just be the key to driving this employee’s performance to a whole new level, or at least the key to getting more work out of him better and faster for the short term.

The best approach is to negotiate these special rewards in very small increments. You want to be able to say, “Okay. I’ll do that for you tomorrow if you do X for me today.” Work a particularly undesirable shift? Work longer hours? Work with a difficult team? Do some heavy lifting? Work in some out of the way location? Clean up some unpleasant mess? Then deliver the reward in question as soon as you possibly can. Immediate rewards are much more effective with Gen Yers because they provide a greater sense of control and a higher level of reinforcement. Gen Yers are likely to remember the precise details and context of the performance and are therefore more likely to make the connection the next time the desired performance is called for. Plus they won’t spend time wondering if their performance has been noted and appreciated, and they will therefore be less likely to lose the momentum generated by their short-term success.

Most managers have more discretionary resources than they realize at their disposal. These are often resources that can be deployed as special short-term rewards. What extra funds are available to you that you might be able to use for special short-term bonuses? What can you do to improve work conditions in the short term for your employees? How much latitude do you have to make special short-term accommodations in employees’ schedules or paid time off? How much control do you have over extra training opportunities? Can you offer exposure to decision makers? How hard is it to have a written commendation added to an employee’s file? There are many extra rewards managers have in their control, and you need to use every resource at your disposal.

That does not mean that everything is open to negotiation. You should be rock solid on your basic standards and requirements.

What is not negotiable? What is essential? What is not acceptable? That’s your starting point.

From there, take control of the ongoing negotiation and help Gen Yers earn those special rewards they want so much. In the process, you’ll get so much more, and better, and faster work out of them, one day at a time.

Bruce Tulgan (New Haven, CT) is the author or coauthor of numerous books including his most recent, “Not Everyone Gets a Trophy” (2009), the best-seller “It’s Okay to be The Boss” (2007), and the classic “Managing Generation X” (1995). Since founding the management training firm RainmakerThinking in 1993, he has been a sought-after keynote speaker and seminar leader. Tulgan’s free weekly video newsletter is available at http://www.rainmakerthinking.com

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