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SERGEANTS MAJOR ACADEMY Department of Professional Studies

Lesson S301 Human Resource Management Processes and Systems

Reading A Human Resources Management Issues, Challenges and

Trends: "Now and Around the Corner" Chapters 2, 8 and 9

CHAPTER 2

GLOBALIZATION AND HUMAN RESOURCE MANAGEMENT

Ronald R. Sims

The environment in which today’s organizations find themselves continues to be more globalized as the world is becoming a “global village.” This globalization is driven in part by continued growth in multinational investment to include more and more companies entering into alliances with foreign companies, exporting their products overseas, and building plants in other countries. All of the human resource management (HRM) challenges, issues and opportunities discussed in previous chapters in this book are interrelated conceptually and operationally in the international context.

This chapter discusses a number of the HRM challenges, issues and opportuni- ties HRM professionals and their organizations will need to address in today’s and tomorrow’s global world of work. The chapter first takes a look at today’s global organization and some HRM issues. Next, the discussion turns to the globaliza- tion of business and factors affecting HRM in global markets before focusing on an analysis of levels of global or international and HRM operations. Finally, the chapter discusses globalization and implications and impacts on HRM in the future.

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32 • RONALD R. SIMS

TODAY’S GLOBAL ORGANIZATION AND HUMAN RESOURCE MANAGEMENT ISSUES

For the past decades, there have been profound changes in the international busi- ness scene. With geographic national borders being almost replaced by multi- national firms, and a heightened level of labor mobility around the globe, the implication of HRM to design and develop firms’ global business strategy, and to direct individuals (i.e. managers and professional staff alike) for working in different countries, is undoubtedly significant. Rosalie Tung (2016) has recently suggested that in the past three decades or so, globalization/regionalization, mi- gration and reverse migration (also referred to as “brain circulation”), the ascen- dancy of emerging markets, the demand for people with a global mindset, and the worldwide war for talent have brought about fundamental changes to the na- ture, magnitude, and raison d’etre for HRM in a global context. And, that these changes require HRM professionals and their organizations to adopt new lenses to fully understand the dynamics that impact global or international human resource management policies and practices.

Organizations are attempting to gain competitive advantage, which can be pro- vided by international expansion as these countries are new markets with large numbers of potential customers. For example, organizations that are producing below their capacity can use expansion to possibly increase sales and profits. Still other organizations are building production facilities in other countries as a means of capitalizing on those countries’ lower labor costs for relatively unskilled jobs.

Importing and exporting goods and services is the easiest way to “go global.” India has the world’s second-largest population (1.2 billion people) and a grow- ing middle class, so businesses are increasingly trying to expand their exports to that country (U.S. News & World Report, 2016). According to Snell and Morris (2019), Apple is one of those companies. Although the iPhone dominates the U.S. market, only 5 percent of smartphones in India are iPhone. Partnerships, mergers and takeovers are other ways companies are addressing globalization.

The reality is that most organizations now function in the global economy. For example, U.S. businesses are entering international markets at the same time that foreign companies are entering the U.S. market. Consider the reality that many American and foreign firms have partnered with Chinese firms to expand in China, which is the world’s most populous country, with 1.3 billion people. In turn, cross-border mergers continue to increase (Noe, Hollenbeck, Gerhart & Wright, 2019; Shen, 2016) as Chinese and other foreign companies are merging with American firms (Sheng, 2016). Consider also that it has been suggested that globalization is the dominant driving force in the world economy, reshaping soci- eties and politics as it changes lives (Cascio, 2019).

Globalization has also resulted in the blurring of national identities of prod- ucts. Many may think of Budweiser as an American beer, but its maker (Anheus- er-Busch) is owned by a Belgian company called InBev. Like many other compa- nies, Anheuser-Busch InBev has been purchasing or partnering with factories and

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Globalization and Human Resource Management • 33

brands in other countries such as China and Mexico to expand its sales. Similarly, BMW is a German brand, but the automaker builds cars in the United States, Chi- na and elsewhere (Choi & Schreiner, 2014; Duprey, 2013; Snell & Morris, 2019).

Giant multinational corporations such as Nestlé, Unilever, and AstraZeneca, began to lose their national identities as they integrated and coordinated product design, manufacturing, sales, and services on a worldwide basis. Further, many other U.S. firms, for example, generate a substantial portion of their sales and profits from other countries; companies such as Coca-Cola, Exxon/Mobil, and Microsoft derive a significant portion of total sales and profits from outside the United States (Dewhurst, Harris & Heywood, 2012). In 1982 GE, for example, generated 20 percent of its sales outside the United States and 70 percent in 2017 (Mann & Spegele, 2017). Many foreign organizations have taken advantage of growth opportunities in the United States. For example, Toyota, based in Japan, has grown its market share and increased its number of jobs in the United States and elsewhere in North America. Also, Toyota, Honda, Nissan, and other Japa- nese automobile manufacturers, electronic firms, and suppliers have maintained operations in the United States (Mathis, Jackson, Valentine, & Meglich, 2017).

Higginbottom (2017) has recently argued that these are indeed “uncertain times” (i.e., for global (and local) organizations and HRM professionals). The last several years have played host to seismic political events such as Brexit and the election of Donald Trump as the U.S. president in 2016. The acronym VUCA which stands for volatility, uncertainty, complexity and ambiguity is a trendy management term that perfectly encapsulates the conditions that many multina- tionals are operating under.

Brexit, for example, which stemmed from a slim majority of U.K. voters de- ciding in a June 23, 2016 referendum, that they no longer wanted to be governed largely from a bureaucracy located in Brussels, Belgium, continues to pose a seri- ous threat to the European Union. The EU and Britain are currently negotiating the terms of their separation which will have major implications for global busi- nesses and many observers predict that, at least in the short term, this exit will have a negative impact on the British economy (see, Amadeo, 2018a; Partington, 2018; Romei, 2018).

Numerous free-trade agreements forged between nations over the past 60 years, like the General Agreement on Tariffs and Trade (GATT) in 1948 and the North American Free Trade Agreement (NAFTA) in 1994, helped quicken the pace of globalization. However, the election of Donald Trump as president of the U.S. in 2016 has created uncertainty for organizations making their location decisions in his efforts to renegotiate, for example, NAFTA which is the world’s largest free trade agreement. In an effort to keep companies from moving produc- tion outside the United States, Trump announced a 35 percent tariff on steel and a 10 percent tariff on aluminum on Canada, Mexico and the EU. President Trump campaigned on renegotiating NAFTA and frequently berated companies seeking

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to build plants in Mexico, for example, particularly when it entails closing plants in the United States (see Amadeo, 2018b; Stoll & Colias, 2016).

While factors like Berxit and the election of Trump as the U.S. president are impacting globalization, perhaps none is more important that the rise of Inter- net technologies (Dreyfuss, 2017; Quora, 2017; Sato, 2014). The Internet, as it continues to develop, has certainly changed the ways that people live and work. Indeed, in some industries, such as music and e-commerce, it has completely revolutionized the rules of the game (Cascio, 2019).

The Internet gives everyone in the organization, at any level and in every func- tional areas, the ability to access a mind-boggling array of information-instanta- neously from anywhere. Ideas can be zapped around the globe in the blink of an eye instead of seeping out over month or years. A global marketplace has been created by factors such as the following:

• Global telecommunications enhanced by fiber optics, satellites, and com- puter technology.

• E-commerce that makes organizations global from the moment their Web sites are up and running, as customers from around the world log on.

• Financial markets are now open 24 hours a day around the world (Lioudis, 2018).

• Cost pressures (that prod firms to move where labor and other resources are cheapest), coupled with a search for new markets (as firms and consumers around the world seek foreign goods and services).

• The integration of cultures and values through international travel, as well as the spread of goods such as music, food, and clothing. In combination, these have led to common consumer demands around the world (Tarique, Briscoe, & Schuler, 2016).

• The emergence of global standards and regulations for trade, commerce, finance, products, and services (Gunther, 2005).

The rapid increase in telecommunications and information technology en- ables work to be done more rapidly, efficiently, and effectively all over the world. Friedman (2016 has suggested that an expanding high-tech, information-based economy increasingly defines globalization and shapes the business cycles within it. That is, much of the flow of capital, labor, services, and goods among Asia, America and Europe are technology based. Without chips, screens, and software help from Asia, the U.S. economy would grind to a halt. Clearly, open borders continue to allow new ideas and technology to flow freely around the globe, ac- celerating productivity growth and allowing businesses to be more competitive than they have been in past decades.

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Globalization and Human Resource Management • 35

Globalization and HRM

Due to globalization, companies have to balance a complicated set of issues related to different geographies, including different cultures, employment laws, and business practices, and the safety of employees and facilities abroad. HRM issues underlie each of these and other concerns. They include such things as dealing with employees today and tomorrow who, via the Internet and social me- dia, are better informed about global job opportunities and are willing to pursue them, even if it means working for competing companies or foreign companies. Determining the knowledge and skill base of workers worldwide and figuring out how best to hire and train them (sometimes with materials that must be translated into a number of different languages) is also an issue for companies in the global environment.

There is every indication that the recent social and political changes have con- tributed to globalization and the movement toward international competition. De- spite the reasons an organization may have for expanding operations globally, HRM is critical to the success of any global initiative. If one adopts the basic prin- ciple that HRM strategy must be derived from corporate strategy and that people do determine an organization’s success or failure, then the HRM function needs to be a key strategic partner in any global operations. Still, in some instances HRM is often neglected in the planning and establishment of global endeavors. Despite such neglect, today’s and tomorrow’s HRM professionals must continue to develop their own and other organizational members competencies or skills in the ever-growing international context of the world of work. This means not only understanding the events and factors that continue to increase the global nature of business but also their role in helping to improve their organization’s competitive advantage in global environments.

UNDERSTANDING THE GLOBAL ENVIRONMENT

It is important for HRM professionals to continue to recognize that because politi- cal, economic, social and technological conditions are constantly shifting around the world, how employees are managed in those changing environments will need to shift as well. HRM professionals can better understand the global environment by regularly conducting a political, economic, sociocultural, and technological (PEST) analysis which can act as an audit of a company’s environmental influ- ences to assist in determining the corporate strategy and accompanying HRM response(s) (see, for example, Post, 2017; Snell & Morris, 2019).

By conducting a PEST analysis HRM professionals and other organizational leaders are able to scan different contextual environments to understand the long- term trends and how they might impact a company. A PEST analysis can help HRM professionals to 1) spot business or human resource opportunities, and give them advanced warning of threats, 2) identify trends in the business environment so they can proactively adapt to these changes, 3) help to avoid implementing

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HRM practices in a particular country where they may fail, and 4) put an end to old habits and assumptions about how people should be managed to help bring about innovative ideas for the entire organization.

Political Factors

Government regulations and legal issues affect a company’s ability to be profit- able and successful, and this factor looks at how that can happen. Issues that must be considered include tax guidelines, copyright and property law enforcement, political stability, trade regulations, social and environmental policy, employment laws and safety regulations. Companies should also consider their local and fed- eral power structure and discuss how anticipated shifts in power could affect their business.

HRM professionals can assess the political factors by examining a country’s labor laws, property rights, and patents. When Lincoln Electric, the Ohio-based welding company, for example, started operations in Brazil, they could not offer their yearly bonus program based on performance because any bonuses paid for two consecutive years became a legal entitlement (Siegel & Larson, 2009).

Property rights in many countries are poorly protected by governments. Who- ever has the political power or authority can seize others’ property with few or no repercussions. Civil unrest can also lead to the poor enforcement of property rights. Businesses have less incentive to invest in countries or locate factories in countries experiencing strife. Another issue that has implications for global companies relates to the intellectual property rights—rights related to patents, trademarks, and so forth.

Economic Factors

This factor examines the outside economic issues that can play a role in a company’s success. Items for HRM professionals and other organizational mem- bers to consider include economic growth, exchange, inflation and interest rates, economic stability, anticipated shifts in commodity and resource costs, unemploy- ment policies, credit availability, unemployment policies, and the business cycle followed in the country.

By looking at trends around market and trade cycles, specific industry changes, customer preferences, and country economic growth forecasts HRM profession- als and other organizational members can best understand the economic issues that are bound to have an impact on the company. For example, in 1995, the World Trade Organization (WTO) was formalized as a cooperative forum for country leaders to come together and increase free trade across the world. As of Decem- ber 2017, the WTO member countries represented over 164 member-nations and covered 97 percent of all international trade (Amadeo, 2018c). In addition, coun- tries are continually negotiating free trade agreements with each other in hopes of increasing their economic activity.

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Since China joined the WTO in 2001, its economy has grown dramatically, drastically altering its political and trading relationship with many nations. In a strange twist of fate, Xi Jinping, the leader of the communist world and China’s president, has taken to defending free trade and globalization, whereas U.S. presi- dent Donald Trump, leader of the free world, has taken to attacking them as noted previously (Elliott & Wearden, 2017).

Sociocultural Factors

The sociocultural factor analyzes the demographic and cultural aspects of the company’s market. These factors help companies examine consumer needs and determine what pushes them to make purchases. Among the items that should be examined are communications, religion, values and ideologies, education, social structure, demographics, population growth rates, age distribution, cultural limi- tations, lifestyle attitude, attitudes towards work and job market trends.

An understanding of sociocultural factors has important implications when it comes to a company’s decision about when and how to do business in a country. For example, because of low labor costs and language similarities, many U.S. businesses have found India an attractive place to locate their facilities, particu- larly call centers.

By recognizing and accommodating different ideologies, religious beliefs, communication styles, education systems, and social structures, HRM profession- als and other organizational members stand a better chance of understanding the culture of a host country—a country in which an international business operates. Even in countries that have close language or cultural links, HRM practices can be dramatically different. For example, employers might be expected to provide employees with meals while at work and transportation between home and work. In most of the Islamic Middle East, it is completely acceptable to ask coworkers very personal questions about their children, especially their sons, but never about their wives (Tulshyan, 2010; Vollmer, 2015).

Technological Factors

Technology issues affect how an organization delivers its product or service to the marketplace. Specific items that need to be scrutinized include, but are not limited to, government spending on the maturity of manufacturing equipment, information systems, technological research, technological advancements, the life cycle of current technology, the role of the Internet and how any changes to it may play out, and the impact of potential information technology changes. Even in less-developed countries where manufacturing is typically stronger due to low cost of labor and high cost of capital-intensive equipment, labor-saving technolo- gy is becoming more affordable and accessible. Take, for instance, a textile factor in Vietnam. It is more cost effective for the factory to purchase high-tech thread- ing equipment to spin the cotton into thread than to hire hundreds of people to

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thread the cotton by hand, even when the average wage for such employees is less than $100 a month. Just like the other factors, companies should consider genera- tional shifts and their related technological expectation to figure out how they will affect who will use their product and how it’s delivered (Snell & Morris, 2019).

While advances in technology have pushed for more service-based jobs, infor- mation systems and technology platforms have also increased the rate at which these services can be traded across countries. Along with the creation of the WTO, 1995 also signifies the beginning of the Internet era mentioned early which is a major driver of the increase in globalization.

Table 2.1 provides an example of PEST analysis that can give HRM profession- als and other organizational members a clear understanding of how this works:

Every country varies in terms of its political, economic, sociocultural and tech- nological systems. These variations directly influence the types of HRM systems that must be developed to accommodate the particular situation. The extent to which these differences affect a company depends on how involved the company is in global markets.

Today, employees around the world continue to become empowered to com- pete without the need of a large company. For example, many websites such as guru.com have developed an online marketplace where individuals can offer vari- ous services and compete for business throughout the world. Consider the reality that one might be interested in developing a new website for their company. By going to the Internet one can select various individuals offering specific services. They may be from different parts of the world. In conclusion, these PEST factors shift the way companies are formed and how they and their HRM professionals go about managing their human resources in a global environment.

ANALYZING A COMPANY’S LEVEL OF INTERNATIONAL AND HRM OPERATIONS

Today’s international business operations can take several different forms. A large percentage of these operations carry on their international business with only lim- ited facilities and minimal representation in foreign countries. Others have exten- sive facilities and personnel in various countries of the world. Managing these

TABLE 2.1. Sample Pest Analysis

Political Economic Sociocultural Technical

• New state tax policies for accounting

• New employment laws for employee handbook maintenance

• Political instability in a foreign partner country

• International economic growth

• Changes in interest rates

• Shift in educational requirements and changing career attitudes

• Population growth rate

• Automated processes in the industry

• Rate of innovation • Changes in technology

incentives

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resources effectively, and integrating their activities to achieve global advantage, is a challenge to a company’s leaders and HRM professionals.

Often we hear companies referred to as “multinational” or “international.” However, it is important for HRM professionals to understand the different levels of participation in international markets. This is especially important because as a company becomes more involved in international trade, different types of HRM challenges, problems, and opportunities arise.

Bartlett and Ghoshal (1991) identified the following four international organi- zational models:

• Decentralized federation in which each national unit is managed as a sepa- rate entity that seeks to optimize its performance in the local environment. (This is the traditional multinational corporation).

• Coordinated federation in which the center develops sophisticated man- agement systems enabling it to maintain overall control, although scope is given to local management to adopt practices that recognize local market conditions.

• Centralized hub in which the focus is on the global market rather than on local markets. Such organizations are truly global rather than multinational.

• Transnational in which the corporation develops multi-dimensional stra- tegic capacities directed towards competing globally but also allows local responsiveness to market requirements.

Adler (2008) offers another categorization of the four various levels of inter- national participation from which a company may choose and includes the fol- lowing levels of involvement or participation: domestic, international, transna- tional, multinational. The four basic types of organizations differ in the in degree to which international activities are separated to respond to the local regions and integrated to achieve global efficiencies.

Domestic. Most organizations begin by operating within a domestic market- place. For example, a business that starts in the U.S. marketplace must recruit, hire, train, and compensate their employees who are usually drawn from the local labor market. The focus of the selection and training programs is often on the employees’ technical competence to perform job-related duties and to some ex- tent on interpersonal skills. In addition, because the company is usually involved in only one labor market, determining the market rate of pay for various jobs is relatively easy.

As the company grows it might choose to build additional facilities in differ- ent parts of the country to reduce the costs of transporting the products over large distances. In deciding where to locate these facilities, the company must consider the attractiveness of the local labor markets. Various parts of the country may have different cultures that make those areas more or less attractive according to the work ethics of the potential employees. Similarly, the potential employees in the different areas may vary greatly because of differences in educational systems.

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Finally, local pay rates may differ. However, it is important to note that in most instances, companies functioning at the domestic level face an environment with very similar political, economic, sociocultural, and technological situations, al- though the variation might be observed across states and geographic areas.

International. As more competitors enter the domestic market, companies face the possibility of losing market share; thus they often seek other markets for their products. This usually means entering international markets, initially by exporting products but ultimately by building production facilities in other countries. The international corporation is essentially a domestic firm that builds on its existing capabilities to penetrate overseas markets. Companies such as Procter & Gamble, Honda and General Electric used this approach to gain access to Europe—they es- sentially adapted existing products for overseas markets without changing much else about their normal operations (Snell & Morris, 2019).

The decision to participate in international competition raises a host of HRM issues. All the problems regarding locating facilities are magnified. For example, HRM professionals must consider whether a particular location provides an en- vironment where human resources can be successfully acquired and managed.

Global. The global corporation, on the other hand, can be viewed as a multina- tional frim that maintains control of its operations worldwide from the country in which it is headquartered. Japanese companies, such as NEC and Matsuhita, tend to treat the world market as a unified whole and try to combine their activities in each country to maximize their efficiencies on a global scale. These companies operate much like a domestic firm, except that they view the whole world as their marketplace.

Global organizations compete on state-of-the-art, top-quality products and ser- vices and do so with the lowest cost possible. Whereas MNCs attempt to develop identical products distributed worldwide, global companies increasingly empha- size flexibility and mass customization of products to meet the needs of particular clients. MNCs are usually driven to locate facilities in a country as a means of reaching that country’s market or lowering production costs, and the company must deal with the differences across the countries. Global organizations, on the other hand, choose to locate a facility based on the ability to effectively, efficient- ly, and flexibly produce a product or service and attempt to create synergy through the cultural differences.

This creates the need for HRM systems that encourage flexible production (thus presenting a host of HRM issues). These companies proactively consider the sociocultural, political, economic, and technological systems to determine where production facilities can be located to provide a competitive advantage. Global companies have multiple headquarters spread across the globe, resulting in less hierarchically structured organizations that emphasize decentralized decision making. This results in the need for HRM systems that recruit, develop, retain, and use employees who are competent transnationally.

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Transnational. Finally, a transnational corporation attempts to achieve the lo- cal responsiveness of a multinational corporation while also achieving the effi- ciencies of a global firm. To balance this “global/local” dilemma, a transnational uses a network structure that coordinates specialized facilities positioned around the world. More specifically, transnational corporations use geo-diversity to great advantage, placing their top executives and core corporate functions in different countries to gain a competitive edge through the availability of talent or capital, low costs, or proximity to their most important customers. Of course, it is all made possible by the Internet, as improved communication facilitates an inte- grated global network of operations.

By using this flexible structure, a transnational provides autonomy to inde- pendent country operations but brings these separate activities together into an integrated whole. For most companies, the transnational form represents an ideal, rather than a reality. McDonald’s is an example of a transnational corporation, especially with culture-specific food items, like India’s vegetarian McAloo Tikki, the McKebab in Israel, or a Hawaiian Deluxe Breakfast complete with span, rice, eggs, and hash browns. With over 31,000 restaurants across 119 countries serving 58 million people each day, it makes sense that McDonald’s overseas revenue makes up nearly 65 percent of their total revenue, and that they cater McDonalds’ core burger-fries-and-shakes menu to local tastes (Johnson, 2011).

The development of transnationals has led to a fundamental rethinking about the nature of a multinational company. Does it have a home country? What does headquarters mean? Is it possible to fragment corporate functions like HRM glob- ally? To be sure, organizational structure directly affects all HRM functions from recruitment through retirement because to be effective, HRM must be integrated into the overall strategy of the organization. Indeed, from the perspective of stra- tegic management, the fundamental problem is to keep the strategy, structure, and HRM dimensions of the organization in direct alignment (See Briscoe & Schuler, 2012) while being respectful of local country laws or regulations.

GLOBALIZATION AND IMPLICATIONS AND IMPACTS FOR HRM IN THE FUTURE

Entry into international markets creates a host of HRM issues, challenges, prob- lems, and opportunities that must be addressed by HRM professionals and other organizational members if a company is to not only survive but also thrive in a global environment. Once the choice has been made to compete in a global arena, companies must seek to manage employees who are sent to foreign countries as well as local employees. And this results in another issue facing international organizations, the extent to which their HRM practices should either ‘converge’ worldwide to be basically the same in each location, or ‘diverge’ to be differenti- ated in response to local requirements. There is a natural tendency for managerial traditions in the parent company to shape to the nature of key decisions, but there are strong arguments for giving as much local autonomy as possible in order to

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ensure that local requirements are sufficiently taken into account. (This is known as the global/local dilemma) (see Andrews, 2011). Convergence may be increas- ing as a result of the following factors:

• The power of markets • The importance of cost • Quality and productivity pressures • The development of like-minded international cadres • The widespread practice of benchmarking ‘best practices.’

However, before focusing on these challenges it is important for HRM profes- sionals to first understand what is meant by international human resources man- agement (IHRM) and the different levels of participation in international markets. This is especially important because as noted previously a company becomes more involved in international trade, different types of HRM issues, challenges, problems, and opportunities arise.

Broadly defined, global or IHRM is the process of procuring, allocating, and effectively utilizing human resources in an international business. More specifi- cally, global or international human resource management (IHRM) is the process of employing, developing and rewarding people in international or global organi- zations. It involves the world-wide management of people, not just the manage- ment of expatriates. An international organization or firm is one in which opera- tions take place in subsidiaries overseas, which rely on the business expertise or manufacturing capacity of the parent company. Such companies or organizations bring with them their own management attitudes and business styles. HRM pro- fessionals of such organizations cannot afford to ignore the international influ- ences on their work.

IHRM involves a number of issues not present when the activities of the com- pany or organization are confined to one country. For example,

• The variety of international organizational models that exist • The extent to which HRM policy and practice should vary in different coun-

tries. (This is also known as the issue of Convergence and Divergence). • The problem of managing people in different cultures and environments. • The approaches used to select, deploy, develop and reward expatriates

who could be nationals of the parent company or ‘third-country nationals’ (TCNs)—nationals of countries other than the parent company who work abroad in subsidiaries of that organization.

How Does Globalization Affect HRM?

Globalization has made us a multicultural society which has implications on HRM professionals and their function in a company’s host and other countries. There are four theoretical frameworks that can help HRM professionals and other

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company employees explore the influences on HRM across international bound- aries, including: cultural, institutional, universal and contingency perspectives (White, 2015).

The cultural perspective suggests there are clear cultural differences between nationalities and these should be recognized. International corporations which accept and recognize these cultural differences in managing employees through HRM practices will be successful in their host countries.

The institutional perspective accepts there are differences that need to be un- derstood and recognized within societies and these have an impact on the HRM practices, but it rejects the concept that certain practices, such as recruitment and selection, performance management and reward lead to improved organizational performance as these practices may mean different things within different societ- ies.

The universal perspective approach claims that certain HRM practices, such as performance management, recruitment and selection and reward lead to higher organizational performance. It has been suggested that HRM practices that are successful in the home country should be adopted into the host country (March- ington & Wilkinson, 2012). A criticism of this viewpoint is that it does not take into account internal and external factors, such as the characteristics of the orga- nization or the culture of its host country (White, 2015).

Finally, the contingency perspective depends on both the internal and external factors of an organization for the take up of HR practices. The key features for HRM are the location of the organization, the product market, the organizations life cycle stage and if the organization is privately owned or a joint venture. Each of these factors will have an effect on HRM, for example where the organization is based will depend on the HR practices and policies it deploys.

Impacts and Implications on HRM

Given the above one can argue that the impacts and implications on HRM in global or international or multinational corporations depends on the type of orga- nization, it’s product life cycle and the core belief of its hierarchy (Marchington & Wilkinson, 2012). Edwards (2011) takes this view further and outlines that the influences are categorized into home country/country of origin effects, dominance effects, international integration effects and host country effects.

The home country/country of origin view supports the enforcing of headquar- ter HRM practices from the home country across all countries where there is a subsidiary. All countries where there is a subsidiary for the multinational corpora- tion will adopt a single approach to HRM practices, such as recruitment and selec- tion, reward and performance management. Using this model means the global or multinational or international company doesn’t take into account local culture and practice when implementing HRM practices.

The dominance effect supports a standard approach of HRM practices across all countries for the multinational, global or international corporation as this is

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seen to be best practice internationally. Again this doesn’t take into account local culture and practices in which the international corporation operates.

The international integration effect relates to the extent at which the interna- tional, global or multinational corporations build closer relationships across dif- ferent borders. In some instances, the corporation may move their headquarters from their home country to other regional countries, adopting their exiting HRM policies while also bringing some best HRM practice from the home country.

The host country effect adopts the HRM practices and policies of the host country in which the corporation operates in. This could be due to it being too difficult to enforce the home country HRM practices and policies due to cultural differences or the practices and policies in place do not need to be changed.

Globalization is seen to be a complex and controversial subject with many supporters and critics. As briefly discussed earlier, the implications on HRM pro- fessionals and their functions for international corporations are dependent on a variety of factors. Market pressures and local influences, such as culture, have strong implications on HRM practices implemented by global corporations with research supporting the view of the complexities and different influences. It can be argued therefore that there is no one best fit for HRM practices for all organiza- tions across the globe, but there are some best fit processes that can be incorpo- rated along with the local culture and business practice.

Today’s organizations are becoming more international and having systems, policies and process in place to be able to deal with this changing landscape of a host companies’ workforce is paramount. A system, for example, for employ- ees that supports multiple language and different data formats will help improve engagement as employees can manage their own data in their native language. This also enables organizations to roll out employee self-service access to other countries, as well as providing non-host country nationals who work for the cor- porations to use the application in their chosen language.

Global HRM is an umbrella term that includes all aspects of an organization’s HRM, payroll, and talent management processes operating on a global scale. As technological innovations make it easier for organizations to conduct busi- ness across the world, global expansion and accompanying HRM policies and procedures as noted earlier has become an increasing reality—if not necessity. Operating human resources across geographic and cultural boundaries can often prove difficult for global organizations. Nonetheless, with the widespread use of technology, the ability to communicate with anyone around the world and access to new and varied markets, international HRM issues like those briefly discussed below are important for HRM professionals to grasp.

Language. As briefly noted earlier, one of the more obvious effects of work- force globalization is the need for language services such as translation. Employ- ees from foreign countries who speak different languages often must travel to meet or communicate with others inside the organization. This has caused more companies to hire foreign language translators. Translators help employees from

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different countries communicate during meetings or at events. They also help U.S. employees traveling to foreign countries interact with the local employees, part- ners and customers.

Culture. Developing a global organizational culture is much more complex than building one domestically. The point of a common culture is that employ- ees share norms and values. When a corporation’s employees come from varying cultures themselves, they inherently have distinct differences in their own view of work, communication and other aspects of the company. Thus, HRM profes- sionals must work diligently to train employees on cultural sensitivity and find common points shared by employees throughout the organization. Virtual work teams often are used to promote cross-cultural teamwork.

Localization. Even while trying to create a global culture, HRM professionals often have to emphasize localization in each country. This correlates with strate- gies used by companies as they enter foreign markets and try to build good rap- port with local communities. This means having strong hiring and training pro- cesses at national and local levels and compensation and motivation systems that fit well with each country of operation.

Compliance with International Laws. One effect of globalization on HRM is the need for businesses to understand and apply the laws of many different jurisdictions to the particular business. The federal government sets out a number of tax and labor laws that businesses operating in the United States must comply with, but there may also be local and regional laws that apply to companies that operate in different states or different countries.

As companies decide to expand into the global marketplace or as they hire employees from diverse geographic and cultural backgrounds, they may have to adapt to new labor laws and tax liabilities. Doing business in Europe, for example, will require the firm to pay value added tax. Hiring employees at branch locations in different locations might change the requirements on minimum wage, tax al- lowances or working hours. Also, hiring employees who are non-naturalized US citizens might require HRM to apply for work visas and report economic data to the federal government. Compliance with international law can be an issue for companies that have little to no experience in the global environment, because these laws tend to be complex and sometimes difficult to implement. Keeping well-informed of the legal requirements for the business’s operations can help al- leviate some of this complexity. Therefore, understanding a countries’ laws is vi- tally essential to the organization because any breach of them will have a serious impact not only on the business’s financial well-being but also on its reputation.

Diversity Recruitment & Cultural Diversity. Globalization makes for a larger labor pool from which to choose, but it also increases the possibility of language and cultural barriers in the recruitment process. If the company does not address such barriers, it can make the recruitment process increasingly time- consuming and difficult. HRM professionals must adapt to the different customs and cultures when hiring employees in different countries. Language barriers also

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may necessitate hiring bilingual employees and adapting employee documents, such as employee manuals and training materials, into different languages.

Globalization also means that companies of all sizes are now interacting with customers and stakeholders from diverse cultures, languages and social back- grounds. In response, many HRM professionals seek to hire employees from equally diverse backgrounds. Companies engaging in this diversity recruitment recognize the value of having people on staff that their customers can relate to, and they know that having a team of diverse people contributes to the range of ideas and influences within the organization.

Successful diversity recruitment in international HRM is dependent upon un- derstanding and maintaining cultural diversity. Working with people from differ- ent locations or from different cultural backgrounds means adapting the compa- ny’s work style to new ideas, new ways of communicating and unfamiliar social practices. If the company hires an employee from England, for example, the em- ployee might have different ideas about how to manage employees or on how to run technology processes based on their own experiences back home. Being open to new work styles and cultural differences is the hallmark of cultural diversity in HRM.

Benefits and Compensation. Benefits and compensation are the backbone of any HRM strategy, but in international HRM, benefits and compensation are even more important in focusing on the work-life balance of employees. The idea behind work-life balance is to provide employees with programs and initia- tives that improve both their personal and professional lives. This is considered part of international HRM, because many multinational companies have already implemented programs such as flexible working time, paternity leave, extended holidays and on-site childcare. In fact, many nations around the world, including much of Europe, mandate these programs by law. Implementing them on the lo- cal scale is one of the challenges and, ultimately, rewards of international HRM.

Training and Development. Related to the idea of benefits and compensation in international HRM are training and professional development programs. Train- ing programs typically encompass in-house seminars and meetings designed to give employees on-the-job knowledge of skills that are important to doing busi- ness globally. HRM might offer language classes to expatriates, for example, or a company might host language classes to give its call center staff an edge in tele- phone sales. It might also teach its employees how to use a new global software platform. This emphasis on training seeks to give the company a competitive edge in the global marketplace by honing the employees’ diversity emphasis.

Professional development is concerned with providing employees opportuni- ties to achieve their career-related goals and very often encompasses the “extra” training that HRM provides to its employees, such as providing them resources to earn a college or university degree, allowing them to attend networking events and conferences, global training seminars and other specific competency-based programs. Professional development also helps expatriates, for example, to hone

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their skills in global marketing, international business development and finance trends. Professional development is important to globalization because it creates a win-win situation. The employees feel as though the organization is concerned with providing a range of skills and competencies for their employees. Likewise, the organization benefits from the added skills and connections that the employees who take advantage of professional development programs acquire.

Impact of Globalization on the HRM Function and Professionals

As globalization continues to expand, the functions within global or interna- tional companies all are impacted. It is not unusual for employees to fear being replaced by a cheaper workforce overseas and executives are required to learn the various cultural differences and regulatory environments in which they operate. But in the author’s view none of the departments and employees are affected as much as HRM and professionals that must manage the workforce at home and abroad. Technology is available that can help HRM professionals manage the pro- cesses involved in globalization, but there are downsides for HRM professionals and other leaders and managers who must deal with languages, time differences and employment rules around the world.

Job and Roles Redefined. One of the positive aspects of globalization on HRM is redefining the role of the HRM professional within global organizations. Instead of managing the minutia involved with the administration of employee benefits and payroll, which continues to be outsourced, HRM professionals in- creasingly play a larger role in the company by being involved with strategic plan- ning and developing strategic HRM programs to, for example, train and improve the diverse and global workforce.

The Potential for Recruitment Grows Substantially. Like in many of their domestic organizations HRM professionals are no longer bound by the physical boundaries of their local area when their company moves into the global playing field. As a result, HRM’s recruitment efforts become easier and more diverse as they have a wider pool of talent from which to draw. The larger employee pool is especially notable in the higher-skilled categories where there often is a gap be- tween supply and demand. Businesses may thrive with competitive products and services, but cannot survive globally without the right mix of talented employees that HRM professionals are responsible for identifying, recruiting, selecting, on- boarding, training and developing, and compensating, and so on.

Critical HRM Technology Changes Occur. For companies that retain bene- fits, compensation, payroll deductions, employee training and performance evalu- ations in-house, HRM professionals increasingly are tasked with operating new computer systems required to manage a global workforce. Hundreds of vendors can provide global companies with the appropriate software programs to deal with the numerous HRM tasks, but someone still has to evaluate the appropriate fit for the corporation and operation of the systems. HRM professionals have to

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expend considerable time and effort to learn new platforms when their companies rely on the latest software to manage a worldwide workforce.

Challenging Cultural Differences. Perhaps one of the most challenging as- pects of globalization on HRM professionals is the need to discover and learn the cultural differences at play with their new global workforce. HRM professionals must learn how best to communicate company goals and missions, integrate di- verse value systems into their companies and coordinate the activities of all their employees to achieve their goals. HRM professionals in the home office must also build working relationships with frontline managers to communicate company policies, ensure new hires understand the parameters of their employment and translate company directives for workers. HRM professionals need to develop an understanding of the living conditions and training processes in other countries and follow foreign employment regulations, labor relations laws and organized labor issues, as well as figure out how to create effective performance appraisals often from afar. More than ever, HRM professionals must partner with and rely on the local supervisors or managers on the ground to communicate vital HRM information, rather than relying on their own training and abilities.

CONCLUSION

Globalization is a polarizing subject that is not easily defined. Globalization al- lows for increased competition, lifts barriers to entry for developing countries, helps to promote economic growth and works to unify the world’s economies. Globalization provides opportunities for businesses to invest in foreign markets and to gain access to new capital. A key concern in achieving financial results through globalization is the effect it has on a firm. Bringing employees together despite distance and cultural differences is a challenge company leaders and HRM professionals must continue to tackle.

As is the case with domestic organizations, the HRM of company is an integral party of its success. HRM for todays and tomorrow’s global corporation that oper- ates in multiple countries presents many cultural and socio-economic challenges. Globalization has many positive and negative effects on any global or interna- tional corporation’s HRM function and professionals.

Global HRM efforts will continue to present particular issues, challenges and opportunities for HRM professionals. There are a number of best practices avail- able to HRM professionals and other organizational leaders for managing an or- ganization’s most valuable resource—it’s people at work. Much of what has been discussed throughout this chapter and others in this book on HRM can be ap- plied to both domestic and internationally successful organizations that are able to sustain and prolong their success through the way they manage their human resources.

While there are many similarities, global HRM is distinct from domestic HRM because of its broader perspective, the greater scope of activities included in global HRM, and the higher level of risk associated with global HRM activities.

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Today’s and tomorrow’s global organizations will continue to take any one of a number of different approaches to HRM, with the choice depending on political and legal regulations; the managerial, educational, and technological develop- ment in the host country; and differences between the home and host cultures.

HRM professionals will need to increase their skill and competence in working with other organizational members to successfully coordinate global or interna- tional HRM operations in a variety of countries, each with its own local cultural, legal, and traditional influences. In the years to come HRM professionals must ensure that their organization’s policies are flexible enough to allow for these lo- cal variations while not losing sight of the fact that such policies also must be de- veloped to help achieve the overall strategic global objectives of the corporation.

Increased care must be taken by HRM professionals in developing the various HRM activities to ensure that they take into consideration each local country’s cultural and legal nuances. Staffing, training and development, performance ap- praisal, compensation, workplace safety, management of labor relations and the use of expatriates versus locals are of paramount concern to successful global HRM (see Cascio, 2019; Mello, 2019; Mathis et al., 2017; Noe et al., 2019; Snell & Morris, 2019).

Like all of the other HRM activities discussed in this book, HRM profession- als and other managers and leaders must recognize the important role that glo- balization and its impact and implications for its employees can have on their organization’s success in the international arena. The collective HRM activities all play important roles in developing and sustaining competitive advantages for a global organization. Today and in the future the organization’s ability to attract, develop, and retain a talented workforce will be a critical factor in developing a high-performance, successful international organization.

The ‘universalistic’ approach to HRM must be rejected by HRM professionals as the basic functions of HRM are given different weights among countries and are carried out differently. In addition, the cultural differences among countries have produced the slogan in global or international HRM “Think GLOBALLY and act LOCALLY.” This means that an international balancing act is required by HRM professionals and their organizations, which leads to the fundamental assumption made by Bartlett and Ghoshal (1991) that balancing the needs of co- ordination, control and autonomy and maintaining the appropriate balance are critical to the success of the multinational company.

In concluding this chapter it is important for HRM professionals to remember that the recent uncertainty in global politics and the continued business risks mean that global companies and their HRM professionals will continue to face some difficult challenges in the coming years. HRM professionals will need to increas- ingly be aware of the many factors that significantly affect HRM in a global en- vironment, such as political, economic, sociocultural, and technological, and that they understand how these factors come into play in the various levels of global participation. Finally, it requires that HRM professionals be adept at understand-

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ing the impact and implications of globalization on the broader corporation, its employees and on their role in helping to effectively manage the company’s most important resource, its people, to gain and sustain competitive advantage in to- day’s and tomorrow’s global marketplace.

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Human Resources Management Issues, Challenges and Trends: “Now and Around the Corner”, pages 163–184. Copyright © 2019 by Information Age Publishing All rights of reproduction in any form reserved. 163

CHAPTER 8

ATTRACTING AND RETAINING MILLENNIALS

Is Servant Leadership the Answer?

Shannon O. Jackson, Pamela Chandler Lee, and Jonathan Shoemaker

According to the Pew Research Census Bureau, more than a third of workers today are millennials, born between 1981–2000 (Fry, 2015). Research shows that this large and growing sector of the workforce expects a different work experience than their predecessors, such as GenXers and baby boomers. Undoubtedly, mil- lennials are the most educated, ethnically diverse, technologically competent and perhaps the most innovative generation in the workforce. Thus, as Mabrey (2015) explains, they want a work environment that is “less formal, less concerned with customs and traditions…honest about [the] view that excessive work demands might not be worth the cost of advancement” (pp. 1, 3). Significant to our discus- sion is the reporting that millennials also “look for meaningful work in a col- laborative environment… [and] a more sustainable work/life balance” (Mabrey, 2015, p. 2). Additionally, since millennials are in constant search of such balance, according to Taylor and Kester (2010), more than 65 percent of millennials plan to switch jobs throughout their careers (p. 48).

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So then, the question becomes, how do organizations attract and then retain this ever more important sector of the workforce? As discussed by Reuteman (2015), millennials are comfortable working with teams and having input; they want to feel a part of something bigger than themselves. However, in their desire for work-life balance, participative management, and immediate feedback, they are likely to leave an organization if they become dissatisfied (Ferri-Reed, 2014; Lowe, Levitt, & Wilson, 2008; Malcolm, 2016). As a matter of fact, the number one reason millennials leave their organizations is because they don’t feel valued or respected by the people for whom they work (Reuteman, 2015). As Reuteman (2015) explains, “People don’t leave companies; they leave managers… they’re not mad at the building…they’re mad at the people they work with on a day to day basis… they leave managers” (p. 8).

Consequently, this research emphasizes the significance of effective leadership for creating an organizational culture that attracts and retains millennials. In other words, if managers implement a leadership style that is consistent with millenni- als’ perspective of work, these workers will not only be interested in joining the organization, but they may also be more committed to staying with the company for the long-haul. Like the members of other generations, millennials have a desire to contribute and make an impact in their companies; they are motivated by chal- lenging work that allows them to grow and develop, and they especially “want to be part of innovative and energetic organizations that will value their ideas and encourage their creativity” (Lowe, Levitt, & Wilson, 2008, p. 47). However, mil- lennials generally have a different view of loyalty to organizations than other age groups. If the work environment does not meet their needs, they are more likely than other generations to leave the company and seek opportunities elsewhere (Fries, 2018; Lowe, Levitt, & Wilson, 2008; Malcolm, 2016). Additionally, these workers seek confirmation that their work and their contributions are appreci- ated. If this feedback is not readily provided by their leaders, they are likely to disengage from their work, from their coworkers, and then from the organization.

Thus, this essay proposes that servant leadership is the most appropriate lead- ership style for engaging millennials and meeting their need for participation, teamwork and serving a vision larger than themselves. Robert Greenleaf’s theory of servant leadership, also referred to as “leadership upside down” (Daft, 2010, p. 176), is “based in ethical and caring behavior...[which] enhances the growth of people, while at the same time improving the caring and quality of our many institutions” (Spears, 1996, p. 33). As Barbuto and Gottfredson (2016) insist, “millennials want what servant leaders are suited to provide, which is a leader who focuses on the developmental needs and human capital improvements of its employees, even beyond the needs of the organization or the leader” (p. 2).

In this chapter, we will first discuss the millennial generation and their pres- ence in the workplace. We will then provide a review of leadership research and discuss the relevance of leadership for creating an organizational culture which respects, attracts, and engages millennial workers. This analysis will emphasize

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the principles of servant leadership and its relevance for the millennial genera- tion. We will then recommend specific strategies for attracting and retaining this expanding sector of the employee population.

THE MILLENNIAL GENERATION: WHO ARE THEY?

For the last few decades, the millennial generation has been the topic of extensive research, discussion and speculation, in popular press as well as academic publi- cations, by managers and practitioners, as well as researchers and scholars. The similarities and differences between millennials and other generations have been lauded, opposed, celebrated, and even denied. Some experts insist that millenni- als reflect some of the most unique—and possibly the most frustrating—habits in the workplace. There are others who maintain that, other than their age, millen- nials are not that much different from other generations (Costanza, 2018). In an article for Entrepreneur magazine, Christian Brucculeri, CEO of Snaps, a mobile platform that creates branded content, said, “The same basic principles apply to the millennial generation as to any other age group. Some people are inspired, excited, hardworking, humble and curious. Some are entitled, unfocused and po- litical. Not everyone is great!” (McCammon, 2016, para. 18).

Nevertheless, while some of the most sweeping generalizations about millen- nials may not apply to everyone in the age group, there is a great deal of support for generation theory, which represents generations as social constructs in which sets of ages are defined by historical or social events (Costanza, Badger, Fraser, Severt, & Gade, 2012; Strauss & Howe, 1991; Twenge, 2010). Although the de- scription of each cohort varies widely, prevailing research defines baby boomers as those as born between about 1945 and 1964, GenXers were born between 1965 and 1981, and millennials, also referred to as Generation Y, were born between 1981 and 2000 (Costanza et al., 2012). Millennials are referred to as tech-savvy multi-taskers, who desire instant gratification and recognition, work life balance, flexibility, transparency, career advancement, and team-oriented tasks (Abbot, 2013; Malcolm, 2016).

Millennials also seem to be more comfortable with technology than any other generation in the workforce. As a matter of fact, it is this familiarity with technol- ogy which defines the key features that set millennials apart from other genera- tions. Millennials represent the generation that grew up with tablets, laptops, the Internet, and social media as norms in their environment. Thus, immediate access to information and connection with others may inspire the need for teamwork, collaboration, and immediate feedback (Green et al, 2005; PWC, 2011). Along with an appreciation for technology and social media, millennials seek an organi- zational culture which encourages innovation and creativity, and which provides the resources and support for them to be their best selves. Leadership has the re- sponsibility for establishing and maintaining such a culture in order to attract and retain this growing segment of the workforce.

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A REVIEW OF LEADERSHIP

Analyzing the relevance of leadership for engaging millennials in the workplace is a worthwhile endeavor. As this discussion will confirm, leadership influences the culture, climate, and even the performance of an organization more than any other single component. Historical analyses reflect a scholarly interest in the lead- ership construct since the 1800s. An examination of peer-reviewed articles reveals hundreds of definitions from a variety of perspectives. While there are some dis- tinctions in these viewpoints, there are also some similarities. For example, the most oft-cited definitions of leadership consist of the following components: Power or influence

• Communication • Inspiration • Purpose • Visioning • Change • Outcomes • Objectives • Process • People or relationships (Daft, 2010; Rost, 1993; Yukl, 2013)

Some of the most basic functions of leadership, or what leaders do in their organizations include:

• Guiding the activities of the organization to meet a common objective • Directing and facilitating programs and opportunities for organizational

profitability • Empowering followers to support the mission and vision of the organiza-

tion • Training, developing, and supporting followers in their roles • Influencing the behavior of followers, and • Establishing and maintaining the organizational culture (Eberly, Johnson,

Hernandez, & Avolio, 2013; House & Aditya, 1997; Rost, 1993; Schein, 2010)

Significantly, contemporary research consistently emphasizes the importance of leadership for organizational performance (Center on Leadership, 2009; Yukl, 2008). According to Citigroup (2007), some of the most well publicized corporate failures have pointed to the critical role of leadership in the success or failure of organizations. Kaiser, Hogan, & Craig (2008) concluded that as much as 15–45% of a firm’s performance can be attributed to leadership functions. These research- ers conducted a meta-analysis of studies investigating managerial succession. Through various methodologies, consistently, the research showed a relationship

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between leadership and organizational performance. Specifically, changes in lead- ership were closely followed by changes in the organization’s performance.

Studies have also linked organizational performance with organizational or corporate culture (Gordon & DiTomaso, 1992; Kotter & Heskett, 1992). Orga- nizational culture generally refers to the pattern of shared assumptions, beliefs, and values of its members (Schein, 2010; Trice & Beyer, 1993). Schein (2010) further emphasizes that this pattern is then “taught to new members as the correct way to perceive, think, and feel” (p. 18) about organizational problems. Some researchers have postulated that one of the most—if not the most—important role of leadership is to establish and maintain the culture of the organization. As a matter of fact, Schein (2010) contends that leadership is manifested “when we are influential in shaping the behavior and values of others…and are creating the conditions for new culture formation” (p. 3).

Scholars assert that leadership has a more significant impact on organizational culture than any other element of a company (Bass & Avolio, 1993; Schein, 2010; Trice & Beyer, 1993). It is important to note that the influence of leadership not only refers to top level leaders, such as the Chief Executive Officer (CEO) of a company, but also mid-level managers and supervisors performing the function of leadership. In his seminal work examining leadership and organizational cul- ture, Schein (1985, 2010) identifies specific mechanisms or tools that leaders use to teach and then reinforce the values, beliefs, and assumptions of the organiza- tion. Schein refers to these tools as Primary Embedding Mechanisms and Sec- ondary Articulation and Reinforcement Mechanisms. The Primary Embedding Mechanisms represent “the most powerful daily behavioral things that leaders do” (Schein, 2010, p. 236); the Secondary Mechanisms represent “the more formal mechanisms that come to support and reinforce the primary messages” (Schein, 2010, p. 236). Importantly, the secondary mechanisms are only effective if they are consistent with the primary mechanisms. Schein identifies the following lead- ership behaviors as the Primary Embedding Mechanisms:

• What leaders pay attention to, measure, and control on a regular basis • How leaders react to critical incidents and organizational crises • How leaders allocate resources • Deliberate role modeling, teaching, and coaching • How leaders allocate rewards and status • How leaders recruit, select, promote, and excommunicate

Thus, according to Schein (2010), new employees learn more about the culture of their organizations from the daily behaviors of leadership than they learn from formal training or orientation sessions (p. 250). Significant for this research is the leader’s role in recruiting, rewarding, and retaining employees.

Because millennials are assigned to and work in various levels and depart- ments throughout an organization, the organizational culture must reflect an ap- preciation for millennials and their contributions. In other words, an organiza-

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tional culture which embraces millennials’ perspective of work must permeate the company. The role of leadership for establishing and maintaining organizational culture cannot be ignored. The following subsections will briefly discuss the pro- gression of leadership research from the 19th through the 21st centuries.

Trait Approach

The scholarly and practical appreciation for the relevance of leadership for or- ganizational performance has evolved through more than a century of research. In the early days, scholars presumed that the basis for leadership was found in a set of innate traits such as drive, a desire to lead, honesty, integrity, self-confidence, intelligence, job-relevant knowledge, extraversion and a leaning toward guilt as a way of encouraging a sense of responsibility for others (Kirkpatrick & Locke, 1981). Hundreds of empirical studies investigated the correlation between traits and a propensity for leadership; and traits and leadership effectiveness. The re- sults of these studies “…failed to find any traits that would guarantee leadership success” (Yukl, 2013, p. 12). Scholars concluded that the narrow view of leaders as being born did not explain the relevance of followers, nor did it acknowledge the importance of the leaders’ behaviors for organizational performance.

Behavioral Approach

In the late 1930s and early 1940s, several researchers demonstrated that a per- son’s behaviors are more significant for understanding the function or practice of leadership than his innate traits. The implications of these findings indicated that leadership could be learned. For example, in 1939, Lewin, Lippett and White led a research project commonly known as the Iowa State Studies, published in the Journal of Social Psychology. This seminal research found that leaders tended to display one of three leadership styles: (1) a democratic style, in which follower participation was a key element; (2) an autocratic style, in which decision making was centralized rather than participative; or (3) a laissez-faire style, in which the leader relegated responsibility for decision making to followers. Lewin, Lippett and White found that the democratic style, in which followers were empowered and encouraged to participate, was correlated with the most positive organiza- tional outcomes (Lewin, Lippett, & White, 1939).

A decade later, in the 1950s, Stogdill and Coons led the Ohio State Studies, which also examined the behavioral tendencies of leaders. The research showed that there were two dimensions involved in how leaders behaved: (1) they held a high consideration for followers’ ideas and feelings, or (2) they were more con- cerned with the structure through which relationships were oriented toward com- pleting work tasks. Stogdill and Coons discovered that having a high consider- ation for employee needs and feelings, combined with a high recognition for the importance of a structure in which job completion was paramount, was the most effective leadership style (Stogdill & Coons, 1951).

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Research in the 1960s brought us the University of Michigan studies by Kahn and Katz. These studies followed a similar line of thought to the Iowa State and Ohio State studies, in that Kahn and Katz examined the behavior of leaders in terms of whether they were primarily employee oriented or production oriented. Again, the question of whether followers’ needs mattered for effective leadership was the primary research question. Kahn and Katz found that leaders who were primarily concerned with their followers had the highest levels of productivity, and their employees experienced the highest levels of job satisfaction (Kahn & Katz, 1960).

Then in the mid-1980s, Blake and Mouton published their now famous Mana- gerial Grid, once again examining the relationship between productivity and at- tention to follower needs, wants and desires. Blake and Mouton found that leaders performed best when they demonstrated a high consideration for both people and production (Blake & Mouton, 1984).

Transforming Approach

In 1978, while leadership scholars were proclaiming the significance of rela- tionships between leaders and followers for organizational success, James Mac- Gregor Burns introduced the theory of the “transforming” or transformational leader (Burns, 1978). Distinct from transactional leadership, in which leaders and followers exchange services to meet organizational objectives, Burns suggested that effective leadership is based on trusting and mutual relationships between leaders and followers that evolve over time. He defined transforming leadership as a process through which “leaders and followers raise one another to higher levels of morality and motivation” (p. 20). In many ways, transformational lead- ership is a motivational theory, in which the leader appeals to followers’ moral values, in order to influence followers to transcend their self-interests for the good of the organization (Bass, 1985; Burns, 1978). Thus, while the theory focuses on developing and transforming individuals, the end goal is transformation in the organization to achieve organizational objectives.

Over the last two decades, transformational leadership has become the most popular and most well-regarded theory of leadership in the literature. With hun- dreds of articles extoling its virtues, transformational leadership has been cor- related with constructs such as profitability, job satisfaction, trust, emotional in- telligence, charisma, and corporate social responsibility (DuBrin, 2013; Groves & LaRocca, 2011; Rubin, Munz, & Bommer, 2005). Nevertheless, many of the leaders in these organizations are concerned about attracting and engaging millen- nials, suggesting that there may be some inconsistency between the components of transformational leadership and the needs of the millennial generation.

It could be argued that while transformational leadership appeals to followers’ morality and values, the objective of the model is organizational performance, profitability, and success. Conversely, while millennials certainly want to be com- pensated fairly, they are more concerned about work-life balance and quality of

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life (Dixon, 2016; Scalco, 2017). Interestingly, some researchers have suggested that the leader’s focus—on the organization or on the employee—is what dis- tinguishes transformational leaders from servant leaders (Chaudhuri, Kettunen, Naskar, 2015; Stone, Russell, & Patterson, 2003). According to Stone, Russell, and Patterson (2003), “the transformational leader’s focus is directed toward the organization, and his or her behavior builds follower commitment toward orga- nizational objectives, while the servant leader’s focus is on the followers…the achievement of organizational objectives is a subordinate outcome” (p. 1).

Thus, leaders who listen to their employees and demonstrate concern for their individual growth and development may be in the best position to establish an organizational culture in which millennials are valued and appreciated. As Fries (2018) asserts:

Millennials want to work with leaders who value feedback from all employees… millennials are often keenly aware that the further up the corporate food chain lead- ers are, the more they tend to lose understanding of the challenges other employees face…and tend to dismiss the validity of their experiences. (para. 9, 10)

Based on these findings, this analysis proposes that Servant Leadership is an appropriate model for recruiting, rewarding, and retaining this millennial wave of employees.

SERVANT LEADERSHIP THEORY

In the 1970s, based on an illustrious 40-year career in management at AT&T, and after reading Herman Hesse’s short novel entitled Journey to the East, Robert Greenleaf began examining the concept of leaders as servants (Spears, 1996). As a result of his research, Greenleaf concluded that “the great leader is first experi- enced as a servant to others...true leadership emerges from those whose primary motivation is a deep desire to help others” (Spears, 1996, p. 33).

Researchers have noted that the concept of leaders as servants is not original to Greenleaf. This model is seen in ancient, historic, religious and even contempo- rary leaders such as Jesus Christ, Moses, Confucius, Mother Theresa, and Martin Luther King, Jr. (Keith, 2008). It is important to acknowledge that it is not neces- sary for one to be a deity or a Saint to be characterized as a servant leader. Many successful contemporary leaders are identified as servant leaders. One of the most notable is C. William Pollard (Sendjaya & Sarros, 2002), a former executive of ServiceMaster who twice served as CEO of the firm (1983–1993 and 1999–2001). Describing himself as a person who leads with a servant’s heart:

Pollard contends that the real leader is not the person with the most distinguished title, the highest pay, or the longest tenure...but the role model, the risk taker, the servant; not the person who promotes himself or herself, but the promoter of others. (Sendjaya & Sarros, 2002, para. 50)

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Also, according to the founder and former CEO of Southwest Airlines, Herb Kelleher, Southwest was founded in 1971 based on Kelleher’s desire to serve; Kelleher insists that Southwest’s success is sustained by people “who have a pre- disposition to serve others” (Leader Network.org, 2007, para. 6). While Kelle- her has not held an active leadership role at Southwest since 2008, the airline is consistently recognized as one of the most admired companies in the world. One of the four core values which creates the foundation for the organization’s busi- ness strategy and unique corporate culture encourages employees to demonstrate a “Servant’s Heart” (Southwest, 2015).

Servant leadership is becoming widely accepted as an effective model of lead- ership for the 21st century. Servant leaders are more concerned about developing others than promoting themselves; they welcome and appreciate the importance of diversity, empowerment, and collaboration for their organizations’ success. Unlike many other leadership theories which are defined by the actions of the leader, servant leadership relates to the character of the leader who has a heart for serving and ministering to the needs of others (Carter & Baghurst, 2014).

When Greenleaf first introduced the theory in the 1970s, scholars were initially skeptical of its merits and its practicality for contemporary business. However, in the last four decades, some of the most successful leaders in the world have demonstrated a leadership style consistent with this theory. The theory has also received widespread attention in mainstream media outlets such as Fortune maga- zine and Dateline NBC. Leading scholars in the management and leadership disci- plines—such as Max DePree, Stephen Covey, Peter Block and Peter Senge—have also confirmed the positive impact of servant leadership in organizations.

Based on Greenleaf’s work, Spears (1995) identified the following 10 charac- teristics of servant leaders:

• Listening: Servant leaders listen intently to others, without prejudging • Empathy: Servant leaders know that people need to be recognized for their

unique gifts • Healing: Servant leaders recognize the opportunity to help make whole

those they serve • Awareness: Servant leaders have general as well as self-awareness; they

view situations from a perspective of ethics, power and values • Persuasion: Servant leaders build consensus rather than coerce compli-

ance • Conceptualization: Servant leaders dream great dreams; they stretch tra-

ditional thinking and are not consumed with attaining short term goals • Foresight: Servant leaders foresee and forecast the likely outcome of a

situation based on the lessons of the past, the realities of the present, and the consequences of decisions for the future

• Stewardship: Servant leaders assume a commitment to serving the needs of others, such as employees, shareholders and the wider community

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• Commitment to the Growth of People: Servant leaders believe people have an intrinsic value that is more than their value as employees or work- ers

• Building Community: Servant leaders believe true community is created among those who work in an institution as well as the institution’s external constituents

Greenleaf (1977) was careful to emphasize that the primary outcome of effec- tive servant leadership is not organizational performance: “The best test and the most difficult to administer is: Do those served grow as persons? Do they, while being served, become healthier, wiser, freer, more autonomous, [and] more likely themselves to become servants?” (pp. 13–14).

The following section discusses key strategies that today’s employers should adhere to in order to create and sustain a work environment in which the specific needs of millennials are considered primary.

RECRUITING, REWARDING, AND RETAINING MILLENNIALS

Human Resource departments exist to find the right people and to keep the right people once they are found. Among other objectives, this mission relates to three specific strategies: Recruiting, Rewarding and Retaining high-performing em- ployees. All three strategies are integrated, and, in fact, there are significant over- laps among them (see Figure 8.1).

For example, as potential job candidates are being recruited, they will want to know about the kinds of rewards they can expect, and then decide whether those rewards will motivate and interest them enough to apply for the position. Reten- tion may also be emphasized during the recruiting phase, as employees consider

FIGURE 8.1. Recruiting, Rewarding, Retaining

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joining Company XYZ for a career, and not just a job. Finally, there is significant overlap between Rewarding and Retaining, as many types of rewards are pro- vided to employees to prevent them from leaving for greener pastures.

Importantly, as Schein (2010) offers, two of the most significant leadership behaviors which establish and maintain organizational culture relate to how re- wards are allocated, and how leaders recruit, select, and promote employees. Con- sidering these leadership behaviors, we will discuss Recruiting, Rewarding and Retaining in terms of the needs of millennials and the implications for servant leaders.

Recruiting

Finding the right employees begins with good recruiting practices. Recruiting must be performed strategically, just like any other function of the organization. Thus, if the organization is focused on hiring millennials, some strategies will be more effective than others.

For example, millennials are attracted to a psychologically healthy workplace as well as a workplace that supports corporate social responsibility (CSR). Thus, when recruiting millennials, it is important to communicate that the employer values CSR and psychological health. CSR refers to the extent to which the orga- nization values protection of its environment, support of its community, and re- spect for its employees (Ferri-Reed, 2014). A psychologically healthy workplace is one which prioritizes work-life balance, professional growth and development, and recognition and involvement of all employees (Catano & Hines, 2016). All of these priorities are reflective of the characteristics of servant leadership.

In some instances, millennials were in favor of accepting lower wages if they felt the organization made a positive contribution to issues they felt strongly about (Cone Communications, 2015). Interestingly, CSR programs seem to be effective in attracting millennial candidates, regardless of whether the millennial is more strongly motivated by social concerns or making money (Catano & Hines, 2016).

Research has also demonstrated that millennials seek organizations in which the leadership provides regular feedback and is committeed to open and trans- parent communication (Ferri-Reed, 2014). This transparency should begin with providing a realistic job preview for applicants, even as early as first contact. First contact with a potential applicant could occur in person at a job fair, on the orga- nization’s employment website, or through social media. Even early-career job applicants are savvy enough to know if they are being fed a company line instead of being given realistic expectations about the job (Tucker, 2012). A realistic job preview could mean providing employee testimonials or allowing the employee to experience the organization through an interactive simulation or “try-out day” (Sabel, 2018).

Millennials are also accustomed to communication via social media. They seek an organization that is able to promote social and technological integration (Ferri- Reed, 2014). A robust website and social media presence are requirements in the

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current recruiting market. These resources are of paramount importance to mil- lennials who get much of their information from these sources. Posts to various social media platforms should be engaging and frequent, and websites should be easy to navigate and user-friendly.

Organizations that wish to attract millennials should also emphasize a healthy and responsible organizational culture in recruiting materials. Millennials gener- ally prefer an organization that is willing to offer job security and a future with- in the company (Ferri-Reed, 2014). Best Companies to Work For, such as 3M, Google, St. Jude Research Hospital, and the Walt Disney Company, tend to pro- mote this aspect of their culture (Thurman, 2016).

It is important for organizations to maintain focus on their purpose, and not just their products. Many firms complain that their work is not glamorous and, thus, will not appeal to millennials. For example, manufacturing and insurance are two critical industries that have historically been challenged to attract millen- nial job candidates (Duett et al., 2017; Putre, 2016). One solution is to focus the recruiting message not so much on what the company does, but on why the work is important and how it contributes to the community and society at large. Fully 60% of millennials said they chose their current employer to fulfill a sense of purpose above all (Islam, 2016). Millennials want to know that the work they do has significance and fulfills a need.

Finally, making it known that the organization values a culture of servant lead- ership is important for attracting millennials. This message should be a natural fit as servant leadership is congruent with many of the factors millennials value, in- cluding open, honest communication, CSR, a psychologically healthy workplace, and a focus on being purpose-driven (Marshall, 2018).

A culture of servant leadership is uniquely appealing to millennials because of their motivation to enact change that improves their organizations for the future; they want to make a difference and solve problems as soon as they begin a new job (Fox, 2015). Servant leaders who are willing to serve first and lead second are more likely to respond to the new organizational reality of volatility and complex- ity where millennials are the dominant employee population (Islam, 2016).

Rewarding

When considering Rewards, let’s call the question: Which rewards can talent acquisition and human capital management professionals offer to attract and re- tain millennials? Perhaps a better question is whether there is one set of rewards that will appeal to every millennial. The likely answer is, no. The first rule of Total Rewards is an understanding that every employee is motivated differently; the key is to determine which incentives will be attractive to the majority of the work- force. For example, employers are realizing that compensation packages must be flexible to appeal to the largest number of employees with different needs and motivations. A recent compensation survey indicated that employees prioritize flexibility and choice in benefits offerings (Nyce & Gardner, 2017).

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It is also important to note that there can be just as much diversity within a gen- eration as there is between generations (Costanza, 2018). Certainly, some benefits appeal to some age groups more than others, but most employees—not just mil- lennials—would prefer work that is flexible and offers some level of job security.

Typically, employers offer a combination of three types of rewards: Direct Fi- nancial Compensation, Indirect Financial Compensation and Non-financial Com- pensation. Direct Financial Compensation is easy to peg: here we’re talking about wages, tips, commissions and bonuses, any tangible reward the employee earns that can be spent immediately. Indirect Financial Compensation is any tangible reward that has a measurable monetary value, but is spent on behalf of the em- ployee, instead of being paid directly to the employee. These include employer subsidies of health care benefit premiums, administrative fees and matches for retirement plans, use of a company car, a housing allowance, or free meals. The employee doesn’t receive the money for these benefits, but she does enjoy the reward that the employer is paying for on her behalf. Even paid time off can be considered Indirect Financial Compensation. While employees get paid directly when they call out for sick, personal or vacation time, the employer is potentially paying for someone else to cover the absent employees while they are out.

Direct Financial Compensation (a.k.a. pay) will always be a popular incentive for employees, and millennials are no exception. When asked about their priority for Rewards, at least 44% listed competitive wages as one of their most important priorities (Zimmerman, 2016). However, pay is not a generational motivator, but an early career motivator. Every past generation has hoped for a high-paying job after years spent perpetually pinching pennies and eating Ramen noodles while in school or training. This perspective can be particularly true when recent graduates are carrying historically high tuition and student loan debt (Zimmerman, 2016).

However, in a departure from previous generations, millennials don’t neces- sarily only prioritize pay. Pay seems to run a close race with opportunities for advancement and professional development (Malcolm, 2016). Millennials rated “advancement potential” as their second highest priority in what made an industry desirable; their first priority was availability of jobs (Duett et al., 2017). Thirty percent of employees described “building a long term career” with their employer as a major career goal (Whitten, 2017). Consistent with advancement must come a focus on professional and personal development. Eighty-nine percent of millenni- als reported that they want to be constantly learning on the job (Islam, 2016). The organization must be intentional about offering their millennial employees formal and informal development opportunities (Fox, 2015). The dual motivations of pay and advancement underscore the importance of balancing a Total Rewards pack- age with both Direct and Indirect Financial Compensation. Additional Indirect Financial incentives that are likely to be attractive to millennials include tuition reimbursement, which many organizations have been offering for decades. A few forward-thinking companies are even offering student loan debt repayment; this

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benefit is especially important to millennials, who graduated with an average of $37K in debt in 2016 (DiCamillo, 2017).

However, the jury is still out about which benefits millennials value most. Some surveys of rewards for millennials suggest that health care benefits are important (Zimmerman, 2017). This finding can be partially explained by rising health care costs throughout the U.S., and the challenge of starting a family while also recov- ering from student loan debt. Allowing more flexibility for employees to custom- ize health care plans and benefits also appeals to millennials who are interested in optimizing the benefits they will use most (Gilmore, 2017). Cafeteria-style ben- efits plans, where employees can choose from a wide range of services that fit their needs, are most desirable. Other sources recommend early vesting periods for defined contribution plan matches, a budget allotment for technology tied to each employee, and time for outside projects and innovation (Kruman, 2016).

Ultimately, millennials are also concerned about fairness and equity. More than ever, employees are able to understand their comparable worth to employers through readily accessible commercial and government sources such as salary. com, glassdoor.com, the Bureau of Labor Statistics and the U.S. Department of Labor’s Occupational Network Online (O*NET). Millennials seek pay transpar- ency and information about how their compensation is determined (Dixon, 2016). Sharing this information with employees is simply a good business practice; if compensation is based on reasonable and fair standards, there’s no reason those standards should not be shared.

Of course, some millennials would like to be rewarded with individualized perquisites. Perks like ping-pong tables, free snacks, nap pods and the opportunity to bring pets to work fit this category. These are only some of the high-end benefits that are trumpeted in popular press as evidence that millennials are entitled. Man- agement may believe that these perks are a waste of time and resources. However, there are two major problems with this mentality. First, the price-tags of these perks to the employer are in reality not that high. As a matter of fact, the price can be considered low compared to the costs of health care premiums, higher salaries, and better matches toward deferred contribution plans that previous generations have come to expect. The second problem is that research continues to show that these perks actually work to lower employee stress, increase organizational loy- alty, and improve contextual performance (Oden-Hall, 2017).

Many employers believe that they must throw money at employees (whether directly or indirectly) in order to attract millennials. While some attention must be given to Financial Compensation of both types, it is becoming clearer that sup- plementing rewards with Non-financial Compensation may be the most effective way to motivate employees, particularly millennials. Non-financial compensation includes those elements that are difficult (if not impossible) to put a price on. These include aspects of work that are often built into the organizational culture, such as a high degree of work-life balance, high quality of life at work, feeling valued, performing meaningful and challenging work, and having flexibility and

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autonomy. The good news is these benefits are low or no cost for the employer. The bad news is they can be difficult to effectively implement without significant attention to organizational development (Sommer, 2011).

Work-life balance is an important non-financial concept. Rather than repre- senting one specific benefit, this concept refers to policies that allow employees to better attend to non-work responsibilities that in the past may have been im- possible to address. Flexible hours, telecommuting or working from home, and a culture that values productivity over face-time are examples of perks that are essentially free to the employer, but can significantly improve employee perfor- mance, efficiency and even health (Gaskell, 2016). Establishing for job applicants that the organization encourages flexible scheduling can be a useful recruiting tool (Scalco, 2017).

Quality of life at work is an important consideration that can attract millenni- als. It is imperative for employees to feel valued by their organizations (Dixon, 2016; Malcolm, 2016). Respect from supervisors and management is one compo- nent of feeling valued. Millennials expect direct, straightforward communication and list respectful treatment as one of their top priorities (Gilmore, 2017). Mil- lennials also appreciate regular constructive feedback that contributes to profes- sional growth. Quality of life can also refer to how much control the employee has over his or her own work. Research shows that millennials who received regular feedback from their supervisors were significantly more engaged at work than their peers (Marshall, 2018). Millennials also prefer significant autonomy and the ability to self-manage their workload whenever possible (Islam, 2016). A physical example of how employers are emphasizing quality of life is the trend toward a less-traditional and more comfortable and collaborative work environ- ment, eliminating cubicles and desks in favor of common areas and fewer walls (Islam, 2016).

Servant leadership, while not a reward on its own, is closely related to many of the elements of Non-financial Compensation. Servant leaders will strive for inclusion of employees in decision-making, emphasize empowerment and auton- omy, and embrace opportunities to maximize quality of life at work (Barbuto & Gottfredson, 2016). Offering Financial Compensation can also be linked to ser- vant leadership. For example, servant leaders empathize and put themselves in the place of their entry-level employees in order to appreciate which benefits would be most desirable and how to best motivate employees through fair and equitable rewards (Fox, 2015).

Any cultural change that will result in improved Non-financial Compensation must begin with support from leadership and an active effort to make the change work. Start small with achievable changes, such as allowing best performers to work from home on certain days of the week, or providing flex time to employees as a performance-related privilege. If these are successful and well-received, it will be easier to gradually make more significant cultural changes.

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Retaining

Millennials have earned an undeserved reputation as job hoppers. It is thought that they leave jobs quickly, presumably for better opportunities. No matter the numbers or the reasons, losing a talented employee—of any generation—can be costly. As a matter of fact, the cost of replacing a fully trained professional em- ployee, even at the early career stage, can be as high as $20,000 (Fries, 2017). Clearly, retaining employees should be a major concern of any organization.

Retention of high performing employees can be particularly difficult because these are the employees who have the most alternatives for better or different employment opportunities. This is especially true of millennials who are early in their working lives; thus, they are more open to changing jobs or even careers, particularly if they do not perceive opportunities for advancement or promotion. Organizations need to offer swift opportunities for advancement along with spe- cific criteria for how to earn promotions and advancement. Entry-level jobs are often arduous, but they are always necessary. It is up to early-career leadership to help entry-level employees recognize the pathways between their current work and future opportunities (Fox, 2015). It should go without saying that a significant amount of recruiting and promotion should be focused internally to the organiza- tion. Here, Rewards must support Retention as leadership earmarks a significant budget for training and development. Millennials are also innovators. Creating opportunities for employees to work on specific problems, seek new business op- portunities, or pitch new ideas can be rewarding for both the organization and the employee (Fries, 2017).

Open and efficient communication is also an imperative. For the most part, millennials have grown up with email, texting and instant messaging and may prefer more succinct, more frequent communications (Hackel, 2017). Transparen- cy and directness in communicating what employees need to know will minimize the negativity of gossip and the office rumor-mill. Communication also means giving employees the opportunity to voice their opinions and contributions, re- gardless of their level in the organization (Malone, 2017). Communication even includes getting feedback when all else fails: the exit interview. Some employees will leave despite the company’s best efforts; it is important for the organization to know why (Fries, 2017).

Servant leadership is important to Retention. Employees are more likely to remain with an organization where they are led by example, and when employees all the way to the C-Suite are expected to abide by the same rules, norms and val- ues as everyone else (Malone, 2017). Contrary to the stereotypes about millenni- als’ work ethics, they do not readily leave their organizations to seek more money or other rewards. The number one reason millennials leave their organizations is because they don’t feel valued or respected by the people for whom they work (Reuteman, 2015). Displaying empathy and emphasizing a commitment to com- munity and the growth and development of all people, servant leaders establish

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Attracting and Retaining Millennials • 179

a culture in which employees feel heard, valued, and empowered to be their best selves.

YOU AND YOUR WHOLE GENERATION!

Millennials are pigeon-holed far too often. They are known as the “generation of entitlement,” and “job-hoppers” who “cannot live” without their technology (Roepe, 2017). Based on the discussion in this research, it might be tempting to believe that millennials are seeking an awful lot of perquisites to which they may not be entitled. Yet, good strategies for recruiting, rewarding and retaining millen- nial’ employees means understanding the resources they need to succeed. Provid- ing a combination of motivating extrinsic and intrinsic rewards to employees is essentially what makes the employer/employee relationship work, regardless of the age or the career stage of the employee.

Generational labels, while convenient, can never be completely representa- tive of every member of a generation. The rewards employees tend to seek are a combined product of their career stage and what is available in their time, not only their particular generation. Millennials seek many of the same perks that previ- ous generations looked for when they were early in their careers. Additionally, not all millennials are seeking the same rewards. Shifts in the economy and the labor market do not conveniently happen every 20 years (Costanza, 2018). One researcher suggested that the millennial generation should be more accurately split into two groups: “Early Millennials” (born during the first half of the 1980s) and “Recessionists” (born between 1988 and the mid-1990s). These groups differ according to how much they are motivated by money and the degree of balance they desire between work and life (Roepe, 2017).

Further, while millennials may appear to take modern workplace perks for granted, they do so in the same way previous generations may have taken some elements of compensation for granted. For example, consider subsidized health care premiums, safety in the workplace, paid time off, or even a guaranteed mini- mum wage. Before these perks became standards, past generations would never have expected that most (or all) employers would offer them. When they first entered the workforce, most baby boomers and GenXers simply did not conceive that these rewards were even possible. After all, little emphasis was put on Non- financial compensation, and the importance of concepts such as corporate social responsibility and team-based incentives were less researched and even less un- derstood.

CONCLUSION

Because they represent such a large and influential percentage of the labor force, attracting millennials is critically important for an organization’s success and sur- vival. Even as they appreciate the significance of this growing population, many organizations seem to be missing the mark in recruiting and retaining these em-

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ployees. A review of the literature reveals that financial compensation may not be the only way, nor is it always the most effective way to engage millennials. Millennial workers seek opportunities to advance in their organizations, and they have a desire to innovate, create and contribute to their societies. They may also value flexible work schedules, autonomy at work, or the opportunity to telecom- mute even more than monetary incentives. These kinds of opportunities should not be viewed as isolated components on a list of benefits; rather, they are indica- tive of an organizational culture which acknowledges the significance of work life balance and is concerned about employees’ quality of life at work. Establishing and maintaining such a culture requires leadership which values the needs and concerns of employees, prioritizes their personal and professional development, respects their ideas, encourages their creativity, and supports their quest to realize their potential. Servant Leadership is the answer. By leveraging Recruiting, Re- warding, and Retaining strategies that will attract, motivate, and keep millennials engaged, employees of every age are certain to be served.

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CHAPTER 9

MILLENNIAL WORKERS AND THE EMPLOYEE ENGAGEMENT

PHENOMENON Has the Wave Crested?

Angela N. Spranger and Sierra Chen

INTRODUCTION

The concept of employee engagement has become ambiguous, a work-related psy- chological measure influenced by factors that scholars and researchers have focused on identifying. While the realm of research scholars seeks to identify it, the ob- vious effects of employee engagement, or, rather, disengagement are consistently observed in the workplace. A recent Gallup survey suggested that only 13% of em- ployees around the globe are engaged on the job and disengaged workers outnum- ber engaged workers nearly two to one (Rana, Ardichvili, & Tkachenko, 2014). Research is trailing behind a phenomenon that is dominating the workplace.

By determining the factors that can predict levels of employee engagement, organizations can focus their efforts on active improvement. But, more impor- tantly, by identifying employees’ expectations of the factors of employee engage- ment, organizations can better understand the needs of their employees and tailor

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their organizational goals directly toward those needs. In a 1990 study, Kahn ad- dressed the deeper components of engagement (meaningfulness, safety, and psy- chological availability) which form the basis of addressing what HR professionals and executives can do to help ensure their associates feel seen, safe, and valued (Spranger, 2015) in the workplace. These components of engagement create the foundation of the psychological expectations of employees and, as a result, their expectations of their managers and organizations.

In this chapter, we explore the employee engagement phenomenon to better un- derstand the expectations of visibility (feelings or perceptions of being seen), safety, and value as related to engagement, particularly regarding the expectations of mil- lennials entering the workforce. By studying the engagement phenomenon and the factors that impact it from the perspective of millennials and their expectations, HR professionals and executives can determine areas of change that might inject positive adaptation in their organizations. In this chapter, we seek to decrease the ambiguousness of the concept of employee engagement by determining millennials’ expectations going into the workplace instead of focusing on their experiences in the workplace or after the fact. A primary research question then is, what are millen- nials’ expectations of visibility, safety, and value in the workplace? Secondarily, if these expectations are not met, how does it impact their level of engagement?

LITERATURE REVIEW

Employee engagement is a phenomenon that is dominating the workforce and organizational culture. It is a concept substantiated by a rigorous academic con- versation, which has caught up with the initial leadership of the consulting and practitioner community. As the significance of employee engagement becomes more firmly set in organizational culture, the generations are shifting, raising new questions about how an organization should best engage employees from differ- ent stages of life. Baby Boomers, one of the largest generations in history, are preparing to retire from the workforce while Millennials are flooding in with new expectations, demands, and work habits. Organizations must brace themselves for the changes that are about to occur, understanding how to engage millennials who will, by 2025, make up about 75% of the workforce (Deloitte, 2014; Don- ston-Miller, 2016). At its core, employee engagement manifests itself in the idea that an employee who feels seen, safe, and valued in the workplace will be more engaged. In this conceptual chapter, we emphasize the foundations of the term “employee engagement,” and relate it to the current expectations of millennials as a young, technologically advanced generation that will bring new ideas, but also new expectations of visibility, safety, and value.

Defining Employee Engagement

Employee engagement is an ambiguous concept discussed by researchers, but difficult to define in clear, concrete terms. However, there are several founda-

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Millennial Workers and the Employee Engagement Phenomenon • 187

tions for the concept on which my research was built. The first foundation was Maslow’s Hierarchy of Needs in 1970, a straightforward, conceptual framework for understanding the importance of fulfilling basic human needs (Kahn, 1990; Shuck, Rocco, & Albornoz, 2011). This theory of motivation relies on a model which arranges human needs in order of necessity, suggesting that higher-level needs cannot be met until lower-level needs have been met. The needs are ar- ranged in a pyramid shape, demonstrating the most critical needs to survival as the lowest needs on the hierarchy according to foundational necessity.

The hierarchy’s bottom level represents an individual’s physiological needs; the theory suggests that these are the most potent of needs for human survival. This level includes needs such as food, water, and shelter (Shuck, Rocco, & Al- bornoz, 2011). The next level is safety, which is the feeling of personal protection and control over one’s life. This need provides a fundamental concept of the idea of the importance of safety in the workplace. Humans have an inherent need to feel in control over their lives and personally protected. It also includes the need to feel a part of something bigger than oneself. Environments that do not foster this element of safety may be overly competitive and cold, which discourages relationship development and reduces productivity and innovation. In Kahn’s employee engagement framework, safety promotes meaningfulness and psycho- logical availability. According to Kahn, employees who do not feel safe become cognitively, emotionally, and physically “paralyzed” (Kahn, 1990).

The need for love and belonging is closely intertwined with the need for safety, as the need to develop relationships is especially prevalent in the workplace. Em- ployees develop several relationships at work, all of which have the potential to influence employees’ outcomes and experiences. Employees who interpret rela- tionships with co-workers as positive are more likely to experience a positive workplace climate, which leads to higher employee engagement (Shuck, Owen, Manthos, Quirk & Rhoades, 2016). The importance of a mentor in the workplace also reflects this shared need for love and belonging, while underscoring the need to be seen and valued. Mentorship allows for more inexperienced employees to be recognized by a more experienced employee or manager which makes them feel included in the workplace.

Once the need to feel safe and experience love and belonging is satisfied, the need for esteem becomes very relevant as employees work to achieve career goals, manifesting the desire for respect and recognition. The need for self-actualization finishes the hierarchy with a need to realize potential and “become everything one is capable of becoming” (Maslow, 1970; Shuck, Rocco, & Albornoz, 2011). According to Kahn, self-actualization, the need to realize potential, parallels em- ployee engagement (Kahn, 1990). If the most basic needs such as physiological needs, safety, love and belonging, and esteem needs are met, employees will be more equipped to realize their potential by sharing their knowledge and creating opportunities for other people.

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Maslow’s Hierarchy of Needs represent some of the most basic human needs that manifest themselves in humans and, therefore, organizations in which hu- mans work and seek fulfillment. Employees within an organization are driven by an inherent need to be seen, safe, and valued. When such constructs are fulfilled, it enhances employee well-being and satisfaction in the workplace.

The second foundation for understanding employee engagement comes from Kahn’s 1990 article which laid a psychological framework for employee engage- ment. Kahn emphasized the fact that meaningfulness, safety, and availability are all key factors in determining levels of engagement (Kahn, 1990; Shuck, Rocco, Albornoz, 2011). Kahn defined meaningfulness as the “positive sense of return on investments of self in role performance,” safety as “the ability to show one’s self without fear or negative consequences to self-image, status, or career,” and avail- ability as “the sense of possessing the physical, emotional, and psychological re- sources necessary for the competition of work” (Kahn, 1990). According to these three psychological constructs (meaningfulness, safety, and availability), Kahn asserted that when individuals are engaged, they bring all aspects of themselves (cognitive, emotional, and physical) to the performance of their work role. Thus, employee engagement represents the “simultaneous employment and expression of a person’s preferred self in task behaviors that promote connections to work and to others, personal presence, and active, full role performance” (Kahn, 1990; Valentin, Valentin, & Nafukho, 2015). Utilizing this psychological foundation, we can also assign meaning to the difference between engagement and disengagement.

The concept of disengagement represents a clearly different phenomenon from simply low levels of engagement. Kahn defined disengagement as the “uncou- pling of selves from work roles; people withdraw and defend themselves physi- cally, cognitively, or emotionally during role performances” (Kahn, 2010; Saks & Gruman, 2014). Shuck, Zigarmi and Owen furthered this conversation by in- troducing a study that showed engagement as an experienced and complex psy- chological phenomenon that is experienced within the context of an employee’s experience (2015). As it relates to this chapter, an employee who does not feel seen, safe, and valued in the workplace will not be engaged. Additionally, the level of that employee’s disengagement will depend on the degree to which he or she perceives himself or herself as invisible, in danger, or of little value to the company. Human resource management and HR development professionals may engage employees by actively ensuring that they feel comfortable and appreciated in the workplace. This is not to suggest that Millennials, or any other employees, should be indulged or have policies and procedures relaxed to accommodate them in the workplace. Nor do we suggest that employees can, or ought to, be made to feel completely comfortable in the workplace at all times. Still, organizational development initiatives that intentionally address employees’ needs to feel seen, safe, and valued in the workplace will yield significant impacts on the organiza- tion’s culture, and the individual and organizational outcomes that are a proven result of high employee engagement.

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Maslach, Schaufeli, and Leiter (2001) furthered the development of the concept of engagement by defining it as the opposite of burnout. By defining engagement as “an energetic state of involvement with personally fulfilling activities that enhance one’s state of professional efficacy,” the researchers characterized engagement by energy, involvement, and efficacy (Saks & Gruman, 2014). If this is true, we can add these components to our understanding of what engagement and disengage- ment are and how they affect the workplace and organizational outcomes. In their 2001 article, Maslach, Schaufeli and Leiter researched the idea that engagement is characterized by high levels of activation and pleasure, in that employees who are engaged in work are less susceptible to burnout because stress factors are reduced and replaced with satisfaction (Valentin, Valentin, & Nafukho, 2015).

Adding another dimension to the research on employee engagement, Macey and Schneider focused on the idea that employees may be predisposed to certain positive outlooks based on personality characteristics (Macey & Schneider, 2008; Shuck, Rocco, & Albornoz, 2011). These researchers have proposed that positive outlooks on the workplace may be based on innate personality characteristics and suggested that employees with a proactive personality may be more likely to be engaged in their work (Macey & Schneider, 2008; Shuck, Rocco & Albornoz, 2011). Instead of looking at employee engagement from an intrinsic, psychologi- cal perspective, they focused their research efforts on the external manifestation of internal employee satisfaction.

From this abbreviated summary of contemporary employee engagement re- search, and using Maslow’s hierarchy of needs as a foundational concept, we move to considerations of the actual, practical significance of employee engage- ment. For this chapter, we define employee engagement as an employee’s in- clination to both internally and externally express satisfaction in the workplace according to an organization’s efforts to make their employees feel seen, safe, and valued. We have taken Maslow’s hierarchy of needs as a psychological foundation to address the factors that affect an employee’s motivation in the workplace. From there, we incorporate the work of Kahn (1990) who explains employee engage- ment as an employee’s perceptions of safety and meaningfulness combined with his or her psychological availability (or, the amount of cognitive energy he or she dedicates to the work). Finally, we acknowledge disengagement as a separate, important phenomenon as noted by Kahn (2010), Saks and Gruman (2014), and Maslach, Schaufeli and Leiter (2001).

THE SIGNIFICANCE OF EMPLOYEE ENGAGEMENT

There are several correlations and predictive relationships that can be observed from high and low levels of engagement in the workplace. These include en- hanced employee well-being, improved productivity, positive financial business outcome, positive workplace climate, and reduced levels of burnout. Many orga- nizations believe that employee engagement is a dominant source of competitive advantage on the basic premise that happy/engaged employees will perform better

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due to their connectedness to the organization (Saks & Gruman, 2014). Workers who feel supported, safe, and provided opportunities for learning are more likely to engage (Shuck, Rocco, & Albornoz, 2011).

In 2014, Kerns suggested that workforce engagement exerts an important in- fluence on happiness and well-being in the workplace setting. Employees who find their relationships with co-workers to be positive and trusting are more likely to exhibit higher levels of performance (Shuck et al., 2016). Forret and Love (2008) defined trust in coworkers as “holding confident positive expectations in situations involving risk with coworkers” (p. 249). This workplace concept, trust, has received significant attention in management research, leading to empirical determination of its relationship to increased organizational commitment, overall workplace trust, greater proactive behavior in the workplace, and lower intent to quit. The researchers investigated the relationship of perceptions of justice as independent variables (distributive, procedural, and interactional justice) to co- worker trust and morale at the group level of analysis (Forret & Love, 2008). By analyzing survey data gathered from 264 employees at six small companies in the Midwestern U.S., Forret and Love controlled for gender, marital status, education, position and company tenure.

Organizational justice as a concept overall is based on fairness perceptions. Distributive justice is defined as perceived fairness of outcomes received, while procedural justice is defined as perceived fairness of company procedures used to determine those outcomes. Interactional justice is defined as the manner in which results are explained. It addresses the “quality of interpersonal processes and treatment of individuals (i.e., were they spoken to with sincerity and sensitivity) as well as the extent to which the reasons behind the outcome are explained” (For- ret & Love, 2008, p. 249). The three subconstructs of organizational justice are interrelated but have been determined to be empirically distinct, accounting for “unique incremental variance” (Forret & Love, 2008, p. 249). Distributive justice predicts outcome satisfaction, withdrawal and OCB. It has also been associated with job and pay satisfaction, satisfaction with management, trust in organiza- tion and trust in manager. Procedural justice predicts of outcome satisfaction, job satisfaction, performance, organizational commitment, withdrawal and counter- productive work behaviors, cooperative conflict management, aggression towards management, and trust in management. Interactional justice related to evaluations of authority figures, job satisfaction, OCB, outcome satisfaction, commitment, withdrawal behavior and performance. Additionally, it predicts supervisor rela- tionship quality, intent to quit, and intent to reduce work effort.

Forret and Love (2008) found support for all of the hypotheses in their cross- sectional field study, with positive associations and regression analyses show- ing that each variable predicted trust. Longitudinal research would show how justice perceptions influence coworker trust, but this cross-sectional self-report survey study left room for common method variance. Forret and Love (2008) made recommendations for increasing the subconstructs under organizational jus-

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tice perceptions, in order to increase trust and other organizational outcomes. To improve perceptions of procedural justice, managers should ensure procedures are fair, involve employee input, and allow for formal appeals mechanisms. Hu- man resource managers can improve perceptions of distributive justice by helping employees understand how organizational compensation works so that the em- ployees understand reward allocation. Salary transparency, to the degree possible, helps with this—understanding how salaries are set, visibility on the company’s effort to eliminate salary inequality, and other compensation-related initiatives will help improve distributive justice perceptions. Management should get a bet- ter understand of what their employees actually view as rewards, or as stated earlier in this chapter what motivates their employees, to make sure distribution is fair. To improve interactional justice, managers must treat employees with respect and dignity regardless of performance level, employing active listening without defensiveness when questioned.

Simons (2002) also discusses the potential gap between leaders’ espoused and enacted values, stating that organizational norms emerge from the employees’ experience of trust stemming from poor word / deed alignment in their leaders and colleagues. In a conceptual paper investigating trust as a highly complex con- struct which underpins the reciprocal commitments between employees and their employers, Simons enumerates multiple behavioral antecedents which create employee perceptions and combine with their interpretations of those behaviors, leading to specific consequences of a concept Simons describes as behavioral in- tegrity. Those consequences include specific individual-level organizational out- comes, such as employee willingness to promote and implement change, intent to stay, organizational citizenship behaviors, and employee performance (Simons, 2002). Identifying the definitions and interrelationships between trust, credibility, psychological contracts, and hypocrisy, Simons suggests that behavioral integrity represents a perceived, ascribed trait that shows consistent alignment between a colleague or supervisor’s words and deeds. In this chapter, we connect employees’ perception of safety with the concept of trust in manager and trust in organization. Further, we suggest that a high degree of trust in the workplace manifests as high perceived value as well.

When employees are given opportunities to be seen and valued, such as train- ing development opportunities, career development opportunities, resources and benefits given by the manager, or mentorship opportunities, they will also be more likely to engage (Rana, Ardichvili, & Tkachenko, 2014). These feelings of safety and value/recognition in the workplace demonstrate a positive predictive correla- tion between relationships and engagement. Kerns also suggested that engage- ment stirs employee optimism about positively impacting products, services, and quality, which increases the customer experience as well (Rana, Ardichvili, & Tkachenko, 2014).

Employee engagement also has a correlation with several factors that are re- duced when employees are adequately engaged in the workplace. Both theory

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and practice support the clear predictive value of a culture of high engagement— not just high engagement scores. Practitioner research such as the Gallup meta- analysis of studies in 1997 popularized efforts to investigate the relationship of “employee engagement” as a workplace phenomenon with business and work unit profitability, productivity, employee retention, and customer satisfaction and loyalty across 1,135 business units (Harter et al., 2006). Later, the concept of “em- ployee passion” emerged, briefly, in practitioner research. Zigarmi, Blanchard, Essary, and Houson (2017) suggests that employee passion encompasses such empirical constructs as intent to stay, organizational commitment, job commit- ment, discretionary effort, and employee endorsement. To have employee pas- sion, certain organizational and job characteristics must exist: meaningful work, autonomy, career growth, recognition, collaboration, fairness, connection to lead- ers, and connection to colleagues. More recent scholarly research studies have shown that high engagement leads to a decrease in theft, turnover, burnout, and unhappiness (Kerns, 2014; Saks & Gruman, 2014). Researchers generally exe- cute studies of employee engagement at the workgroup or business unit level of analysis, because at this level the data are aggregated and reported generally to maintain employees’ anonymity and confidentiality. Measurable outcomes at the workgroup or business unit level of analysis include customer loyalty, profitabil- ity, productivity, employee turnover, and safety statistics.

When employees are engaged and satisfied in feeling seen, safe, and valued by their organization and employers, it promotes a sense of meaningfulness that al- lows employees to view their role in the organization as valuable and worthwhile. Employees need to have a sense of return on their cognitive and emotional invest- ments before they are willing to fully engage with their work (Rana, Ardichvili, & Tkachenko, 2014). When employees’ work and workplace give them satisfaction, it discourages them from leaving the organization. Employees who do not feel seen, safe, or valued in the workplace become cognitively and emotionally disen- gaged, which leads to low productivity in the organization (Kahn, 1990).

EMPLOYEE ENGAGEMENT AND MILLENNIALS

According to recent Gallup surveys, millennials are the least engaged generation in the workforce as organizations struggle to integrate different values and expec- tations in a workplace that has been shaped by Baby Boomers and Generation X (Adkins, n.d.; Rigoni & Adkins, n.d.). Around 86 million millennials will be in the workplace by 2020, making up about 35% of the total workforce (Asghar, 2014; Kurian, 2017). By 2025, the percentage will rise to millennials representing an es- timated 75% of the workforce, as ten thousand Baby Boomers reach age 65 every day in the United States and begin to retire (Dannar, 2013). As the Baby Boomers retire, one of the largest generations in the United States will exit the workforce. This leaves room for the Millennials to integrate themselves into those openings, entering companies with expectations that differ dramatically from those of Baby Boomers (Asghar, 2014).

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Surveys also show that 93% of millennials left their employer to change roles and 21% say that they have changed jobs within the past year, which is signifi- cantly more than the turnover rate of non-millennials (Adkins, n.d.; Rigoni & Adkins, n.d.). As mentioned previously, one of the reasons that employee en- gagement is significant to the effectiveness of a company is because productivity increases profitability. However, when employees are disengaged, which triggers high turnover, consultants estimate that it costs the U.S. economy $30.5 billion annually (Adkins, n.d.).

Gallup found that only 29% of millennials are engaged at work, meaning that only 29% are emotionally and behaviorally connected to their job and company. On the other hand, 16% of millennials are actively disengaged, meaning that they are actively working against the goals of the company and seeking to do damage to it. This leaves the remaining 55% disengaged workers who are interested in simply completing their tasks and leaving (Adkins, n.d.). Companies need to give these workers reasons to stay, attracting, retaining, and engaging their employees in the workplace so that they feel seen, safe, and valued. It is important to under- stand the millennials’ levels of engagement now, before they make up the larg- est portion of the workforce. By understanding the expectations that Millennials bring to the workforce, companies can be more prepared and equipped to engage them and ensure that they feel seen, safe, and valued in the workplace.

Who are the Millennials?

In an increasingly diverse, multigenerational workforce, the challenges of navigating issues of communication and organizational commitment has garnered increasing attention from Human resources professionals and executives, as well as management scholars and researchers. Rodriguez (2006) stated that the big- gest, most important factor driving executive level diversity and inclusion strat- egy would be the need to engage all employees’ skills and creativity, and use those assets to add value to the customer experience. The term “diversity” in itself evokes the idea of differentiation in the workplace, and it is appropriate to identify Millennials in the context of varying qualities, experiences, work styles and val- ues that make individuals unique. Diversity factors may be surface level, such as those which are visible and easily observed (age, race, gender, some disabilities) or it may be deep level, involving religion, some disabilities, sexual orientation and ethnicity. In the contemporary workforce the four dominant groups represent the Veterans, or Traditionalists (those born before 1946), Baby Boomers (born mid-1940s to mid-1960s), Generation Xers (mid-1960s to 1980), and Millennials (1980 to 2000). The latest generation, Gen Z, has reached working age (those born from 2000 forward) and will bring even more diversity and specific expectations into the workplace.

The Veteran workers in the United States workforce are the survivors of World War II and the Great Depression. They tend to hold great pride in and loyalty toward American values, and have significant respect for authority and

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chain of command. Baby Boomers, the children of the returning Veterans, value work but see it as a competition, as they had to prove themselves at every level of achievement they earned. Members of Generation X tend to desire feedback and flexibility, which require clear communication. However, Gen Xers resent close supervision and work to live, rather than operating under the need to prove their dedication through long hours and high visibility. The Millennials are the smartest, cleverest, healthiest, most wanted generation to have ever existed. They are quickly bored by routine, confident, assertive, and friendly with their parents (who may have adopted an overly-involved role in their lives, thus earning the term “helicopter parent”) (Gurchiek, 2008).

There is an impending talent shortage, as the experienced individual contrib- utors and managers of people from the Veteran and Baby Boomer generations exit the workforce. Additionally, and worse, traditionally there has been a limited transfer of knowledge between the groups. Gurchiek (2008) suggests that the gen- erations rarely interact in the workplace, such that employee engagement, trust, and commitment are difficult to establish. Members of different generations on the same team may not recognize each other’s skills and work ethics, or value one another’s perspectives.

As mentioned earlier, Millennials are those individuals who were born between 1980 and 2000, between the ages of roughly 20 to early 30s. This generation will soon represent the largest portion of the American workforce (Asghar, 2014). Also known as Generation Y, the millennials have been described as globally aware, technologically sophisticated, ambitious, team-oriented, narcissistic, socially in- ept, and lacking in work ethic (Asghar, 2014; Dannar, 2013; Gibson, Greenwood, & Murphy, 2009). Millennials are curious, questioning and results oriented, a generation that accepts diversity and is comfortable with instant communication and social networking (Gibson et al., 2009). They have, however, been given names like the “Look at Me” generation to describe their overly self-confident, self-centered, disloyal, and unmotivated stereotypes (Myers & Sadaghiani, 2010).

A generation’s values and behaviors are a manifestation of the relationship between parents, siblings, influential people, the media, and historical events that have a significant impact during formative years (Danner, 2013). Events such as 9/11, Columbine and other violent tragedies (such as school and theater mass shootings), and celebrity scandals have shaped millennials’ culture and perspec- tive, causing them to alter their expectations of companies for which they work (Gibson et al., 2009; Schweitzer & Lyons, 2010). Growing up in a true global economy, most members of the generation experienced instant gratification of microwave cooking, news and entertainment in small bites from music television videos, early exposure to personal computers and other digital tools. Millennials have experienced many influential events and now have an emphasis on an ethical business culture and an organization that lives out its values.

Technology is an integral part of the millennial identity as they are the first generation to be in continual communication with a network of friends and fam-

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ily. As a result, millennials view work and life as a balance that is equally achiev- able because of advanced technology. This can, perhaps, explain why millennials are perceived as lacking work ethics. Millennials have grown accustomed to easy access to information and are eager to eager to share their thoughts, opinions, and experiences on social networks (Dannar, 2013; Gibson et al., 2009). This genera- tion was raised to believe, indeed to know, that their opinions mattered and were absolutely critical to people around the world. As a result, social media tools like Facebook, Twitter, Wikipedia, Snapchat and Instagram empower millennials and represent a significant part of millennials’ lives, communication norms, and iden- tities, even in the workplace.

Millennials are a unique generation because they are entering the workforce with superior knowledge of technology. They are also unique because they are a generation shaped by unique events that have drastically shifted their values and beliefs. Employers and companies should take what makes this generation unique and use it to their advantage, creating work environments that are more likely to engage and retain millennial employees.

Millennials’ Expectations

Based on the values and beliefs that have come to define millennials, research- ers seek to determine what they expect of their workplace. In determining these expectations, companies can be more prepared in learning how to engage them. For the millennial employee, the first three years of the employment life cycle are critical. Their loyalty, if any, is tenuous during that time period and they may be slow to trust institutions but may trust a manager instead. They may show no hesitation in expressing their perspective that if they are not engaged, do not like the job, the work, the workplace, or the management, they can quit and be well received at home or somewhere else. To avert these potentially negative trends, leaders and role models can help millennials design reasonable blueprints to get where they want to go professionally. HR and frontline managers can and should make it acceptable to deal with workplace problems, challenges, and conflicts in different ways. And, most importantly, encouraging congruence between the (organization’s and the) managers’ stated or espoused values and their enacted values, or walking the talk (Gurchiek, 2008).

IMPLICATIONS FOR PRACTICE

Popular literature suggests that millennials “want it all” and “want it now” (Ng, Schweitzer, & Lyons, 2010). They want work/life balance, good pay and benefits, rapid advancement, interesting and challenging work, and work that holds sig- nificance. Millennials place a heavy emphasis on work/life balance. Because of advancing technologies, millennials do not feel that they need to choose between work and life, regarding it as “symbiotic in nature” (Dannar, 2013). The events of September 11, 2001, when the United States experienced its most drastic loss

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of life due to foreign terrorist attacks, caused many millennials to re-evaluate their life priorities and choose work that allows them to adequately balance work and their personal lives. Millennials place their trust in organizations and have a strong preference for structured environments with clear rules (Schweitzer & Ly- ons, 2010). In this conceptual chapter we have laid the groundwork for a clearer understanding of millennial workers’ needs to feel seen, safe, and valued in the workplace, set in the theoretical context of employee engagement.

Millennials want to be seen. They desire attention and feedback, regarding their leaders as mentors, and companionship and close relationships within the workplace that emphasize teamwork and collaboration (Dannar, 2013). Motivated by ambition, a desire to be respected, and the significance of the work, millennials seek rapid advancement in an organization. They are willing to leave the company if this does not happen fast enough (Danner, 2013). Millennials are exception- ally good at gathering and acquiring information and knowledge because of their technological expertise, but they expect their organizational leaders to provide guidance as to how that information should be interpreted (Dannar, 2013). They want to be mentored and provided with sufficient support for their advancement (Kurian, 2017). Mentoring allows organizational leaders to provide instruction and guidance, offer wisdom, guide skill development, and develop meaningful relationships with their employees (Dannar, 2013). Mentoring also serves as a compromise between organizational expectations and millennial expectations. A mentor can teach millennial employees the company’s expectations in ways that makes sense to someone whose values have been shaped by different events and lifestyles (Asghar, 2014).

Millennials Want to Feel Safe in the Workplace

They want to enjoy the working experience and feel comfortable in the organi- zational culture. Close companionship is important for millennials, who prefer to collaborate rather than compete with co-workers (Dannar, 2013). Millennials want to collaborate with colleagues and managers that they respect and connect with colleagues inside and outside the office (Kurian, 2017; Asghar, 2014). Gurchiek (2008) suggested several specific actions that human resources and management professionals can integrate to improve intergenerational employee engagement:

1. Create training programs that address future senior leaders’ preparation 2. Design a set of competencies to model desired behaviors, including

knowledge transfer 3. Link compensation to goals of personal growth and career progression 4. Define the jobs or roles that are “mission-critical;” identify unique re-

quirements, and target /develop the talent needed 5. Customize retention strategies to generational needs 6. Define expectations about performance and productivity and then stand

by that

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7. Use clear, straightforward language 8. Don’t hint and don’t assume 9. See the best. 10. Celebrate achievements.

To ensure that Millennials feel safe in the workplace, communicate expecta- tions clearly and offer opportunities for achievement of personal and professional goals in a learning organizational culture, or an environment that does not punish mistakes or inquiries.

Millennials want to be valued. They have a constant need for gratification and appreciation for both small and big successes. A workplace that fosters open and honest communication is more likely to engage this generation because they want to feel like their ideas and opinions matter. They want to know that their insight has company-wide significance (Kurian, 2017; Ng, Schweitzer, & Lyons, 2010). Millennials value manager feedback and they view strong relationships with su- pervisors to be foundational to their long-term satisfaction in the organization (Myers & Sadaghiani, 2010). Because millennials are motivated by accomplish- ment, close companionship, and a desire to be respected, they want responsibility within the company, evidenced in the significance of the work, and want a chance for promotions (Dannar, 2013; Myers & Sadaghiani, 2010). By making work more exciting and relevant, managers can engage their millennials employees, showing them verifiable career opportunities (Gibson et al., 2009). According to Dannar (2013), a “delegation of employment-related duties should be utilized so millennials can experience high levels of responsibility, meaningfulness, and a sense of personal fulfillment” (p. 9).

Company leaders can foster a workplace environment that facilitates the best performance from all their employees, starting with making their employees feel seen, safe, and valued. These organizations may need to alter rules and policies, so they can fully utilize millennials’ abilities (Myers & Sadaghiani, 2010). It is important for companies to understand the expectations that Millennials bring into the workplace so that they can better engage them. The impending influx of Millennials should excite employers, but it should also motivate them to prepare their workplace to ensure compatibility and compromise with millennial and or- ganizational expectations.

IMPLICATIONS FOR RESEARCH

This initial conceptual foray into the dialogue around employee engagement has led to many practical ideas and considerations for HR managers and executives to consider. These considerations are particularly relevant with regard to improving employee engagement among the millennial generation as they enter the work- force en masse within the next two to seven years. Our initial research has indi- cated clear connections between established theoretical models and the idea that employees of all generations, but especially Millennials, need to feel seen, safe,

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and valued in the workplace. These connections link theories around employees’ basic human needs with specific ways to address and validate those needs in the workplace. Additionally, we see opportunities for additional academic research into the dimensions of employee engagement and workplace motivation identified here. Specifically, we intend to identify validated scale items to capture employee perceptions of visibility, safety, and perceived value in their workplaces. Compil- ing such a scale from previously validated instruments, testing, and administering it, will provide a clear image of Millennials’ expectations and actual perceptions of being seen, safe, and valued in their workplaces. We seek to compare these data points with responses to an abbreviated measurement of employee engagement such as the Utrecht Work Engagement Scale, or UWES or UWES-9 (Roof, 2015; Schaufeli, Bakker, & Salanova, 2006) to millennial employees with less than five years’ workforce experience will provide a dataset from which we can identify the relationships between employee engagement and feelings of being seen, safe, and valued in the workplace, and what those factors indicate in terms of millennial employees’ expectations.

One challenging limitation of the continued research motivated by this review of the literature is that while millennial employees may be willing to share their expectations and desires for their workplace experience, common method vari- ance (CMV) is likely to pose a challenge, as with any self-report data gathering initiative. Additionally the challenge of social desirability bias may affect how participants respond to questions about whether they expected to feel seen, safe, and valued in the workplace prior to joining their current employer, and the de- gree to which they actually feel those things. Further examination of the employee engagement literature for validated scales that precisely capture employee en- gagement is required, as well.

CONCLUSION

This chapter established the linkages between individual motivation, employee engagement, and employee perceptions of visibility, safety, and value in the work- place. We have reviewed the literature on employee engagement and identified that among millennial workers there are specific demands which HR leaders and frontline managers and supervisors should acknowledge and address, to ensure higher engagement among the millennial workforce. We have also initiated analy- sis of the available scales and instruments with which we can measure and docu- ment employees’ perceptions of engagement and identify correlations between engagement levels and feeling seen, safe, and valued in the workplace. As we add to the dialogue around millennial workers’ expectations and existing perceptions of employee engagement, we do so with the desire to help consultants and practi- tioners in human resource development and HR management, as well as frontline managers and supervisors, to convert theoretical research results into practical steps that will positively affect productivity, performance, and employee com- mitment. In light of the constantly evolving body of knowledge around employee

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engagement and organizational commitment, trust, relative to the demands of the millennial workforce, we assert that the employee engagement “wave” has not crested, but that there is significant work yet to be done in this area.

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