Development and retention of Generation Y employees: a conceptual framework
| Pages | 433-455 |
| DOI | https://doi.org/10.1108/ER-09-2016-0172 |
| Date | 12 February 2018 |
| Published date | 12 February 2018 |
| Author | Mohammad Faraz Naim,Usha Lenka |
| Subject Matter | HR & organizational behaviour,Industrial/labour relations,Employment law |
Development and retention of
Generation Y employees:
a conceptual framework
Mohammad Faraz Naim and Usha Lenka
Department of Management Studies, Indian Institute of Technology Roorkee,
Roorkee, India
Abstract
Purpose –The purpose of this paper is to present a conceptual framework of development, commitment, and
retention of Generation Y employees.
Design/methodology/approach –Based on a review of existing literature and using social exchange and
social constructivist approach, this study presents a conceptual framework with mentoring, strategic
leadership, social media, and knowledge sharing as its key constructs to retain Generation Y employees.
Findings –Mentoring, strategic leadership, social media, and knowledge sharing have a great potential to
foster competency development. Competency development is critical to evoke affective commitment of
Generation Y employees, which in turn results in intention to stay forth.
Research limitations/implications –The proposed conceptual framework should be empirically
validated in the future research.
Practical implications –Organisations should incorporate mentoring, strategic leadership, social media,
and knowledge sharing into their talent management strategy for Generation Y employees. Competency
development then in turn evokes commitment of Generation Y employees, leading to intention to stay forth.
The framework suggests an approach for generation-specific retention strategy.
Originality/value –This is one of the first studies to propose a holistic framework to retain Generation Y
employees. This paper adds a new dimension to the talent management literature by focusing on young
generation employees.
Keywords Generation Y, Gen Y, Retention, Intention to stay, Commitment, Mentoring,
Strategic leadership, Knowledge sharing, Social media
Paper type Conceptual paper
Introduction
Over the last few years, there is a paradigm shift in the workforce demographics with continued
influx of Generation Y employees (born between 1981 and 2000) (Lancaster and Stillman, 2010),
together with retirement of Baby Boomers. Based on generational cohort theory, a generation
includes members born in same time and experiencing the common formative events during their
developmental times, leading to a similar value system, perceptions, and attitudes
(Kupperschmidt, 2000). Generation Y members have experienced events such as emergence of
internet, economic liberalisation, popularity of social media, growth of environmental awareness,
and rise of terrorism. Most of Generation Y employees are born to parents with stable financial
background and groomed in a multicultural, technology-rich contextual environment.
The contextual environment has a profound influence in moulding their personality as
carefree, fun-loving, and risk-taking individuals. Their work values, ethics, and working style are
remarkably different from Generation X and Baby Boomers (Naim and Lenka, 2017). They are
ambitious, creative, and goal-oriented with a strong sense of self-worth and confidence in their
abilities (Twenge, 2010). They exhibit high levels of optimism, assertion, and self-esteem (Martin,
2005). This generation represents socially connected individuals, with technological literacy and
strong relationship orientation (Lowe et al., 2008). They prefer inclusive style of management and
want their supervisors to offer mentoring and decision-making power (Ng et al., 2010).
Generation Y employees are reported to crave immediate feedback about their performance
and timely recognition of their contributions (Hurst and Good, 2009; Martin, 2005). In addition,
Employee Relations
Vol. 40 No. 2, 2018
pp. 433-455
© Emerald PublishingLimited
0142-5455
DOI 10.1108/ER-09-2016-0172
Received 9 September 2016
Revised 5 May 2017
18 August 2017
Accepted 25 August 2017
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0142-5455.htm
433
Development
and retention
of Generation
Y employees
one characteristic trait of Generation Y employees is the need for learning and development.
They value continuous learning opportunities offered by organisations to evaluate their
employment offers (Lub et al., 2012). Therefore, Generation Y employees want to continuously
upgrade their knowledge and competencies to stay marketable in talent market (Naim, 2014).
Consequently, they hop the jobs in search of better advancement opportunities. A recent study
by Deloitte found that nearly one-third Generation Y workers are planning to leave their
employer and look for new career opportunities.
Despite shift in workforce dynamics, there is no significant change in HRM practices,
which are less appealing to Generation Y employee, causing higher attrition rates
(Davidson et al., 2011). Enormous competition across the sectors and lucrative offers from
competitors have compounded the issue of retention. The incredible pressure to
outperform competitors provided with inadequate resources further reduces employee
engagement levels. Lack of engagement is a critical issue among employees of all
generation. However, Generation Y employees are most vulnerable as they are highly
ambitious and seek instant success in every endeavour (Hartman and McCambridge,
2011). When organisations are not able to match their expectation, they prefer quitting
jobs. Engagement and retention requires urgent industry attention as their representation
would be approximately 50 per cent by 2020 (Saxena and Jain, 2012). As Generation Y
employees have strong learning orientation, therefore organisations need an appropriate
developmental strategy to retain Generation Y employees.
The rationale for focusing on Generation Y employees is marked by their
ever-increasing representation in the workforce and the imminent retirement of Baby
Boomers. To an estimate, by 2020 India alone will host roughly 464 million Generation Y
employees, with an average workforce age reaching 29 years (Rajendram, 2013). This has
resulted in an immediate need to design talent management interventions, keeping in
mind Generation Y’s needs and preferences, to enhance their commitment and retention.
Employees with higher-order growth needs of self-esteem and self-actualisation harbour
an urge for learning and Generation Y employees are new to workplace and lack
work-experience. Hence, they are anxious to acquire work-related knowledge and
competencies. One of the ways to support their developmental needs is competency
development. With this objective, this conceptual paper focuses on competency
development and its effect on commitment and retention of incumbent Generation Y
talented employees. We analyse psychological profile of Generation Y members by
capturing their idiosyncratic work-related values and preferences in the context of talent
management. To sum up, the aim of this paper is to map a social-exchange-based
conceptual framework that includes enablers of competency development and its effect on
the attitudinal outcomes as a function of generational cohort.
We adopted a social-exchange perspective based on psychological contract theory to
explore the work values, attitude, and preferences of Generation Y employees. Social
Exchange theory states that all social relationships in the workplace are formed, sustained,
or severed based on exchange of mutual benefit (Emerson, 1976). In any relationship,
individual extend support and assistance to other individuals and anticipate a reciprocal
response. The conceptual framework explains that organisational initiatives to enhance
employee competencies are reciprocated with high levels of affective commitment and
intention to stay.
This paper respondsto calls for further research on attracting and retaining GenerationY
employees and assessing the impact of talent management practices on employee outcomes
(Gelens et al., 2013). The major contribution of this paper is that we contribute to the
theoretical underpinning of TM research from a generational perspective. In so doing,
grounded on psychological contract theory, we incorporated mentoring, social media,
strategic leadership, and knowledge sharing as enablers of Generation Y’scompetency
434
ER
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