Exploring millennial psychological contract expectations across talent segments

Pages773-792
DOIhttps://doi.org/10.1108/ER-04-2018-0096
Date03 June 2019
Published date03 June 2019
AuthorJyoti Joshi Pant,Vijaya Venkateswaran
Subject MatterHr & organizational behaviour,Industrial/labour relations,Employment law
Exploring millennial psychological
contract expectations across
talent segments
Jyoti Joshi Pant
Department of Human Resources,
Prin. L.N. Welingkar Institute of Management Development and Research,
Bengaluru, India, and
Vijaya Venkateswaran
Department of OBHR, Indian Institute of Management Tiruchirappalli,
Tiruchirappalli, India
Abstract
Purpose The purpose of this paper is to identify talent segments within the millennial generation based on
performance and intention to stay and differentiate them in terms of their expectations. Based on results,
the paper proposes a customized approach to talent management.
Design/methodology/approach The paper uses a mixed methodology, including 11 exploratory focus
group discussions, followed by a survey involving 1,065 employees from nine information technology and
business process management companies.
Findings The paper creates a framework of talent segments (performing loyals, performing movers,
developing loyals and developing movers) that have different values for the organization. Significant
differences are observed in their PC expectations from the manager, PC expectations related to career growth
and development and PC expectations related to job and work environment.
Research limitations/implications Researchers faced constraints in obtaining actual performance data
from the organizations; therefore, a self-perception report of performance was used.
Practical implications Organizationstalent-management strategy must acknowledge and understand
the differences in PC expectations of talent segments and offer tailored TM programs for maximum impact.
Social implications The paper challenges the old assumption of a uniform psychological contract (PC)
that has guided the talent management strategy. Every talent segment has value and must be viewed on
continuum rather than a binary construct of Talent or no talent.
Originality/value This is one of the few studies which explores how the perception of PC expectations
differsbetween talent segments.It contributes to literatureon talent segments, PC andthe millennial generation.
Keywords Expectations, Psychological contract, Millennial generation, Talent segments
Paper type Research paper
Introduction
Globally, competition has intensified for talent, and organizations face unprecedented
challenges in managing employee performance and retention. High performing and high
engaging employees with an aspiration to succeed in important positions constitute talent
(Naim and Lenka, 2017b). Given the limited resources, it is important that organizations
segment their workforce and deploy resources to develop their most critical employees
(Seopa et al., 2015). Such strategy to attract, develop and retain talent will enable
organizations gain competitive advantage (Philips, 2008).
With a worldwide demand for its services, the technology (IT) and business process
management (BPM) industry is fast growing. In 2017, with an 8 percent growth rate, its
revenues stood at US $154 billion. It is the largest private employer in India generating
indirect employment for 10 million employees.Challenging jobs make this industry attractive
to youngsters.With an average age of 27 years, it is their largest employer (NASSCOM, 2015,
2016, 2017). To deliver performanceand sustain its growth, this industryneeds a continuous
supply of high performing and loyal employees. The average voluntaryemployee attrition for
Employee Relations: The
International Journal
Vol. 41 No. 4, 2019
pp. 773-792
© Emerald PublishingLimited
0142-5455
DOI 10.1108/ER-04-2018-0096
Received 4 April 2018
Revised 7 December 2018
29 January 2019
Accepted 30 January 2019
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0142-5455.htm
773
Talent
segments
20172018ranged between 14.6 and 15.1 percent (KPMG,2018). Development and retentionof
talent is a major challenge in theIT industry. Understanding needs of talent in thissector to
make it sustainable is important.
Millennials makes up 25 percent of the global population and 50 percent of the Indian
population (Amaria, 2015; Catalyst, 2017; Worldometers, n.d.). Although there is no general
agreement on the name of the generations and their years of birth, this study defines them
as born between 1980 and 2000 using framework espoused by Erickson (2008). Gen Y is
global, virtual, very diverse and has different expectations (Chen and Choi, 2008; Hess and
Jespen, 2009; Smola and Sutton, 2002; Tulgan, 2004; Zeeshan and Iram, 2012). Their
psychological contract (PC) reveals significant interest in training, development, and career
advancement. Senior leadership face challenges in meeting their expectations
and retaining them (Nathwani and Alves, 2007) and more engaging TM programs are
needed (Festing and Schafer, 2014). Millennials have been mostly studied at college level
and their professional life needs to be well understood to forge a strong employment
relationship (Eisner, 2005; Martin, 2005; Dries et al., 2008; Josiam et al., 2009). Their
increasing representation in the workforce has led to an immediate need to design talent
management strategies keeping their needs, preferences (Naim and Lenka, 2018) and PC.
Generations vary across countries. There are inadequate studies on Gen Y in India, and
there is a need to study them in their cultural context (Deal et al., 2010; Rajput et al., 2013;
Saxena and Jain, 2012; Mamtha and Nandini, 2013). Based on this rationale, the study
focuses on millennials and their talent segments in India.
PC is the implicit contract between the individual and their organization, which specifies
what each expects to give and receive (Kotter, 1973). PC is important in understanding the
employment relationship. When organizations are unable to fulfill employeesexpectations, it
impacts their performance, attendance, productivity, in-role duties, loyalty and intention to
stay (Bal et al., 2010;Bunderson, 2001; Chrobot-Mason,2003; Johnson and OLeary-Kelly, 2003;
Lester et al., 2002;Robinson, 1996; Robinson and Rousseau, 1994; Rousseau, 1995; Zhao et al.,
2007). FulfillingPC promotes innovativebehavior, loyalty, obedienceand greater participation
among IT professionals (Newton et al., 2008). Better talent management and retention
strategies must focus on strengthening the PC expectations of employees (Bhatnagar, 2007)
and HR must regular ly assess changes i n it (Aggarwal and B hargava, 2009).
The current study is grounded on the tenets of PC. Overall there is limited research done
on PC (Shore and Tetrick, 1994) PC across different cultures (Roehling et al., 2000;
Kelley-Patterson and George, 2002) and PC of the millennial generation after their college
(Lester and Kickul, 2001). The study answers the call of researchers to examine the
differences in the PC obligations of employees identified as talent and non-talent pools
(Al Ariss et al., 2014). This study is highly pertinent in addressing issues of talent crunch
and high employee turnover in the IT-BPM industry. An important contribution of this
paper is the creation of a talent segment framework using high-low performance and
high-low intention to stay dimensions. It is the first of its kind to assess differences in PC
expectations between talent segments. The literature is presented on talent segments,
millennials, PC, which form an integral part of the current research.
Talent segments
Workforce differentiation helps leverage human capital. Talent reviews can be used to fill
strategic jobs with high performing talent and develop high-potential employees.
Organizations must understand the value of various talent segments, recognize their
diverse contributions and offer differentiated HRM (Becker et al., 2009; Boudreau and
Ramstad, 2005; Collings and Mellahi, 2009; Huselid and Becker, 2011; Kumar et al., 2015;
Ruse and Jansen, 2008; Yarnall, 2011). The underlying assumption of a talent management
strategy is that talent is not equal. Companies disproportionately invest their resources on
774
ER
41,4

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