Is Gen Y Loyal to Employers?


NEW YORK (MainStreet)—Do 20- and 30-somethings prefer a womb-to-tomb quasi-communist corporate culture like Japan, or do they prefer a less secure, more competitive, corporate culture of modern America?

There was a time when Americans worked for a company for decades. Some people would begin working for a company at the age of 18, and by the time they retired 40 years later, they were still working for the same company. Indeed, many people often marked golden anniversaries with the same company.

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The bond between worker and owner or manager was strong. Just as strong was the bond between worker and union. Even union and companies worked towards a common goal. Both management and labor took satisfaction by producing a quality product or service.

But somewhere along the line things changed. Companies moved, sold out to new owners or were acquired by larger companies, and the bond between employee and employer weakened. No longer did the employee expect loyalty from a company; no longer were companies loyal to their workers.

Now these are generalizations to be sure. Not every company was loyal to their workers. Not every worker was loyal to their company. There were exploitations on both sides. But as a general rule this relationship existed.

But this seems not to be the case today. Do the young people of today those in their 20s and 30s–in other words, Generation Y-feel an obligation to their employer? Do they feel the employer is obligated to them? Or is there no expectation of loyalty by either employer or employee now?

Does Generation Y prefer that there is no loyalty? Do they prefer that their relationship with their employer is an every-one-for-themselves model? Would they rather have the parental nature of the Japanese labor model instead of capitalistic Darwinism?

Orlando Barone is an executive coach at The Wharton School of Business. He is also an adjunct faculty at Villanova University, conducts the Emerging Leaders Program Negotiation at the Harvard School of Public Health and was an adjunct for the graduate business program at St. Joseph's University, Philadelphia, so he is in touch with the new crop of employees and managers.

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Barone feels Generation Y believes they have been trained as transactional managers or leaders. None of his students, not even the Japanese, mention the Japanese model of loyalty.

"I got the impression they perceived themselves more loyal to their values than to a particular company or organization," Barone said. "They would be loyal to a place that enabled them to make the kind of impact they would like to make. I did not sense that they would be likely to identify with their organizations as if it were a sort of home or family. And reciprocally, they do not expect that kind of loyalty from their employer."

But Barone does sense that a transformational leader would engender a great deal of loyalty from Gen Y. There is a desire for a personal rather than organizational connection that has impressed him. They are aware that companies come and go but people are always there.

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"They've witnessed this, and they seem to be responding 'logically' to the reality," Barone elucidated. "They are entering a tough new world. They expect to succeed, because they expect to work hard and long to do it. They also believe their education and talent equip them to succeed. They have many anxieties, of course. This is an anxious age. But nothing I've observed tells me they are likely to back down or concede the game."

Janice R Bellace, a professor of legal studies and business ethics and a professor of management at the Wharton School of the University of Pennsylvania, has a little bit of a different take.

She noted that in contract law, employees are required to be loyal to their employer, but employers are under no similar obligation. When speaking about 'loyalty' in a non-legal sense, she commented that the traditional bond between employer and employee started to dissolve a generation ago.

"It probably began breaking down in the 1980s," Bellace explained. "By the 1990's, the expectation among employees was that you better be out for yourself."

Does the American youth of today prefer the Japanese model of a womb to tomb corporate nannyism – a paternalistic company? Do they instead prefer the selfish everyone-for-himself attitude commonplace among American business leaders?

"The attitude of employees today is more pragmatic -- why should I commit to you when you are not committed to me," said Bellace. "This phenomenon is probably not reflective of the recent massive layoffs. It is widespread. Even in white collar jobs, the employment relationship is now viewed as more transactional."

Bellace then proffered a third alternative to the Japanese and American employment philosophies. She cited Germany as an example of a different that is successful.

"In the German model, you take on an employee and you train them and you keep training them," Bellace said. " Employees are seen as a valuable resource. The employee becomes committed to the employer, because they see the investment the firm has made in them."

She also noted that the stereotype of harsh discipline that purportedly exists in Japanese companies is untrue. She observed a very different dynamic while touring a Japanese car factory.

"Having been in a Japanese factory, I observed the supervisor is not militaristic towards the worker," she said. "It is quite the opposite. They consult more."


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Regarding the expectations that today's youth have from the government – she feels it depends upon their political beliefs. But regardless of political belief, today's youth do not think there's much prospect for government assistance with employment or in their careers.

Peter Cappelli, a management professor Wharton and a research associate at the National Bureau of Economic Research in Cambridge, Mass., noted that focus on how employers have been breaking the dual loyalty idea has been around since the 1980s.

"I think employees would like a loyalty based arrangement, but they do not believe employers will deliver," he said. There isn't any reason to think the current practices are better." Larry Epstein, the director of the Special Projects School at Drexel University in Philadelphia, thinks this trend has been twenty years in the making.

"Few employers view the hiring of an employee to be the beginning of a 'cradle to grave' relationship," Epstein said. "As a result, very few recent graduates take a job believing that they are going to stay there for a long period of time; they are more likely to expect to be there a year or so, gain some job skills, and then start looking for their next opportunity. If they end up being there five years later, they view that as unexpected."

--Written by Michael P. Tremoglie

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