Generational Gyrations The business cycle gives rise to generations of haves and have-nots: How do "jealous" Gen Xers manage "arrogant" Yers?

Over the years, there's been much written about Generation Xin the workplace. Only 10 years ago, Xers were turning corporatepolicy on its ear. Baby Boomers saw young Xers as brash andunmanageable, and Xers saw themselves as self-reliant individualswho didn't need (or trust) traditional corporate structure.

As they say, what goes around comes around. Now in their 30s andlate 20s, those Gen X upstarts are finding themselves in asituation they've never faced before: managing a youngergeneration-the new group of employees in their early 20s known asGeneration Y, which has a different outlook on life and work.

"Gen Xers had the mac-and-cheese years of struggle where,even after grad school, they still found themselves working up theladder. Now a 22-year-old kid walks in who can't shave yet andwants an $80,000 salary," says Steven Rothberg, 35, founderand president of Minneapolis-based CollegeRecruiter.com, a jobsearch Web site. He says most Gen X-led companies he recruits forbegrudgingly accept the demands of the market. "They hate it,but they deal with it. They feel they're having to pay unfairwages," he says. "There's an under-lyinganger."

Have You Paid Your Dues?

Ask thirtysomething Gen Xers about their youth, and they'llrecall the corporate layoffs of the 1980s and the difficulty offinding their first "real jobs" in the economic downturnof the early 1990s. Their experiences have made them pragmatic andcautious. Gen Yers, on the other hand, have yet to seek work in abad economy. As long as they've been paying attention, theeconomy has been golden, job offers plentiful and starting salarieshigh. According to Jobtrak, a job Web site, the average startingsalary in fall 2000 was $37,268. Another Jobtrak study in March2000 revealed that 52 percent of graduating college studentsexpected to be millionaires by the time they were 40 years old.

Gen X entre-preneurs and managers aren't sure they want toaccommodate these expectations Gen Yers are bringing to theworkplace, although they know it's what the current marketdictates. As much as they hate to admit it, Xers have taken someworkplace cues from their Boomer elders, applying a"dues-paying" mentality in their own businesses. Xers seea company ladder that should be observed and respected, even in aprosperous economy.

"It was never so easy for us. We always had to work hard.Gosh, I sound like my grandparents," says Joshua Shaub, 30,president and CEO of New York City-based Mighty Seven Networks, ane-marketing company with 35 employees. Shaub says that when hegraduated from Cornell University in New York City in 1992, he tookany job he could get. He spent a year as a desktop publisher,hoping eventually to work his way into a "good" wage."I fought upstream and developed my skills. In the early1990s, the system was harder, and $30,000 was a good salary,"he says. "Now I have 24-year-olds asking for $75K. It'sridiculous."

Shaub says he had a 22-year-old job applicant come in whoexpected his pay to be raised from $45,000 to $80,000 in one yearif he came on board. Shaub asked the applicant why he deserved sucha dramatic increase. "He told me that now he had three monthsof work expe-rience and knew the industry," Shaub says. (Theapplicant didn't receive the job.) Then there was the22--year-old sales employee who wanted a huge office and "alot of respect" without having enough experience to navigatethe small deals yet. Shaub says his thirty-something managers havecomplained that Generation Y workers lack professionalism."[In Gen Y], there's a mis-perception of competency and alack of understanding of how business is done," Shaubsays.

When his Gen Y employees ask for raises, Shaub reminds them thatthe company is making an investment in them. He then tells them howhe started the company and explains the financial risks he istaking as an entrepreneur. Finally, he lays out his performanceexpectations and associates raises with structured goals. "Myattitude is, if they are interested in learning the business andgetting better at their jobs, I'm willing to invest inthem," he says.

But while dues -paying is a big thing with thirtysomething Xers,it's a hard concept for today's younger workers tograsp-and one that, by and large, they don't feel they need to."Paying your dues is null and void in today's economy. Itmeans that I was miserable, so you should be miserable, too,"says Claire Raines, co-author of Generations At Work (AMACOM),which reveals how different generations can work together."Age and rank used to correlate. Now the world haschanged."

Meeting Halfway

Renee Hillman, 22, is the marketing director for Raleigh, NorthCarolina-based Concept 2000 Realty Inc., a 17-employee firm. Sheagrees that today's job market, combined with Gen Y'stech-savvy abilities, has made people in her age group veryoptimistic. "We have lots of expectations paywise andrespectwise when we're first going into a job. We've beenoverwhelmed with options," she says. "In fact, I left mylast job because I felt that my work wasn't appreciated or myopinion valued." What do Gen X leaders need to realize abouttoday's younger twentysomethings? "Remember that we'renot that much younger than you are. Speak to us and involveus," she says.

Her boss, Sheri Phares-Moritz, 27, Concept 2000's owner,says the younger twentysomethings in her company want instantadvancement, total involvement and regular bonuses. She and Hillmandiscuss a raise every six months. "She lets me know herworth," Phares-Moritz says with a smile. Even though the agedifference isn't huge, Phares-Moritz feels light years awayfrom her younger workers in what she's experienced in theworking world. When she told her Gen Y employees that one of herfirst jobs in the mid-1990s had a salary of only $18,000, they wereamazed. "For a whole year?" they asked.

Phares-Moritz constantly assigns of-ficial benchmarks soshe's ready when Gen Yers approach her for raises. "Itgives me a tool based on company policy," she says.Discussions about raises often concentrate on long-term goals andon what employees' skills are worth. "They want changeright now. You try to keep them focused and tell them the moneywill build if they stick with it."

Rothberg says Gen Xers misinterpret Gen Y's desire for moremoney and responsibility early on as a signal that they want toleave. That's because the groups have different time frames foradvancement. "Gen Xers want to get two to five years on are-sume or they think it looks bad. Gen Yers think that if theyhave two to five years in one place, they're notadvancing."

And Gen Y is only the tip of a very large iceberg. TheMillennials-the kids of the Boomers who will be entering the workforce over the next decade-are hot on the heels of Gen Y and willhave even higher expectations toward work, says Bill Strauss,co-author of Millennials Rising (Vintage).

For Gen X leaders, Gen Y is just a test-run for bigger changesahead. Raines says that as today's teens move from the soccerfield to the office, Gen X entrepreneurs can expect calls fromanxious Boomer parents checking in on their children's careerprogress. "This is already starting to happen," shesays.

The challenge for thirtysomething entrepreneurs is to keepeverything in perspective and to acknowledge that times havechanged since they started out in the early 1990s. Chuck thedues-paying mentality, Rothberg says, and stop trying to applyyesterday's rules to today's jobs. Failing to change iscounter-productive, and Rothberg has seen leaders struggle."Some Gen X company leaders refuse to acknowledge that realityhas changed," he says, "and they're having adifficult time recruiting."

Making It Work

Here are some quick tips for working with Gen Y employees:

• Explain your sense of hierarchy. Make sure your Gen Yemployees under-stand why a hierarchy exists, and be prepared toalter your thinking. Take time to explain what kind of dues-payingis required to get employees to where they want to be in thecompany, and listen. Offer concrete benchmarks for advancement, andacquaint Gen Yers with business risk when discussing payraises.

• Add responsibility. Because Gen-eration Y wants moreresponsibility sooner, try to offer continuing training andmentoring. Gen Yers are enthusiastic when they feel their opinionsmean something. "Gen Xers can start providing the initiativewith Generation Y," Strauss says.

• Focus on similarities. Both groups share similarities,including a positive attitude toward free agency and basically thesame desires (the only difference being the expected speed inrealizing those desires). Carolyn A. Martin, a master trainer forRain--maker-Thinking Inc.-a New Haven, Connecticut, firm thatresearches the working lives of Americans born after 1963-andco-author of Managing Generation Y (HRD Press), believes that Gen Xleaders have their work cut out for them in managing youngergenerations. Says Martin, "The challenge for Gen X will betranslating their experiences and thinking."