REWARD PREFERENCES FOR GENERATIONS IN SELECTED ICT COMPANIES

ANNETJIE MOORE

annetjie.moore@gmail.com

MARK BUSSIN

Department of Human Resource Management

University of Johannesburg

ABSTRACTThe focus of this study was to determine whether generations prefer

different rewards in the Information and Communication Technology

(ICT) industry. The research was completed through a quantitative,

structured survey by means of an electronic survey in two ICT

companies employing some 4450 people. 164 valid responses were

received from sending it to a stratified sample of 1500 employees. The

preferences of the generations were compared and categorised in

terms of reward categories as described in the literature. To determine

the reward preferences of the generations, the Kruskal- Wallis Test was

applied. The results show that generations do not display different

rewards preferences.

Key words: Age, benefits, generations, learning and development,

pay, rewards, work environment.

Giving employees choices regarding their remuneration packages

has become a topical issue in South African organisations

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(Bussin, 2003). This is in terms of rewards to ensure

performance, job satisfaction and retention of the best people

with critical skills to make the company successful. Companies

want high performing individuals and the employees want to be

rewarded in line with performance, value add and personal

choices. The concept of personal differences and personal choice

is not new in the Remuneration sphere, for example Herkenhoff

(2002) did a study called - National Remuneration (Pay)

Preferences: Cultural Analysis Within the Hofstede Model Using

Cultural Values to Untangle the Web of Global Pay.

In an ever-changing, fast moving world, where the only real

differentiator in business lies in people’s competence, it is of

the utmost importance to win the talent war to attract, develop

and retain the best people in the industry. One way of doing

this is to design reward strategies to suit individual choice.

This research is exploratory and a major research question is -

are there in fact reward preferences among generations in the ICT

sector or not? The researcher works in the ICT industry where

resources are scarce and the need for good retention strategies

is imperative.

Table 1, indicates how generations are categorised by identifying

different dates as periods. These periods are linked to key

events which had a major impact on the generations. These dates

or periods are similar, but not exactly the same in all

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countries, as different events influenced different countries’

generations (Codrington & Grant- Marshall, 2004).

(Insert Table 1 here)

The rationale of this study is to determine whether generations

such as Veterans, Baby Boomers, Generation X and Generation Y,

prefer specific reward schemes, in line with their beliefs,

values, needs, drivers and world views. Generations refer to

categories of people, who are grouped together due to certain

events which had a major impact on their lives, such as World War

ll or 9/11 in New York or the first democratic election in South

Africa in 1994. The aforementioned generations form the bulk of

the South African and other world economies at the moment. The GI

or the Hero Generation will be excluded from this study as most

people in the GI generation have already retired.

Recent research (Giancola, 2008), reports no correlation between

rewards and generations in the USA. It would appear that an

inconsistency exists between generation theory and research.

Definitions

For the purposes of this research, definitions will be linked to

the two main subjects for discussion, namely generations and

rewards.

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The definition of rewards will include pay, benefits, learning

and development and the work environment (Bussin, 2002a) and

generations will be defined as categories of people who are

grouped in line with major events in their lifetime.

Most companies pay rewards to enhance individual or even team

based performance. Rewards can take many forms and shapes, but

the purpose of this study is to identify specific rewards for

specific generations.

These rewards may have a positive influence on performance, job

satisfaction and retention which are only a few of the

challenging staff issues that companies and management, face on a

daily basis.

Staff turnover becomes a recurring, costly cycle and the root

problem is often not determined. It is not unusual in

organisations, according to a P-E Corporate Survey (September,

2005), to have an average annual staff turnover for 24% of ICT

staff and 10% for general staff. Voluntary terminations comprise

54% of all terminations. Factors listed as reasons for voluntary

terminations for skilled staff are:

better career prospects 46%

higher salary and better employment conditions 44%

emigration 7%

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job dissatisfaction and/or personality conflict

3%(Source: P-E Corporate Services, 2005)

Apart from the cost and skills shortages, one needs to understand

the core reasons for dissatisfaction, how to address it and

strive to be an employer of choice. This does not necessarily

mean a bigger salary bill. By making use of personal preferences

to structure rewards, some of the problems may be resolved.

Typically, generic reward schemes are implemented in companies

according to job grading systems to pay employees in the

workplace (Bussin, 2002b). Reward preferences in line with

specific generation requirements are not generally considered

yet. According to Karp, Fuller & Sirias, (2002) policies are

often created by Baby Boomers and the needs of Generation X and

Generation Y, are not always catered for. This in return

generates a gap between the reward system and the expectations of

employees. This could lead to dissatisfied staff and high staff

turnover.

The rationale behind this study is to obtain a better

understanding of the reward preferences of Veterans, Baby

Boomers, Generation X and Generation Y, as it may influence the

interaction among these groups in the workplace and more

specifically in the way rewards are structured and implemented.

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To date, research focused mostly on remuneration and rewards per

job categories and levels within the organisation.

If the main drivers for these generations are different, then

they will have different needs in terms of rewards and

subsequently, businesses need to understand and change

remuneration policies to align with the requirements.

Generations

Margaret Mead was one of the first to have studied generation

theory. She spent most of her life studying tribes in New Guinea,

as she was interested in the way they lived. When these tribes

came in contact with the first world, the transformation was

rapid. She identified three generations in the New Guinea people

(Codrington & Grant – Marshall, 2004).

The first generation is that the grandparent’s past will be the

grandchild’s future. The second generation is that it is normal

that the behaviour of the new generation will be different from

the preceding generation and thirdly, the new generation set the

trends and are expected to be different from the predecessors in

behaviour, attitude and value system (Codrington & Grant –

Marshall, 2004).

The generations identified for the twentieth century are the GI

or Hero Generation, Veterans, Baby Boomers, Generation X and

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Generation Y. For the purpose of this research, GI will be

excluded as most people who were born before 1920 do not

participate actively in the workplace any more. Shelton and

Shelton (2002), Lammiman and Syrett (2004) and Codrington and

Grant – Marshall, (2004), classified the differences among the

generations. The generation gaps are resultant of cohorts or

defining moments in people’s lives and history. Some defining

moments for each generation, are highlighted in Table 2.

(Insert Table 2 here)

This table illustrates the differences among the generations and

how views and attitudes have changed 180 degrees between the

Veterans and the Generation Y in most aspects of life.

Technology, for example, enabled the generations to communicate

globally at the push of a button, whereas in the 1920’s it took

weeks to get a letter to another country.

Veterans

The Veterans entered the world during World War ll and the Great

Depression. During these difficult years this generation saved

everything and nothing went to waste. They grew up in a time when

“children should be seen and not heard” (Codrington & Grant –

Marshall, 2004). They welcomed stability and consistency as a

result they are withdrawn and unadventurous. From there, the term

Veterans or Silent Generation.

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During their adult years, this generation worked very hard and

they believe in paying their dues. Women stayed at home and

raised the children. The Veterans saved for a rainy day. As they

retired, they are the wealthiest generation in history. Although

they still do not spend money unless it is absolutely necessary,

it does not mean they do not enjoy life. They are still active

and take hikes, travel, play tennis and bowls and in general keep

busy.

Baby Boomers

The Baby Boomers were born at the end of World War ll. Their

parents indulged them and they were told that they will have

everything the parents never had. These kids were active and grew

up “reckless”. As teenagers their slogan was “Make love, not war”

and the hippie movement was a way to express their anti-

establishment views (Codrington & Grant – Marshall, 2004). As

they grew older, some of the Baby Boomers became very

materialistic, moralistic and domineering, no matter what their

economical status was.

These generations have different views on work. Statements like

“The old-timers won’t change and the kids won’t work,” indicates

that conflict in perceptions between the generations and it is as

a result of the generation gap (Karp, Fuller & Sirias, 2002). The

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Boomer generation is twice the size of the Generation X.

Generation Y is also twice the size of Generation X.

Karp, Fuller and Sirias (2002), draw attention to the differences

between Baby Boomers and Generation X. Boomers have the ability

to see the world from different angles and are perceived to be

ambiguous. They are also classified as the ‘Schizo-Generation’,

as they would spank their children for unacceptable behaviour and

reward the child for his spirit, where Generation X wants to

stand clear from ambiguity.

The Boomer motto of ‘living to work’ is reversed in the Gen Xer’s

preference of ‘working to live’. This simple but powerful

dichotomy between Boomers and Gen Xers is sufficient in itself to

foster significant levels of unproductive conflict (Karp, Fuller

& Sirias, 2002).

Today, 40 years later, it is the Boomers that are the drivers for

legislation against drugs, smoking and pornography. They are

active and have gymnasium memberships and Mick Jagger of the

Rolling Stones is still having huge rock concerts, although he

does not need to work (Codrington & Grant – Marshall, 2004).

Consequently, it seems that Baby Boomers may prefer rewards in a

cash, recognition and status format.

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Generation X

Generation X is described by Codrington and Grant – Marshall

(2004) as the “whiners” or the lost generation, who wears baggy

jeans and baseball caps. They grew up in the “anti-child” era, as

the Boomers focused on themselves and children were not

fashionable and often the parents were divorced. Therefore they

flourish in an informal work environment.

As adults, this generation was in the middle of the dot.com burst

bubble. They lost jobs and were left without a sustainable

income. Generation X work to fund their lifestyle and to be able

to share time with family. Loyalty towards companies does not

exist as Generation X observed how their loyal parents were

retrenched.

A Generation X individual enjoys taking risks and have even

invented extreme sports such as bungee jumping, rollerblading,

river rafting and biking.

Although Shelton and Shelton (2002) give an American view, many

of the differences are applicable to the generations in South

Africa. Generation X is fast-paced and high-tech. This generation

takes longer to get married and start families. The most

important values are a work/live balance, to be independent and

pragmatic. They also did research to determine what creates a

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Generation X friendly work environment and the top four

requirements are:

positive relationship with supervisor;

positive relations with co-workers;

interesting work;

opportunities for learning.

Against this background, it is important to create a work

environment where this generation can built good relationship and

where interesting and challenging work form part of the working

environment.

McNulty (2006) summarises both the behaviours and reward

preference in a nutshell by saying that Generation X is

idealistic, ambitious, flexible, self-sufficient and people

orientated. The flipside of the coin is that they distrust

leadership, juggle busy lives and demand merit-based remuneration

and participative management.

Generation Y

On the opposite side of the spectrum, Generation Y has grown up

with the Internet and therefore, connectivity is a key component

in their lives. Lammiman and Syrett (2004) claim that this

Generation have stronger group bonds than Generation X. Loyalty

to each other in a group, is of paramount importance.

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The difficulty that employers face is that to Generation Y,

corporate employment is senseless, hypocritical and boring. They

have created their own “language” in their networks and groups

are marked with humour and vivid imagery. They have a huge

influence on the 24/7 living as they want immediate

gratification. This 24/7 living created a lively new evening and

night time economy (Lammiman & Syrett, 2004).

Generation Y is more mobile than Generation X as they do not have

a strong drive for job security or necessary a career with one

employer. Lammiman and Syrett (2004), highlight important factors

to keep this Generation engaged:

introduce ideas-generation and team work methods to

engage them mentally;

managers must make use of the good ideas which are

generated among the staff and measure it;

taking advantage of the strength of technology and

maximise flexibility to perform work and assist with

the 24/7 lives;

communications must be honest and open;

assist individuals to link work with “third party”

activities such as charity.

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This generation wants to change the world and need time to focus

on community and social issues that are important to them.

Rewards could be simple, but practical such as quality fast food

vouchers or technology. They enjoy fun in the workplace and to be

involved in challenging projects (Codrington & Grant – Marshall,

2004).

Reward systems

“Among the most obvious rewards are pay, promotion, interesting

work, status symbols and fringe benefits. "Giving and withholding

of these rewards can have a tremendous influence on motivation

and satisfaction” (Lawler, 1973 p. 26). People work to be

rewarded and to obtain work satisfaction. Different people will

require different ‘formulas’ in which they want to be rewarded

for work done. There are a number of models to consider, and we

have considered Bussin (2002a) because we believe that it will be

best understood by respondents.

Bussin, (2002a) adapted a remuneration model called Total Reward

Mix. The Reward Mix is structured in four categories namely pay,

benefits, learning and development and the work environment.

Table 3 sets out the Total Reward Mix.

(Insert Table 3 here)

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The pay component of the model includes a base salary, variable

pay such as incentives, commissions and bonuses. Recognition

could include dinners and award clubs, while shares or share

options are linked to a long term incentive.

The second aspect of this reward model is benefits. It consists of

access to a medical aid, Employee Assistance Programmes (EAP),

health care such as clinics and help lines. Retirement is often

only considered in a serious light when employees are approaching

the silver years. This is an important aspect of benefits where

the employer needs to take the lead role. Savings could include

discounted rates at financial institutes or other similar

agreements with suppliers for improved rates for employees.

Savings could also include company contributions to retirement

vehicles and medical aid. Time off becomes more and more

important for employees to enhance work/life balance and to

contribute to society. Some perks could be identified as

insurance, security, canteens and crèches.

The world and the work environment change at a rapid pace.

Employees want to learn and improve themselves. Companies that

support learning and development are ranked high among the top

companies to work for in South Africa (Corporate Research

Foundation, 2005).

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The work environment is not always considered as part of the reward

strategy of a company. Technology and work relations are

important aspects of the work environment. Wilson (1999)

discusses the importance of the company culture, leadership,

strategy and the impact on the reward strategy. It is imperative

for the company to provide performance support and constructive

feedback to employees in order to adjust and grow, resulting in

increased productivity and profitability (Milkovich & Newman,

1999). Work/life balance is becoming more and more important in

people’s lives to enable them to juggle the balls of life, and

not to drop any of them.

All companies have access to the four categories of rewards as

per the Bussin (2002a) model, but the success lies in how these

aspects are mixed and matched to address the employees’

preferences.

Bussin (2002b) identified long- and short term incentives. Short

term incentives are profit sharing, gain sharing, bonus schemes

and commission schemes, whereas long term incentives are rolling

incentives, value add schemes and share schemes. Milkovich (1999)

developed a reward system model where the components are clearly

stipulated as shown in Table 4.

(Insert Table 4 here)

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This model echoes the model which is used by Bussin (2002a). It

is indicative of the fact that reward systems are multi-faceted

and that no simple, single solution exists. From a practical

viewpoint, the challenge is to manage the model in line with the

requirements and expectations of the generations and to maintain

a fair and equitable reward system, aligned to the company’s

strategic objectives.

Although reward models have broad strokes of similarity at a

strategic level, an indicator of a successful reward system is

the way in which it is deployed. For the purpose of this study,

the Total Reward Mix model will be used to facilitate the

research as it is based on a South African context.

In summary, it is important to understand the reasons for the

reward system, as well as the employees’ requirements and needs

to create a win-win situation for both employee and employer. The

most important aspect of this study is to determine whether or

not reward systems are linked to the generations’ preferences in

the ICT Industry.

Research on generations and rewards

As this is a relative new topic in the human resources

environment, very little research has been done with the focus on

the relationship between generations and rewards.

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Recent research to determine a link between generations and

rewards reveals an interesting twist in the tail of the

theorists. The greater importance of life stage over generation

profiles in understanding employee needs is also indicated in an

analysis of the specific rewards of generational advocates

(Giancola, 2008). He also emphasised that all people are

primarily concerned about their job, career and compensation, no

matter what the generation and therefore concludes that reward

preferences are determined by lifecycle rather than by

generations.

Giancola (2006) expressed his concern as the generation gap has

been overstated by the theorists and that the generation theory

has major gaps. Interesting enough, research found that Baby

Boomers are more interested in retirement planning and Generation

Y prefers career development in terms of rewards. These

differences are linked to life stage rather than to generation

preferences.

To summarise this section, a review of literature revealed that

the Generations have different views, beliefs, values, needs and

drivers. Researchers on the other hand disagree with the

theorists and link reward preferences to the individual’s

lifecycle (Giancola, 2008). The purpose of this research is to

determine whether there is a link between the generations and

reward preferences in the ICT industry, or not.

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Objectives of the study

The objective of this research is to determine whether

generations prefer different rewards or not. The results are

intended to be helpful to companies with their remuneration

design and offering.

RESEARCH DESIGN

Research Approach

The approach was quantitative research which involved a cross-

sectional survey and correlational techniques for the statistical

analysis. A new questionnaire was developed and a pilot was

conducted on work colleagues and experts who work in the area of

rewards. The questionnaire was forwarded via electronic mail to

Human Resources divisions of two ICT companies, based in

Johannesburg. The contact people in the Human Resources divisions

were asked to distribute the questionnaire to a stratified sample

of staff. The staff complement for both companies combined is

4450.

The research proposition was that generations prefer different

reward systems, even in the ICT industry.

Research Method

The sampling procedure and participants

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The questionnaire was developed from the literature review and

then piloted with 12 work colleagues and remuneration experts.

Appropriate suggestions were taken into account and the

questionnaire was amended accordingly. The questionnaire was

then sent to the Human Resources representatives in the two ICT

companies. The representatives forwarded the survey to a

stratified sample of 1500 employees to complete the

questionnaire on an anonymous basis. The strata were

proportionate by job level with every third person receiving a

questionnaire. A total of 165 responses were received from the

participants. This represents a response rate of 11%.

The respondents representing the various companies in the survey

are reflected in Table 5.

(Insert Table 5 here)

The level of the participants’ current positions is captured in

Table 5. During the sampling process it is important to report

the sample size, specify the population, consider the dropout,

using methods of correction and not to obscure the response rate

(Gourard, 2004). Therefore, the valid percentage calculated,

took the dropout rate into account. After cleaning the data up,

there were 164 usable responses.

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Apart from the current level in the organization, the

participants were requested to record their age in the

questionnaire. The responses were categorised into the

generations’ model, discussed earlier.

Measuring instruments

A structured questionnaire was designed to gather the data on

the reward preferences of the participants. The questionnaire

consists of closed-ended and ranking questions to gather the

information. A combination of questions was used. Firstly, a 5-

point Likert Scale was used, ranging from Strongly Agree to

Strongly Disagree and secondly to correlate the views, it was

combined with ranking questions.

Generations

The generations were categorised as follows:

Veterans (1920 – 1940)

Boomers (1941 – 1960)

Generation X (1961 – 1980)

Generation Y (1981 – 2000)

The limitation of this theoretical categorisation is

acknowledged. It is however, based on current literature, and

needs to be validated for South Africa.

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Reward

The questionnaire was divided into four categories of rewards:

Pay

o Base salary

o Variable pay (Commissions, Incentives, Bonuses,

Profit share, Overtime, Special assignment pay,

Standby allowance)

o Recognition (Status, Prominence due to work

status, work valued in society, Awards, Letters,

Complements, Trophies, Personalised items,

Hobbies)

o Long term incentives (Deferred pay, Shares

schemes)

Benefits

o Health (Medical aid, Life insurance, On-site

health care, HIV/Aids awareness & training, EAP,

Wellness program, 24 hour hotline)

o Retirement (Provident fund, Financial advice)

o Savings (Company contributions to Provident fund)

o Time-off (Leave such as annual, sick,

maternity/paternity, compassionate, family

responsibility, community & charity, in lieu of

overtime)

o Perks (Uniform allowance, travel, Company

arrangements with financial institutes, Concierge

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services, Crèches, Canteens, Security, Petrol

cards, Cell phone allowances)

Learning and Development

o Career Development (Experience different things,

Challenges, Promotion)

o Performance Management (Feedback, Right amount &

complexity of work)

o Succession Plan (Change to get ahead)

o Training (Knowledge, Skills improvement,

Projects, Experiential learning, Formal

development plans)

Work Environment

o Organisational Climate (Friendly, Secure, Flexi-

time, Flexi-place, Part-time, Fun, Peer and

management relations, Technology, 24/7 Lifestyle,

e-mail, Internet, SMS, VOIP, Shopping, Global

community, Travel )

o Leadership (Ability to influence & inspire,

Values, Participation)

o Performance Support (Create a learning

environment to support and enhance performance)

o Work/Life Balance (Work, Personal (Family,

Friends, Hobbies and Community)

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Once completed, the Human Resources departments forwarded the

electronic submissions to the researcher, which was delivered to

the Statistical Consultation Service at the University of

Johannesburg for capturing and analysis.

Research procedure

Human Resources representatives for the two organisations were

approached and asked if they would distribute the electronic

survey questionnaire to all employees in the organisation. This

was then emailed to all employees, with a return date and address

to the Human Resources representative. The returns could be

completed and delivered anonymously, faxed or emailed to the

Human Resources representative, who compiled the responses for

the researcher. Once the cut-off date had passed, the researcher

collected the completed questionnaires from the Human Resources

representatives.

Statistical Analysis

In the research, the relationship between the Independent

Variable (Generations) and the Dependent Variable (Rewards) was

clarified. The constructs can be shown schematically as follows:

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Preferences

Reward System

Generations

Figure 1: Schematic representation of the link between variables

To determine the reward preferences of the generations, the

Kruskal- Wallis Test was applied to determine the mean

descriptives of each category related to the different

generations.

RESULTS

The specific aspects explored in this survey were to determine if

generations prefer different rewards or not. A synopsis of the

biographical data is reflected in Table 5 in the previous

section.

The above data is important in the South African context, to

adjust and measure transformation in the country, as per the

Employment Equity Act. The focus is to increase equally across

races and genders in the country, as well as in the ICT industry.

The item inter-correlation was subjected to a KMO and a

Bartlett’s test and was 0.761 which is higher than 0.7, making

the matrix suitable for being factor analysed. Two factor

analytic methods were used to determine the four factors, which

are used in the research. Firstly, the extraction method was the

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Principal Axis Factoring and secondly, Varimax with Kaizer

Normalisation was used as a rotation method.

It was determined that the Cronbach alpha was 0.821 and therefore

the scale was reliable.

Table 6 reflects the outcome of the responses on a 5-point

scale, which has been reduced to a three point scale for ease of

reference. The categories of Not important at all and Unimportant

were combined and were named Unimportant in the table below. The

Important category is a combination of Important and Extremely

important categories.

(Insert Table 6 here)

During the analysis, five Eigen values (5,239; 2,148; 1,520;

1,333 and 1.055) were identified, which accounted for 66.4% of

the variance. To compare the empirical research with the theory,

a four factor analysis was forced. The outcome is reflected in

Table 7 below. The communalities of the variables are determined

for the first number of factors. This procedure is repeated until

the sum does not change (Gorsuch, 1983).

The Rotated Factor Matrix is displayed in Table 7, which displays

the different item loadings on the four postulated factors.

(Insert Table 7 here)

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The categories as per the literature research, versus the outcome

of the empirical research are reflected in table 8 below. The

literature research has four categories, namely pay, benefits,

learning and development and work environment. During the

empirical research, the sub-elements did not correlate completely

to the literature research. The researcher named four categories

(Total Cost To Company (TCTC), over and above TCTC, career and

work atmosphere) in the empirical research to categorize the sub-

elements and to compare it with the literature categories.

(Insert Table 8 here)

Although the two clusters of categories are different, the

outcome of the research still provides natural groupings of

different categories or rewards, specific to the ICT industry. To

determine the reward preferences of the generations, the mean

descriptive for each category, is ranked per generations in Table

9.

(Insert Table 9 here)

In this section, statistical analyses were completed on the data

to determine whether a relationship exists between the theory and

the findings of the research. From the summary in Table 9 above,

it is clear from the research that the generations prefer Total

26

Cost to Company (TCTC) to the Over and Above Total Cost to

Company (Over and Above TCTC) rewards.

DISCUSSION

The aim of this research was to determine whether generations in

the ICT industry prefer different rewards or not.

The findings of the research indicate that there is no direct

relationship between rewards preferences and generations in the

ICT industry. All the generations rated Total Cost to Company

(salary, health care, retirement benefits and share options) as

the most important aspect of rewards. This finding supports the

research of Giancola (2008), who states that different

generations do not prefer different rewards.

On the other hand, the lowest rated aspect of rewards for all the

generations participated, was Over and above Total Cost to

Company (perks, savings and variable pay).

It is clear from the research that the older the participant, the

lower the rating of Career (career development, performance

management, performance support, recognition, succession

planning, time off, training) aspect of rewards. Both Generation

Y and X ranked Career as second on their list of reward

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importance, where it slipped into third position for the Baby

Boomers and in last position for the Veterans. This is the only

category which reports a significant difference of 0.008

(Kruskal- Wallis Non Para Metric), which is smaller than 0.05.

This difference may be subscribed to the lifecycle element as

discussed by Giancola (2008).

The rating of Company Atmosphere (leadership style,

organisational climate and work/life integration) seems to vary

among the generations.

Value add of this research

The research has added insight and value to reward preferences

for generations in the ICT sector. It has become clear that money

matters to all generations, as it was ranked either first or

second by all four generations. Should this reward cocktail be

mixed in line with the likes and dislikes of individuals, ICT

companies may experience a higher retention rate of knowledge

workers, which could result in better customer services and

increased profits.

This research confirms that the main reasons for staff turnover

in the ICT industry as discussed earlier in this article, is

better career prospects and higher salaries. Continuous up-

skilling of staff and providing them with some career prospects

are critical to retain staff members. This may also give staff

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members the opportunity to better their income in the short to

medium term. The second message which is loud and clear, is to

pay critical staff attractive market related remuneration and

provide challenges and career opportunities.

As the above is critical, the only way to determine staff

members’ aspirations are to talk to the individuals’ on a regular

basis and to build solid and credible relationships, as staff

members leave managers, not their jobs.

Limitations of this research

The following aspects are viewed to be limitations to this study:

Only two ICT companies participated in the survey,

which may not be representative of the industry due to

the core business focuses.

The generation categories used come from global events

and may not be 100% applicable in South Africa.

Future research

As a result of this study, the following research is suggested in

this field:

This study could be completed in a different industry

to determine if generations in different industries

prefer different rewards

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It is recommended that research is completed focusing

on gender and race, to develop an even better reward

model in the South African context

The study was structured within specific guidelines.

It would be interesting to determine if employees have

different ideas regarding rewards

To measure the impact of a generation’s customized

reward strategy on staff retention and customer

satisfaction, as well as the impact on the bottom line

To determine if rewards are linked to the individual’s

career life cycle

Conclusion

Rewards for generations in the ICT industry is a relative new

concept. This is the first known empirical study of its kind in

South Africa. The trends reflected in this research mirror the

research in the USA, where it is claimed that reward preferences

are linked to lifecycle rather than generations.

The final conclusion is that although rewards are not linked to

generations in the ICT industry, it is clear that one size does

not fit all and companies need to be sensitive and still provide

employees with flexible rewards options.

30

REFERENCES

Bussin, M. (2002a). Choosing the right Incentive Scheme. Randburg:Knowledge Resources Publishing.

Bussin, M. (2002b). Retention Strategies. Randburg: Knowledge ResourcesPublishing.

Bussin, M. (2003). Factors driving changes to remuneration policy andoutcomes. Unpublished Doctor of Commerce dissertation.Johannesburg: University of Johannesburg.

Codrington, G & Grant-Marshall, S. (2004). Mind the Gap!Johannesburg: Penguin Books (Pty) Ltd.

Corporate Research Foundation. (2005). The Best Companies to work for inSouth Africa. (6th Ed.). Paarl: Corporate Research FoundationPublishing

Giancola, F. (2006). The Generation Gap: More myth than Reality.HR. Human Resource Planning, 29, (4): 32-37.

Giancola, F. (2008). Should generation profiles influence rewardsstrategy? Employee Relations Law Journal, 34 (1): 56-68

Gourard, S. (2004). Quantitative Methods in Social Science. Norfolk:Biddles Ltd.

Gorsuch, R. (1983) Factor Analysis. Lawrence Erlebaum Associates

Herkenhoff, L.M. (2002) National Remuneration (Pay) Preferences: CulturalAnalysis Within the Hofstede Model Using Cultural Values to Untangle the Web of GlobalPay. Universal Publishers

Karp, H., Fuller, C., & Sirias, D. (2002). Bridging the Boomer Xer GapCreating Authentic Teams for High Performance Work. California: Davis-BlackPublishing.

31

Kimmel, A.J. (1989). Ethics and Values in Applied Social Research. California: Sage Publications, Inc.

Lammiman, J. & Syrett, M. (2004). Cool Search. Cornwall: TJ International Ltd.

Lawler lll, E.E. (1973). Motivation in Work Organisations. California: Brooks/Cole Publishing Company.

McNulty, E.J. (2006). Can you manage different Generations? Boston: Harvard Business Press.

Milkovich, G.T. & Newman, M.N. (1999). Compensation. (6th Ed.). United States: Irwin/McGraw-Hill.

P-E Corporate Services SA (Pty) Ltd. (September 2005). Human resources practitioner’s handbook. Johannesburg: P-E Corporate Services.

Salls, M. (2004). The Non-profit Boon from Boomers. Boston: Harvard Business School Press.

Shelton, C. & Shelton, L. (2005). The NeXt revolution. California: Davis-Black Publishing.

Wilson, T. (1999). Rewards that drive high performance. New York: AMACOM.

Wilson, T.B. (2003). Innovative Reward Systems for the Changing Workplace. New York: McGraw-Hill.

32

Table 1

Generation timelines in different countries

Generation USA Europe/UK Japan South AfricaGI’s

Veterans

Boomers

Generation X

Generation Y

1900 - 1923

1924 – 1942

1943 – 1962

1963 – 1983

1984 –

1900 - 1918

1919 – 1945

1946 – 1965

1966 – 1984

1985 –

1900 - 1925

1926 – 1945

1946 – 1965

1966 – 1985

1986 –

1900 - 1920

1921 – 1940

1941 – 1960

1961 – 1980

1981 – 2000Reference: (Codrington and Grant- Marshall, 2004).

33

Table 2Differences in the Generations

Defining Values and Characteristics

Attitude

Leadership

Communication

Likes

Dislikes

Defining Events

Veterans(1920– 1940)Reserved,clean-living, gentlemanly

Pay your due, workhard

Formal, hierarchical, loyal, hard working, low key, detail-orientated

Burgeoning airmail, Telephone

Security,stability

Debt, borrowing, upstartyoung people

Discover penicillin, Great Depressio

Boomers(1941 - 1960)

Personal gratification, wellness, success, bossy, stylish, inquisitive, competitive, talkative

If you have it, flash it

Visionary, idealistic, workaholics, energetic, bossy, loud, reward-driven, consensus

Post, courier services, telex,typewriters

Shopping, ostentation, winning, leading, vision

Paying off debt,aging

Mau Mau revolt, Russia launched Sputnik,

Generation X(1961 -1980

Balance, self-reliance, pragmatism, individualistic,arrogant, risk-taking

Whatever…enigmatic

Caution, creative, realistic, low key, innovative,flexible, independent, adaptable, competence

Personal computers, internet, email,web, cellular phones

Sharing, chilling, being individualistic,being with friends, change

Bossiness, corporate culture

Launched microchip,

Generation Y(1981 – 2000)

Respect, independent, loyal, humour, tolerant, caring,honest, balanced,optimistic, clean-cut

Let’s make the world a better place

Civil minded, visionary, confident, optimistic, moralistic, principled, values driven

Email, internet, web, sms, PC withvoice recognition, digital voice,

Shopping, labels,family, friends, the environment, technology

Dishonesty, unbalanced life, ostentation

Internet, virtualcommunities, 24/7lifestyle,

34

Outlook

Work Ethic

Success is a result of

Money is for

Education is

Health

Feedback

n, World War ll, Pearl Harbour, Hiroshima,

Victorian

Work hardbecause it is my duty, life timecareer

Hard work

Security,save for a rainy day

Lucky to have one – we’ll do our very best

Grinned and bore the painNo news is good news

contraceptive pill, Nelson Mandela sentenced to life, cold war, assassinations, feminist movement, Sowetoriots

Optimistic

Driven , self-fulfilling, makes me feel important, job security and career

Political savvy,networking skills

Enjoyment, owe the bank money

A birthright

Doctor must cureme immediately

Regular feedback

Watergate, rightto abortion, test-tube baby, Margaret Thatcher – firstfemale Prime Minister, Working moms, Challenger, latchkey kids, Berlin wall comes down, divorced parents, AIDS

Sceptical

Balanced, fund lifestyle, career rather than security

Holding two jobs

Survival, means to an end

I’ll listen, butI can teach myself

Alternative therapy

Immediate feedback

baggage free, Mandela released,Princess Diana dies, Dolly the clone sheep, Viagra, SMS, 9/11, Iraq war, e-mail spam increases

Opportunity

Enjoy change, entrepreneurial, will help to change the world,parallel career

High energy, fastthinking, quick learning

Immediate gratification andto save the world

There’s more to school than memorising

Obsessed with keeping healthy

Feedback wheneverI need

35

Table 3

Total reward mix

Pay

Base salary

Variable pay

Recognition

Shares

Benefits

Health care

Retirement

Savings

Time off

PerksLearning and Development

Career Development

Performance

management

Succession planning

Training

Work Environment

Organisational climate

Leadership

Performance support

Work/life balance

36

Table 4

Components of total reward system

1. Remuneration

2. Benefits

3. Social Interaction

4. Security

5. Status/Recognition

6. Work Variety

7. Workload

8. Work Importance

9. Authority/Control/

Autonomy

10. Advancement

11. Feedback

12. Work Conditions

13. Development Opportunity

Salaries, Wages, Commissions and Bonuses

Vacations, Health Insurance

Friendly Workplace

Stable, Consistent Position and Rewards

Respect, Prominence due to work

Opportunity to experience different things

Right amount of work

Is work valued by society

Ability to influence others; Control own

destiny

Chance to get ahead

Receive information helping to improve

performance

Hazard free

Formal and informal training to learn new

knowledge, skills, abilities

37

Table 5

Biographical detailsCompany   Number of

ParticipantsPercentage

Company A 147 89.10%Company B 18 10.90%Total 165 100%

Level of position

Top management

12 7.30%

Senior management

18 11.10%

Middle management

35 21.30%

Supervisors 46 28%Staff 53 32.30%Total 164 100%

Generations

Veterans 21 12.80%Baby Boomers 53 32.20%

Generation X 52 31.70%Generation Y 38 23.20%Total 164 100%

RaceWhite 129 78.70%Black 27 16.50%Indian 4 2.40%Coloured 4 2.40%Total 164 100%

GenderMale 96 58.50%Female 68 41.50%Total 164 100%

Marital Status

Single, never married

40 24.40%

Co-habituating

6 3.70%

Married 88 53.60%Separated, divorced,

30 18.30%

38

widowed  Total 164 100%

39

Table 6

Mean descriptives of categories aligned with generations

   

  Generation Y   Generation X   Baby Boomers   Veterans

Unimportant

Neitherimportant

norunimporta

nt

Important Total Unimporta

nt

Neitherimportant

norunimporta

nt

Important Total Unimporta

nt

Neitherimportant

norunimporta

nt

Important Total Unimporta

nt

Neitherimportant

norunimporta

nt

Important Total

To receive a base salary

Count 0 1 20 21 0   41 41 0 1 47 48 0   18 18

% 0.0% 4.8% 95.3%100.0

% 0.0%   100.0%100.0

% 0.0% 2.1% 98.0%100.0

% 0.0%   100.0%100.0

%

To get career development

Count

0 3 19 22 1 2 39 42 3 6 40 49 3 3 12 18

% 0.0% 13.6% 86.3%100.0

% 2.4% 4.8% 92.8%100.0

% 6.1% 12.2% 81.7%100.0

% 16.7% 16.7% 66.6%100.0

%

To have health carebenefits

Count

1 1 20 22 1 3 38 42 7 4 39 50 1   17 18

% 4.5% 4.5% 90.9%100.0

% 2.4% 7.1% 90.4%100.0

% 14.0% 8.0% 78.0%100.0

% 5.6%   94.4%100.0

%

The leadership style of the organisation

Count

0 4 16 20 0 6 35 41 1 5 42 48 1 2 16 19

% 0.0% 20.0% 80.0%100.0

% 0.0% 14.6% 85.3%100.0

% 2.1% 10.4% 87.5%100.0

% 5.3% 10.5% 84.2%100.0

%

The organisational climatewithin the organisation

Count

1 1 19 21 2 6 33 41 1 3 46 50 0 5 14 19

% 4.8% 4.8% 90.5%100.0

% 4.9% 14.6% 80.5%100.0

% 2.0% 6.0% 92.0%100.0

% 0.0% 26.3% 73.7%100.0

%

- 40 -

The performancemanagement system in the organisation

Count

1 3 17 21 0 3 38 41 2 7 40 49 2 3 14 19

% 4.8% 14.3% 81.0%100.0

% 0.0% 7.3% 92.7%100.0

% 4.0% 14.3% 81.6%100.0

% 10.5% 15.8% 73.7%100.0

%

To receive performancesupport in the organisation

Count

0 4 17 21 0 2 39 41 3 5 42 50 1 3 15 19

% 0.0% 19.0% 81.0%100.0

% 0.0% 4.9% 95.1%100.0

% 6.0% 10.0% 84.0%100.0

% 5.3% 15.8% 79.0%100.0

%

To receive perks

Count 0 5 16 21 2 7 30 39 9 13 27 49 3 4 9 16

% 0.0% 23.8% 76.2%100.0

% 5.2% 17.9% 76.9%100.0

% 18.4% 26.5% 55.1%100.0

% 18.8% 25.0% 56.3%100.0

%

To receive retirement benefits

Count 0 1 18 19 1 2 39 42 5 6 37 48 1   16 17

% 0.0% 5.3% 94.7%100.0

% 2.4% 4.8% 92.9%100.0

% 10.5% 12.5% 77.1%100.0

% 5.9%   94.1%100.0

%

To receive recognitionwithin the organisation

Count

0 6 14 20 1 2 39 42 3 7 40 50 2 3 12 17

% 0.0% 30.0% 70.0%100.0

% 2.4% 4.8% 92.8%100.0

% 6.0% 14.0% 80.0%100.0

% 11.8% 17.6% 70.6%100.0

%

To receive incentives to save

Count 1 5 15 21 4 3 35 42 6 10 34 50 1 3 14 18

% 4.8% 23.8% 71.4%100.0

% 9.5% 7.1% 83.3%100.0

% 12.0% 20.0% 68.0%100.0

% 5.6% 16.7% 77.8%100.0

%

To receive share or share options

Count

1 6 14 21 0 7 34 41 2 6 40 48 0 4 13 17

% 4.8% 28.6% 66.6%100.0

% 0.0% 17.1% 82.9%100.0

% 4.2% 12.5% 83.3%100.0

% 0.0% 23.5% 76.4%100.0

%

To have succession planning within the organisation

Count

0 3 18 21 0 3 38 41 2 7 41 50 2 3 13 18% 0.0% 14.3% 85.7% 100.0 0.0% 7.3% 92.6% 100.0 4.0% 14.0% 82.0% 100.0 11.1% 16.7% 72.2% 100.0

41

% % % %

The have time-off options

Count 0 2 19 21 0 2 41 43 4 11 34 49 1 3 15 19

% 0.0% 9.5% 90.4%100.0

% 0.0% 4.7% 95.4%100.0

% 8.1% 22.4% 69.4%100.0

% 5.3% 15.8% 79.0%100.0

%

To have training opportunities

Count

0 2 18 20 0 2 40 42 1 9 40 50 1 3 14 18

% 0.0% 10.0% 90.0%100.0

% 0.0% 4.8% 95.3%100.0

% 2.0% 18.0% 80.0%100.0

% 5.6% 16.7% 77.7%100.0

%

To have a variable pay component as part of the remuneration plan

Count

0 1 18 19 5 4 30 39 2 8 37 47 1 4 13 18

% 0.0% 5.3% 94.7%100.0

% 12.8% 10.3% 76.9%100.0

% 4.2% 17.0% 78.7%100.0

% 5.6% 22.2% 72.3%100.0

%

To have work/life balance

Count 0 2 17 19 0 1 40 41 1 3 46 50 0   17 17

% 0.0% 10.5% 89.5%100.0

% 0.0% 2.4% 97.5%100.0

% 2.0% 6.0% 92.0%100.0

% 0.0%   100.0%100.0

%

42

Table 7

Rotated factor matrix

Factor

1 2 3 4

To have training opportunities .854 .087 .050 .071

To get career development .766 .227 .013-.07

1

To receive performance support in the organization .605 .256 .375 .235

The performance management system in the organization .506 .046 .474 .151

To have succession planning within the organization .483 .458 .184 .015

To receive recognition within the organization .481 .341 .050 .271

The have time-off options .340 .021 .171 .151

To receive share or share options .040 .617 .158 .025

To have health care benefits .165 .596 .074 .152

To receive retirement benefits .269 .549 .003 .411

To receive a base salary .081 .435 .055 .067

The organisational climate within the organization .136-.02

0.846

-.00

7

The leadership style of the organization .156 .207 .740 -.19

- 43 -

5

To have work/life balance .028 .135 .409 .172

To receive incentives to save .208 .431-.08

5.641

To receive perks .340 .323-.03

7.614

To have a variable pay component as part of the

remuneration plan

-.02

5

-.00

8.104 .572

Extraction Method: Principal Axis Factoring.

Rotation Method: Varimax with Kaiser Normalization.

44

Table 8

Categories according to the literature versus research

Literature

Categories

Sub- elements Empirical

Categories

Sub-elements

Pay Base pay

Long term

incentives

Recognition

Variable pay

Total Cost to

Company (TCTC)

Package (Factor

2 in table 7)

Base salary

Health care

Retirement benefits

Share options

Benefits Health

Perks

Retirement

Savings

Time-off

Over and above

TCTC Package

(Factor 4 in

table 7)

Perks

Savings

Variable pay

Learning and

Development

Career Development

Performance

Management

Succession Planning

Training

Career (Factor 1

in table 7)

Career Development

Performance

Management

Performance Support

Recognition

Succession Planning

Time off options

Training

Opportunities

45

Work

Environment

Leadership

Organisational

Climate

Performance Support

Work/Life Balance

Company’s

Working

Atmosphere

(Factor 3 in

table 7)

Leadership style

Organisational

Climate

Work/Life integration

46

Table 9

Mean descriptive of categories aligned with generations

Research Categories Generation

Y

(1981 –

2000)

Generation

X

(1961 –

1980)

Baby Boomers

(1941 – 1960)

Veterans

(1921-

1940)

TCTC package 4.42 4.59 4.32 4.54Over and Above TCTC

package

4.21 4.23 3.80 4.06

Career 4.33 4.52 4.12 4.06Company’s Working

Atmosphere

4.33 4.44 4.50 4.39

47