Millennials & Compensation (Originally published May 2007)

Millennials (born approx. 1981-2000) are coming into the workforce with high salary aspirations. Once on the job, their expectations of rapid promotion and pay increases confound employers who expect a certain level of performance and service to justify a raise. One compensation innovation used in manufacturing environments today is skill-based pay, which compensates employees for skills, not job titles, and ties salary increases to the acquisition of new, relevant skills. Skill-based pay, also known as knowledge-based pay, lends itself well to the Millennial mindset. Here’s why:

• It validates Millennials for their existing aptitude and ensures they’ll receive financial recognition for mastery of new skills
• It empowers Millennials to take control of their professional development through targeted goal setting
• It’s a symbolic departure from the traditional “pay-your-dues” approach, a model Millennials bristle at
• It places the emphasis on training, a value Millennials hold dear

Want more tips for managing the different generations in your workplace? Contact us at www.interchange-group.com. We look forward to hearing from you!