Cristina Banks, PhD, a senior lecturer at Haas Business School at the University of California, Berkeley, thinks she knows why her students have "run screaming to graduate school": Their experience with entry-level jobs, where their needs as employees are habitually ignored, has turned them off of the work world.

"When they leave the undergraduate or graduate program, they're armed with new knowledge and their motivation couldn't be higher to go out and do great things with organizations," she explains. "And within six months, they are discouraged about the opportunities provided to them to actually apply that knowledge and motivation."

Their initial experience is often deflating, say Banks and other industrial/organizational (I/O) psychologists. They're told to pay their dues until they earn enough credit to have a voice--the worst possible management for young people. "It's a terrible waste," says Banks.

I/O psychologists have studied the types of incentives that build job commitment among today's new generation of workers, Generation X. Born between 1961 and 1981, these workers share certain characteristics, such as independence and a desire for a sense of belonging and meaningfulness of work. I/O psychologists like Banks are now passing what they've learned about this group to employers to help them respond adequately to their younger employees' needs.

"Businesses have to be much more responsive to young people when they say they're not being challenged," says Banks. "A company has to be much more intentional in constructing careers to build those qualities into the work-life experience."

It's more than money

Retaining the 40-and-under set can be a challenge. Their company loyalty tends to be short-lived. "In their parents' generation, they would have been seen as job-hoppers," says Russell Lobsenz, PhD, of PerformaWorks in Raleigh, N.C. "That mentality is gone."

But, while their tenure at one job may be brief, their on-the-job dedication is often high. "They're not going to stay with an organization for 30 years like their parents did," says Lobsenz, "but while they are there, they will give 110 percent."

To get the young and peripatetic to stay, employers must do more than pay well.

"Pay, for them, is important only to the extent that they are able to do what they want to do outside the workplace," says Lobsenz. "They are not as materialistic as the Baby Boomers."

In fact, financial incentives don't thrill these kids, says Lobsenz, since many watched their sweet stock option packages go sour with the market downturn. So, what can employers do? Several I/O psychologists offer their advice:

  • Give them access to professional development opportunities. "It's ironic to say, but help them train for other jobs," Lobsenz says. One might guess they would leave the job as soon as the training ended, but Lobsenz says that's not the case. "The more training they get and the more professional development that they see, the more likely they are to stay."

  • Show an honest interest in building their skills. Establish sincere mentor programs and career development programs where individuals feel like their personal career is being invested in and looked after, suggests Banks. Tuition reimbursement is another attractive perk, says Gwen Fisher, PhD, of the University of Michigan Institute for Social Research.

  • Communicate with them--a lot. "Young workers expect a lot more feedback than their predecessors, and they want it immediately," says Lobsenz. "They don't want to wait six months or a year for a formal appraisal."

They want praise, they want to know that they are contributing and they want to see how they fit into the big picture, he says. Banks suggests that employers hold discussion hours and brown-bag lunches so that there is regular communication between leadership and employees.

  • Involve them in decision-making. All workers want to be part of key decisions about the company. But today's new workers are particularly eager to be included in determining how work goals will be met, I/O psychologists say. Lobsenz thinks this trait might be the result of cultural shifts. "They were latch-key kids growing up in the 1970s when the divorce rate was skyrocketing and they learned independence at an early age in order to get through life," he explains. "That probably translates to the work environment as well." Banks suggests creating problem-solving groups that seriously engage employees and their suggestions for better functioning.

  • Offer them access to different kinds of information. "They are adept at using different data," Lobsenz says. "If they work for managers who horde information and don't share, then that's going to be a big problem for these individuals."

  • Make them part of a diverse staff. "One of the defining values of Generation X people is that they have a very high tolerance for difference when it comes to things like sexual orientation and social mores," Lobsenz says. "They want to be around others that are different because they probably feel like they can learn from them."

  • Offer lateral and rotational assignments. The old way of thinking was, "If you're not moving up, you're moving out." Not anymore. Instead, young employees see it as a way to get experience in different roles and responsibilities at their level.

  • Help them achieve balance. A big issue for employees is having enough time to accomplish both their work and personal goals, Fisher says. "It's really individually determined," she says. "What constitutes a balance for any employee is going to depend on what his or her priorities are."

Amenities like onsite exercise facilities, ATM machines and dry-cleaning pick-up services are examples of time- and energy-saving conveniences younger employees also appreciate.

Generation X workers are more apt to want a flexible work schedule that allows them to attend more social events. Independent and technically savvy, younger workers are a breed of their own.

"This is one of the most adaptable cohorts that the nation has ever seen," notes Lobsenz. "They have strong confidence in their skills and abilities." Unafraid to take risks, "they realize that they'll fall on their feet."

Julie Cohen interned at the Monitor last summer and is now at Swarthmore College.