Career Development International

Generational preferences for work environment fit: effects on employee outcomes

James W. Westerman Jeanne H. Yamamura
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James W. Westerman Jeanne H. Yamamura, (2007),"Generational preferences for work environment fit:
effects on employee outcomes", Career Development International, Vol. 12 Iss 2 pp. 150 - 161
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CDI RESEARCH NOTE

12,2
Generational preferences for
work environment fit: effects on
150
employee outcomes
Received June 2006
Revised September 2006
James W. Westerman
Accepted November 2006 Department of Management, Appalachian State University,
Boone, North Carolina, USA, and
Jeanne H. Yamamura
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University of Nevada Reno, Reno, Nevada, USA

Abstract
Purpose – The examination of generational differences is an important area of inquiry for
management research. Firms must recognize the influence of the values and work preferences of the
next generation on organizational outcomes in order both to retain staff and to groom future leaders. It
is proposed to examine the theory that firms’ lack of success at employee retention may be impacted
by the extent to which they understand and address generational differences in values, goals, and
preferences.
Design/methodology/approach – This study used survey methodology to examine generational
and gender differences amongst the work environment preferences of 234 accountants in accounting
firms.
Findings – The results indicated the importance of goal orientation and system work environment fit
for younger generation workers on satisfaction and intention to remain; and relationship fit on the
satisfaction of Baby Boomers. Baby Boomers also experienced higher levels of overall satisfaction
than younger generation employees.
Research limitations/implications – The sample is limited to accountants in the USA.
Originality/value – Generational differences significantly impact employee attitudes and outcomes
in the workplace. If firms are unable to modify their cultures and work environments to adequately
meet the needs of their younger generation employees, they will continue to experience high levels of
dissatisfaction and turnover.
Keywords Employee turnover, Job satisfaction, Accountants, United States of America
Paper type Research paper

Introduction
The demographic shift currently under way in full-time employment in the USA is
significant and well documented. At present, Generation X and Generation Y
employees comprise 45 percent of today’s workforce, and workers under the age of 34
will make up approximately 60 percent of the full-time workforce by 2010 in the USA
Career Development International (Bureau of Labor Statistics, 2004; Martin and Tulgan, 2001). The examination of
Vol. 12 No. 2, 2007
pp. 150-161 generational differences among workers is a critical and underdeveloped area of
q Emerald Group Publishing Limited
1362-0436
inquiry for management research. Ultimately, all organizations are influenced by the
DOI 10.1108/13620430710733631 values and preferences of their next generation, as managers attempt to adapt and
 groom future leaders in a reciprocal process with implications for a firm’s culture Generational
(Judge and Bretz, 1992), ethical issues (Dose, 1997), and human resource policies and preferences
procedures (Jurkiewicz, 2000). Failure on the part of managers to understand and
adjust appropriately to generational differences and the demands of new generations
entering the workplace can result in misunderstandings, miscommunications, and
mixed signals (Fyock, 1990), and can affect employee productivity, innovation, and
corporate citizenship (Kupperschmidt, 2000), ultimately resulting in problems with 151
employee retention and turnover.
Research also suggests that differences between generations in the workforce can be
a significant source of conflict in organizations (e.g. Adams, 2000; Bradford, 1993;
Jurkiewicz, 2000; Karp et al., 1999; O’Bannon, 2001). A study by the Society for Human
Resource Management found that 58 percent of human resource professionals reported
observing conflict among employees as a result of “generational” differences (Society
for Human Resource Management, 2004). An understanding of the differences between
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and relationships among the preferences and motivators of generations and associated
work outcomes can be used as an important building block in the development of
effective recruitment materials, training methods, hiring processes, and benefits
packages (Leschinsky and Michael, 2004).
The accounting industry in the USA provides an illustrative example. Research in
the CPA profession indicates that 86 percent of CPAs believe there is a generation gap
in the profession (Telberg, 2005). For the seventh year in a row, the 2004 annual survey
of CPA firms sponsored by the AICPA’s Management of an Accounting Practice
Committee ranked staff recruitment and retention as a top concern of CPA firms in the
USA (American Institute of Certified Public Accountants, 2003, 2004). Increased
demand for entry-level employees resulting from Sarbanes-Oxley requirements,
coupled with insufficient numbers of accounting graduates, has intensified competition
for new and experienced hires (e.g. Bennett, 2006). PricewaterhouseCoopers reported
“we beg, we borrow, we steal, we grovel, we scour the world” to find personnel, and
reports of poaching are commonplace (McGee, 2005). Some firms have added services
ranging from chair massages to concierge assistance to sweeten recruitment and
retention packages for new employees. These efforts, however, may result in wasted
resources if they do not result in employee outcomes of increased retention and
satisfaction. This research serves as an exploratory study to examine which
dimensions of employee fit with work environments has effects on employee job
satisfaction and turnover intentions between the generations.

Generational differences
A generation is defined as an identifiable group that shares birth years and significant
life events at critical developmental stages (Kupperschmidt, 2000). A generational
group includes those who share historical or social life experiences, the effects of which
are relatively stable over their lives. These experiences influence a person’s feelings
toward authority and organizations, what a person values from work, and how a
person plans to satisfy those desires (Jurkiewicz and Brown, 1998; Kupperschmidt,
2000). The existence of generational differences was illustrated in research by Smola
and Sutton (2002), who examined the differences in value sets between generations.
Their research concluded that “our findings strongly suggest that work values are
more influenced by generational experiences than by age and maturation” (Smola and
 CDI Sutton, 2002, p. 379). Our examination of inter-generational values differences
12,2 references two generational categories – Baby Boomers and the new arrivals into the
workplace, Generations X and Y (Kupperschmidt, 2000; Smola and Sutton, 2002). A
brief description of the generations follows.
Baby Boomers were born between 1946 and 1964, and are often associated with
values such as optimism, team orientation, and personal gratification (Leschinsky and
152 Michael, 2004). They are known as independent thinkers with a “healthy disrespect for
authority”. Baby Boomers have wielded unusual influence over the years as the
“world’s largest cohort”, impacting society, business, and the economy. This influence
has reinforced Boomers’ belief that they are “special” and that their needs will always
be met. The sheer size of this generation, however, also means that its members are
extremely competitive and very concerned with their own self-interests.
Generation X and Y members were born between 1965 and 1994 and were strongly
influenced by the unique experiences of their childhood (e.g. recurrent layoffs since the
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1980s and the development of transitory career paths, two working parents, divorce).
Although considerable attention in recent years has been paid to these generations
individually, they share many common characteristics and are more alike than dissimilar
(research to date has not indicated any substantive differences in work environment
preferences between Generations X and Y, accordingly this study treats the two
generations as a single group). For Generation X and Y members, financial, family, and
societal insecurity have led to a sense of individualism over collectivism (Jurkiewicz and
Brown, 1998). They bring to the workplace well-honed, practical approaches to problem
solving, as they are technically competent and comfortable with diversity, change,
multi-tasking, and competition (Kupperschmidt, 2000). At ease with a “wired” world,
they are “connected” 24 hours a day (Jennings, 2000; Ryan, 2000). They voice their
opinions and have an appetite for work (Smola and Sutton, 2002). Although the
descriptive differences between the Baby Boomer and XY generations have been the
subject of much discussion, the influence of work environment preference differences
between the groups remains empirically unverified and untested.

The importance of work environment fit

Magnusson (1981) and Caplan (1987) have suggested that one of the most important
tasks in psychology may be to examine the individual’s perceptions of the outer world
in interaction with their expectations about environments. We have known for some
time that variables in the work environment impact employee behavior (Blumberg and
Pringle, 1982; Kyriakidou and Ozbilgin, 2004; Niles and Harris-Bowlsbey, 2002; Olson
and Borman, 1989; Peters et al., 1985). Early research on needs-press theory (Murray,
1938), field theory (Lewin, 1943), occupational choice (Holland, 1966), and the theory of
work adjustment (Dawis, 1994) revealed the belief that employee behaviors do not
occur in a vacuum, but in a specific and unique work environment. People placed in
work environments that “fit” are more likely to intrinsically enjoy their work. The
reverse is true for those placed in work environments that do not “fit”. For these
employees, normal daily work occurrences may be unpleasant and interpreted more
negatively, thus resulting in negative outcomes such as boredom, poor work
performance, and lack of satisfaction. Sub-par employee performance is often the result
of psychological problems that are characteristic of a mismatch between an individual
and his/her environment (Lubinsky, 2000).
 Although research indicates that significant generational differences exist in values Generational
(Smola and Sutton, 2002), an unexamined question is whether there are generational preferences
differences in the relationship between work environment fit and individual outcomes.
This research utilizes Moos’s Work Environment Scale (WES) (Moos, 1994), a
person-organization fit measure that focuses on the social climate of work
environments. Social climates represent a conglomerate of attitudes, feelings, and
behaviors which characterize life in an organization, and the idea that the way one 153
perceives the environment tends to influence the way one will behave in that
environment (Moos, 1987; Walsh, 1987). Existing generational research indicates that a
differential sensitivity to work environment fit between the generations is likely to
exist. For example, research by Smola and Sutton (2002, p. 378) indicated that younger
employees were “less loyal to the company”. As a result, younger employees may take
the view that nothing is permanent, and may disproportionately emphasize the
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importance of work environments that match their preferences. They may become
more dissatisfied and more willing to leave if these work environment preferences are
not actualized. During the internet boom of the late 1990s, work environment was a key
factor in high technology firms’ recruiting and retention strategies, including diverse
incentives ranging from casual dress and flexible work schedules to game rooms with
ping-pong tables.
This study examines whether differences exist between the generations with
respect to the relationship between the level of person-organization fit and job
satisfaction and intention to remain with an organization. It hypothesizes that work
environment preferences are more salient and meaningful to younger employees
involved in increasingly transactional, utilitarian, and short-term psychological
contracts with their employers (Atkinson, 2002). For example, research by Smola and
Sutton (2002) indicated that younger generation employees desired to be promoted
more quickly than their older counterparts (indicating high expectations for job
challenge, success, and accomplishment). As a result, an employee’s goal orientation fit
(i.e. his/her desire for a work environment providing suitable levels of job challenge,
participation, and strong expectations for accomplishment) is likely to be more
strongly connected to satisfaction and intention to remain with an organization for
younger generation employees.
With the increasingly transitory nature of work, the reduction in lifelong
employment and the increase in part-time and contract work (Sonnenberg, 1997),
younger generation employees are more likely to be aware of the need for constant skill
development and updating (Hesketh and Bochner, 1993). Rather than passively relying
on employers to take responsibility for employee career development, younger
generation employees are more likely to take a more active role in their career planning
and execution. As a result, it is likely that if the younger generations’ preferences are
not realized in the work environment, the impatience and increased mobility of
younger generation employees will manifest itself in higher levels of dissatisfaction.
Our first hypothesis is thus:
H1. Work environment fit on the dimension of goal orientation is more significant
to the job satisfaction and intention to leave of Generation XY than it is for
Baby Boomers.
 CDI We also anticipate differences between the generations on the importance of
12,2 relationship-oriented work environment fit. Given the increasingly transactional and
technological nature of early employment relationships (Rousseau and Ho, 2000;
Rousseau and Schalk, 2000), it is possible that the expectation for (and the value placed
on fit with) social interaction in the workplace is decreasing for Generation XY
members. The advanced careers of Boomers, on the other hand, are likely to make them
154 more entrenched within their organizations, while their age and family commitments
may make them less mobile. In addition, their position as managers makes social
interaction more important in achieving effective management. These factors may
contribute to an increased need of Baby Boomers for social interaction and cohesion
with cohorts. Meeting this need will, in turn, be important to Baby Boomers’
satisfaction. Our second hypothesis follows:
H2. Work environment fit on the dimension of relationship orientation is more
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significant to the job satisfaction and intention to remain of Baby Boomers

than it is to Generation XY.
Fit between the expectations for and the reality of an orderly, organized work
environment, with clear expectations and control, may also differ between generations.
Generation XY has been described as a “Nintendo Generation” in which work
environment expectations can be described using a video game as a metaphor (Herman
and Eckel, 2002). In this environment, player expectations are clear and well defined,
behavior is continually measured, and players receive consistently high levels of
feedback on their performance, which motivates continuing effort. Generation XY has
grown up in an environment of instant gratification which they can tailor and structure
to meet their desires, including quick access to money (ATMs), information (internet),
entertainment and communication (television, computers, and cellphones), and even
dating (online dating services). Unmet desires among the younger generation of
workers for clear expectations and orderly, organized work environments that more
closely resemble the structured and controlled media environments in which they have
spent such large amounts of time may result in lower levels of satisfaction and
intention to remain with a firm. Our third hypothesis is thus:
H3. Work environment fit on the dimension of system maintenance is more
significant to the job satisfaction and intention to remain of Generation XY
than it is to Baby Boomers.

Inter-generational differences in satisfaction

In research and practice, it is assumed that nearly everyone seeks satisfaction in his or
her work. Further, research in the life span vocational adjustment field indicates that
“as people develop and adapt, their purposes more closely match the work that
occupies their time and effort; in other words, the match becomes increasingly
harmonious [. . .]. Therefore, job satisfaction is expected to increase as people progress
through career life stages” (Jepsen and Sheu, 2003, p. 163). However, as employees have
become more disposable amid a continued move toward increased subcontracting and
outsourcing, generations that possess enhanced expectations of defining one’s
self-worth with one’s job may find more dissatisfaction. Further, the uncertain and
shifting job requirements dictate that employees demonstrate more flexibility,
 openness to new learning, and the ability to cope with continuous change. These Generational
requirements may be less of a frame-breaking experience for Generation XY, having preferences
been raised in a turbulent environment. As a result, we hypothesize decreased
satisfaction of workers in the older Baby Boomer generation, supporting a generational
differences approach as opposed to the life-span vocational adjustment approach,
which anticipates increasing satisfaction over time:
H4. Baby Boomers will have lower levels of job satisfaction than will Generation 155
XY employees.

Methodology
Sample
The sample for this study consisted of the membership of a state society of CPAs in a
Western state. Survey questionnaires were mailed to current members located
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throughout the state and employed in accounting. Out of 1,222 questionnaires

distributed, 234 responses were received, for a response rate of 19 percent. Respondents
ranged in age from 22 to 58, and age was used to categorize the subjects into their
generations. The sample was fairly equal in terms of gender, with 54 percent male and
46 percent female. The majority were married (approximately 71 percent) and 27
percent held a Master’s degree. On average, respondents had 7.42 years of experience.
t-Tests confirmed the lack of significant differences between Generations X and Y on
all variables of interest, enabling the two groups to be combined as a single generation
for purposes of further analysis and hypothesis testing. Our Baby Boomer sample
consisted of 137 subjects, and Generation XY consisted of 97 subjects.

Measures
The Work Environment Scale (WES) was used to assess climate preferences of the
respondents. The WES is descriptive rather than evaluative in nature, and measures
employee preferences for three dimensions of work environment settings:
(1) system maintenance;
(2) goal orientation; and
(3) relationship dimensions.

System maintenance refers to how orderly and organized the work setting is, how clear
it is in its expectations, and how much control it maintains. Goal orientation refers to
the degree to which an environment encourages or stifles growth through providing for
participation in decision-making and autonomy, maintaining a task orientation, and
providing job challenge and expectations for success and accomplishment. The
relationship dimension refers to the degree of interpersonal factors in a work
environment, such as the social interaction and cohesion among workers, and the
friendship and support provided by co-workers and management. Fit or congruence
between an individual’s preferences for and the reality of his/her current work
environment as measured by the WES has been demonstrated as a significant
predictor of employee satisfaction (Westerman and Cyr, 2004; Westerman and
Simmons, 2007) in the person-organization fit literature. The WES measures subjects’
perceptions of their ideal and current work environments using commensurate
measurement scales. “Fit” on each dimension (goal orientation, system maintenance,
 CDI and relationship) is measured by calculating the correlation between the scale
12,2 responses for the actual work environment and the ideal or preferred work
environment.
Two dependent variables were utilized in this study. The first measure, satisfaction,
developed by Agho et al. (1992), incorporates six questions relating to appreciation for
work including enthusiasm, satisfaction, and enjoyment. The second dependent
156 variable measured intention to remain with the organization in accordance with the
scale of O’Reilly et al. (1991), utilized in prior person-organization fit research.

Results
Multivariate regression analyses were employed to investigate whether generational
differences existed in the relationship between the three dimensions of work
environment fit and job satisfaction and intention to remain. The regressions were
performed separately on Generation XY and the Baby Boomers. All of the regression
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models were significant predictors of the dependent variables at the p , 0:01 level. As
hypothesized, different patterns of relationships between dimensions of work
environment fit and the outcome variables were present for each generation. The
multivariate results are presented in Table I.
H1 was fully supported as goal fit was a significant predictor of both satisfaction
and intention to remain with the organization for Generation XY, and not a significant
predictor for Baby Boomers. The results provided partial support for H2, as
relationship fit was a significant predictor of satisfaction (but not intention to remain)
for Baby Boomers. Relationship fit was not a significant predictor of either outcome
variable for Generation XY. H3 also received partial support, as system fit was a
significant predictor of intention to remain with the organization (but not satisfaction)
for Generation XY. System fit was not a significant predictor of either outcome variable
for Baby Boomers. H4, which hypothesized that Baby Boomers would be less satisfied
in the workplace overall than their Generation XY counterparts, was also not
supported (mean difference ¼ 1:56, p . 0:99).

Discussion
As hypothesized, distinctly different patterns of results were found between
environmental fit variables and employee outcomes between generations. The
primary finding of this study is that work environment fit (specifically goal orientation
and system fit) is significantly predictive of employee outcomes for younger generation
employees. Goal orientation addressed the degree to which the working environment
enabled career growth through the provision of decision-making opportunities,
autonomy, and job challenge. For Generation XY accountants, “fit” in goal orientation
seems to represent a primary factor in their career development and success as
professionals, in that it was predictive of both an employee’s job satisfaction and their
intention to remain with an organization. Furthermore, it is likely that if these
preferences for goal orientation fit are not realized in the work environment, the severe
impatience and drastically increased mobility of younger generation employees will
manifest itself in higher levels of dissatisfaction and turnover. The importance of
system fit to employee intentions to remain with an organization also indicates that
younger generation employees are more likely to leave an organization if their desires
for clear expectations and orderly, organized work environments (which arguably
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Generation XY Baby Boomers

Satisfaction Intent to remain Satisfaction Intent to remain
Independent variables Beta Significance Beta Significance Beta Significance Beta Significance

Relationship fit 0.017 0.886 20.031 0.767 0.232 0.027 0.084 0.430
Goal fit 0.282 0.025 0.363 0.001 0.172 0.138 0.155 0.188
System fit 0.245 0.081 0.350 0.006 0.037 0.753 0.142 0.238
Adjusted R 2 0.218 0.382 0.127 0.086
F 9.73 0.000 20.37 0.000 7.19 0.000 4.97 0.003
Note: Values in italics indicate p , 0:05
preferences
Generational

generation
employee outcomes by
Regression analyses: the

environment fit on
effects of work
157

Table I.
 CDI resemble the structured and controlled media environments in which they have spent
12,2 such large amounts of time) are not met.
The finding that relationship fit was the primary determinant of employee
satisfaction for the Baby Boomer generation, may indicate a constraint that Baby
Boomers feel in regards to an increasingly volatile employment market in combination
with a level of decreased relocation mobility as a result of their age. Further, they may
158 have more well-developed family and social networks than younger generation
employees. Although their ability to leave an employer may be limited, this finding
indicates that relationship fit is of particular importance to the job satisfaction of Baby
Boomer employees, and should be considered in the effective management of a Baby
Boomer workforce.

Limitations and implications for future research

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This study combined Generation X and Y into a single sample for analysis. There has
been much discussion as to the conceptual distinctiveness of Generation Y; however, to
our knowledge there are no empirical results reliably indicating such differences.
Future research should examine whether Generation Y has unique workplace needs
and demands in comparison with Generation X. As we did not measure explicitly for
career stage, it is a challenge for future research to disentangle the effects of career
stage and generational differences on our results. Finally, the generalizability of our
results is limited by the response rate and our sample being focused on accountants.
These generalizability issues, while valid, are offset, we believe, by the value added
from the use of a professional sample in an area experiencing substantial staffing
challenges. Future research should expand to include other occupations.
These caveats not withstanding, the results of this study have theoretical and
practical implications. Additional research is needed to more specifically identify
generational differences in work environment preferences and values. Of particular
interest is expansion to address potential occupational, corporate culture, and national
cultural effects. Consideration should also be given to further work on generational
differences in job satisfaction and intention to remain and identification of specific
factors impacting such differences. Such profound demographic shifts as are currently
underway in the USA are not limited to this nation, and the results of this research
indicate that the potential failure of firms to adjust to changed work environment
preferences will affect their sustained competitiveness and ability to contribute to any
country’s continued economic prosperity. We believe that additional research is needed
to identify more specifically the generational differences in work environment
preferences and values to provide managers with the information necessary to ease the
transition between generations and improve workplace productivity internationally.

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About the authors

James W. Westerman is an Associate Professor of Management at Appalachian State University.
He received his PhD in Management from the University of Colorado at Boulder and an MBA
from Florida State University. His research interests include person-organization fit,
compensation, and employee ethics, and has been published in the Journal of Organizational
Behavior, Journal of Business Ethics, Academy of Management Learning and Education, Group
and Organization Management, and the Journal of Business and Psychology, among others. He is
the corresponding author and can be contacted at: westermanjw@[Link]
Jeanne H. Yamamura, CPA, MIM, PhD, is an Associate Professor at the University of Nevada
Reno. Her research is focused in the area of the international management of accounting
professionals and in ethical decision making. Her journal publications include the International
Journal of Accounting, the International Journal of Accounting, Auditing and Performance
Evaluation and the International Journal of Human Resource Management.

To purchase reprints of this article please e-mail: reprints@[Link]

Or visit our web site for further details: [Link]/reprints
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