Are Young People Lazy and No Good?

No.

I get a version of this question in many of the management programs and speaking engagements I do. Executives and managers lament that they don't find the same work ethic among younger people they believe they had themselves when young.

Some of this is nostalgia bias: we always tend to bathe memories of our own youth in a glorious, romantic light.

Some of this is sample bias: the executive audiences to whom I speak are made up of people who probably were more oriented toward acheivment than were their peers when they were young. That's how they got to be where they are today.

It's fashionable for older, wiser leaders to bash the young, but it's entirely off base. Consider this Business Section headline, from today's New York Times: "Big Bonuses Still Flow, Even if Bosses Miss Goals." The article goes on to say, in part:

Four more top executives of the Las Vegas Sands, which owns the Venetian Resort Hotel and Casino, received more than they should have. The total in excess bonus payments for the five men was $2.8 million.

The compensation committee of the board conceded that it had made an error. But it said that "the outstanding performance of the company in 2005" justified the extra money, and it allowed the executives to keep it.

Shareholders of Las Vegas Sands did not fare as well. The value of their holdings fell 18 percent last year.

As executive pay packages have rocketed in recent years, their defenders have contended that because most are tied to company performance, they are both earned and deserved. But as the Las Vegas Sands example shows, investors who plow through company filings often find that executive compensation exceeds the amounts allowed under the performance targets set by the directors.

Executives of companies as varied as Halliburton, the military contractor and oil services concern; Assurant, an insurance company; and Big Lots, a discount retailer, all received bonuses and other pay outside the performance parameters set by the boards of those companies.

It is the equivalent of moving the goalposts to shorten the field, compensation experts say.

"Lowering the hurdles is especially disconcerting because very often the goals are not set all that high to begin with," said Lucian Bebchuk, professor at Harvard Law School and author with Jesse Fried of "Pay Without Performance." Mr. Bebchuk said shareholders should be especially alert to increases in bonuses because more companies were shifting away from stock options and into cash incentives.

Some employment agreements actually stipulate that they will provide bonuses even if company performance declines. The agreement struck in 2004 by Peter Chernin, president and chief operating officer of the News Corporation, entitles him to a bonus even if earnings per share fall at the company. If earnings rise by 15 percent in any given year, Mr. Chernin's bonus is $12.5 million. But if they fall 6.25 percent, Mr. Chernin's bonus is $4.5 million, and an earnings decline of 14 percent translates to a $3.52 million bonus.

These kinds of articles get written all the time. As income disparity across the population increases in the United States, they will continue to be written. Real middle class wages have been flat for a long time, and the middle class wealth effect brought about by rising real estate values is tailing off. Enron executives Ken Lay and Jeffrey Skilling have now been found guilty of multiple felonies by a jury. If workers, and even middle managers, are a bit disaffected, that disguntlement comes from within a larger social and economic context.

Young workers oftentimes don't trust their working institutions, and that lack of trust comes from a recognition that entry level workers are expendable as jobs move overseas. Perceiving no loyalty from their employers, young people behave more like economic free agents ready to jump at any better opportunity. That, to many executives, looks like a lack of commitment, even like laziness. But taking care of themselves first by not becoming too attached to their jobs is, for many young people, a rational survival strategy in a global economy.

I'm not saying top executives are bad. I'm not saying young people are bad. I'm not saying all top executives or executive compensation systems are corrupt or flawed, though I am pointing out that this idea is continuing to gain momentum in the wider U. S. culture. I'm not saying anyone is bad! I'm saying scapegoat thinking is typically lazy and self-serving.

I appreciate the desire to find simple answers that confirm our first reactions, but it's simply not true that young people today are any less talented or motivated than the rest of us were when we were young. Human nature has not changed. If you offer young people a real opportunity to grow, show them their talents and efforts matter to your organization, and in particular, to their direct supervisors, they will run through brick walls for you. Just as many of us did when we were young.

I see this in my work for clients on mentoring systems all the time. You have to select the right people for the right jobs, and then, if you want high productivity and loyalty, you have to invest time in your talent. On the other hand, if your business treats its people like cogs in a machine, making little allowance for the expression and understanding of individual people's talents, you'll get just what you expect. We can all congratulate ourselves for being young go-getters once upon a time, but how, exactly, does that help our businesses?