Bruce Tulgan recalls a conversation he overheard a few years ago at a law firm where he worked as a young attorney. "No loyalty," a senior partner complained about another young, recently hired associate who had just jumped ship. "Such a slacker," another sniped. "Gee," Tulgan wondered, "the lawyer they were talking about went to Harvard Law School. Could she really be a slacker?"

So Tulgan put himself on the generation-gap case. To satisfy his curiosity, he put dozens of Generation Xers -- people born between 1965 and 1976 -- on his personal witness stand and asked them about their experiences in the workplace. Tulgan discovered that his generation was not just a bunch of slackers. They weren't lazy, disloyal, or arrogant. They were just...different. They were, he found, more interested in success and its rewards than in paying dues and climbing the ladder rung by rung.

After a hundred interviews, he realized that he had enough material to write a book: Managing Generation X. Its success also launched Tulgan's company, RainmakerThinking, which specializes in helping managers understand their younger employees. His next book, Winning the Talent Wars, is to be published by Harvard Business School Press in the spring of 2001.

Reporter Alison Stein Wellner talked to Tulgan about how to attract and manage young workers. An edited transcript follows:

Q: What's the biggest mistake that managers make when they're trying to keep young employees?
A: Managers always ask me the wrong question about this: How do we get the best people to pay their dues and climb the ladder? They should be asking me, "How do we get the best work out of the best people on a consistent basis?" That's a different question and a whole different way of looking at management. Smart managers on the front lines are telling us that it's no longer about filling positions -- it's about using a hodgepodge of solutions: temps, independent contractors, former employees.

Q: Why are job-hopping young employees such a problem for small companies?
A: When you lose someone, your investment in recruitment and training goes out the door with them. You're not getting the return that you need on that investment. If you only have one way of employing people -- on-site, full-time, uninterrupted, and exclusive -- then you've only got one way to get a return on your investment in that person. And that's just bad business. The other problem is that so many companies have all of the market opportunities, but they can't seize them because they can't staff as much work as they can sell.

Q: How can you get Gen Xers and Gen Ys to stay with your company long enough to get the job done?
A: Have more than one way of employing people. Companies that get good at being fluid, flexible, and maintaining ongoing relationships with their employees are going to get work done. Instead of thinking about filling positions on an organizational chart, think about how to get the work done. What actually needs to happen?

We recommend a reserve-army approach. When someone leaves, you say: "Great! Now you're part of our fluid talent pool." This usually happens on that employee's last day of work. It would be better to do it on the first day and say: "Welcome aboard! Now, is there any way that we can keep you on an ongoing basis? Where would you like to work and when would you like to do it?"

Q: Does this really work?
A: Absolutely. I just called a former employee and offered her a half-time fluid position. We'd really like to have her do this particular job because she knows exactly how to do it. We'll buy her a cell phone and laptop, pay her a salary and full benefits. Her charge will be just to get the job done. It doesn't matter where and when she does it.

Q: But if you're being so flexible, how can you make sure that the work is really getting done?
A: You manage performance instead of time. Manage results. Have concrete goals, deadlines, and always spell out guidelines and parameters.

Q: How does this work?
A: We use a daily memo. We're all accountable to our own lists, which are sent to everyone by e-mail. It's what keeps us out of our employees' hair. Everyone manages themselves. We're also really into performance-based compensation. It's on a periodic basis, totally based on results.

Q: Can you give an example of how this works?
A: When one of our employees first got here, she was trying hard to keep up with the number of Web subscriptions. She was falling way behind. We asked her what she thought was a reasonable deadline for catching up. She did it. Boom! Cash bonus. We have everyone on a pretty good salary, too. People love it. We also have real flextime. Mostly people find it convenient to be in the office roughly at the same time, but if someone wants a day off, they just say, 'I'm not going to be here on Wednesday.' We don't have a specific number of vacation days.

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