My friend Tina once told me about a conversation she had with her uncle. He asked her about her job, and she responded that she had just resigned to move to a more fulfilling job with a smaller company. He admonished her for being “erratic”. A real worker, he said, sticks with his company, like he did for 30+ years. She almost never heard the end of it, if not for her aunt who to came to her rescue.

Tina is part of Gen Y, or the Millenium Generation – those born between 1980-1995, said to be tech-savvy, success-driven, prone to change jobs more often, and challenge traditional thinking. From now until the next decade, millenials will be flooding the workforce, and managers will have to find ways to get the most out of them in the workplace. After studying their behavior up close (and yes, I’m a Gen Y-er, too), these are my observations on how to manage this generation and maximize their potentials.

1. Focus on productivity, not hours. More than any other generation before it, millenials want better work-life balance. They prefer flexible schedules that will allow them to leave work as soon as they finish their tasks for the day. To be sure, this will not work for all companies, but for those where it can, I say why not? It’s a win-win situation in that employees will be driven to work more efficiently and meet productivity targets, and afterwards enjoy a relaxing afternoon with friends as their reward. I’ve seen this get implemented with great results.

2. Demonstrate strong leadership. For this generation, respect isn’t freely given by virtue of position. It is earned. They have to see their bosses practice what they preach and demonstrate their competence. Give them a pat at the back to acknowledge their contributions. Be transparent about the goings-on in the company – they appreciate brutal honesty. If you can do these things, you’re sure to secure their esteem and loyalty.

3. The key word is GROWTH. Give them challenging, meaningful work. Millenials constantly look for new experiences and opportunities for growth. Being stuck in a static environment for long periods of time will make them restless, just like other generations, but even more so. This is one of the main reasons why they tend to switch jobs more often. Perhaps it’s because they grew up in a world of fast-paced technology, and they want to evolve at the same rate. Provide them with sufficient mentoring and training to develop their skills, which in turn will make them even more valuable assets for the company. If they demonstrate the readiness, give them accountability for their projects so they can better appreciate the impact of their work on the business.

4. Don’t berate, communicate. As I’ve said before, millenials appreciate honesty and transparency (I don’t think they’re alone in that respect). In addition, they also want to work in an environment where they can speak freely and be treated as equals. To make them listen and follow you, it’s best to talk to them, and not down to them. Having managed millenials myself, I find that this really is the most effective way to reach out to them and improve their performance.

5. Embrace technology. Having been surrounded by technology all their life, they are quicker to adapt to the latest trends. Listen to their ideas on how to use these to boost productivity. Unless it’s critical, a total ban on personal Internet usage at work may actually be counter-productive. A recent study shows that e-breaks relieves stress and rejuvenates the mind, much like coffee breaks. Done in moderation, leisurely activities such as letting them log on Facebook or surf other sites, as long as they comply with your office’s acceptable web usage policy, wouldn’t be a bad idea.