<?xml version="1.0" encoding="UTF-8"?>
<x>
    <y>
        <z value="john" designation="manager"></z>
            <z value="mike" designation="associate"></z>
           <z value="dave" designation="associate"></z>
   </y>

<?xml version="1.0" encoding="UTF-8"?>
<xsl:stylesheet xmlns:xsl="http://www.w3.org/1999/XSL/Transform"
xmlns:xs="http://www.w3.org/2001/XMLSchema"
exclude-result-prefixes="xs" version="2.0">

<xsl:template match="x">
    <employees>
        <xsl:apply-templates/>
    </employees>
</xsl:template>

<xsl:template match="y">
    <employee>
        <xsl:apply-templates/>
    </employee>
</xsl:template>

<xsl:template match="*[contains(@designation, 'manager')]">
    <manager>
        <xsl:attribute name="value">
        <xsl:value-of select="@value"/>
        </xsl:attribute>
     </manager>
</xsl:template>

<xsl:template match="*[contains(@designation, 'associate')]">
    <associate>
        <xsl:value-of select="@value"/>
    </associate>
</xsl:template>

</xsl:stylesheet>

<?xml version="1.0" encoding="UTF-8"?>
<employees>
    <employee>
        <manager value="john">
            <associate>mike</associate>
            <associate>dave</associate>
        </manager>
    </employee>
</employees>