Why demotion of older workers is a no-go area for managers

Abstract

Abstract:Demotion -a reduction of an employee's rank and salary -is often mentioned by managers and policy makers as a measure to increase the employability of older workers, but in practice demotion is rarely applied. This paper takes a fresh look at the question of demotion by first employing a survey among European employers and second the use of a survey and a vignette study among managers in the Netherlands (N = 355). The European survey shows that although demotion is not often applied a considerable percentage contemplates the application in the near future, especially those employers who encounter work staff aging. The vignette study offers insight in their stated preferences with respect to demotion for a particular employee, described by a number of possible causes of underperformance. The key question is whether these causes refer to internal or external causes and causes which the employee can or cannot control. By using background characteristics on the manager, obtained through survey questions, we can assess whether the decision to demote is also affected the expectations of managers on the wider consequences of making demotion standard practice. Internal causes such as not willing to participate in training, and not being motivated to work increase the likelihood of demotion, whereas external causes (financial situation of the firm) are of little importance. However, even when an employee scores low points on all possible causes, demotion still is hesitantly considered. Much of this hesitation is connected to the perceived negative externalities which managers expect to materialize once demotion becomes standard practice.3

Do stereotypes about older workers change? A panel study on changing attitudes of managers

“…The central issue this paper focuses on is whether employers' stereotypical views regarding older workers change, and if so, what structural factors explain these changes. The scholarly literature on stereotypes held by employers shows that their human resource decisions on older workers are firmly affected by the stereotypes they hold about them (Avolio and Barrett, 1987;Chiu et al, 2001;Earl et al, 2017;Van Dalen and Henkens, 2018). The fact that employers in aging societies have been lukewarm until now in hiring older workers or investing in their human capital may also be seen as a sign of an employer's distrust in the capacities of the older worker (Munnell and Sass, 2009;Van Dalen et al, 2015;Oude Mulders et al, 2017.…”

Do Stereotypes About Older Workers Change? Evidence from a Panel Study Among Employers

“…Of all the possible character traits that a candidate can possess being of 'old' (55 years and older) puts a candidate most strongly at a disadvantage according to European citizens. Employers have been shown to be influenced in making human resource decisions on older workers by the stereotypes they hold about them (Avolio & Barrett, 1987;Chui, Chan, Snape, & Redman, 2001;Van Dalen & Henkens, 2016). For instance, age discrimination may be the result of the belief that job performance decreases with age (Finkelstein, Burke, & Raju, 1995).…”

Dealing with an aging workforce: Locating threats and opportunities in corporate media

“…Such cultural aspects of traditional labor-market institutions constitute the environment in which frames are created and meaning is made (Scott, 2003). At the same time, measures that break with conventional aspects of traditional Dutch approaches to work and employment, such as demotion (see Van Dalen & Henkens, 2015), were silenced. These culturally-resonant frames, moreover, seem to fit the strategic aims of the organization, allowing them to impart meaning to the issue of workforce aging along the lines of institutional traditions.…”