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Why demotion of older workers is a no-go area for managers
van Dalen,Hendrik Peter Henkens,Kene
van Dalen,Hendrik Peter
Henkens,Kene
Abstract
Demotion – the reduction of an employee’s rank and salary – is often mentioned by managers and policy-makers as a means of increasing the employability of older workers in an ageing labour force. However, so far in practice demotion is rarely applied. This paper is the first empirical investigation of how managers perceive demotion as an instrument of human resource management. By means of a survey and a vignette study among managers in the Netherlands (N = 355), we examine whether managers consider demotion of poorly performing older workers a fair solution. Three contributions stand out. First, based on attribution theory we find support for the hypothesis that managers judge demotion to be fair in those cases where deterioration in task performance is caused by controllable factors (such as work motivation) and unfair when the causes are uncontrollable (such as age). Second, the expectations of managers about the organization-wide consequences of introducing demotion as a human resource policy play a significant role in considering demotion. Most managers perceive negative organizational externalities (e.g. decrease in loyalty and motivation of staff) to arise when introducing demotion and are reluctant to apply demotion in practice. And a third contribution: positive (negative) beliefs of managers about the hard skills – e.g. creativity, willingness to learn, flexibility – of older workers make demotion less (respectively more) likely.
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Date
2018-11-05
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Keywords
demotion, productivity, older workers, managers, vignette sudy, J33 - Compensation Packages ; Payment Methods, M51 - Firm Employment Decisions ; Promotions, M5 - Personnel Economics
Citation
van Dalen, H P & Henkens, K 2018, 'Why demotion of older workers is a no-go area for managers', International Journal of Human Resource Management, vol. 29, no. 15, 4, pp. 2303-2329. https://doi.org/10.1080/09585192.2016.1239214