Age-Inclusive HR Practices Lead to Improved Organizational Outcomes

Age-Inclusive HR Practices Lead to Improved Organizational Outcomes
Topic(s): culture, diversity, strategic HR
Publication: Personnel Psychology
Article: Spotlight on age-diversity climate: The impact of age-inclusive HR practices on firm-level outcomes
Authors: S.A. Boehm, F. Kunze, & H. Bruch
Reviewed by: Sijia Li

Most industrialized countries are facing challenges posed by aging populations. Correspondingly, companies have to manage and engage a more age-diverse workforce than ever before. Sometimes, employees from three or even four different generations may work in the same company. Boehm, Kunze, and Bruch (2014) examined the effects of age-inclusive HR practices on organizational outcomes and found promising results.

WHAT ARE AGE-INCLUSIVE HR PRACTICES?

Age-inclusive HR practices may include, but are not limited to, age-neutral recruitment and selection practices, equal opportunities to training, promotion, and transfer, and promotion of an organizational culture that values employees’ contributions regardless of their age. Basically, the HR practices should consistently reflect the organization’s commitment to an age-diverse workforce.

 

HOW DO THEY LINK TO ORGANIZATIONAL OUTCOMES?

Age-inclusive HR practices impact organizational outcomes indirectly through age-diversity climate. Age-diversity climate is defined as “organizational members’ shared perceptions of the fair and nondiscriminatory treatment of employees of all age groups with regard to all relevant organizational practices, policies, procedures and rewards.” In other words, it refers to employees’ shared impression that the organization takes an age-neutral approach to recruitment, promotions, and other employment practices.

Age-inclusive HR practices serve as signals of an age-diversity climate to employees. Employees are likely to perceive the organization as more just, supportive, trustworthy, and having a long-term interest in employees. Therefore, employees will reciprocate with more work-related effort and support for their colleagues, which will contribute to improved organizational performance. Also, organizational commitment and intent to stay will increase, thus reducing turnover intentions.

Through a survey study with 93 German companies, the researchers found that companies with more age-inclusive HR practices enjoyed better age-diversity climate and better organizational outcomes in areas of company growth, financial performance, return on assets, employee productivity, and efficiency of business procedures.

 

WHAT SHOULD ORGANIZATIONS DO?

HR practitioners need to be aware of the demographic change of the workforce and be prepared to handle this trend. Age-inclusive HR practices that address equal access to employment, promotion, training, and opportunity to contribute may be a valuable tool. In order to further promote an age-diversity climate, HR practitioners should also make sure to communicate these practices to employees to increase their awareness. Lastly, age-inclusive HR practices are advantageous to all organizations, not only those featuring a high age-diverse workforce.