Effect of Workforce Age on Quantitative and Qualitative Organizational Performance: Conceptual Framework and Case Study Evidence
AbstractField studies linking workforce age to performance tend to treat performance as one-dimensional and often focus on individual, not organizational performance. To analyze the effects of workforce age on organizational performance, we suggest treating performance as multi-dimensional with at least two output dimensions: quantity and quality. We provide a novel conceptual framework that borrows insights from multiple disciplines to better understand ageing phenomena in organizations. In particular, we build on psychological and medical studies showing that individual age has different effects on different cognitive capabilities. As a result we argue that workforce ageing may affect various performance dimensions, such as quantity and quality, in different, often opposite ways. In our empirical part we examine a unique dataset containing detailed court data over a time span of 19 years. We find that average workforce age is linked negatively to quantitative organizational performance but positively to qualitative organizational performance. Our findings suggest that future organizational studies should decompose performance at least along the quantity-quality dimension. Our theoretical framework helps to understand the different types of ageing effects and to derive itemized implications for changes in organizational performance. It also helps to reconcile contradictory findings of previous studies and to derive important managerial implications for task assignments, career policies, and company strategies in view of upcoming demographic changes in many developed countries.
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Bibliographic InfoPaper provided by University of Zurich, Institute for Strategy and Business Economics (ISU) in its series Working Papers with number 0143.
Length: 38 pages
Date of creation: Mar 2011
Date of revision:
ageing workforce; demographic change; organizational performance; age productivity effects;
Find related papers by JEL classification:
- J1 - Labor and Demographic Economics - - Demographic Economics
- M51 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Firm Employment Decisions; Promotions
- J7 - Labor and Demographic Economics - - Labor Discrimination
This paper has been announced in the following NEP Reports:
- NEP-AGE-2011-03-12 (Economics of Ageing)
- NEP-ALL-2011-03-12 (All new papers)
- NEP-HRM-2011-03-12 (Human Capital & Human Resource Management)
- NEP-LAB-2011-03-12 (Labour Economics)
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- Uschi Backes-Gellner & Martin R. Schneider, 2011. "Economic Crises and the Elderly," Working Papers 0142, University of Zurich, Institute for Strategy and Business Economics (ISU).
- Uschi Backes-Gellner & Stephan Veen, 2013. "Positive Effects of Ageing and Age-Diversity in Innovative Companies Ð Large Scale Evidence on Company Productivity," Economics of Education Working Paper Series 0093, University of Zurich, Institute for Strategy and Business Economics (ISU).
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