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

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  • van Dalen, Harry

    (Tilburg University, School of Economics and Management)

  • Henkens, Kene

    (Tilburg University, School of Economics and Management)

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.

Suggested Citation

  • van Dalen, Harry & Henkens, Kene, 2016. "Why demotion of older workers is a no-go area for managers," Other publications TiSEM a52d9382-0db4-4bd5-b2ab-5, Tilburg University, School of Economics and Management.
  • Handle: RePEc:tiu:tiutis:a52d9382-0db4-4bd5-b2ab-58eec4e6c6a4
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    References listed on IDEAS

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    Cited by:

    1. van Dalen, Harry & Henkens, K., 2017. "Do Stereotypes about Older Workers Change? : Evidence from a Panel Study among Employers," Discussion Paper 2017-028, Tilburg University, Center for Economic Research.

    More about this item

    JEL classification:

    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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