Age diversity and aggregate productivity
Abstract: This research explores theoretically, empirically and quantitatively the role of age diversity in determining aggregate productivity and output. Age diversity has two conflicting effects on output. On the one hand, due to skill complementarity across different cohorts, age diversity may be beneficial. On the other hand, rapid skill-biased technological change makes age diversity costly as up-to-date education tends to be concentrated among younger cohorts. To study this trade-off, I first build an overlapping-… Show more
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It is increasingly recognized that managing organizations with an age-diverse workforce is a prevalent and significant organizational issue (Avery et al., 2007; Kunze et al., 2011). Consequently, one of the critical challenges currently facing HR managers is the effective utilization of the potential of various age groups and the selection of appropriate human resource management (HRM) tools and practices (Smolbik-Jęczmień and Żarczyńska-Dobiesz, 2017). Existing research highlights differences in the approach to older and younger employees. Older workers are often perceived as reluctant to acquire new skills (Armstrong- -Stassen and Schlosser, 2008; Ng and Feldman, 2012a; Gross-Gołacka, 2016), whereas very young employees are considered to lack substantive knowledge and professional experience (Hysa, 2016). Therefore, awareness of the capabili- ties and limitations of each group is crucial for achieving high financial and non- -financial performance, partly due to the complementary competencies of em- ployees from different age groups (Kilduff et al., 2000). Most managers in organizations claim to recognize the benefits of multi- -faceted employee diversity, including age diversity (Kossek and Zonia, 1993; Kossek et al., 2003). However, few organizations take action to increase the age diversity of their workforce (Houkamau and Boxall, 2011; Shen et al., 2014). Nevertheless, the benefits of diversity management are well-documented by numerous scholars (e.g., Subeliani and Tsogas, 2005). Publications emphasize that greater diversity can lead to better market and customer understanding, at- tracting and retaining top talent, problem-solving, and greater organizational flexibility. Additionally, diversity policies can help employ and retain the most talented employees, improve productivity, efficiency, and creativity, enhance staff trust, increase job satisfaction and employee engagement, improve relations with customers and suppliers, and create a positive company image (Özbilgin and Tatli, 2011). One method to increase diversity is the implementation of age-inclusive HR practices. Age-inclusive HR practices (Kunze et al., 2013), also known as age- -friendly organizational practices (Appannah and Biggs, 2015) or diversity- -friendly HR policies (Kunze et al., 2013), aim to overcome age-related barriers, promote age diversity, and ensure an environment where everyone can develop their potential regardless of age (Walker, 1997; Taylor and Walker, 1998). This means that age-inclusive HR practices establish universally accepted principles of cooperation (Bowen and Ostroff, 2004). Every employee group should have a sense of belonging to the organization, be treated equally by supervisors when assigning tasks, and be informed about their work outcomes (Armstrong-Stassen and Schlosser, 2011). Such a sense of coexistence within the organization is based on the need for recognition by others, acknowledgment of individual con- tributions to the common good, and group membership. The sense of organiza- tional belonging depends on employees’ perception of their group membership. Differential treatment of employees may lead to perceptions of favoritism among some employees (Armstrong-Stassen, 2008). Age-inclusive HR practices can thus facilitate the creation of teams consisting of employees of different ages, complementing each other with their skills and experience (Walker, 2005a, 2005b), thereby achieving better outcomes. For these reasons, companies facing an increasing shortage of employees while striving for excellent performance should consider increasing the age diversity of their workforce through appro- priate HR practices. However, the literature does not explain in detail the extent to which organizations implement age-inclusive HR practices, whether these practices affect the age diversity of employees, and how this relationship influ- ences organizational performance. An important factor contributing to the increase in age diversity among em- ployees, as highlighted in the literature, is the presence of a supportive climate for such diversity in the workplace. This climate is defined as the collective per- ception of practices and procedures applied to employees of different ages (Herdman and McMillan-Capehart, 2010). Furthermore, this climate can mani- fest in the respect for employees’ dignity and their age diversity (Wegge et al., 2012; King and Bryant, 2017). Therefore, managers should be interested in cre- ating a climate that supports age diversity in the workplace, as this can lead to the integration of organizational processes with employee behaviors and atti- tudes, ultimately resulting in favorable financial and non-financial outcomes (Bowen and Ostroff, 2004). The literature indicates the risk that age diversity among employees may contribute to processes of categorization based on age group membership (Kunze et al., 2011). Awareness of a supportive climate for age diversity can be leveraged to mitigate the undesirable consequences of age diversity, such as discrimination, stereotyping, and related barriers to potential employee development (King and Bryant, 2017). Enhancing mutual respect among employees of different ages may be key to increasing age diversity and improving both financial and non-financial performance (Dovidio et al., 2010). Thus, the workplace climate can indeed relate to the perception of the strength with which the group influences company practices, within the social context of organizational belonging (Avery et al., 2007). As indicated above, age diversity among employees can positively impact organizational performance − financial outcomes such as return on assets, sales growth, and equity profitability (Richard and Shelor, 2002), as well as non- -financial outcomes like creativity and business decision-making processes (Goll et al., 2001). Additionally, the literature provides evidence that employees of similar ages may often compete with each other, exhibiting low task perfor- mance (Cho and Mor Barak, 2008). Therefore, age polarization among employees can negatively affect both financial and non-financial organizational outcomes. It is worth considering the relationship between the degree of age diversity at the organizational level and the corresponding financial and non-financial results, as these relationships, particularly when accounting for mediating and control vari- ables, are not yet fully explored in the literature (e.g., Harrison and Klein, 2007), especially within the context of domestic literature. It is hypothesized that a mediating factor in the relationship between age diversity and organizational performance is knowledge transfer (Skuza, 2018). According to D.A. Garvin, A.C. Edmondson, and F. Gino (2008), knowledge transfer is understood as learning from internal and external experts, other teams, and departments. In the contemporary economy, knowledge is increasingly val- ued by managers, as possessing key knowledge for the organization can influ- ence its competitiveness (Shen et al., 2014). However, the transfer of knowledge among employees of different ages has only recently become a focus of re- searchers (Kulik et al., 2014). The literature suggests that knowledge transfer can be significant for organizations with age-diverse employees. Preliminary empirical evidence indicates that knowledge transfer between younger and older employees can be valuable, as it allows for leveraging the comprehensive knowledge of others. However, age diversity can also hinder knowledge transfer, as individuals tend to prefer interacting with peers of similar characteristics, particularly sociodemographic traits like age. Therefore, there is concern that age differences may pose obstacles to communication, collaboration, and knowledge transfer. Thus, the relationships between diversity and knowledge transfer, as well as its mediating role in shaping the link between diversity and performance, require further investigation. The issue of effectively managing employees of various ages within an or- ganization is significant both theoretically and empirically due to several reasons: insufficient research on organizational context − while age diversity is an area of interest for researchers, the context of the entire organization has not been adequately studied, particularly in Poland (Shemla et al., 2016); focus on organizational climate and HR practices − previous research has concentrated on how age diversity influences the organizational climate and HR practices; however, the antecedents of diversity have been underexplored, especially regarding how age-inclusive HR practices and workplace climate affect age diversity (Armstrong-Stassen and Schlosser, 2011); overemphasis on financial outcomes − while previous studies have shown that age diversity improves financial outcomes, non-financial outcomes have often been overlooked or minimally analyzed (Kunze et al., 2013); neglect of knowledge transfer − factors that enhance age diversity, such as knowledge transfer, have been largely ignored (Kulik et al., 2014). The current state of knowledge on age diversity remains underexplored and reveals numerous research gaps, despite its importance to all organizations. Much of the literature has focused on intergenerational diversity (Kirton and Greene, 2010). Additionally, researchers are examining the process of inclusion related to social groups or categories within the broader societal context (Marcut, 2014). However, age diversity lacks a clear theoretical framework. This mono- graph aims to present theoretical frameworks for each variable in the model, particularly age diversity. The developed research model includes many new and significant relationships, based on which ten main hypotheses were formulated and tested. The findings and scientific considerations in this work contribute to the de- velopment of the research field and the scientific discipline by: defining age diversity and management − clarifying what age diversity is and how it can be managed; understanding influencing factors − identifying what influences age diversity and how these variables affect organizational functioning; measurement tools − confirming the applicability of measurement tools for vari- ous variables; effective management strategies − presenting effective ways to manage younger and older employees by identifying factors influencing age diversity. The theoretical-cognitive objectives of the study were formulated as follows: systematizing knowledge in the areas of age diversity among employees, age- -diversity-supportive workplace climate, knowledge transfer, and HR practic- es supporting age diversity among employees; determining the influence of age diversity among employees on organizational outcomes considering the potential mediation of individual variables; identifying antecedents of age diversity among employees; developing a conceptual model of the relationship between age diversity among employees and organizational outcomes, HR practices supporting age diversity among employees, knowledge transfer, and age-diversity-supportive workplace climate. The cognitive-explanatory objectives of the study were formulated as follows: investigating the level of age diversity among employees and the application of HR practices supporting age diversity among employees, age-diversity- -supportive workplace climate, and knowledge transfer processes in the sur- veyed organizations; empirically examining the impact of age-diversity-supportive workplace climate on age diversity; empirically examining the impact of HR practices supporting age diversity among employees on age diversity; empirically examining the impact of HR practices supporting age diversity among employees on age-diversity-supportive workplace climate; empirically examining the mediating role of age-diversity-supportive work- place climate in the relationship between HR practices supporting age diver- sity among employees and age diversity; empirically examining the impact of age diversity among employees on organizational outcomes: financial and non-financial; empirically examining the impact of knowledge transfer on organizational outcomes; empirically examining the mediating role of knowledge transfer in the rela- tionship between age diversity among employees and organizational out- comes; empirically examining the mediating role of age diversity among employees in the relationship between HR practices supporting age diversity among em- ployees and age-diversity-supportive workplace climate as well as knowledge transfer. The practical objectives of the study include: formulating guidelines for practice regarding strengthening age diversity among employees and increasing its impact on firm outcomes. The methodological objectives include: confirming the feasibility of using research tools to measure all variables, especially the variable related to age diversity. Therefore, the main objective of the study can be formulated as follows: to explain age diversity among employees in the context of antecedents and organi- zational outcomes. The scientific monograph is divided into five chapters, preceded by an in- troduction and followed by a conclusion. The first chapter presents the theoreti- cal foundations of the concept of age diversity among employees. It starts with a general understanding of employee diversity and highlights its importance not only in human resource management but also in the broader context of corporate social responsibility. The chapter also classifies employee diversity, discusses theoretical foundations of age diversity, and presents theories related to age. It further emphasizes two approaches to describing employees: generational context and groups of younger and older employees. The second chapter charac- terizes the antecedents of age diversity, focusing on age-inclusive HR practices and a supportive workplace climate. It also highlights the relationships between these practices and workplace climate. The third chapter discusses the effects of age diversity at the organizational level, focusing on its impact on financial and non-financial outcomes and the mediating role of knowledge transfer. The fourth chapter introduces the research methodology, including methods, sample selec- tion, variables, measurement, and data analysis. The fifth chapter presents and interprets empirical findings. In conclusion, the study addresses the scientific problem and the extent to which the objectives were achieved, identifies main limitations, proposes practical implications for the business sector, and suggests directions for further research.
It is increasingly recognized that managing organizations with an age-diverse workforce is a prevalent and significant organizational issue (Avery et al., 2007; Kunze et al., 2011). Consequently, one of the critical challenges currently facing HR managers is the effective utilization of the potential of various age groups and the selection of appropriate human resource management (HRM) tools and practices (Smolbik-Jęczmień and Żarczyńska-Dobiesz, 2017). Existing research highlights differences in the approach to older and younger employees. Older workers are often perceived as reluctant to acquire new skills (Armstrong- -Stassen and Schlosser, 2008; Ng and Feldman, 2012a; Gross-Gołacka, 2016), whereas very young employees are considered to lack substantive knowledge and professional experience (Hysa, 2016). Therefore, awareness of the capabili- ties and limitations of each group is crucial for achieving high financial and non- -financial performance, partly due to the complementary competencies of em- ployees from different age groups (Kilduff et al., 2000). Most managers in organizations claim to recognize the benefits of multi- -faceted employee diversity, including age diversity (Kossek and Zonia, 1993; Kossek et al., 2003). However, few organizations take action to increase the age diversity of their workforce (Houkamau and Boxall, 2011; Shen et al., 2014). Nevertheless, the benefits of diversity management are well-documented by numerous scholars (e.g., Subeliani and Tsogas, 2005). Publications emphasize that greater diversity can lead to better market and customer understanding, at- tracting and retaining top talent, problem-solving, and greater organizational flexibility. Additionally, diversity policies can help employ and retain the most talented employees, improve productivity, efficiency, and creativity, enhance staff trust, increase job satisfaction and employee engagement, improve relations with customers and suppliers, and create a positive company image (Özbilgin and Tatli, 2011). One method to increase diversity is the implementation of age-inclusive HR practices. Age-inclusive HR practices (Kunze et al., 2013), also known as age- -friendly organizational practices (Appannah and Biggs, 2015) or diversity- -friendly HR policies (Kunze et al., 2013), aim to overcome age-related barriers, promote age diversity, and ensure an environment where everyone can develop their potential regardless of age (Walker, 1997; Taylor and Walker, 1998). This means that age-inclusive HR practices establish universally accepted principles of cooperation (Bowen and Ostroff, 2004). Every employee group should have a sense of belonging to the organization, be treated equally by supervisors when assigning tasks, and be informed about their work outcomes (Armstrong-Stassen and Schlosser, 2011). Such a sense of coexistence within the organization is based on the need for recognition by others, acknowledgment of individual con- tributions to the common good, and group membership. The sense of organiza- tional belonging depends on employees’ perception of their group membership. Differential treatment of employees may lead to perceptions of favoritism among some employees (Armstrong-Stassen, 2008). Age-inclusive HR practices can thus facilitate the creation of teams consisting of employees of different ages, complementing each other with their skills and experience (Walker, 2005a, 2005b), thereby achieving better outcomes. For these reasons, companies facing an increasing shortage of employees while striving for excellent performance should consider increasing the age diversity of their workforce through appro- priate HR practices. However, the literature does not explain in detail the extent to which organizations implement age-inclusive HR practices, whether these practices affect the age diversity of employees, and how this relationship influ- ences organizational performance. An important factor contributing to the increase in age diversity among em- ployees, as highlighted in the literature, is the presence of a supportive climate for such diversity in the workplace. This climate is defined as the collective per- ception of practices and procedures applied to employees of different ages (Herdman and McMillan-Capehart, 2010). Furthermore, this climate can mani- fest in the respect for employees’ dignity and their age diversity (Wegge et al., 2012; King and Bryant, 2017). Therefore, managers should be interested in cre- ating a climate that supports age diversity in the workplace, as this can lead to the integration of organizational processes with employee behaviors and atti- tudes, ultimately resulting in favorable financial and non-financial outcomes (Bowen and Ostroff, 2004). The literature indicates the risk that age diversity among employees may contribute to processes of categorization based on age group membership (Kunze et al., 2011). Awareness of a supportive climate for age diversity can be leveraged to mitigate the undesirable consequences of age diversity, such as discrimination, stereotyping, and related barriers to potential employee development (King and Bryant, 2017). Enhancing mutual respect among employees of different ages may be key to increasing age diversity and improving both financial and non-financial performance (Dovidio et al., 2010). Thus, the workplace climate can indeed relate to the perception of the strength with which the group influences company practices, within the social context of organizational belonging (Avery et al., 2007). As indicated above, age diversity among employees can positively impact organizational performance − financial outcomes such as return on assets, sales growth, and equity profitability (Richard and Shelor, 2002), as well as non- -financial outcomes like creativity and business decision-making processes (Goll et al., 2001). Additionally, the literature provides evidence that employees of similar ages may often compete with each other, exhibiting low task perfor- mance (Cho and Mor Barak, 2008). Therefore, age polarization among employees can negatively affect both financial and non-financial organizational outcomes. It is worth considering the relationship between the degree of age diversity at the organizational level and the corresponding financial and non-financial results, as these relationships, particularly when accounting for mediating and control vari- ables, are not yet fully explored in the literature (e.g., Harrison and Klein, 2007), especially within the context of domestic literature. It is hypothesized that a mediating factor in the relationship between age diversity and organizational performance is knowledge transfer (Skuza, 2018). According to D.A. Garvin, A.C. Edmondson, and F. Gino (2008), knowledge transfer is understood as learning from internal and external experts, other teams, and departments. In the contemporary economy, knowledge is increasingly val- ued by managers, as possessing key knowledge for the organization can influ- ence its competitiveness (Shen et al., 2014). However, the transfer of knowledge among employees of different ages has only recently become a focus of re- searchers (Kulik et al., 2014). The literature suggests that knowledge transfer can be significant for organizations with age-diverse employees. Preliminary empirical evidence indicates that knowledge transfer between younger and older employees can be valuable, as it allows for leveraging the comprehensive knowledge of others. However, age diversity can also hinder knowledge transfer, as individuals tend to prefer interacting with peers of similar characteristics, particularly sociodemographic traits like age. Therefore, there is concern that age differences may pose obstacles to communication, collaboration, and knowledge transfer. Thus, the relationships between diversity and knowledge transfer, as well as its mediating role in shaping the link between diversity and performance, require further investigation. The issue of effectively managing employees of various ages within an or- ganization is significant both theoretically and empirically due to several reasons: insufficient research on organizational context − while age diversity is an area of interest for researchers, the context of the entire organization has not been adequately studied, particularly in Poland (Shemla et al., 2016); focus on organizational climate and HR practices − previous research has concentrated on how age diversity influences the organizational climate and HR practices; however, the antecedents of diversity have been underexplored, especially regarding how age-inclusive HR practices and workplace climate affect age diversity (Armstrong-Stassen and Schlosser, 2011); overemphasis on financial outcomes − while previous studies have shown that age diversity improves financial outcomes, non-financial outcomes have often been overlooked or minimally analyzed (Kunze et al., 2013); neglect of knowledge transfer − factors that enhance age diversity, such as knowledge transfer, have been largely ignored (Kulik et al., 2014). The current state of knowledge on age diversity remains underexplored and reveals numerous research gaps, despite its importance to all organizations. Much of the literature has focused on intergenerational diversity (Kirton and Greene, 2010). Additionally, researchers are examining the process of inclusion related to social groups or categories within the broader societal context (Marcut, 2014). However, age diversity lacks a clear theoretical framework. This mono- graph aims to present theoretical frameworks for each variable in the model, particularly age diversity. The developed research model includes many new and significant relationships, based on which ten main hypotheses were formulated and tested. The findings and scientific considerations in this work contribute to the de- velopment of the research field and the scientific discipline by: defining age diversity and management − clarifying what age diversity is and how it can be managed; understanding influencing factors − identifying what influences age diversity and how these variables affect organizational functioning; measurement tools − confirming the applicability of measurement tools for vari- ous variables; effective management strategies − presenting effective ways to manage younger and older employees by identifying factors influencing age diversity. The theoretical-cognitive objectives of the study were formulated as follows: systematizing knowledge in the areas of age diversity among employees, age- -diversity-supportive workplace climate, knowledge transfer, and HR practic- es supporting age diversity among employees; determining the influence of age diversity among employees on organizational outcomes considering the potential mediation of individual variables; identifying antecedents of age diversity among employees; developing a conceptual model of the relationship between age diversity among employees and organizational outcomes, HR practices supporting age diversity among employees, knowledge transfer, and age-diversity-supportive workplace climate. The cognitive-explanatory objectives of the study were formulated as follows: investigating the level of age diversity among employees and the application of HR practices supporting age diversity among employees, age-diversity- -supportive workplace climate, and knowledge transfer processes in the sur- veyed organizations; empirically examining the impact of age-diversity-supportive workplace climate on age diversity; empirically examining the impact of HR practices supporting age diversity among employees on age diversity; empirically examining the impact of HR practices supporting age diversity among employees on age-diversity-supportive workplace climate; empirically examining the mediating role of age-diversity-supportive work- place climate in the relationship between HR practices supporting age diver- sity among employees and age diversity; empirically examining the impact of age diversity among employees on organizational outcomes: financial and non-financial; empirically examining the impact of knowledge transfer on organizational outcomes; empirically examining the mediating role of knowledge transfer in the rela- tionship between age diversity among employees and organizational out- comes; empirically examining the mediating role of age diversity among employees in the relationship between HR practices supporting age diversity among em- ployees and age-diversity-supportive workplace climate as well as knowledge transfer. The practical objectives of the study include: formulating guidelines for practice regarding strengthening age diversity among employees and increasing its impact on firm outcomes. The methodological objectives include: confirming the feasibility of using research tools to measure all variables, especially the variable related to age diversity. Therefore, the main objective of the study can be formulated as follows: to explain age diversity among employees in the context of antecedents and organi- zational outcomes. The scientific monograph is divided into five chapters, preceded by an in- troduction and followed by a conclusion. The first chapter presents the theoreti- cal foundations of the concept of age diversity among employees. It starts with a general understanding of employee diversity and highlights its importance not only in human resource management but also in the broader context of corporate social responsibility. The chapter also classifies employee diversity, discusses theoretical foundations of age diversity, and presents theories related to age. It further emphasizes two approaches to describing employees: generational context and groups of younger and older employees. The second chapter charac- terizes the antecedents of age diversity, focusing on age-inclusive HR practices and a supportive workplace climate. It also highlights the relationships between these practices and workplace climate. The third chapter discusses the effects of age diversity at the organizational level, focusing on its impact on financial and non-financial outcomes and the mediating role of knowledge transfer. The fourth chapter introduces the research methodology, including methods, sample selec- tion, variables, measurement, and data analysis. The fifth chapter presents and interprets empirical findings. In conclusion, the study addresses the scientific problem and the extent to which the objectives were achieved, identifies main limitations, proposes practical implications for the business sector, and suggests directions for further research.
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