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date: 20 November 2017

Aging Workforce Issues from a Multilevel Approach

Summary and Keywords

The proportion of older people in the industrialized workforce is increasing owing to the aging of the baby-boom generation, improved health in industrialized countries, changing retirement laws, need for additional income by older workers, and entry of fewer younger people into the workforce in some countries. This “graying” trend of the workforce raises a number of issues such as the needs, motivation, job attitudes, and behaviors of older workers; how to manage age diversity issues at work; late career issues; and preparing the worker and the organization for retirement. Specifically, older worker issues as a research topic includes work-relevant changes taking place within individuals as they age (e.g., physical, cognitive, and personality changes); how older workers are affected by their physical and social environments; the sources of age stereotyping and discrimination and how to combat them; and how these factors affect outcomes such as older workers’ well-being, health, attitudes, motivation, performance, and desire to continue working.

Keywords: age, aging, age stereotyping, age discrimination, age diversity, age-related changes, aging workforce, aging in the workplace, older workers, older workforce

Introduction

The proportion of older workers in the global workforce is increasing because of factors such as the aging of the population in most countries, increased life expectancy, improved healthcare services in developed countries, retirement laws that have raised the retirement age, and the need for additional income (Bloom, 2011; Hertel & Zacher, 2015; Truxillo, Cadiz, & Rineer, 2014). The “graying” trend of the global workforce raises a number of issues around the older workforce (Truxillo, Cadiz, & Hammer, 2015) such as who is considered an older worker; the needs and motivation of older workers; age differences in job attitudes and behaviors; age stereotypes, discrimination, and age diversity management; the societal context for older workers; successful policies and laws regarding late career issues; and preparing the worker and the organization for retirement.

Definitions

Who Is an Older Worker?

In this article, an older worker is defined as one who is at the later stages in his or her career or approaching retirement age or who remains employed after the standard retirement age. Instead of a specific age or age range—which can vary considerably across jobs and across legal and societal contexts—the term “older worker” generally refers to as those in their late 50s, 60s, and older, who are actively involved in the workforce. This broader definition provides a wider representation of the older-worker population given that there are variations across countries in terms of normal retirement age (e.g., the normal retirement age for an employee entering the labor force in 2014 is 67 in Canada, Israel, Netherlands, Norway, and the United States; 65 in Germany and Turkey; and 63 in France; Organization for Economic Co-operation and Development [OECD], 2015, p. 133) and societal norms about aging (e.g., cultural values concerning getting older and being employed at older ages), and differences in ages across professions and work sectors, as well as individual differences in how people age (e.g., physical and psychological changes by age).

Systems Approach to Development and the Multilevel Context for Older Workers

The systems approach to development (Bronfenbrenner & Morris, 1998) posits that human development takes place via the interactions between individuals and their surroundings. As opposed to growing up and developing in isolation, humans interact with the agencies in the immediate environment (e.g., family members, friends, peers in a work group, supervisors, and colleagues) and in broader environments (e.g., society), and these mutual relationships function together to shape people’s attitudes and behaviors in life. These relationships occur on a continuous basis throughout life, and individuals contribute to them by their own individual characteristics, while at the same time contextual factors contribute to how they will define themselves and react in certain situations.

Taking the systems approach, this article discusses the issues around the aging workforce from a multilevel perspective. First, it presents the issues at the individual level by describing the within-person changes that occur by age, such as physical, cognitive, and personality changes. Next, the issues at the organizational context level are addressed, which arise when older workers interact with their colleagues at work. Age-based changes in work motivation, training motivation, job attitudes, and work performance are summarized. Age stereotyping and discrimination are outlined; and how they emerge and affect older workers’ job attitudes and behaviors is reviewed by pointing out relevant theories. Finally, from a broader level, this entry discusses the implications of the societal context within which older workers live and work by outlining the recent trends and retirement policies and how they influence the evolving issues around the aging workforce.

Individual Context for Older Workers: Age-Related Changes Within the Person

A number of age-related changes occur within the person that may affect work life. These include the changes in physical and cognitive capacities and personality characteristics. Two life-span development theories have emerged in the age and workplace literature: selection-optimization-compensation (SOC) theory (Baltes, 1987) and socioemotional selectivity theory ([SST]; Carstensen, 1995), and are helpful in describing the motivational changes by age.

Physical Changes

Neurophysiological and biological aging occurs slowly and gradually across the life span. Sensory capacities, including vision, hearing, and smell, are adversely affected by age, and the impairments become more apparent after middle adulthood (Papalia, Sterns, Feldman, & Camp, 2007). Because of the loss of muscular mass starting around age 30, muscular strength and endurance weaken; and motor functions and coordination slow down, causing a decline in the speed of performance and reaction times (Kaplan, 1993). The reserve capacity of the body’s organs tends to decline slowly by age, which may adversely affect coping with physical demands of everyday life (Fries & Crapo, 1981). However, these changes are variable between individuals and may depend on other factors, such as gender, ethnicity, lifestyle choices (e.g., diet, exercise), and genetic or environmental factors (e.g., risk of exposure to toxic materials).

Cognitive Changes

Issues about age-related cognitive changes attempt to understand how different types of cognitive ability change across the adult life span. Research differentiates between different types of intelligence or cognitive skills, typically broken down into two broad categories (Cattell, 1943). Fluid intelligence addresses the capacity to process novel information and for abstract reasoning, short-term memory, learning, and problem-solving. It tends to peak at young adulthood and decline throughout the life span (Schaie, 1996). On the other hand, crystallized intelligence includes general knowledge, vocabulary, verbal expressions, and experiences that one gains over one’s lifetime. While fluid intelligence tends to decline after young adulthood is reached, crystallized intelligence tends to increase through middle age and beyond (Baltes, 1997; Cattell, 1987). In this respect, a loss-and-growth process occurs over the adult life span in experiencing a decline in fluid intelligence while accumulating crystallized intelligence. (Ackerman, 2014; Kanfer & Ackerman, 2004; Klein, Dilchert, Ones, & Dages, 2015). It is noteworthy to add that, like physical ability, cognitive ability is influenced by many factors besides age, such as culture and cohort effects (Hertel & Zacher, 2015; Salthouse, 2014).

Changes in Personality Characteristics

Research has challenged the commonly held belief that personality was stable across the life span. Investigating 92 longitudinal studies meta-analytically, Roberts and colleagues (Roberts, Walton, & Viechtbauer, 2006) supported that individuals demonstrated mean-level changes in most of the Big Five personality traits (Five-Factor Model, FFM; Costa & McCrae, 1992). Specifically, as people aged, they reported higher scores on agreeableness, conscientiousness, emotional stability, and social dominance, while they became less socially vital. Likewise, studies using cross-sectional and longitudinal samples found support for a mean-level increase in agreeableness and conscientiousness (Soto & John, 2012; Specht, Egloff, & Schmukle, 2011), and a decline in neuroticism for older people (Soto, John, Gosling, & Potter, 2011). In addition to Big Five personality traits, meta-analytic findings (Ng & Feldman, 2012) demonstrated that age was not significantly related to proactive personality and generalized self-efficacy in working adults.

Life-Span Developmental Theories and Motivational Changes

Life-span developmental theories approach human development as a continuous process. In this respect, they provide a theoretical background about how people successfully adapt to age-related changes. These theories can also apply to the understanding of work life. The following section summarizes two of these life-span theories that have emerged in the age and workplace literature and their implications for older worker issues.

Selection-optimization-compensation theory (Baltes & Baltes, 1990). The SOC model suggests that individuals are motivated to use different strategies to keep functioning successfully by attempting to offset negative consequences of declining abilities and resources due to age. Selection strategies help people choose among alternatives when they are setting life goals. Having limited energy and time motivates individuals to attentively review alternative goals and choose those that align with their needs and resources. Selection strategies include such actions as narrowing down goals and prioritizing them. For example, an older employee may choose to focus on a few projects at a time to preserve time and energy for his or her family. Once goals are selected, optimization takes place by reviewing one’s available resource repertoire (e.g., knowledge, skills, and abilities) to optimize his or her performance. For instance, to retain their knowledge of a software program, older professionals may want to practice their skills more often than they used to do. Finally, exerting effort to offset a potentially weak performance due to age-related declines in one’s capacity constitutes compensation strategies. For example, hiring a personal assistant to help with administrative work would save an older manager time and energy that he or she could use in other life domains (Baltes, Zhdanova, & Clark, 2011). Research findings support that older workers were more content with their work life (i.e., they reported higher job satisfaction) if they actively performed these SOC strategies (Schmitt, Zacher, & Frese, 2012). Using SOC strategies also increased the work ability of older healthcare employees when job control was high (Weigl, Müller, Hornung, Zacher, & Angerer, 2013); and receiving a SOC-training enhanced mental well-being of healthcare employees such as nurses when job control was low (Müller, Heiden, Herbig, Poppe, & Angerer, 2015).

Socioemotional selectivity theory (Carstensen, 1995). SST posits that the perception of “time left in life” influences individuals’ motivation to select goals and adopt a present or future orientation in life. The theory suggests that younger individuals tend to have an expansive perception of time, whereas older individuals have a more restricted future time perception (Carstensen, Isaacowitz, & Charles, 1999). As a result of this difference in time perspectives, older individuals tend to consider time a more valuable commodity; try to use the present time more wisely; and choose to invest their resources (i.e., energy and time) in emotion-related goals, such as building and maintaining meaningful social relationships. Consequently, spending more time with close family members and friends or mentoring colleagues at work become more meaningful goals for social relatedness. In contrast, having a more open-ended perception of time, younger individuals adopt a future orientation and feel more comfortable pursuing knowledge-related goals, such as gaining job knowledge and participating in training to advance in their careers. As job-related knowledge accumulates over time, this focus on attaining growth tends to decline later in life, and emotional goals are prioritized. (e.g., Kanfer & Ackerman, 2004; Truxillo, Cadiz, Rineer, Zaniboni, & Fraccaroli, 2012).

Because they recognize different age-related changes in multiple domains within individuals (e.g., cognitive and physical capacities, personality, perception of remaining time) and how those changes can affect motivation, attitudes, and performance, both the SOC model (Baltes & Baltes, 1990) and SST (Carstensen, 1995) are highly relevant to the workplace literature. The implications of these two theories can be easily adapted to the workplace to develop age-related workplace interventions, including training and mentoring programs, work redesign, age-diverse team building, and supportive work-life HR policies for employees of different ages (Truxillo et al., 2015). Another emerging area that integrates the SOC model and SST is the leadership literature (Zacher, Clark, Anderson, & Ayoko, 2015). Capitalizing on age-based motivational changes, the life-span models of leadership aim to explain how leader age is related to leadership effectiveness and the role of leader-follower age differences in leader performance.

The sections so far have summarized the individual context within which physical, cognitive, personality, and motivational age-related changes occur. Stepping back to the multilevel approach of aging workforce issues, the next section analyzes how those changes in the individual level may shape the specific workplace context for employees of different ages.

Age Within the Organizational Context: Work Motivation, Job Attitudes, and Work Performance

This section reviews how these age-related changes may translate into workplace by describing changes in work motivation, job attitudes, and work performance.

Changes in Work Motivation

In line with individual-level age-related changes and life-span developmental perspectives, Kanfer and Ackerman (2004) offered an integrative framework on work motivation by identifying four main themes that change across the life span: loss, growth, reorganization, and exchange. Loss describes the declining capacities in fluid intelligence by age (e.g., abstract reasoning, working memory); whereas growth refers to the improving performance on crystallized intelligence (e.g., general knowledge, verbal comprehension) as one gets older. Reorganization includes age-based changes in the organization and structure of nonability traits (e.g., personality, emotion, and affect). And finally, exchange refers to the changes in one’s values, self-concept, affect and emotions, personality, and vocational interests over the life course. The authors proposed that changes in these four themes across adult life influence work motivation. For example, older workers are more likely to use their accumulated job knowledge to compensate the decline in fluid intelligence and to pursue intrinsically motivated tasks that affirm their self-concept. Younger workers tend to focus on growth to advance in their careers and to participate in learning and development activities to gain the job knowledge and skills their jobs require.

Kooij, De Lange, Jansen, Kanfer, and Dikkers (2011) conducted a comprehensive meta-analysis, including 86 studies with a total sample size of 48,447, to examine the relationship between age and various work-related motives, such as growth, security, social, extrinsic, and intrinsic motives. In line with SST (Carstensen, 1995) and Kanfer and Ackerman’s (2004) model of age-related work motivation, their results showed that age was significantly and negatively associated with growth motives (e.g., development or advancement at work) and extrinsic work-related motives (e.g., promotion, recognition, compensation, and benefits); whereas it was significantly and positively related to intrinsic work-related motives (e.g., job characteristics related to accomplishment, job enjoyment, and existing skill utilization). Thus, Kooij et al.’s (2011) results supported that older workers were more interested in working on interesting jobs and accomplishing meaningful tasks, exercising autonomy and utilizing skill variety at work, and helping others such as mentoring or coaching.

These age-related shifts in work motivation are also supported by the empirical study of Inceoglu, Segers, and Bartram (2012). Investigating two samples with over 10,000 working adults in the United Kingdom, Inceoglu et al. (2012) demonstrated that what motivates employees at work differed across age groups. For example, jobs that require expansive personal resources (e.g., competition and power) were perceived to be less motivating for older workers than for younger colleagues. In addition, older workers reported higher preference for intrinsically rewarding jobs in which they had autonomy and a chance to help others. Finally, older age groups were less motivated by extrinsic rewards, such as material rewards, career progression, status, and recognition, compared to younger workers.

Changes in training motivation. Relevant to work motivation, training motivation may also change over one’s lifetime. As noted in the section “Cognitive Changes,” fluid intelligence that is associated with learning and processing of novel information tends to decrease with age after young adulthood is reached; whereas crystallized intelligence, associated with general knowledge, verbal expressions, and experiences gained over time, tends to increase with age (Baltes, 1997; Cattell, 1987). Also, in line with the life-span work-motivation theories (e.g., Kanfer & Ackerman, 2004; Baltes & Baltes, 1990; Carstensen, 1995), individuals tend to be more growth oriented and motivated to acquire new job knowledge and skills when they are younger. As they become older and gain job knowledge and status in later stages of life, however, pursuing socioemotional goals becomes more meaningful. As a result of these age-related changes in cognitive capacities and the shift in life goals, a single content, design, and delivery method of training may not be equally attractive or beneficial for younger and older workers (Inceoglu et al., 2012). Thus, despite the common negative stereotype that older workers are less motivated to learn compared to their younger counterparts, research argues that older workers are not less motivated to learn but that they are motivated by different job features (Inceoglu et al., 2012). For example, older workers approached coaching trainings more favorably when they could satisfy generativity motives by acquiring new skills to pass their knowledge onto younger colleagues (Ng & Feldman, 2008).

As examples of training design, research supports that older workers benefit more from self-paced training (Callahan, Kiker, & Cross, 2003) in which they are allowed to adjust their own speed while learning; and they respond better to error-management training (e.g., Carter & Beier, 2010) that encourages trainees to perform errors as they learn.

Implications of the changes in work motivation and training motivation. These findings have important implications that combat the negative stereotypes of the aging workforce by demonstrating that older workers value different work characteristics more than younger colleagues, and thus they are not less motivated (Kanfer & Ackerman, 2004; Ng & Feldman, 2012). In an attempt to evaluate whether common stereotypes about older workers were consistent with the empirical data, Ng and Feldman (2012) conducted a meta-analysis including 418 studies (N = 208,204). The results presented no empirical support that older workers had low work motivation. Moreover, there was a positive, though weak, relationship between age and job motivation (.11) and job involvement (.12). Despite the common negative stereotype that older employees have lower ability to learn (Posthuma & Campion, 2009), empirical data (Ng & Feldman, 2012) suggests that age was negatively, yet weakly, related to career development motivation (−.14), learning self-efficacy (−.17), and motivation to learn (−.14). In addition, although age was negatively, yet weakly, related to training motivation (rc = −.05; 95% CI: [−.05, −.05]), no significant relationship was detected between age and training participation (rc= −.04; 95% CI: [−.10, .02]). To conclude, the research evidence points out that the relationship between age and work motives is not necessarily negative, and that the magnitude of the negative relationship is not as strong as it are commonly assumed to be (Ng & Feldman, 2012).

Changes in Job Attitudes

Job attitudes refer to “evaluations of one’s job that express one’s feelings toward, beliefs about, and attachment to one’s job” (Judge & Kammeyer-Mueller, 2012). Meta-analytic findings suggest that older workers generally hold more favorable attitudes toward their jobs, colleagues, and organizations (Ng & Feldman, 2010). Some of the attitudes that were positively associated with age were organizational commitment, organizational identification and loyalty, satisfaction with coworkers and supervisors, interpersonal trust, job satisfaction, and intrinsic work motivation. In line with SST (Carstensen, 1995), the authors argued that older workers tend to pursue meaningful emotion-related goals based on their perception of restricted time in life and try to maximize positive experiences gained “now,” leading to having more positive attitudes toward work and work environment, in general.

Examining the changes in personality traits over time can also help determine whether older workers have different job attitudes. In a longitudinal study, Wille, Hofmans, Feys, and De Fruyt (2013) tracked young professionals’ personality traits and job attitudes over a 15-year time period and reported significantly higher agreeableness and conscientiousness, and lower neuroticism scores at the end of the study. They also revealed that the changes in these personality traits were correlated with the changes in employees’ attitudes regarding their jobs (e.g., job involvement and job satisfaction), thus pointing out the possibility of the maturation of attitudes by age over the life span. It is noteworthy that studies investigating the age-job-attitudes link are limited. To understand how age relates to job attitudes, future research should utilize longitudinal study designs, explore curvilinear relationships in addition to the linear examinations between age and attitudes, and investigate whether age-based changes in job attitudes are uniform across cultures (Yaldiz & Truxillo, 2015).

Changes in Work Performance

Although age relates to most of the job attitudes in a positive way, the relationship between age and work performance is more complex. For example, in terms of the relationship between age and various dimensions of work performance, in their meta-analysis, Ng and Feldman (2008) demonstrated that age was not related to core task performance and found a positive relationship between age and organizational citizenship behaviors, a form of contextual performance. These findings indicate that older workers may attempt to offset the negative consequences of declining fluid intelligence by using improved crystallized intelligence. Taking advantage of their job knowledge, professional expertise, and experience accumulated throughout the years, it would be reasonable for older workers to approach work-related issues on a higher level than younger colleagues with limited job knowledge and experience (Salthouse, 2012).

Salthouse (2012) proposed that age-related cognitive declines may not be necessarily associated with work performance for a number of reasons, such as that individuals do not have to manifest maximum performance at all times in everyday life; there are factors other than cognitive ability (e.g., personality, knowledge, skills, and abilities) that affect success in life; individuals can employ accommodations (e.g., SOC strategies) to counteract potentially negative consequences of cognitive declines on performance; and finally, crystallized intelligence improves in later life. Klein et al.’s (2015) studies on working adult samples from executives and nonexecutives positions provide support to Salthouse’s last argument on crystallized intelligence. The authors investigated the relationship between cognitive ability and performance across different age groups, and found that although age was negatively related to general mental ability scores, different relationships were observed when specific ability components were analyzed (i.e., crystallized and fluid intelligence). The findings showed that older employees outperformed their younger counterparts in verbal ability tests, which are associated with crystallized intelligence, whereas, relative to their older colleagues, younger employees had higher scores in the figural and inductive reasoning tests that are associated with fluid intelligence.

As it would be expected that physical changes, such as declining sensory-motor capacities, would leave older workers in a less physically fit position than younger colleagues, Warr, Miles, and Platts (2001) have noted that the implications of physical changes on work performance have not been studied with larger samples or across jobs. For example, research on occupational health and safety has revealed that age was positively related to safety performance, whereas it was negatively related to objective work injuries (e.g., Ng & Feldman, 2008), which was contradictory to what would be expected by declines in sensory-motor capacities. Moreover, it seems that older workers are less likely to be injured at the workplace compared to younger colleagues, however, when they are hurt, their injuries tend to be more serious (Rogers & Wiatrowski, 2005).

In terms of age-based changes in health conditions and their effects on performance, meta-analytic findings (Ng & Feldman, 2012, 2013) revealed that age was positively associated with a few negative health outcomes such as higher blood pressure and cholesterol, although these negative outcomes did not translate into lower work performance (Ng & Feldman, 2008, 2012). In addition, although age was modestly related to these negative health outcomes, older workers’ self-reports of subjective health found no correlations between age and physical health and somatic complaints. Finally, in terms of self-reported mental health, including anxiety, low positive mood, depression, negative mood, anger, and irritation, the correlations with age were very weak and negative in direction (<−.15), suggesting that these negative outcomes are not associated with age, or to the extent that they are, the relationship is negative. A related concern for the aging workforce is shiftwork (Smith, Folkard, Tucker, & Evans, 2011). Disturbed circadian rhythms as a result of changing sleep-wake hours and their unfavorable associations with sleep problems, fatigue, metabolic disorders, and cardiovascular disease present an increased health risk for older workers, especially those who work night shifts. However, more research is needed to uncover the influence of age-related health conditions on older workers’ performance during shift work.

In conclusion, research findings have presented evidence that cognitive, physical, biological, and motivational changes throughout the life span have numerous implications for older workers’ performance, yet more research is needed to explain the mediating mechanisms (e.g., job and organizational tenure, personality) and boundary conditions (e.g., exercise, dietary habits, job characteristics, and organizational safety climate) before reaching more conclusive results on the age-job performance relationship.

Age Within the Organizational Context: Age Stereotyping and Discrimination at Work

With increased workplace age diversity, there is also an increased chance for age discrimination against workers of all ages. This section focuses on organizational contextual issues in terms of the stereotyping and discrimination faced by older workers.

Definitions

Although sometimes used interchangeably, the terms “age stereotyping” and “age discrimination” reflect separate, albeit related, issues. Age stereotyping includes the process by which workers in different age groups are viewed differently. Age stereotypes may be explicit (conscious) or implicit (unconscious) on the part of the observer. However, age stereotyping may not always lead to age discrimination, whereby older people and younger people are treated differently by supervisors or coworkers. Such treatment can involve a number of human resources decisions (e.g., hiring, performance appraisals, access to training) or more subtle versions of discrimination (e.g., social inclusion within a work group).

Age Stereotyping

A number of mechanisms have been proposed to explain stereotyping more broadly, including age stereotyping.

Stereotype content model: Competence and warmth. One theoretical approach that has dominated the stereotyping literature is that by Fiske, Cuddy, Glick, and Xu (2002). This approach describes two key dimensions of stereotyping—namely, competence and warmth. Specifically, certain subgroups are seen as having different levels of competence and warmth, thus affecting an observer’s stereotype of a person. For example, middle-class people are seen as having both high competence and high warmth so that, overall, there is a positive stereotype associated with them. In contrast, older adults are seen as being high in warmth but low in competence (Cuddy & Fiske, 2002), and these findings regarding older adults are said to hold across cultures. However, it is important to note that much of the research on nonworkplace age stereotyping included people who are beyond retirement age (i.e., in their 70s, 80s, and beyond), so that these results may not hold true for people of working age.

Explicit and implicit age stereotypes. A related line of research in understanding stereotypes differentiates between explicit (conscious) and implicit (unconscious) stereotypes (Greenwald & Banaji, 1995). Explicit stereotypes fall within the conscious awareness of the observer, and in that sense, they may be more easily combated than implicit stereotypes, which the observer may have but not be aware of. This makes implicit stereotypes particularly insidious both to detect and to combat. The measurement of such implicit stereotypes is also a challenge, although one dominant approach has been through IATs (implicit association tests; Greenwald, McGhee, & Schwartz, 1998), which are said to tap into unconscious stereotypes by measuring a person’s response latencies. Research in the social psychology literature differentiates implicit and explicit stereotypes; whereas most of the workplace age discrimination research to date has focused solely on the effects of explicit stereotypes (Truxillo, Finkelstein, Pytlovany, & Jenkins, 2015).

Stereotypes of older workers: General findings. In addition, research has also examined stereotypes specifically associated with older workers. In a review of the literature, Posthuma and Campion (2009) found that typical older worker stereotypes included their being resistant to change and to technology, costlier because they require higher wages and are closer to retirement, and lower performing. This is similar to other meta-analytic evidence regarding the perceptions of older workers (e.g., Bal, Reiss, Rudolph, & Baltes, 2011; Finkelstein, Burke, & Raju, 1995). Moreover, others have argued that older workers may be deemed overqualified; or, at least, overqualification is used as an excuse for age discrimination (Finkelstein, 2011). It is important to note that other meta-analytic evidence (Ng & Feldman, 2012) suggests that most of these older worker stereotypes are not true, except for perhaps having lower motivation to learn and training motivation. Further, there are also some positive stereotypes of older workers, such as being more conscientious and higher in organizational citizenship behaviors than their younger counterparts, and less neurotic (Bertolino, Truxillo, & Fraccaroli, 2013; Truxillo, McCune, Bertolino, & Fraccaroli, 2012). These positive stereotypes of older workers versus their younger counterparts highlight the complexity of understanding why older workers appear to face greater actual discrimination outcomes (Truxillo et al., 2015) and reemployment times (Wanberg, Kanfer, Hamann, & Zhang, 2015).

Job-age stereotypes. In addition, a line of research has identified that there are job-age stereotypes, or stereotypes that are associated with different jobs and industries. As a frequently cited example, the high-tech industry is generally associated with younger-aged people. The existence of these job-age stereotypes have been found for a number of industries and jobs (Cleveland & Landy, 1983; Gordon & Arvey, 1986), and may be partly due to the representation of various age groups within a particular industry. The job-age stereotype concept is important for understanding how discrimination may take place within organizations, because the match between a person’s age group and the job under consideration has been found to lead to discriminatory decisions during hiring processes such as the likelihood of hiring an applicant or an applicant’s expected job performance were they to be hired (e.g., Perry, Kulik, & Bourhis, 1996).

Relational demography and faultlines. Relational demography research in organizations examines the effects of demographic differences on worker and organizational outcomes. Much of the relational demography research is based on social identity theory ([SIT]; Tajfel & Turner, 1979), which posits they people exist in a social world in which their self-image is based on their group memberships. People can associate themselves with certain groups to increase their self-esteem. Conversely, social categorization (Lankau, Riordan, & Thomas, 2005) as an out-group member can lead to negative self-perceptions and may lead to discrimination against them by in-group members. Based in SIT and social categorization approaches, relational demography research examines how demographic differences within work groups can affect outcomes such as worker well-being and productivity (Shore, Cleveland, & Goldberg, 2003; Thatcher, 1999). Faultlines research examines how subgroups of workers may form within teams based on multiple demographic differences, such as age and gender (e.g., two subgroups within a team consisting of older males and younger females), which can lead to increased tension and conflict within the group (Thatcher & Patel, 2011, 2012). Notably, faultlines based on age may have less potent negative effects than faultlines based on other demographic characteristics (e.g., gender and race; Thatcher & Patel, 2011).

Finally, it may be worthwhile to mention the issue of generational differences, often touted in the popular press. However, it is noteworthy that little research has examined the issue of discrimination based on generations; this is perhaps because of the generational concept is highly confounded with chronological age and also because the notion of generations as a concept has been challenged (e.g., Cadiz, Truxillo, & Fraccaroli, 2015; Costanza & Finkelstein, 2015).

Age Discrimination

There have been a number of reviews on actual discrimination against workers based on their age (e.g., Truxillo et al., 2015; Truxillo, Fraccaroli, Yaldiz, & Zaniboni, 2017). These reviews cite a number of ways that age discrimination may occur in organizations, including in recruitment, selection, training opportunities, performance appraisal, retention, and interpersonal treatment. Meta-analytic research confirms that being older is associated with negative workplace outcomes (e.g., Bal et al., 2011; Finkelstein, Burke, & Raju, 1995). Although such age discrimination has been found to exist, its specific underlying mechanism has not been definitively identified, and perhaps varies on the particular decision and context. For example, demographic differences have been found to have fewer effects over time as workers come to know each other at a deep level, not just by the demographic group with which they are associated (Harrison, Price, Gavin, & Florey, 2002). If this is the case, then age stereotypes may affect workplace decisions when less is known about the employee (e.g., they are a job applicant) than when they have become well known to the observer (e.g., during performance appraisals.)

Age Diversity in the Workplace

This section describes research streams on the social environment faced by workers of different ages. This issue has taken increased attention from researchers as workgroups have grown more age-diverse with different ages working side-by-side. One take-away message of this work is that age diversity may increase some workplace challenges, but if properly managed (e.g., when management fosters a positive age diversity climate for people of all ages), age diversity can strengthen team functioning.

Age Diversity Climate

Diversity climate research focuses on employees’ shared perceptions of how workers from different subgroups are treated within an organization (Avery, McKay, & Wilson, 2007). The age diversity climate literature focuses more specifically on employees’ perceptions of how workers in different age groups are treated within an organization. One key finding of the age diversity literature is that, if mishandled, age diversity may lead to negative outcomes (Kunze, Böhm, & Bruch, 2011). In contrast, the research on age diversity climate suggests that a positive age diversity climate can be fostered through positive HR functions that support people of all ages; and that a positive age diversity climate leads to positive outcomes for the organization, such as decreased turnover and improved productivity (Böhm, Kunze, & Bruch, 2014).

Team age diversity. The effects of age diversity within teams are unclear (Truxillo et al., 2014), perhaps because of the effects of moderators in determining whether age has a positive or negative effect on team processes and performance. For example, demographic diversity in teams may initially hamper team functioning (e.g., Cannon-Bowers & Bowers, 2011), but as noted in the “Age Discrimination” section earlier, increased exposure to other team members over time may reduce negative demographic effects (e.g., Harrison, Price, Gavin, & Florey, 2002). Similarly, age diversity may negatively affect team performance under conditions of low transformational leadership (Kearney & Gerbert, 2009) or under conditions of routine (rather than complex) decision-making (Wegge, Roth, Neubach, Schmidt, & Kanfer, 2008). In short, whether or not age diversity affects team performance is likely to be a function of other situational factors.

Age and leadership. Much has been made in the popular press of the issue of age differences between supervisors and subordinates, particularly in situations where supervisors are younger than their employees. However, the issue of leadership and age is in need of greater examination (e.g., Truxillo & Burlacu, 2015), although researchers are beginning to tackle the issue of age and leader success (Walter & Scheibe, 2013; Zacher, Clark, Anderson, & Ayoko, 2015). For example, Zacher, Rosing, Henning, and Frese (2011) found that older leaders are more successful if they display generativity (support for future generations; Kanfer & Ackerman, 2004) toward subordinates. Research has also shown differences in how performance feedback may be given to older and younger people (Wang, Burlacu, Truxillo, James, & Yao, 2015), an issue related to leadership in an age-diverse workforce.

Age and knowledge transfer. In an age-diverse workforce, older workers and those who transition to retire can be a knowledge source due to their job-related knowledge, skills, and abilities, and the job experience that they accumulated over years. As aging workers get ready to leave the workforce, transfer of critical knowledge from older generations to younger ones who will remain within the organization becomes important for organizational success (Beazley, Boenisch, & Harden, 2002). However, research on knowledge transfer from older and retiring employees is as yet limited (e.g., Burmeister & Deller, 2016) and issues such as types of knowledge (e.g., procedural versus relational), individual (e.g., personality) and relationship characteristics (e.g., age similarity between the older and younger employees, role of trust), and the contextual factors (e.g., organizational support, positive climate) need to be examined to uncover the antecedents of successful transfer knowledge from older workers.

The sections so far have described the age-related changes that occur within the individual and in the organizational contextual environment that surrounds the aging workforce. Proceeding to a higher-level context, the societal context and its implications on older workforce is reviewed next.

The Societal Context for Older Workers

The individual- and organizational-contextual-level issues discussed in the previous sections are related to some broader and deep changes in the socioeconomic and demographic contexts that have mostly occurred in economically developed countries (e.g., Western Europe, North America, and Japan; Phillips & Siu, 2012). These changing trends in socioeconomic and demographic contexts present a new and challenging broader environment for individuals and organizations in decision-making processes and in setting future goals. The following section reviews these changes in the societal context and explains how they are related to issues around the aging workforce.

Demographic Transitions

There has been a consistent decline in birth rates globally during the last 50 years. According to the statistics, birthrates have declined from around 37 births for every 1,000 people in the population between the years 1950–1955 to 20 births per thousand between the years 2010–2015; and this index is particularly low in Europe and North America, at 11 per 1000 (Kinsella & He, 2009). A second change has occurred in the life expectancy of people, which has consistently increased over the last century. In Europe and North America in the early 21st century, people who reach age 65 are likely to anticipate an additional life expectancy of around 20 years, whereas this number was around 14 years in 1950 (Kinsella & He, 2009). Taken together, lower birthrates and longer life expectancy lead to overall aging of the population and, consequently, aging of the working population. Although this trend is evident mostly in economically developed countries, the growth of the older population should also become noticeable in developing countries, such as China and Russia, in the future.

These two salient demographic changes have strong repercussions for the labor market. The declining birthrates pose risks for a possible deficit in the number of future workers and for destabilizing the size of the workforce in Western society (Vaupel, 2010). In addition, the imbalanced distribution of older populations in certain geographical areas, the huge asymmetry between labor forces concentrated in developing countries, and the capital concentrated in advanced industrialized countries may reinforce a migration across countries.

In addition to the increased longevity, people also have improved access to healthcare services than they used to in the past. Consequently, people are able to continue working, under certain conditions, even in their advanced ages. Thus, a relatively new segment of the labor market is emerging: actively working retired individuals. These individuals continue working after retirement age, such as in the form of bridge employment (e.g., a job where they work fewer hours or they have less responsibility). This emerging phenomenon of late career issues after traditional retirement age has begun to capture the attention of researchers (Wang, Olson, & Shultz, 2013). “Retirement” no longer necessarily means quitting working for everyone. For example, there are more 60- or 65-year-olds in the workforce than in the past. In addition, motivational differences may exist among those who prefer to stay active in the workforce. That is, people may decide to postpone retirement to remain socially engaged in life or due to extrinsic motivational factors, such as earning money.

New Pension System Rules

The aging of the population and the relative scarcity of young generations of workers in certain countries can put strong pressure on pension systems, particularly in the Western European countries such as Germany, Italy, and Spain. In addition, the current trend in the “old age dependency ratio”—the relationship between number of people at retirement age relative to the number of people at working age—is alarmingly wide in countries around in the world (Phillips & Siu, 2012). Consequently, actions have been taken to change the retirement laws such as increasing the retirement age or eliminating a mandatory retirement age entirely (Baruch, Sayce, & Gregoriou, 2014). Moreover, a switch from a pension plan based on “pay” to a pension plan based on “direct contribution” has been introduced in many countries (OECD, 2013). However, the effectiveness of these policies in improving labor-market participation for older workers differs across countries. For instance, from 2003 to 2013, while Germany realized an increase of more than 23% in the labor market participation of older workers (from 55 to 64 years old), quite stable rates were observed in other countries (Fraccaroli & Deller, 2015), which shows that the capacity of national governments to activate pension reform and policies varies largely. Other factors that affect the effectiveness of these policies include socioeconomic factors, such as the intensity of economic crisis and the level of youth unemployment. Specifically, it is more difficult to intervene in favor of older individuals’ participation in the labor market in countries where the economic crisis is stronger and the youth unemployment rate is higher.

New Social Meaning of Late Career and Retirement

The recent changes in demographics, labor market, and retirement norms have led to some other important changes in the ways people interpret, make decisions, and plan the future, as well as in their transitioning from work to retirement. A process of destandardization and individualization of the life course in the elderly is underway (Sargent, Lee, Martin, & Zikic, 2013). Accordingly, a greater variability is expected between individuals in terms of the sequence of the events that characterize the late career issues and transitioning into retirement (Beehr, 2014). Thus, the importance of chronological age may change in a way that may make it less predictive in defining work activities or career stages for older workers. In addition to chronological age, there are other factors that influence the level of engagement and activity of older workers in work life, such as financial situation and health conditions of individuals. There are also various psychological and psychosocial factors that determine behaviors and choices of older workers, such as needs (e.g., need for achievement), work values (e.g., importance of work in life, work centrality), future time perspective (e.g., level of aspiration), relationships inside the family (e.g., occupational position of the partner, family roles), the quality of the job (e.g., autonomy and opportunity to use competences), and the quality of the organizational life (e.g., providing recognition and opportunity for growth; Shultz & Wang, 2011; Wang & Shi, 2014).

Changing Attitudes Toward Aging

Attitudes are socially constructed, and they are related to larger cultural norms. Because the “social calendar” of events in the late life course has changed changing, it is common to see a 68-year-old person still working. Another change is that it may be considered quite anomalous to be retired at age 50—which was a common age of retirement in some sectors in 1980s. Moreover, the increasing presence of older workers in organizations and the society can influence the perceptions about the role of seniority in a society (e.g., the extent that older people may be recognized as sources of wisdom and experience). Similarly, age stereotypes against older workers can be reduced by enhancing intergenerational contact in the workplace, as discussed in the “Age Discrimination” and “Age Diversity Climate” sections earlier (Henry, Zacher, & Desmette, 2015). These changes in attitudes, in turn, may transfer into workplace, for example, by directly or indirectly influencing the quality of team functioning (i.e., intergenerational relationship, capacity to manage differences in age) and the organizational age climate (Kunze & Boehm, 2015).

New Psychological Contracts in Organizations

A final theme is related to the social changes within organizations, that is, the evolution of psychological contracts around changing organizational demographics. Psychological contracts describe the informal exchanges between employees and employers to define mutual obligations: positive work atmosphere, opportunity to develop competencies, rewards (e.g., obligations of the organization), extra-role behaviors, loyalty, and adaptability (e.g., obligations of employees) (Rousseau, 1995). Psychological contracts are subjective in nature, and they present a system to regulate the social exchanges in organizations. Rousseau (1995) distinguishes two types of psychological contract: transactional and relational. Transactional contracts refer to a more materialist exchange in which the essential elements of the psychological contract are rewards from one side and good performance from the other. In contrast, relational contracts deal more with socioemotional exchanges, such as loyalty and long-term engagement. How the perceptions of the psychological contracts may change by age can be explained by SST (Carstensen, 1995). Since SST posits that as people get older socioemotional goals become more important, relative to younger workers, older workers would prefer a relational psychological contract that is more focused on the job aspects related to the quality of social interactions and positive emotional exchanges. In line with this argument, Bal and Kooij (2011) examined whether age moderated the relationship between work centrality and transactional and relational contracts. Collecting data from a sample of 465 healthcare workers in the Netherlands, they found that, surprisingly, age was negatively related to both types of psychological contract. However, the moderation analyses revealed that for older workers, when work centrality was high, the relational contract was high and the transactional contract was low. In the light of SST, the authors discussed that older workers who perceived their work as central to their identities had a relational investment in their organization; whereas those who did not perceive work as an important aspect of their lives had no relational investment in their organization.

To sum up, demographic changes, such as increased life expectancy; new retirement laws that facilitate a longer working life; more favorable attitudes toward aging and the changing norms about the presence of older workers in the workforce; and, finally, the relational focus of psychological contracts are among the factors that constitute the societal context that surround the aging workforce.

Conclusion

The global trend of the aging of the workforce is evident and becoming more widespread. Exploring age-related changes pertinent to the within-individual-, organizational-, and societal levels will contribute to our understanding about the older-workers population and to promoting an age-diverse yet more effective workforce.

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