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This is a literature review assignment paper based on reading selected academic articles. This paper should demonstrate knowledge of the main themes in the literature on the main topic. The aim of this literature review is to Critically review the recent theoretical and empirical literature on the impact of employee discrimination in contemporary employment relations.

The literature review must look at a specific area of employee discrimination, I have come up with a title question that I thought would be a good starting point,

Is It Discriminatory to Employ a Younger Workforce Over a More Mature Aging One?

Answer

Title: CONTEMPORARY EMPLOYMENT STUDIES

 

Contents

Introduction. 2

Theoretical perspectives on age discrimination. 3

Research trends on age discrimination. 5

Age discrimination in the recruitment process: Hiring and firing of aged employees. 7

Conclusion. 11

References. 12

Introduction

Employment discrimination has become a serious problem today. Many employees are being discriminated for various reasons including age, race, gender, and disability. In many workplaces, there is a growing preference for young employees because they are technologically savvy and they also adapt more readily to the dynamism of the contemporary employment environment. This problem has compelled companies and governments to come up with policies and regulations aimed at ensuring that all employees are subjected to an environment of equal opportunities (Hoque & Noon, 2004). Despite the existence of these policies and laws, older workers continue to be discriminated against particularly in terms of recruitment as well as hiring and firing procedures.

A number of reasons are normally given in research for the tendency by companies to prefer younger employees over their older counterparts. Most of them border on sheer prejudice and negative attitudes towards the older members of society (Pelled & Xin, 2000). By promoting negative attitudes, society seems to be justifying its reasons for failing to accord the necessary attention to these older employees (Loretto & White, 2006). The aim of this paper is to review literature on age discrimination in the recruitment process. The paper attempts to identify recent research findings, gaps in literature, research trends, and theoretical frameworks that various researchers use to explain employers’ preference for younger employees over their older counterparts. This literature review also sets out to answer the question of whether it is discriminatory for a company to employ a younger workforce over an aging one.

Theoretical perspectives on age discrimination

Research findings on the rationale for age discrimination provide very important insights. Researchers have focused on theoretical aspects to try and explain why an organization would prefer to employ a young person instead of an aging person (Wood, G, Wilkinson, A & Harcourt, M 2008; Ng & Feldman, 2009; Platman, 2004; Duncan, 2003. However, the review of literature also sheds light on research gaps, controversies, and areas of study where clarification is required. Although the importance of older workers is emphasized, there is also consensus on employees to exercise control over property rights. In other words, the issue of age discrimination should be viewed against the backdrop of growing pressure by employees to hire employees who are best suited to handle the tasks to be accomplished in the workplace.

A number of theories that seek to explain the phenomenon of age discrimination have been propounded. For instance, Goldman (2001) highlights the importance of social information processing theory. The social information processing theory is based on the view that employees of today are heavily reliant on computer-mediated communication that is facilitated by tools such as email, social media, online marketing, and instant messaging. In computer-mediated communication, employees tend to rely on text-based communication that is devoid of non-verbal cues. According to this theory, users of this form of communication are compelled to learn to communicate in a restricted medium and in the best possible manner to develop close relationships. Incidentally, younger employees tend to be better than older employees when it comes to computer-mediated communication (Goldman, 2001). On the other hand, older employees are likely to be technophobic, and this exposes them to the perception of age discrimination. The day-to-day pressures of the contemporary workplace compel employers to prefer younger, techno-savvy employees over their aging counterparts.

The Institutional Theory has also been proposed as one of the ways of explaining the prevalence of age discrimination in the contemporary workplace (Harcourt, Lam & Harcourt, 2005). This theory is normally contrasted with the Rational Economic Perspective (Harcourt, Lam & Harcourt, 2005) and the Human Capital theory in the explanation for differential treatment and age discrimination (Urwin, 2006). The Institutional Theory emphasizes the legal and formal aspects of organizational structures particularly in the public sector. It is a widely used theoretical posture that puts a lot of emphasis on isomorphism, rational myths, and legitimacy of the formal positions adopted by organizations (Urwin, 2006). Employers who arrive at recruitment decisions based on this theory focus on the need for the organizational actions to bring about legitimacy as opposed to monetary and utility optimization (Harcourt, Lam & Harcourt, 2005). In many instances, this adherence to formal aspects of the recruitment process may create a leeway for discrimination on the basis of age.

In contrast, employers who rely on the Rational Economic Perspective dwell largely on the centrality of conscious decision-making, individual self-interest, and economic optimization. An employer may justify his decision to hire a young person instead of an aging person by arguing that it provides the best prospects for economic optimization. Similarly, this theory may explain the prevalence of differences in the experiences of employees of different ages in terms of the treatment accorded to them by their employers.

The Human Capital Theory highlights the centrality of knowledge, competencies, as well as personality and social attributes in determining the suitability for a job by an applicant. This means that during the recruitment process, focus is primarily on the ability by a job candidate to perform labor in such a way that maximum economic value is attained. The theory emphasizes the importance of an aggregate economic view of the individual person acting within economies. In this context, it is necessary for the employer to consider the complex socio-cultural, biological, and psychological complexity that underlies efforts to functional in the context of economic transactions. Based on this theory, employees may feel the need to subject the aging workforce to new skills training with a view to improve their productivity. Urwin (2006) observes that the Human Capital Theory seems to offer some valid explanations for differences in the experiences of employees at differences.

Research trends on age discrimination

Many issues have been highlighted in research on age discrimination. At the outset, it is worthwhile to point out that very few researchers have focused specifically on age discrimination during the recruitment, and hiring processes (Duncan & Loretto, 2004; Ghosheh, 2008; Harcourt, 2004; Morison, Erickson & Dychtwald, 2006). One may need to infer the views of researchers who have touched on this issue in the process of discussing other matters pertaining to this form of discrimination.

In most studies, age discrimination seems to be defined based on collective perceptions of the aging workforce (Kunze, 2011; Soni, 2000; Snape & Redman, 2003; Chiu, Chan & Snape, 2001). These perceptions are often described using the term “ageism”. According to Chiu, Chan & Snape (2001), age stereotypes are prevalent in both Eastern and Western societies. However, in some cases, aging employees may develop a perception of discrimination based on age even when no such discrimination exists. In some cases, such perceptions have been known to have influence the decision by older employees to retire early (Snape & Redman, 2003).

Organizational values and structures may also encourage employees to promote age discrimination (Perry & Finkelstein, 2000). For example, many companies are increasingly adopting new technologies that older employees are not conversant with. Whenever such companies fail to offer the requisite technology training to these employees, the resulting phenomenon appears to take the form of covert age discrimination. Aging employees who are denied the right to further training may rightly feel that they have been discriminated against.

Moreover, decision makers in organizational contexts sometimes use categories and stereotypical statements that amount to age discrimination especially during the hiring process (Kulik, Roberson & Perry, 2007). Such categories and stereotypical statements are in many cases a demonstration of the never-ending tension between the human rights of workers and the property rights of the employer (Weller, 2007).  To address this problem, employers must strike a balance between the need obtain maximum economic return from all employees and the responsibility safeguard the employment rights of older workers (Weller, 2007).

Many studies have focused on the various ways in which the identity of the aging employees has been developed over the years (Riach, K 2007; Hardy, 2009; Gray & McGregor, 2003; Weller, 2007). According to Riach (2007), ageism has greatly contributed to the development of negative attitudes towards older people. In fact, many older employees consider it an indication of age discrimination. Nevertheless, not much has been said in literature regarding the relationship between ageism and age discrimination.

There is consensus that as people age, they may experience pphysical and mental decline. The decision on whether such challenges on the part of aging employees should be used as a basis for hiring younger employees and leaving out their older counterparts depends on the theoretical framework adopted by the employer. There is no consensus regarding the best theoretical framework to adopt when making decision on whether to leave older employees out of employment based on their age.

In some cases, older worker identity is defined using the “othering” approach (Riach, 2007). This approach encourages discrimination based on age because it creates the impression that older employees bring little value to the employer compared to their younger counterparts. The main reasons provided for this argument include health problems, negative self-perceptions, undervaluation of experience, prevailing ageist attitudes, and financial disincentives to hire older employees (Hobman, Bordia & Gallois, 2004; May, Gilson & Harter, 2004; Morison, Erickson & Dychtwald, 2006). Based on sentiments regarding negative self-perceptions, Hardy (2009) concludes that the solution to lack of employment and re-employment opportunities lay in the minds of older employees themselves.

Age discrimination in the recruitment process: Hiring and firing of aged employees

Age discrimination in the recruitment process entails the creation of artificial limitations that bring about negative consequences for older people’s employment prospects. These artificial barriers cause employers to fail to consider them in the recruitment process. For older employees, such barriers can exist not just in the recruitment process but also in other areas of employee development such as training, career development, and performance appraisal. For employers with unfounded biases against aging employee, one of the major consequences is the loss of experienced and efficient workforce. From a social perspective, old stereotypes regarding the aging process remain. These stereotypes are likely to increase particularly in the contemporary context where the economic costs on aging segments of society keep going up through retirement benefits and pension schemes.

Avery, McKay & Wilson (2007) argue that in societies where social security systems are weak or non-existent, employers are likely to promote age discrimination as a way of abdicating their responsibility to provide older employees with decent retirement benefits. Avery, McKay & Wilson (2007) point out that in such situations, employers are likely to discourage old workers from working beyond the traditionally defined pension retirement ages. Many aging employees are likely to perceive this as age discrimination. To avoid this problem, there is a need to change market policies to include mechanisms through which workers can maintain and indeed enhance all appropriate employment protections and rights.

Literature on age discrimination during the recruitment, hiring, and firing processes highlights the dilemma that employers have to face by seeking to balance between the ruthless pursuit of efficiency and the need to protect the employment rights of all employees. The need to pursue the maximization of output per worker is brought about by harsh economic realities and the growing competitive forces in the market. On the other hand, the push for the protection of equal opportunity rights of all workers arises from statutory and regulatory frameworks established at national and international levels. In the face of this dilemma, employers are compelled to put in place various engagement strategies for older employees (Avery, McKay & Wilson, 2007). Despite the introduction of such strategies, the problem of age discrimination during recruitment, hiring, and firing procedures continues to persist (Avery, McKay & Wilson, 2007).

Not much has been done by researchers to highlight specific instances where older employees have been discriminated against during the recruitment process. In the absence of such systematic analysis, it is difficult to determine whether age discrimination has reduced following the introduction of various engagement strategies for older employees. Moreover, the rate at which new strategies are being introduced is lower than the one at which the workplace environment is changing (Avery, McKay & Wilson, 2007). Consequently, one can only rely on anecdotal evidence to obtain an impression of the changing circumstances of aging employees in the contemporary workplace.

In New Zealand, for instance, a study of 227 organizations revealed that employer behaviour in the hiring process reflected both institutions concerns over the legitimacy as perceived by key stakeholders and rational concerns regarding the need for cost minimization (Harcourt, Lam & Harcourt, 2005). In other words, this indicates that employers in New Zealand use both the Institutional Theory and the Rational Economic Perspective to justify the entrenchment of hiring policies that perpetuate age discrimination (Harcourt, Lam & Harcourt, 2005).

Gray & McGregor (2003) did a study in which they compared two surveys conducted in New Zealand in 2000. One survey involved employees aged over 55 while the other one involved employers. In both studies, respondents’ attention was captured by issues relating to older workers. In the study by Gray & McGregor (2003) the defining feature was the congruence of negative attitudes and stereotypes being promoted in efforts to address issues affecting aging employees. Older employees agreed to some extent with employers about difficulties in training them, their unwillingness to learn, and technophobia (Gray & McGregor, 2003). The older workers stated that training was a major concern; 11.6 percent of them stated that they had been discriminated against in regards to training. According to the older workers, provision of training was a major indicator of the employers’ appreciation of their roles as serious contributors (Gray & McGregor, 2003).

The concept of psychological contract is also being discussed in literature in the investigation of the rationale for age discrimination in the hiring and firing processes. The main problem entails determining the extent to which employers may be said to have violated a psychological contract by firing an older, highly experienced employee. At the same time, fiscal implications are normally put into consideration. In fact, this may have contributed to the growing unsuitability of the contemporary labor market for older employees (Weller, 2007). This argument is being promoted mainly in the context of the human capital discourse. In this case, employer preferences are primarily being shaped by policies that are sensitive to the existing institutional structures rather than the laws of the country.

The question that remains unresolved is: should older workers be fired or should employers put in place measures for increasing their productivity such as training? From a normative perspective, the solution lies in subjecting the employees to further training. However, the reality of the matter is that many employers may be unwilling to incur such costs in a market that is flooded with a high-skilled, young population. According to Weller (2007), policies aimed at increasing their productivity are likely to fail in terms of efforts to maximize output and long-term organizational productivity. This is because of the persistence of socially constructed, age-related stereotypes continues to shape the labor demand (Weller, 2007).

According to Platman (2004), the best solution for aging employees is the adoption of portfolio careers. In a portfolio career, employees avoid working in traditional full-time jobs. Instead, they embark on multiple part-time jobs that may range from temporary jobs, part-time employment, self-employment, and freelancing (Porcellato, Carmichael & Hulme, 2010). For those who still prefer to work in full-time employment, a number of actions may contribute to problem-solving as far as age discrimination is concerned. These actions include the use of the “business case” approach, the embracement of diversity and equal opportunity policies, promotion of anti-ageism policies, and progress towards anti-age discrimination legislation.

Conclusion

Literature on age discrimination has addressed a number of issues in detail while others have hardly received any attention. From this review, it turns out that age discrimination exists side by side with negative attitudes and stereotypes towards older employees. Theoretically, three approaches are being used by employers to facilitate or justify age discrimination; they include the Human Capital Theory, Institutional Theory, and the Rational Economic Perspective. Despite this justification, the employers continue to operate in a dilemma in their struggle to balance between the need to adhere to equal opportunity laws and growing demands for monetary and utility optimization by shareholders.

A number of conclusions can be made based on this review. To start with, few researchers have examined the problem of discrimination in the recruitment, hiring, and firing of older employees. Similarly, very few studies have examined the relationship between ageism and age discrimination. Moreover, there is no consensus regarding the best theoretical framework to adopt when making decision on whether to leave older employees out of employment in preference for their younger counterparts. A number of studies emphasize that older employees themselves need to change their mindsets to avoid perceptions of discrimination. Finally, very few studies have been done to highlight specific instances where older employees have been discriminated against during the recruitment process. Consequently, it is difficult to determine whether age discrimination reduces whenever various engagement strategies for older employees are introduced. Therefore, one can only rely on anecdotal evidence to obtain an impression of the changing circumstances of aging employees in the contemporary workplace.

 

References

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Chiu, W, Chan, A & Snape, E 2001, ‘Age Stereotypes and Discriminatory Attitudes towards Older Workers: An East-West Comparison’, Human Relations, vol. 54, no. 5, pp. 629-661.

Duncan, C & Loretto, W 2004, ‘Never the Right Age? Gender and Age-Based Discrimination in Employment’, Gender, Work & Organization, vol. 11, no. 1, pp. 95–115.

Duncan, C 2003, ‘Assessing Anti-ageism Routes to Older Worker Re-engagement’, Work Employment & Society, vol. 17, no. 1, pp. 101-120.

Ghosheh, N 2008, ‘Age discrimination and older workers: theory and legislation in comparative context’, ILO Working Papers, Geneva.

Goldman, B 2001, ‘Toward an understanding of employment discrimination claiming: an integration of organizational justice and social information processing theories’, Personnel Psychology, vol. 54, no. 2, pp. 361–386.

Gray, L & McGregor, J 2003, ‘Human Resource Development and Older Workers: Stereotypes in New Zealand’, Asia Pacific Journal of Human Resources, vol. 41, no. 3, pp. 338-353.

Harcourt, M 2004, ‘Do Unions Affect Employer Compliance with the Law? New Zealand Evidence for Age Discrimination’, British Journal of Industrial Relations, vol. 42, no. 3, pp. 527–541.

Harcourt, M, Lam, H & Harcourt, S 2005, ‘Discriminatory practices in hiring: Institutional and rational economic perspectives’, The International Journal of Human Resource Management, vol. 16, no. 11, pp. 2113-2132.

Hardy, C 2009, ‘Mind over body: Physical and psychotherapeutic discourses and the regulation of the older worker’, Human Relations, vol. 62, no. 8, pp. 1199-1229.

Hobman, E, Bordia, P & Gallois, C 2004, ‘Perceived dissimilarity and work group involvement: The moderating effects of group openness to diversity’, Group and Organization Management, vol. 29, pp. 560–587.

Hoque, K & Noon, M 2004, ‘Equal Opportunities Policy and Practice in Britain: Evaluating the ‘Empty Shell’ Hypothesis’, Work Employment & Society, vol. 18, no. 3, pp. 481-506.

Kulik, C , Roberson, L & Perry, E  2007, ‘The Multiple-Category Problem: Category Activation and Inhibition in the Hiring Process’, Academy of Management Review, vol. 32, no. 2, pp. 529-548.

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