SHRM Foundation Research Workforce Policies and Practices to Promote Effective Engagement and Retention of the Aging American Workforce Funded: June 2007 Completed: July 2010 Lisa Hisae Nishii, Ph.D., ILR School, Cornell University Susanne M. Bruyère, Ph.D., Employment and Disability Institute, ILR School, Cornell University Ageism and the retention of high performers: The positive impact of three forms of inclusion. Executive Summary Scholars as well as offices within the federal government have warned that the combination of retiring baby boomers, declining fertility rates, and shifts in the critical competencies held by younger workers is contributing to what promises to be a pronounced labor shortage and associated slow-down of the American economy within the next few decades. Despite these warnings, few organizations have taken proactive steps to curtail the negative effects that the aging workforce may have for the future growth of their companies. Given the research which suggests that older workers tend to be better performers than their less experienced, younger counterparts, one obvious means of responding to a shortage in skills is to retain high performing older workers longer. Unfortunately, however, as cautioned by the International Labour Organization and others, a major obstacle to the full utilization and retention of older workers is ageism, or discriminatory attitudes and behaviors toward aging workers, which can demoralize them and discourage them from remaining in the workforce. Indeed, EEOC statistics suggest that verdicts against employers related to age-based discriminating are on the rise, with lawsuits costing defendants a total of $72.1 million in 2009 alone, suggesting that ageism is a major problem in organizations. In this research, Lisa Nishii and her colleagues at Cornell University argue that whether or not high-performing older workers experience ageism will depend on the work context. In their past research, they have found that local conditions within people’s immediate work group have a very large impact on their experiences and engagement, so they focus in this research on the work context of the units/ departments within which older workers are embedded. Specifically, they explore three forms of inclusion as contextual factors that might affect experiences of ageism: the inclusiveness of workers’ unit climates, inclusion in the unit manager’s ingroup, and inclusion in the unit’s age cohort. They argue that these three forms of inclusion matter to the extent that they affect the likelihood that people engage in the type of stereotypical thinking that results in ageism. When contextual factors reduce the salience of age, help coworkers to see stereotype-inconsistent and/or personalized information about older workers, and/or minimize the relevance of age in job stereotypes (i.e., what type of people should fill a particular job), ageism should be reduced. KEY FINDINGS AND IMPLICATIONS FOR PRACTICE Minimizing ageism: 1) Inclusive climates: In inclusive climates, employees perceive HR practices to be implemented without bias such that people of some demographic backgrounds are not disadvantaged compared to others. There also tend to be strong norms about the value of engaging one’s “whole self” at work, developing relationships across traditional demographic boundaries, mindfully learning from differences, and integrating diverse points of view in decision-making. The authors found that in these contexts, older workers are significantly less likely to experience ageism. 2) Inclusion in one’s manager’s “ingroup”: When employees develop high quality relationships with their managers, they benefit from greater access to developmental opportunities and resources, personally motivating exchanges with the leader, and valued group opportunities. As a result, they tend to be conferred high status within their units. For older workers, this should mean that any negative stereotypes that may be associated with age are invalidated. Indeed, the study showed that older workers who are considered to be part of their manager’s “ingroup” experienced significantly less ageism than older workers who were not included in their manager’s ingroup. 3) Inclusion in the unit’s age cohort: To the extent that someone is similar in age to coworkers, they will be included in the dominant age cohort within a unit. However, when people are highly dissimilar from coworkers in terms of age, then their age will be highly salient to coworkers, and they are likely to be perceived as outgroup members. Because people tend to perceive outgroup members in stereotypical terms, the authors expected that age dissimilarity would increase the chances that older workers would experience ageism. However, at least in this sample, age dissimilarity did not appear to put older workers at greater risk of experiencing ageism (although age dissimilarity put workers of other ages at higher risk of experiencing ageism). Why it pays to minimize ageism: Not surprisingly, the data confirmed the expectation that high-performing older workers who experience age-based discrimination are less satisfied at work, and therefore were more likely to quit their jobs within 6 months after survey data were collected. Practical Implications: • Just because employees are not filing formal claims of discrimination does not mean that they aren’t experiencing the kind of negative interpersonal interactions that make their work lives unpleasant and therefore make them more likely to quit their jobs. • The findings of this study converge with other recent research evidence about the pay-off associated with creating inclusive organizations. Organizations would be well-served by assessing employees’ perceptions of the inclusiveness of the organization in their annual employee surveys. Units that lack inclusive climates should be targeted for interventions that focus on identifying perceived sources of bias, shifting people’s assumptions so as to allow the discovery of unseen connections among group members, and implementing group process strategies that foster more democratic decision-making. Once members have opportunities to develop more differentiated and meaningful understandings of “different” others, they will be less likely to rely on damaging stereotypes when interacting with one another. • Line managers need to be made aware of the benefits associated with inclusive leadership, and be trained on strategies for refining their leadership styles in ways that enable them to develop high quality relationships with employees of all backgrounds and needs. Bottom Line Older workers tend to perform at higher levels than younger workers, so they are a valuable asset to organizations. However, when older workers experience age-based discrimination, they are more likely to quit their jobs, taking their institutional knowledge and expertise to competing firms. The good news is that organizations can do something about this: when they cultivate inclusive work group climates, and encourage line managers to develop supportive, high-quality relationships with all workers (including older workers), older workers will tend to experience less age-based discrimination and be more likely to stay. When organizations take measures to reduce age-based discrimination, they lower not just the strategic liability associated with losing high performers but also the legal liability associated with discrimination. Study Methods A total of 14,276 employees of a wholesale distribution company responded to an online survey. From among these respondents, the 4,625 non-supervisory employees who worked in one of 779 units that had at least one respondent who was 55 or older were retained for further analyses. Analyses related to the inclusiveness of the unit climates and the age distributions within units were based on data collected from these 4,625 employees. Of them, 411 were older than 55 and were considered “high performing” based on their above company-average scores on their performance rating. It was their experiences with ageism, satisfaction, and turnover that were the central focus of study analyses. Read the full report. View the full list of SHRM Foundation funded research.