Diversity in the workplace is now strongly encouraged in progressive organizations, and an increasing number of companies are enacting diversity-related policies. But this Idea suggests certain policies, such as those related to age diversity, may in fact hamper a firm’s performance if managers appear to hold negative age stereotypes.
Issues related to diversity in the workplace have been at the forefront of management research in recent years. Numerous studies have highlighted the benefits of, for example, including more women on boards, combating institutional racism, employing a diverse workforce, etc. Age diversity has also received much attention, with many countries enacting legislation to regulate ‘ageism’ in the workplace; in the UK, the Equality Act 2010 covers this subject. Furthermore, a 2010 Ernst & Young report noted that 53% of business leaders agree that diversity of teams improves both reputation and financial performance.
But this Idea suggests that age diversity could actually have a negative effect on an organization’s bottom line performance. Researchers from the University of St. Gallen discovered that high levels of age diversity can lead to social fragmentation between different age groups. If a company’s employees’ age composition is highly diverse, this can trigger higher levels of a perceived negative age?discrimination climate, say Florian Kunze, Stephan Boehm and Heike Bruch. This in turn can negatively affect company performance.
They identify two factors in particular that play a role in these negative effects; the first is managers’ negative age stereotypes against older employees. The more negative the stereotypes are, the more likely they are to trigger and aggravate a negative age-discrimination climate in the organization, as well as negative age sub-grouping. The latter can incite subgroup competition and subsequently social fragmentation.
Secondly, however, diversity-friendly HR policies can lessen the negative impact of age diversity. If employees perceive that their organization values and promotes diversity, and provides equal opportunities irrespective of demographic attributes, they may avoid discriminatory behaviour. In fact, such policies may have this effect even if they are targeted towards diversity in general, not specifically towards ageism.
Overall, it seems that age diversity in organizations can indeed reap the benefits associated with such policies, but at the same time, managers’ attitudes and stereotypes are important factors that can ultimately damage performance.
Methodology: The researchers collected data from 147 German small and medium-sized companies over two years from various industries, including trade and finance. The data they analyzed came from three different sources: an employee survey, a survey of the top management team and a survey of the heads of HR. The measures assessed were age diversity, negative top managers’ age stereotypes, diversity-friendly HR policies and company performance.
These findings suggest that companies should regularly assess the age composition of their workforce to develop a sense of awareness, and to evaluate whether increased age diversity and age discrimination is a potential obstacle for performance.
So what should you do if you discover high levels of age diversity in your firm? According to Kunze, Boehm and Bruch, two organizational intervention strategies should be invested in:
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