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Demotion and ageing: to what extent can demotion be a strategic HR-tool to avoid an early exit of older workers from the labour market ? Tanja Verheyen.

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Presentation on theme: "Demotion and ageing: to what extent can demotion be a strategic HR-tool to avoid an early exit of older workers from the labour market ? Tanja Verheyen."— Presentation transcript:

1 Demotion and ageing: to what extent can demotion be a strategic HR-tool to avoid an early exit of older workers from the labour market ? Tanja Verheyen – VUB – Belgium - 18/10/ Herhaling titel van presentatie

2 Pag. Demotion is…. According to Psychologists: a transition Sociologists: a loss of status Economists: a lowering in function Organisational scientists: a downward change in the content of the function Herhaling titel van presentatie

3 Pag Demotion 3

4 Pag. Purpose - an employment plan for over-45s demotion - economic crisis demotion for cost-effectiveness - little empirical research (Borghans, 2007, Sargent, 2003) - existing research limited to consequences for employee (Carson & Carson, 2007, Eby & DeMatteo, 2000, Josten & Schalk, 2009) - different kinds of demotion: a temporary step down, a downward promotion, a lateral demotion with or without reduced salary … (a.i. Hall & Isabella, 1985) Herhaling titel van presentatie

5 Pag. Theoretical framework of job mobility (Ng, Sorensen, Eby & Feldman, 2007) Herhaling titel van presentatie Meso? Consequences? Imposed? Voluntary? demotion Inter & intraorganisational

6 Pag. Research questions General research question: What are the typology, reasons and consequences of demotion from an employers perspective? 3 sub research questions: What is the typology of demotion? What are the reasons for a demotion from an employer point of view? What are the consequences of a demotion from an employer point of view? Herhaling titel van presentatie

7 Pag. Design/methodology Limesurvey: online tool for questionnaires Towards HR-managers of big organisations in Belgium Anonymous, but possibility to leave mailaddress for follow up Through HR service companies and headhunters and HR network organisations, … >1000 contacts Very little response: n= 68, completed questionnaires, 101 uncompleted Herhaling titel van presentatie

8 Pag. Design/methodology 33 questions: 1.Demographic data of the manager 2.Structural features of the company 3.Features on downward transitions according to 1.the organisation filosofy 2.to the employer 3.to the employee 4.Causes/sources of downward transitions 5.Effects on organisational level of downward transitions 6.Application of demotion, if not applied: why not? 7.Follow up research Herhaling titel van presentatie

9 Pag. Analysis SPSS A lot of analysis wasnt possible yet, as a result of too small data files Survey is still ongoing (see further research) Herhaling titel van presentatie

10 Pag. Preliminary results 1. Features of demotion : to what extent do the following statements suit with your company's philosophy on demotion? Demotion is… - a free choice of the employee or an imposed measure of the employer (median: 3-3) - intra-organisational or inter-organisational (median: 3-2) - just like promotion or lateral moves, a method to develop talent (45%: never) - a means to encourage employees to develop their expertise and maintain their value for the company (30% sometimes, 40% always) Herhaling titel van presentatie

11 Pag. Preliminary results 1. Features of demotion : indicate to what extent these features typically are associated with demotion 1. lowering the function level 2. lowering the responsibility towards decision making on the policies of the organization, towards managing people and budget 3. lowering of bonuses (note: not lowering of salary) +/- lowering the budget of the company car demotion is not about lowering meal vouchers, group insurance, laptop or mobile phone Herhaling titel van presentatie

12 Pag. Preliminary results 1. Features of demotion : what do you think an EMPLOYEE typically associates with demotion? 1. lower job esteem and lower decision involvement 2. loss of status 3. loss of salary and lowering of bonuses Note: work life balance and demotion as a failure Herhaling titel van presentatie

13 Pag. Preliminary results 2. Reasons for demotion When would you use demotion to benefit the company? 1. in case of a reorganisation, a merger 2. in case of slimming of the company 3. To garantee job security Note: to persue cost efficiency When would you use demotion to benefit the employee? 1. when the employee himself wants it 2. in case of the Peter Principle 3. in case the employee isnt sufficiently productive ( cost efficiency?) Herhaling titel van presentatie

14 Pag. Preliminary results 3. The effect of a demotion When demotion is applied, is the situation with this demotee positively or negatively evolved? - career focus: negative - organisational comittment: negative - conflicts with colleagues, superiors: stable - employee turnover: stable Herhaling titel van presentatie

15 Pag. Preliminary results 4. Do you apply demotion? - 20% no answer - 65% yes - 35% no - applied within a year: median applied within the last 5 years: median Herhaling titel van presentatie

16 Pag. Preliminary results 5. What about NOT demoting? What keeps employers from applying demotion in regard to the employee? - work motivation - employee satisfaction - work and organisational involvement Note: job insecurity What keeps employers from applying demotion in regard to the company? - legal agreements Note: absenteeism and turnover Herhaling titel van presentatie

17 Pag. What about demotion and ageing? - demotion is a means to encourage employees to develop their expertise and maintain their value for the company (30% sometimes, 40% always) - almost 80% of the employers say they would use demotion if that would result in keeping over 45s at work in their company - the application of demotion in relation to age: -> a slight increase at 50 or older Herhaling titel van presentatie

18 Pag. Further research - from explorative to conclusive research: n=68 n= follow up research: 12 focusgroup interviews with 4 HR- managers: insights in motives and critics on the use of demotion in an organisational context - comparing results of demotion from an employer point of view with that of the employees point of view - comparing results with theory and practice of older workers on the labour market Herhaling titel van presentatie


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