Tanja Verheyen – VUB – Belgium - 18/10/2012 tanja.ve r heyen@vub.ac.be

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 - 18/10/2012 tanja.verheyen@vub.ac.be Herhaling titel van presentatie

2. 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. Demotion

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

6. Research questions • General research question: • “What are the typology, reasons and consequences of demotion from an employer’s 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. 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. Design/methodology • 33 questions: • Demographic data of the manager • Structural features of the company • Features on “downward transitions” according to • the organisation filosofy • to the employer • to the employee • Causes/sources of downward transitions • Effects on organisational level of downward transitions • Application of demotion, if not applied: why not? • Follow up research Herhaling titel van presentatie

9. Analysis • SPSS • A lot of analysis wasn’t possible yet, as a result of too small data files • Survey is still ongoing (see further research) Herhaling titel van presentatie

10. 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. 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. 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. 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 isn’t sufficiently productive • (<-> cost efficiency?) Herhaling titel van presentatie

14. 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. Preliminary results • 4. Do you apply demotion? • - 20% no answer • - 65% yes • - 35% no • - applied within a year: median 1-2 • - applied within the last 5 years: median 2-3 Herhaling titel van presentatie

16. 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. 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. Further research • - from explorative to conclusive research: • n=68 —› n= 150 • - 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 employee’s point of view • - comparing results with theory and practice of older workers on the labour market Herhaling titel van presentatie