Redefining retirement: age equality and the rise of performance management

• DOI: http://doi.org/10.1111/irj.12117
• Date: 01 November 2015
• Author: Vanessa Beck,Glynne Williams
• Published date: 01 November 2015

Redefining retirement: age equality and the

rise of performance management

Glynne Williams and Vanessa Beck

ABSTRACT

How do individuals retire when there is no default retirement age? The changes to the

retirement regulations were aimed at extending individual choice, but with the use of

performance management, employers have a new tool with which to control the time

and manner of retirement. Employees who fail to perform as required are now to be

‘managed out’. Therefore, retirement needs to be treated as an outcome of workplace

employment relations with consequences for all age groups.

1 INTRODUCTION

This article aims to answer a simple question. In the absence of a fixed retirement age,

how does ‘retirement’happen? Working life comes to an end at some point, but with-

out a specific time to retire being set out in law or, in most cases, in employment con-

tracts, how is ‘retirement’defined? How is it contested? And crucially, how much

power do workers have to influence the process, either as individuals or as union

members? The end of the ‘default’retirement age (DRA) in 2011 was presented as

a progressive step for equality and for individual freedom (DWP, 2010). Individuals

are now free to decide when to retire (DWP, 2010). We argue that the new regulations

have indeed prompted a focus on equality, but this is an equality that judges older

workers in comparison with their younger colleagues. It is also an equality based

on a strengthened management prerogative and the undermining of employees’

bargaining power.

The changes to the retirement regulations have given rise to a myth: that workers

are empowered to remain in work, or to end their working lives at a time that suits

them, rather than one determined by their date of birth. This is how the new arrange-

ments have been presented: ‘Most people can now work for as long as they want to’

(gov.uk 2013). This statement is misleading. First, people work for as long as they

need to, not as long as they want to. The popularity of early retirement schemes

(Taylor, 2013a) suggests that, given adequate alternative income, many working

people would quit long before they currently do. Second, the decision to remain in

work beyond what used to be retirement age is not one that an individual can take

unilaterally. Retirement decisions are now negotiated ones and therefore reflect the

relative powers of employer and employee. Although the assumption underlying the

changes in retirement regulations is that the employment relationship is one between

equal parties, this is rarely the case. Even in more egalitarian Nordic countries, Jensen

❒Glynne Williams and Vanessa Beck are at the School of Management, University of Leicester.

Correspondence should be addressed to Glynne Williams, School of Management, University of

Leicester, University Road, Leicester LE1 7RH, UK; email: glynnevw@le.ac.uk

Industrial Relations Journal 46:5–6, 365–380

ISSN 0019-8692

© 2015 John Wiley & Sons Ltd

and Øverby (2013) describe people who have no other choice but to retire because

they are worn-out and/or rejected by employers.

A common feature of commentary on these developments has been an assumption

that (i) extending working lives is a positive, or at least necessary development; (ii)

this is a matter for individual older workers to decide; and (iii) in the absence of arti-

ficial constraints, many older workers will remain as productive members of the

workforce (Radl, 2012). What is largely missing from this analysis is a recognition,

first, that retirement decisions are mediated by workplace employment relations

and, second, that the new regime creates flexibility for management as well as

workers. In the following sections, we consider the employment relationship and con-

trol exerted by employers before moving on to individual choice and formal equality.

Both need to be considered to understand how retirement ‘happens’.

1.1 Employer control of retirement

The assumption that retirement is now a negotiated and mutually agreeable decision

has not faced any serious challenge, despite existing evidence of changing employer

strategy (Rix, 2013). However, because employers can no longer rely on workers

either leaving at a predetermined date, or feeling sufficiently financially secure to

retire voluntarily, they require a mechanism in order to remove staff who are deemed

unproductive. Whilst it would be unlawful to dismiss purely on the grounds of age,

employers are able to do so where there is demonstrable underperformance. Perfor-

mance management (PM) creates the opportunity to identify and ultimately remove

individuals who fall below a set benchmark. All abilities decline at some point, and

employers are now encouraged—indeed forced—to ‘manage-out’such employees

who are incapable of improvement (Beck and Williams, 2015; DWP, 2011;

TUC/CIPD, 2007).

There has been a renewed interest in PM recently, prompted, in particular, by spe-

cific management techniques such as the numerous incarnations of ‘lean production’

(Carter et al., 2012; Newsome et al., 2013; Taylor, 2013b). The focus of these studies

has primarily been on the role of PM in intensifying and controlling the work process.

Less frequently noted is the effect of PM on employment security. By making contin-

ued employment contingent on unilaterally defined and often arbitrary targets, PM

shifts the balance of power towards the employer. Just as importantly, because even

‘absolute’performance criteria are defined relative to work group norms, PM tends

to undermine collective representation by introducing competition into the work-

place. Although management writers have argued for some time for a ‘holistic’or

‘strategic’approach to PM (Armstrong, 2012), the term has most frequently been

associated with periodic appraisal interviews. These are usually confined to larger

employers and are often treated with disdain by managers and employees alike

because they amount to little more than ‘paper’exercises (Chubb et al., 2011).

Although PM is not new, in the sense that management is intrinsically about the

wage-effort bargain, the role of individual appraisals has often been unclear, with

only an implicit link to higher-level organisational priorities or to formal procedures.

In this analysis, widespread scepticism about performance appraisal is justified,

because a focus on evaluation is meaningless unless this is aligned with business strat-

egy. Integrated approaches to PM, on the other hand, promise a range of benefits for

employees (e.g. ‘increased self-esteem’), for the manager (ability to differentiate

366 Glynne Williams and Vanessa Beck

© 2015 John Wiley & Sons Ltd