The management of an ageing workforce: organisational policies in Germany and Britain

• DOI: http://doi.org/10.1111/1748-8583.12043
• Date: 01 November 2014
• Published date: 01 November 2014

The management of an ageing workforce:

organisational policies in Germany and Britain

Heike Schröder, Institute for Human Resource Management, Vienna University of

Economics and Business

Michael Muller-Camen, Institute for Human Resource Management, Vienna

University of Economics and Business and Department of Human Resource

Management, Middlesex University Business School

Matthew Flynn, Centre for Research into the Older Workforce, Newcastle

University

Human Resource Management Journal, Vol 24, no 4, 2014, pages 394–409

Demographic change as well as pressure from the European Union and national government are forcing

organisations to change age-discriminatory HRM approaches. Based on a qualitative analysis of eight

British and German organisations, we found that commitment, scope, coverage and implementation of

age management differ due to country-specific institutions, particularly government, in nudging

employers and unions to preferred age practices. This confirms the path dependency concept suggested

by institutional theory. Nevertheless, we also found that industry-specific factors mediate the

implementation of age management, leading to some convergence across countries. This indicates that

organisations deviate from the institutional path to implement practices that they deem important.

Contact: Dr Heike Schröder, Institute for Human Resource Management, Vienna University of

Economics and Business, Welthandelsplatz 1, Vienna 1020, Austria. Email: h.s.schroder@

gmail.com

Keywords: age management; firm level; Britain; Germany; case study; qualitative research

INTRODUCTION

In most industrialised societies, demographic change is leading to ageing workforces (OECD,

2006), compelling firms to implement HRM that considers the productivity and inclusion of

all employees, regardless of age. In fact, some organisations are already changing potentially

age-discriminatory approaches by fostering life phase-oriented HRM (Maltby, 2011), which can

help maintain older workers’ productivity (Boehm et al., 2013; Kooij et al., 2013). Also, national

governments aim to introduce policies that extend individuals’ working lives (Taylor, 2004), and

most recent labour market data show a reversal of early retirementtrends in some parts of Europe

(Ebbinghaus and Hofäcker, 2013). However, organisational-level HRM is, for the most part, still

characterised by discrimination of older employees in recruitment, training and development

(Woodet al., 2008; Walker and Maltby,2012), particularly by line managers who are often unaware

or unconcerned with both public policies and their organisations’ HR policies concerning age and

work (Flynn, 2010). Further, at the national policy-level, some countries still have strong early

retirement cultures, pulling or pushing older workers out of employment through financial

incentives and/or lay-offs based on performance criteria (Muller-Camen et al., 2011).

Nevertheless, there is increasing pressure for organisations to abandon age-discriminatory

HRM. For example, population ageing (OECD, 2006) is a significant convergence factor that is

reflected at the policy level in the form of European Union (EU) measures to encourage and

require member states to raise the employment levels of people aged 55–64, and to raise real

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doi: 10.1111/1748-8583.12043

HUMAN RESOURCE MANAGEMENT JOURNAL, VOL 24 NO 4, 2014394

© 2014 John Wiley & Sons Ltd.

Please cite this article in press as: Schröder, H., Muller-Camen, M. and Flynn, M. (2014) ‘The management of an ageing workforce: organisational

policies in Germany and Britain’. Human Resource Management Journal 24: 4, 394–409.

retirement ages (Kok, 2004). The most significant EU policy, the Employment Equality (Age)

Directive 2000/78/EC, prohibits workplace age discrimination and was transposed into UK and

German law in 2006.

However, organisations face a ‘plurality of logics’ (Morgan and Kristensen, 2006: 1472) that

both constrain and facilitate management in following preferred approaches to HRM, and may

hence not necessarily respond to EU pressure to change their approaches to managing older

workers. On the one hand, businesses might have a shared interest with the EU in dismantling

national-level social institutions that support an early retirement culture. They may share the

EU’s agenda of reducing pension costs, and in the case of multinational companies (MNCs)

seek to weaken institutions that represent barriers to market entry (Morgan, 2012). On the other,

they may seek to extinguish even limited EU mandates, realised through national initiatives

that introduce new regulations. Further, EU action to raise retirement age could create a ‘chain

of equivalence’ (Contu et al., 2013: 367) between managers and unions who may have a shared

interest in maintaining an early retirement culture.

AGE MANAGEMENT AND NATIONAL INSTITUTIONS

National context, as shaped by the degree of coordination (Hall and Soskice, 2001), as well as

ownership, non-ownership and employment relations (Whitley, 1999), compel managers to take

local path-dependent approaches to management. While Hall and Soskice’s (2001) variety of

capitalism (VoC) approach did not consider the state as a significant institution in influencing

firm behaviour, Whitley’s (1999) national business systems (NBS) approach, among others,

refuted this perspective and regarded the state as one of the main institutions that structure

business systems (Wood and Lane, 2012). Nevertheless, Streeck and Thelen (2005) discuss

whether the state remains a relevant institution in this respect, while Wood and Lane (2012)

argue that changes to the significance of the state, with the effect of, for example, deregulation,

have led to greater variety in firm behaviour, and hence to a weakening of the path dependency

notion.

For example, at a micro-political level, in the case of MNCs, the degree of adaptation of

headquarter policy to the host country institutional logic might be mediated by the type of

management heading international operations: while expatriates may favour implementing

home country strategies, thereby following the institutional logic of the firm’s home rather than

its host country, local managers are more likely to adapt headquarter policies to the local

context (Morgan, 2012). Furthermore, considering macro-political trends, Streeck (2008)

proposes that the strict dichotomy between liberal (LME) and coordinated market economies

(CME), as discussed in traditional VoC literature (i.e. Hall and Soskice, 2001), cannot be

maintained if considering the historical development of (national) institutions. Instead, Streeck

suggests that ‘convergence and continued divergence of national institutional arrangements

may exist side by side, the former, surprisingly, due to political and the latter to economic

reasons’ (Streeck, 2008: 26), possibly leading to internationally variegated systems (Peck and

Theodore, 2007). This is because CMEs are not just coordinated but also organised, as

institutions do not only regulate the efficiency of the market but also allow for its social

buffering through, for instance, welfare arrangements (Streeck, 2011). While CMEs might

become less organised as their political regimes become more liberalised (hence reducing social

provisions), their production regimes remain coordinated (Höpner, 2005). As a consequence,

firms’ social obligations in CMEs might decrease.

This suggests that institutions, as well as their significance, might change over time (Thelen,

2009), and that path dependency is therefore dynamic and reflective of pressure from multiple

Heike Schröder, Michael Muller-Camen and Matthew Flynn

HUMAN RESOURCE MANAGEMENT JOURNAL, VOL 24 NO 4, 2014 395

© 2014 John Wiley & Sons Ltd.