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HR bundles, job performance and motivation to continue to work of older employees in different job types

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HR bundles, job performance and motivation to continue to work of older employees in different job types Master thesis Human Resource studies University of Tilburg Student: Sabine A.M. Fens ANR:
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HR bundles, job performance and motivation to continue to work of older employees in different job types Master thesis Human Resource studies University of Tilburg Student: Sabine A.M. Fens ANR: Supervisor: dr. T.A.M. Kooij Second assessor: dr. J.P.P.E.F. Boselie Project period: February 2010 November 2010 Project theme: Managing and motivating older workers Abstract This study investigated the effects of the HR bundles of development, maintenance, utilization and accommodative practices on the job performance and motivation to continue to work of workers with the age of 41 years and older. Furthermore, the moderating effect of job type on the relationship between HR bundles and job performance was studied. By means of a questionnaire the data was gathered within two organizations and through snow ball sampling. The results showed that the development bundle and job performance were significant related to motivation to continue to work. Also, the moderating effect of high cognitive demanding job types on the relationship between the accommodative HR practices and job performance was found significant, but negatively related. Furthermore, health turned out to be an important indicator for the job performance of older workers. Future research is needed to extent the managing and motivating older workers research area. Keywords: job performance, motivation to continue to work, HR bundles, job demands, job type, health, older worker [2] Index 1. INTRODUCTION 4 2. THEORETICAL FRAMEWORK DEFINING THE OLDER WORKER HR PRACTICES AND JOB PERFORMANCE HR PRACTICES AND MOTIVATION TO CONTINUE TO WORK JOB PERFORMANCE AND MOTIVATION TO CONTINUE TO WORK HR PRACTICES AND JOB PERFORMANCE: MODERATED BY JOB TYPE HR PRACTICES AND MOTIVATION TO CONTINUE TO WORK: MEDIATED BY JOB PERFORMANCE METHOD RESEARCH DESIGN AND PROCEDURE SAMPLE MEASURES CONTROL VARIABLES PRELIMINARY DATA ANALYSIS PRINCIPAL COMPONENTS ANALYSIS DATA ANALYSIS RESULTS CORRELATIONS ANOVA HIERARCHICAL MULTIPLE REGRESSION ANALYSES SUMMARY OF FINDINGS CONCLUSION AND DISCUSSION LIMITATIONS PRACTICAL AND THEORETICAL IMPLICATIONS RECOMMENDATIONS FOR FUTURE RESEARCH 32 REFERENCES 33 APPENDIX 37 APPENDIX A HR BUNDLES 37 APPENDIX B LETTER AND QUESTIONNAIRE 38 APPENDIX C OUTCOME PRINCIPAL COMPONENTS ANALYSIS 44 APPENDIX D OUTCOME POST HOC ANALYSIS HEALTH 47 [3] 1. Introduction Within 10 years there will be more people retiring than entering the labor market (CBS, 2010). Many workers assumed that they would be able to retire before or around their 65 th birthday (Sterns & Miklos, 1995). However, in the Netherlands the government is debating about increasing the age of retirement. In the future workers probably need to work longer than their 65 th birthday before they can retire. What are the consequences of the aging workforce for employers and the workers themselves? It is proved that the functional abilities of people decline with age, in some cases even with 70 percent (Mital, 1994). Jobs which are designed for workers in their 30s and 40s will exceed the capabilities of workers in their 50s and 60s (Mital, 1994). Many researchers (e.g. Shirom, Shechter- Gilboa, Fried & Cooper, 2008; Sturman, 2003) have investigated the relationship between age and job performance, but the research outcomes differed concerning this relationship. Some argued that job performance changes with age. Furthermore, that job performance of workers declines with the age of 50 years and older (Skirbekk, 2003). It can be argued that job performance is influenced by age but also by other important variables and these important variables probably caused the different research findings concerning this relationship. Sterns and Miklos (1995) found that health and functioning do not necessarily decline in middle and later working years, when Human Resource Management (HRM) interventions -such as reduced work hazard and promoting health related behaviors- are used to prevent or reduce age-related changes. Also, job complexity is an important indicator for the job performance and age relationship (Ng and Feldman, 2008; Sturman, 2003). Jobs can broadly be defined as either physical or cognitive demanding (Mital, 1994). Since the functional abilities of workers declines with age, it is very likely that older workers in high demanding jobs become at some point overwhelmed with the demands of the job (Johnson, 2004). This leads to a decrease in job productivity. When the job performance of a worker decreases, this leads to less job satisfaction and commitment, what eventually leads to voluntary turnover (Rhodes, 1983). Job productivity or performance also directly affects organizational effectiveness (Ng, Sorensen & Yim, 2001). Organizational effectiveness is important for the organization s competitive strategy and to achieve their operational goals. It is therefore important to have a motivated workforce (Becker & Huselid, 1998). HRM can improve job performance and the motivation to continue to work by using certain Human Resource (HR) practices (Huselid, 1995). It makes sense that certain HR practices are appropriate for improving the job performance of workers. As mentioned before, such HR interventions or practices, like reduced work hazard, can be used to prevent or reduce age-related [4] changes. But can the same HR practices be used as well as for the high cognitive as for the high physical demanding jobs? Following from the previous discussion an interesting research question is: What is the influence of job type on the relationship between HR practices and job performance and what is the influence of HR bundles on the motivation of older workers to continue to work? This research is valuable for science, since theories and models are tested on the specific group of older workers. Also, the literature about managing and motivating older workers is little, with this study the empirical evidence can be expanded. This is necessary since the group of older workers in the workforce will increase in the upcoming years. From a social point of view, this study gives employers and HR managers more insights about which HR practices leads to better job performance and more motivation to continue to work. Furthermore, this study examines which HR practices are suitable for older workers in high demanding jobs. This knowledge is important for employers and HR managers, since the workforce is one of the key dimensions for the organizations success (Boxall & Purcell, 2008). In the theoretical framework the different variables and their relationship with one another will be more thoroughly explained and the hypotheses and conceptual model will be presented. Next, the method of research will be described followed by the results of this study. Finally, the conclusion, discussion, limitations, theoretical and practical implications and recommendations for future research will be presented in the conclusion and discussion. 2. Theoretical framework 2.2. Defining the older worker Age can be defined by using several different approaches, including chronological, functional, psychosocial, organizational, and the life span approach (Kooij, de Lange, Jansen & Dikkers, 2008; Sterns & Miklos, 1995). The chronological age is the age of workers in calendar years. Functional age can be defined as a performance-based definition of age and there is a variation in abilities and functioning at all ages. The psychosocial age is the social perception of age, which includes age-typing of jobs, perceptions of the workers themselves and the aging of knowledge, skills and abilities. Organizational age implies that the effect of age and tenure are related. Thus individuals age within their job and within the organization. Finally, the life span approach states that behavioral change can happen at any point in the life cycle. When people grow older there are more individual differences. These differences are a result of several factors affecting the behavioral change during the life cycle. For example, factors such as age-graded biological or environmental determinants and history-graded influences. In this study chronological age will be used to measure the age of the [5] workers, since it is based on calendar years and therefore better to compare with on another (Khilji & Wang, 2007; Robson, Hansson, Abalos & Booth, 2006; Ng & Feldman, 2008; Shirom et al., 2008; Sterns & Miklos, 1995). According to the career stage model, employees work attitudes differ across the different career stages (Conway, 2004). The first career stage consists of employees of 30 years and younger. The middle-career stage consists of employees between 31 and 40 years and the later career stage consists of employees of 41 years and older. During the first career stage the emphasis is on learning and exploration and appropriate HR practices are those related to development of skills through training. In the mid-career stage the focus is more on establishing stability and growth and HR practices should relate to career development and job security. The later career stage is focused on maintaining interest in the job, extending one s work role and seeking greater opportunities for involvement. The focus of this study is on the later career stage of the career stage model. Furthermore, aging is associated with certain gains and losses, gains such as cognitive intellectual abilities and losses in physical abilities (Kanfer & Ackerman, 2004). Cognitive ability can be divided in fluid intelligence and crystallized abilities. Fluid intelligence is associated with the working memory, abstract reasoning and information processing. Examples of crystallized intelligence are general knowledge, extent of vocabulary and verbal comprehension (Kanfer and Ackerman, 2004). Fluid intelligence declines when age increases (Beier & Beal, in press; Kanfer & Ackerman, 2004). In this study fluid intelligence is measured, since the primarily focus of this study is on losses concerned with the aging of workers. To conclude, the older worker is defined as a worker with the age of 41 years and older, in line with the later career stage of the career stage model (Conway, 2004). In the following paragraphs the relationships between HR practices, job performance, motivation to continue to work, and job types will be described HR practices and job performance The goal of HRM is to design and implement HR practices which leads to desired worker attitudes and behaviour what contributes to organizational effectiveness (Nishii, Lepak & Schneider, 2008). HRM systems of practices, also called HR bundles, consist of multiple HR practices (Delery, 1998; Guest, Conway & Dewe, 2004; Huselid, 1995; MacDuffie, 1995; Subramony, 2009). There are different relationships between the practices within a system or bundle (Delery, 1998). The relationship between the practices determines the outcome of the bundle. The relationships [6] between the practices can be additive, substitutable, positive synergistic or have a negative synergistic effect. A relationship is additive when the combination of two or more practices produce an added and non-overlapping outcome. A substitutable relationship means that two practices lead to the same outcome, and can substitute for one another. A relationship between practices has a positive synergistic effect when the outcome of the bundle is greater than the sum of the effects from the practices individually. The relationship between practices has a negative synergistic effect when the practices work against one another, the sum of the effects of the practices individually will be greater than the outcome of the bundle. Expected is that the bundles in this study would have a combined positive synergistic outcome for older workers, since the practices in the bundles, as found by Kooij (2010), are suitable for different age groups of workers. Also, the career stage model, as mentioned before, implied that the importance of HR practices differ across the career stages of workers (Conway, 2004). This means that for older workers different HR practices are needed to improve or maintain their level of functioning compared to younger workers. The following bundles would be appropriate for older workers, the bundles of development, maintenance, utilization and accommodative HR practices (Kooij, 2010). The development bundle is aimed at the development, in the sense of advancement, growth and accomplishment, of individual workers and helps to achieve higher levels of functioning. Examples of development HR practices are career planning and on-the-job and training. The bundle of maintenance practices is focused on maintaining the current level or returning to a previous level of functioning after a loss. Examples of maintenance HR practices are health checks and performance appraisal. The utilization bundle is aimed at helping an employee returning to a previous level of functioning after a loss through utilizing the skills and knowledge of the employee. Examples of utilization practices are job redesign and a mentoring role. A fourth bundle of HR practices is the accommodative bundle, which focuses on lowering the work demands of the job and by helping workers function adequately at lower levels. Examples of HR practices are additional leave and adjusted work planning. The Ability-Motivation-Opportunity (AMO) theory can be used to explain the relationship between the bundles of practices and job performance. This theory implies that HR practices and policies can be used to influence the individual s ability, motivation and opportunity to perform, which leads to an improvement of an individuals job performance outcome (Boxall & Purcell, 2008). The ability to perform is present when workers can do the job, because they have the necessary knowledge and skills. The motivation to perform is there when employees feel appreciated and are incentivized. The opportunity to perform is present when the work structure and environment provides the necessary support and possibilities to perform (Boxall & Purcell, 2008). [7] The relationship between the bundle of development practices and job performance strengthens when age increases (Kooij et al., n.d.). Development practices are important for the performance of older workers, since these practices ensure that the workers are up-to-date about changes and developments in the knowledge necessary for their job. It gives them a better ability to perform. Furthermore, it is important for older workers to reinvest in themselves to avoid obsolescence of knowledge (Armstrong-Stassen & Ursel, 2009; Mital, 1994). Kooij et al. (n.d.) also found a positive association between the maintenance bundle and job performance. This bundle and the utilization bundle are focused on maintaining or returning to a previous level of functioning after a loss, what gives workers a better opportunity to perform. Many older employees experience the age-related changes in health and physical functioning, such changes can result in reduced productivity (Hansson, Robson & Limas, 2001). Therefore, in this research is expected that the maintenance and utilization bundle of HR practices have a positive relationship with the job performance of older workers. The accommodative bundle is aimed at lowering the work demands for workers (Kooij, 2010). This is appropriate in the sense that age is associated with certain losses, like physical abilities, and also the accommodative practices gives the workers a better opportunity to perform (Kanfer & Ackerman, 2004). Expected is that the accommodative bundle also has a positive relationship with the job performance of older workers. This leads to the following hypothesis: Hypothesis 1. The bundles of development, maintenance, utilization and accommodative HR practices have a positive effect on the job performance of older workers HR practices and motivation to continue to work The motivation to continue to work can be defined as the desire or intentions of an older worker to continue to work (Kooij, 2010). The relationship between HR practices and motivation to continue to work can be explained by the Social Exchange Theory (SET) (Haslam, 2004). This theory implies that all human beings are sensitive to the costs and benefits of a particular action. For employees to stay within their organization they need to feel recognized and appreciated. The organization can use HR practices to signal to employees that they are appreciated and recognized. Earlier research findings (Armstrong-Stassen & Ursel, 2009) indicate that older workers who feel their contribution is being valued by their organization are more motivated to continue to work. Becker and Huselid (1998) showed that HR practices have a direct influence on the motivation of workers. Furthermore, the [8] happier employees are with HR practices the lower the turnover intentions among those employees (Khilji & Wang, 2007). The bundles of accommodative, utilization and development HR practices have a positive relationship with the motivation to continue to work for older employees (Kooij, 2010). The bundle of development practices is important for retaining older employees due to the positive effect of the practices. This, as a result of feeling appreciated and recognized. Issues of skill or knowledge obsolescence and training are important issues for older workers. Providing access to training is a signal from the organization that it values the older workers contribution to the organization (Armstrong-Stassen & Ursel, 2009). Also, the bundle of utilization practices, aimed at helping individual workers to return to the previous level of functioning after a loss, signals to the workers that they are appreciated by the organization, what is an important reason to continue to work (Kooij, 2010). The accommodative practices helps workers to function at lower levels, when maintenance or recovery is not longer possible. This also indicates that the contribution of these workers is important for the organization. Furthermore, accommodative practices contribute to a good health, what is an important prerequisite for older employees to be motivated to continue to work. Since poor health is negatively related to motivation to continue to work (Kooij, 2010). Although expected, in former research (Kooij, 2010) the maintenance bundle of HR practices had no influence on older workers motivation to continue to work. Kooij (2010) gives as a possible explanation that older workers might view these practices as self-evident. In this study is expected that the maintenance bundle of HR practices will have a positive effect on the motivation to continue to work. Since the maintenance practices, aimed at maintaining a current level of performance or in the face of new challenges, also signals to workers that they are recognized and appreciated by the organization. The following hypothesis is formulated: Hypothesis 2. The bundles of development, maintenance, utilization and accommodative HR practices have a positive effect on the motivation of older workers to continue to work Job performance and motivation to continue to work Motivation to continue to work can be compared with retention and a form of retention is turnover intentions of workers (Mak & Sockel, 2001). When workers have a low job satisfaction this might result in higher turnover intentions and thus negatively influence the motivation to continue to work. [9] The relationship between job performance and retention can be explained through the job performance and job satisfaction relationship (Christen, Iyer & Soberman, 2006; Judg, Thoresen, Bono & Patton, 2001; Petty, McGee & Cavender, 1984). The job performance and job satisfaction relationship implies that performance leads to valued outcomes which are satisfying to individuals, and which leads to satisfaction with their job (Judge et al., 2001). When workers experience satisfaction with their job this leads to more mot
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