Di- Cul

The SAGE Handbook of Aging, Work and Society

Research on Age Diversity in the Workforce: Current Trends and Future Research Directions

Contributors: Florian Kunze & Stephan A. Boehm

Edited by: John Field, Ronald J. Burke & Cary L. Cooper

Book Title: The SAGE Handbook of Aging, Work and Society

Chapter Title: "Research on Age Diversity in the Workforce: Current Trends and Future Research

Directions"

Pub. Date: 2013

Access Date: August 7, 2019

Publishing Company: SAGE Publications Ltd

City: London

Print ISBN: 9781446207826

Online ISBN: 9781446269916

DOI: http://dx.doi.org/10.4135/9781446269916.n3

Print pages: 41-59

© 2013 SAGE Publications Ltd All Rights Reserved.

This PDF has been generated from SAGE Knowledge. Please note that the pagination of the online

version will vary from the pagination of the print book.

Research on Age Diversity in the Workforce: Current Trends and Future Re- search Directions FlorianKunze and StephanA.Boehm

Introduction

A better understanding and more effective handling of diversity in the workplace have become key success factors for organizations around the world (Thomas and Ely, 1996). Due to mega-trends like increasing glob- alization (Rodrik, 2008;Wiersema and Bowen, 2008), the rising importance of cross-national and cross-func- tional work units and teams (Robinson and Dechant, 1997), and the growing labor force participation of women (Jaumotte, 2003; Juhn and Potter, 2006), workforce diversity is increasing in most organizations.

Referring to the collective amount of differences among members within a social unit (Harrison and Sin, 2006), the concept of diversity was originally applied with a focus on categories such as gender, ethnicity, and nationality (Van Knippenberg and Schippers, 2007). However, created by demographic changes in most industrialized countries, the construct of age diversity has recently garnered considerable interest from both scholars and practitioners (Shore et al., 2009). Despite several recent reviews (Jackson et al., 2003; Van Knippenberg and Schippers, 2007; Williams and O'Reilly, 1998) and meta-analytical analyses of diversity's effects in the workplace (e.g., Joshi and Roh, 2009), systematic knowledge on age diversity is still limited.

This seems rather problematic, as age diversity tends to increase even more strongly than other diversity categories. Moreover, organizations currently have only a vague idea of how age diversity will affect their internal processes and states, including their employees’ well-being, commitment, and performance. Due to the relative recentness of this trend, the management of age diversity is not yet an established component of corporate training or development initiatives. This chapter aims to close this knowledge gap by providing scholars and practitioners with insights into age diversity's distinct effects, as well as recommendations for the successful management of an age-diverse workforce. For that purpose we will first summarize different theo- retical explanations for the effects of age diversity on team processes and outcomes. Thereafter we will give an overview on the empirical literature on age diversity in organization, which will be followed by an outlook on future research issues in the field and finally practical implications from a supervisor and organizational perspective.

Reasons for Growing Age Diversity

Growing age diversity is a major workforce trend in most industrialized countries that is attributable to at least three factors. First, in the past decades, companies have tended to hire predominately younger employees. However, due to an expected shortage of labor in many industries (Michaels et al., 2001), companies are increasingly willing to redefine ‘talent’ and to recruit traditionally underrepresented groups such as older em- ployees and employees with disabilities (Lengnick-Hall et al., 2008). Second, many companies in Western Europe engaged in early retirement programs that were also encouraged and supported by the governments. In 2001, more than 50% of German companies had no employees older than 50 years (Bellman and Kistler, 2003). Only recently have countries like Germany and Austria changed their legislation and raised the retire- ment age to alleviate the burden on social security systems and to attain a better ratio between taxes paid and pensions received (Gruber and Wise, 2004). As many companies followed this trend and stopped their early retirement programs (Dychtwald et al., 2004; Tempest et al., 2002), a growing number of older employ- ees can be observed in the workplace, in turn contributing to higher levels of age diversity. Third, at the other end of the continuum, governments try to lower the age of entry into the labor market by changing universities to bachelor-and-master systems or by reducing the required years of schooling, again contributing to higher age diversity in the workplace (Kaube, 2008).

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Implications of Growing Age Diversity

With regard to potential implications for organizations, several aspects are worth mentioning. On the one hand, potential challenges might arise. As we know from research on other diversity categories such as gender and ethnicity, rising levels of age diversity might lead to communication and coordination problems among members of different generations (e.g., baby boomers, Generations X and Y) (Smola and Sutton, 2002; Twenge et al., 2010). In addition, mutual stereotypes (Posthuma and Campion, 2009) and potential sub-group formation (Tajfel and Turner, 1986) could lead to increasing levels of conflict between different age groups. For employees, such processes might lead to individual discontent, decreasing organizational com- mitment and job satisfaction, and higher levels of absenteeism and turnover intention. For organizations, po- tential effects include a loss in productivity and performance.

On the other hand, scholars have repeatedly pointed to the potentially positive aspects of diverse teams, units, and organizations, summarized by Robinson and Dechant (1997) as the ‘business case for diversity’. These positive implications include a generally better use of talent, improved leadership effectiveness, an in- creased understanding of diverse customers, enhanced creativity, and higher problem-solving skills. Similar effects can be assumed for age diversity as teams composed of both younger and older employees should be more effective in gaining, transferring, and applying complementary knowledge, in preventing groupthink (Janis, 1972), and in identifying the needs of age-diverse customers, including the so-called ‘silver market’ (Kohlbacher and Herstatt, 2008). In the next paragraph, we will outline in more detail the theoretical rationale behind such seemingly contradictory effects of age diversity.

Theoretical Rationales for Different Effects of Age Diversity

B. Definition and Conceptualization of Age Diversity

To better understand the potential effects of age diversity, the construct must be clearly defined and concep- tualized. Following the work of Harrison and Klein (2007), diversity can generally be defined as ‘the distribu- tion of differences among members of a unit with respect to a common attribute, X, such as tenure, ethnicity, conscientiousness, task attitude, or pay’ (Harrison and Klein, 2007: 1200). Age diversity is consequently a specific form of diversity. It is a collective-level, compositional construct that reflects the age structure of a particular social entity (such as a team, a work unit, or a whole organization).

Building on this basic definition, it seems important to further differentiate between the different types or con- ceptualizations of age diversity that might develop within entities: separation, variety, and disparity (Harrison and Klein, 2007). Each of these types implies a different form of maximum diversity, leading to varying group processes, and, therefore, different outcomes.

Separation occurs when unit members hold opposing positions on a task- or team-relevant issue (e.g., certain values or attitudes). Regarding age diversity, a group of four might consist of two older employees (60 years) and two younger employees (20 years) who disagree in their assessment of the importance of a certain is- sue (e.g., punctuality or accuracy), leading to separation and potential conflict between the younger and older employees within one unit.

Age diversity can also be conceptualized as variety, based on the different knowledge and experiences that diverse age groups might have, resulting in a fruitful pool of information regarding various tasks. For instance, age-diverse innovation teams might be composed of members from the Internet generation who have up- to-date theoretical knowledge and members from the baby boomer generation who have a substantial track record of practical technology management, thereby complementing each other and achieving better group results.

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Finally, age diversity might also indicate disparity, reflecting differences in the distribution of social assets (e.g., influence, money) among group members. For example, older members in age-diverse units might pos- sess more power and influence than younger colleagues due to their potentially higher hierarchical position, their longer tenure, or their broader social networks within the firm.

Age can lead to all three types of diversity. While variety is mostly associated with positive outcomes, separa- tion and disparity are related to detrimental group processes and losses in effectiveness (Harrison and Klein, 2007). In the following section, the underlying psychological and sociological processes accounting for the positive effects of age diversity as variety and the negative effects of age diversity as separation and disparity will be explained.

Positive Effects: The Information/Decision-Making Perspective

Scholars who argue in favor of positive diversity effects stemming from variety typically base their arguments on the so-called ‘information/decision-making perspective’ (Van Knippenberg and Schippers, 2007: 518). They propose that diverse unit members typically possess different knowledge bases, experiences, or skills, which might help them to devise a better solution to a problem than employees with more homogenous char- acteristics. In addition to their own cognitive resources, diverse members also tend to be members of differ- ent internal and external networks and have access to non-redundant information important for the group's performance (Austin, 2003). In the case of age diversity, this assumption might be particularly valid as old- er and younger employees tend to differ significantly in terms of interests, work experiences, education, use of technology, and social networks, for example. Such differences might stem from both membership in dif- ferent age groups (and related phases of private and professional life) and different generational values or imprints (Joshi et al., 2010; Smola and Sutton, 2002). An age-diverse team or work group that uses these heterogeneous resources effectively might become an ‘information processing instrument for an organization’ (Harrison and Klein, 2007: 1205).

This information richness is assumed to be especially beneficial when dealing with non-routine problems, as diverse team members can better use their additional ‘sociocognitive horsepower’ when working on complex tasks (Carpenter, 2002: 280). Furthermore, (age-) diverse teams seem to be more adaptive to change and might have a better understanding of diverse customers and markets. In addition, research has shown that group members with different experiences and skill sets are likely to be more creative (Burt, 2002; Jackson et al., 1995) and less endangered by the effects of groupthink (Janis, 1972) through more intense discussions with more divergent perspectives (Fiol, 1994).

In summary, scholars who adopt a variety or information/decision-making perspective presume a higher per- formance level of diverse teams and work groups (Bantel and Jackson, 1989).

Negative Effects: The Similarity-Attraction Paradigm, the Social Identity Ap- proach, Token Status, and Perceptions of Inequality

As both research and practice have demonstrated, increasing levels of diversity can also result in negative outcomes, such as higher levels of conflict and turnover and lower levels of cohesion and performance (Sacco and Schmitt, 2005). Possible explanations for such negative effects of diversity can be derived from the con- cepts of separation and disparity. Scholars framing diversity as separation typically rely on two underlying psychological processes that help explain the formation of sub-groups within teams and units and the conse- quent discrimination of certain groups of employees: the similarity–attraction paradigm (Byrne, 1971) and the

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social identity approach (Tajfel and Turner, 1986).

The Similarity-Attraction Paradigm

The similarity-attraction paradigm assumes that individuals prefer to interact with others who are similar to themselves (Byrne, 1971). This actual, or perceived, similarity can comprise demographic characteristics (e.g., age, gender), as well as similar values, attitudes, or beliefs (Avery et al., 2008; McPherson et al., 2001; Tsui et al., 1992). The psychological rationale for this assumption is that people seem to obtain more affirma- tive feedback from people who are similar to them, which in turn reduces uncertainty and creates mutual trust (Hinds et al., 2000). Interpersonal heterogeneity, on the other hand, may lead to decreased levels of commu- nication, as well as to more communication errors (e.g., Barnlund and Harland, 1963; Zenger and Lawrence, 1989). From an empirical point of view, the effects of similarity-attraction have been shown in both friendships and voluntary interactions (Blau, 1977; McPherson and Smithlovin, 1987), as well as in work environments (e.g., Hinds et al., 2000). In the case of age diversity, one might assume that members of a team are partic- ularly motivated to interact with other members belonging to a similar age group as they might share more values, attitudes, experiences, and interests with such individuals than with individuals belonging to different age groups (Lawrence, 1980; 1988).

The Social Identity Approach

The similarity-attraction paradigm is complemented by a second psychological process, which may also lead to separation on the basis of age group membership. Theories of social identity (Tajfel and Turner, 1986) and self-categorization (Turner, 1985) suggest that individuals tend to classify themselves, and others, into certain groups on the basis of dimensions that are relevant for them. These dimensions often include demographic categories, such as age (Avery et al., 2008; Ensher et al., 2001; Finkelstein et al., 1995; Kearney and Gebert, 2009). Individuals make use of these group classifications to differentiate between potentially similar in-group members and different out-group members. Such group categorizations are of high importance for individu- als, as they derive a large part of their social identity from membership in particular groups. Following a basic human need to maintain and strengthen their self-esteem, individuals strive to perceive their own group as superior to others (Abrams and Hogg, 1988; Hogg, 2001). Consequently, individuals tend to favor members of their own group (in-group), which results in higher levels of trust, communication, and cooperation. Members of other groups (out-groups) may face certain forms of stereotyping and discrimination (Brewer, 1979; Brewer and Brown, 1998).

Token Status

A third potential mechanism leading to separation is ‘token status’, as described by Kanter (1977). Based on her assumptions, minorities (usually less than 15% of the total unit) are perceived less as individuals and more as members or symbols of their respective (demographic) category (Young and James, 2001). In the case of age diversity, a small group of older employees might perceive a token status in an organization that is predominantly young, or vice versa. For instance, older employees in an information technology (IT) or start- up environment might sometimes feel like ‘tokens’, being reduced to their age group membership (‘the old’) and not being perceived as individuals with particular strengths and weaknesses. Kanter (1977) described the negative outcomes of a token status, including increased levels of stereotyping, unfair performance pressure, and the creation of interpersonal boundaries that might, in turn, negatively affect performance.

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Perceptions of Inequality

Finally, the concept of age diversity will be analyzed from a disparity perspective, which also suggests pri- marily negative effects on group effectiveness. Having its roots in the sociological literature, disparity is of- ten discussed under the term inequality (Blau, 1977; Blau and Blau, 1982). In the organizational literature, disparity or inequality implies that relevant or desired resources such as pay, power, status, or prestige are allocated unequally across members of a certain unit (Harrison and Klein, 2007). As a consequence of such an asymmetric distribution, certain processes might be triggered within the unit. For example, individuals with a disadvantaged status within the team (e.g., a younger team member who lacks influence) might experience feelings of dissatisfaction and a desire to leave the group. Other potential consequences include communica- tion problems, intra-group conflicts, and drops in performance (Bloom, 1999; Pfeffer and Davis-Blake, 1990; Siegel and Hambrick, 2005).

In summary, age diversity in teams or organizations might also lead to negative effects such as feelings of detachment, discrimination, and exclusion that can arise from processes of similarity-attraction, social identi- ty, tokenism, and inequality.

Literature Review

Following the theoretical explanations of positive and negative effects of age diversity in social entities in the previous sections, we will now offer a coherent overview of empirical studies that have investigated the rela- tionship of age diversity to various team outcomes. To that end, we conducted a literature search using the Web of Science and EBSCO databases for the last 25 years within the fields of business, management, and applied psychology. With that research strategy, we felt certain that we would capture all relevant past re- search within the most prominent peer-reviewed journals in the last 25 years. As the following paragraphs will show in more detail, age diversity has been related to numerous team outcome variables with mixed results. We will try to cluster these findings to offer a structured picture of the existing empirical research on age di- versity, starting with a summary of direct effects of age diversity and continuing with an overview of studies that also considered potential contextual factors in the relationship between age diversity and performance.

Table 3.1 Results of Empirical Studies on Age Diversity and Team Outcomes

Team outcomes Study and direction of effect

Team performance in work teams Bell et al. (2011) (0)

Choi and Rainey (2010) (0)

Ely (2004) (−)

Leonard et al. (2004) (−)

Jehn and Bezrukova (2004) (−)

Joshi and Roh (2009) (−)

Timmerman (2000) (−)

Performance in top management teams Bunderson and Sutcliffe (2002) (0)

Kilduff et al. (2000) (+)

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Simons et al. (1999) (0)

West et al. (1999) (+)

Innovation Bantel and Jackson (1989) (0)

Ostergaard et al. (2010) (−)

Wiersema and Bantel (1992) (0)

Zajac et al. (1991) (−)

Turnover and absenteeism Cummings et al. (1993) (+)

Jackson et al. (1991) (+)

Milliken and Martins (1996) (+)

O'Reilly III et al. (1989) (+)

Wiersema and Bird (1993) (+)

Conflict Relational conflict

Jehn et al. (1997) (0)

Pelled et al. (1999) (−)

Pelled et al. (2001) (+)

Task conflict

Pelled et al. (1999) (0)

Communication/information sharing Bunderson and Sutcliffe (2002) (0)

Kearney and Gebert (2009) (0)

Zenger and Lawrence (1989) (−)

Direct Effects of Age Diversity on Outcomes

Table 3.1 offers an overview of existing empirical studies of age diversity on team outcomes. As can be seen, we used six categories to cluster these studies: (1) the relationship between age diversity and performance in work teams, (2) the relationship between age diversity and team performance in top management teams (TMTs), (3) the relationship between age diversity and innovation, (4) the relationship between age diversity and absenteeism and turnover, (5) the relationship between age diversity and conflict, and (6) the relationship between age diversity and communication.

Overall, no consistent findings on the relationship between age diversity and performance have been es- tablished in the literature thus far. However, almost no empirical study has reported the positive relationship between age diversity and team performance that was proposed using the information/decision-making per- spective. In contrast, most studies have found either a zero or a negative relationship between age diversity and performance. Choi and Rainey (2010), for example, reported a zero relationship between age diversity and performance in 67 federal agencies. Timmerman (2000) discovered a significant negative relationship between age diversity and the success of 871 US basketball teams. Ely (2004) reported similar results relat- ed to the effect of age diversity on performance in a sample of 486 branches of a financial service company. Leonard and colleagues (2004) reported equally negative effects of age heterogeneity on sales figures in a

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sample of 700 retail stores. Finally, Jehn and Bezrukova (2004) found negative effects of age diversity in a sample of 1,528 teams from Fortune 500 information-processing firms.

These mostly negative findings are also backed by recent meta-analyses. Joshi and Roh (2009), for instance, reported an overall negative effect of r = –.06 for age diversity on team performance considering 7,217 teams. In their study, age diversity showed the strongest negative effect on performance of the six diversity types (gender, race, age, function, education, tenure). Interestingly, another meta-analysis by Bell and colleagues (2011) found no general significant effect of age diversity on performance when considering 10,646 teams. Furthermore, the meta-analysis also did not reveal any significant effect when distinguishing between differ- ent forms of operationalization of age diversity (separation, variety, disparity).

Age Diversity and Performance in Top Management Teams

The research on TMT diversity is characterized by rather mixed findings. West and colleagues (1999), for ex- ample, reported in a longitudinal study with 43 UK manufacturing organizations a significant negative result on company profits as a result of age diversity in TMTs. In contrast, Kilduff and colleagues (2000) reported age diversity to be the only demographic variable that was positively related to team performance. Their results, however, have to be interpreted with caution since they were drawn from experienced managers participating in a simulated business game, which might have restricted the external validity of the findings. Bunderson and Sutcliffe (2002) reported a zero relationship between age diversity in management teams and performance of 44 business units. Likewise, Simons and colleagues (1999) showed a zero relationship between age diversity in TMTs and financial performance in 57 manufacturing companies.

Age Diversity and Innovation

The majority of existing studies have found no relationship between age diversity and innovative behavior in work teams. In a sample of 199 US banks, Bantel and Jackson (1989) found no relationship between age diversity of the TMT and total, technical, or administrative innovation. Other research by Wiersma and Bantel (1992) also demonstrated no significant relationship between age diversity and innovativeness. Additionally, other studies have reported a negative effect of age diversity on innovativeness. Zajac and colleagues (1991), for instance, showed a negative relationship between age diversity and innovativeness in 53 internal hospital units consisting of physicians. Recently, Ostergaard and colleagues (2010) also demonstrated a negative re- lationship between age diversity and innovativeness in 1,775 Danish firms. In sum, as for overall performance and innovativeness, the social categorization processes seem to dominate the information/decision-making processes, leading to zero or even negative effects on innovativeness.

Age Diversity, Turnover and Absenteeism

Other outcome measures often studied in regard to age diversity are turnover intentions, actual turnover, and absenteeism rates. Most empirical studies have reported a positive association between age diversity and turnover in work teams (Jackson et al., 1991; O'Reilly III et al., 1989; Wiersema and Bantel, 1992; Wiersema and Bird, 1993). Additionally, other studies have inspected this relationship in more detail and discovered that those employees who differ most in terms of age from their work group are most likely to turn over (Milliken and Martins, 1996; O'Reilly III et al., 1989). Furthermore, Cummings and colleagues (1993) showed similar effects for absenteeism as an outcome variable.

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Age Diversity and Conflict

Based on the earlier descriptions of social identity and social categorization processes (Tajfel, 1974; Tajfel and Turner, 1986; Turner, 1985), age diversity, like other types of diversity criteria, is likely to create sub- groups within teams that may get involved in mutual conflict behavior. In general, the emerging literature of conflict research differentiates between two types of conflict: task-related and relational conflict (Pelled, 1996; Pelled et al., 2001). While the former is assumed to be favorable for work group performance, since different team members engage in productive disputes on collective goals, the latter is assumed to diminish team per- formance, because team members engage in destructive personal disputes that distract their resources and attention from collective team goals (Jehn et al., 1999).

Overall, regarding the age diversity/conflict relationship, the findings from previous studies have been rather mixed. Pelled and colleagues (1999) reported, contrary to their expectations, that age diversity is negatively related to emotional conflict and unrelated to task conflict. The negative relationship with emotional conflict might be explained by the argument that more age similarity (e.g., less diversity) is bound to create more so- cial comparison between colleagues in terms of career progress, which increases emotional conflict (1994). In contrast to these results and arguments, Jehn and colleagues (1997) found in a quasi-experimental study that visible individual demographic differences in terms of age were unrelated to relationship conflicts in teams. Support for a positive relationship between age diversity and relationship conflicts comes from a study by Pelled and colleagues (2001), who found relational dissimilarity in age to be positively linked to affective con- flict in a study with Mexican workers.

Age Diversity and Communication/Information Sharing

Finally, age diversity has also been regularly investigated with regard to its relationship with group commu- nication and information sharing, likewise with mixed results. In line with social identity theory, Zenger and Lawrence (1989) reported age diversity to be negatively related to professional communication in project groups. Bunderson and Sutcliffe (2002) found age diversity in TMTs to be unrelated to information sharing. Similarly, Kearney and Gebert (2009) did not find a main effect of age diversity on elaboration of task-rele- vant information in a sample of 62 research and development (R&D) teams in a multinational pharmaceutical company.

Intermediate Summary: Age Diversity and Outcome Measures

The studies presented so far have painted a mixed picture regarding the effects of age diversity on work team outcomes. In all six categories, varying results have been reported for the potential consequences of age diversity. However, overall, age diversity seems to be a factor that does not affect or impair positive team out- comes (performance, innovation, communication), but it does seem to result in an increase in negative team consequences (turnover, conflicts). Thus, the potentially negative consequences of similarity-attraction-based and social identity-based processes seem to dominate potential benefits from a broader information/decision- making perspective. Only research on TMT composition has revealed some positive effects of age diversity.

However, both from a theoretical perspective and from the perspective of practitioners in companies, these mixed and mostly negative findings on the consequences of age diversity are not satisfying. Consequently, since the end of the 1990s, a new research stream has emerged to tackle the inconsistencies in diversity re- search in general and in age diversity research in particular. To open the ‘black box of organizational demog-

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raphy’ (Lawrence, 1997), diversity researchers have started to investigate contextual factors that may explain the mixed findings on age diversity. This research has followed the logic that certain work-related contextual factors might be responsible for eliciting either the advantages (more cognitive information) or disadvantages (more sub-group formation leading to more conflicts and discrimination) of age diversity. Supporting this argu- ment, Shore and colleagues stated that ‘older employees are likely to have knowledge and experience that is useful within groups, but such human capital may only be utilized in an environment in which positive relations among members are conducive to appreciating different types of contributions’ (2009: 121). The following section will summarize studies on the potential contextual factors of age diversity.

Moderators of the Age Diversity/Outcome Relationship

Table 3.2 offers an overview of studies that have inspected contextual factors of the age diversity/outcome relationship. The most researched contextual factors have been team processes, diversity management and human resources (HR) practices, task type, and leadership behavior.

Team Processes

The study by Ely (2004) in 486 banking subsidiaries discovered team processes, and more specifically co- operation and teamwork, to be moderators of the age diversity/performance relationship. Surprisingly, under conditions of high levels of cooperation and teamwork, age diversity and performance were negatively relat- ed, whereas low cooperation and teamwork were found to favor a zero or positive relationship between age diversity and branch performance. Ely (2004) speculated in light of these results that high teamwork and co- operation may suppress differences of team members, from which the collective performance might profit. Contrary to these results, Choi and Rainey (2010) found no moderation effect of team processes, measured by cooperation and communication in work units, on the relationship between age diversity and performance in 67 public agencies in the US.

Table 3.2 Results of Empirical Studies on Context Factors for the Age Diversity and Team Outcome Relationship

Context factors Study

Team processes Choi and Rainey (2010)

Ely (2004)

Kearney et al. (2009)

Diversity management and HR practices Choi and Rainey (2010)

Ely (2004)

Jehn and Bezrukova (2004)

Task type Timmerman (2000)

Wegge et al. (2008)

Leadership behavior Kearney and Gebert (2009)

Kunze and Bruch (2010)

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Nishii and Mayer (2009)

Finally, Kearney and colleagues identified team need for cognition, meaning the collective actions ‘to seek out and thoroughly process information in numerous domains’ (2009: 583) as a factor that moderates the relationship of age diversity with elaboration of task-relevant information, collective team identification, and performance. For all three outcomes, age diversity was found to be positively related under high values of need for cognition, but negatively related under low values of need for cognition.

Diversity Management and HR Practices

Choi and Rainey (2010) reported diversity management in federal agencies to be a favorable boundary con- dition for the age diversity/business unit relationship. Thus, if employees perceived their business unit, rep- resented by their supervisors, as engaging in pro-diversity initiatives (e.g., policies and practices to promote diversity), the relationship between age diversity and performance was significant. Ely (2004) found no mod- eration effect of diversity education programs in companies in her study on the business-unit level. Likewise, Jehn and Bezrukova (2004) found no moderation effect of diversity-focused HR practices on the relationship between age diversity and group performance in a sample of 1,528 working groups.

Task Type

One often researched contextual factor for the age diversity/outcome relationship is task type. Timmerman (2000), for example, found that age diversity was negatively related to performance in basketball teams, but unrelated to performance in baseball teams. From this finding, she concluded that the higher required level of task interdependence in basketball teams aggravated the negative social identity effects of age diversity. In a sample of 222 work units, Wegge and colleagues (2008) investigated the boundary role of task complex- ity and discovered that age diversity was only related positively to performance for groups solving complex tasks, but not for groups engaging in routine tasks. Additionally, age diversity was positively related to the unfavorable outcome of health disorders only in groups working on routine tasks. In the same study, Wegge and colleagues (2008) also inspected the role of group size as a potential moderator, but found no significant effect.

Leadership Behavior

Only recently have initial studies emerged that investigated leadership behaviors as boundary conditions for the age diversity/group outcome relationship. First, Nishii and Mayer (2009) in a sample of supermarket de- partments discovered that overall demographic diversity, consisting of a composite measure of age, race, and gender diversity, was positively related to group turnover only when leader–member exchange (LMX) differ- entiation was low. Under low LMX differentiation, the relationship turned out to be non-significant. Thus, LMX seems to at least buffer the negative consequences of age diversity. Second, Kearney and Gebert (2009) re- ported a similar buffering effect of transformational leadership (TFL) for the relationship between age diversity and team performance. Their results showed that age diversity increased the elaboration of task-relevant in- formation, and in turn performance, only when TFL was high. Under conditions of low TFL, they found a neg- ative relationship between age diversity, elaboration of task-relevant information, and ultimately performance. Finally, Kunze and Bruch (2010) replicated this relationship by showing that age-based faultlines (e.g., fault-

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lines that foster sub-group formation based on age in alignment with gender and organizational tenure) nega- tively relate to productive team energy only if TFL is low, but are unrelated to productive team energy if TFL is high. Hence, they assumed that TFL is a promising factor to foster the joint activation of affective, emotional, and behavioral potentials in teams with strong age-based faultlines.

Future Research Trends

Despite the numerous recent studies on contextual factors explaining the age diversity/collective outcomes relationship, the research area still possesses many blind spots that can be addressed in future studies. In the following section, we will offer two ideas for future research trends that might help to further complement the incomplete picture on the consequences of age diversity: interaction of age with other diversity criteria in organizational faultline research and research on the organizational-level consequences of age diversity.

Age-Based Faultline Research

In their review of diversity research in general, Joshi and Roh (2009) reported that less than 5% of the studies they initially reviewed applied an operationalization of diversity that considered several diversity facets. Simi- larly, Jackson and colleagues (2003) concluded in an earlier review that less than 5% of the reviewed studies integrated several diversity dimensions simultaneously.

One way to fill this research gap may be to integrate the faultline concept into diversity studies. The faultline concept was introduced by Lau and Murninghan (1998) and refers to the hypothetical dividing lines that split a group into sub-groups based on several demographic criteria that are aligned with one another. For instance, a clear-cut demographic alignment in a group (e.g., all men are old and all women are young) may strengthen coalition formation and finally result in salient group identities (a sub-group of old men versus a sub-group of young women) (Cramton and Hinds, 2005).

Strong group faultlines are generally expected, due to their polarization tendencies, to be negative for several work outcomes. In line with this expectation, prior research has shown that faultlines exhibit a negative rela- tionship with group processes such as conflict (Li and Hambrick, 2005; Polzer et al., 2006; Thatcher et al., 2003), emergent states such as cohesion (Molleman, 2005), and behavioral/social integration (Li and Ham- brick, 2005; Rico et al., 2008). However, there are also counterintuitive findings that have reported faultlines to be linked with less conflict, more team learning, psychological safety, and group learning behavior (Lau and Murnighan, 1998). These results indicated that faultlines and their relationship to team processes and outcomes are not yet fully understood (Mathieu et al., 2008).

One way to develop a better understanding of faultlines would be to examine contextual moderators that may enhance or decrease the strength and number of faultlines (Joshi and Roh, 2009). Recent studies on faultlines have investigated diversity beliefs (Homan et al., 2007), task interdependence (Molleman, 2005), and team identification (Bezrukova et al., 2009) as potential boundary conditions. Furthermore, the previously mentioned study by Kunze and Bruch (2010) found TFL to be a boundary condition for the age-based fault- line/productive team energy relationship.

In sum, plenty of opportunities exist to advance the field of age diversity research in combination with fault- lines. One way might be to inspect in more detail other types of diversity with which age heterogeneity has the

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strongest interaction in terms of faultline creation. Does age interact more with social-category facets (e.g., gender, ethnicity) or with experienced-based categories (e.g., tenure, education), or even with personality traits (e.g., big five trajectories) in faultline creation? Furthermore, like for age diversity effects, more research is needed to inspect the potential activators and deactivators of age-based faultlines in companies (e.g., train- ing programs, proactive leadership behavior) (Thatcher and Patel, 2011).

Age Diversity at the Organizational Level

A second fruitful area for future research might be to study age diversity not only as group-level phenomena, but also as a source for diversity-related processes throughout a company as a whole. Although age diversity possibly does not have direct performance consequences, it is likely to influence subtle and implicit process- es and states within companies. After all, the negative consequences of sub-group formation and conflicts might not be limited to the group level, but might also spread throughout the company across team and unit borders.

One study found a company's age diversity to be positively related to an age discrimination climate, which in turn was negatively related to a collective affective commitment climate and ultimately also to overall compa- ny performance (Kunze et al., 2011). The authors argued that because they are in similar stages in private life and also possess historically generated similarities (Lawrence, 1980), employees from different age groups should practice more intense communication and cooperation within their own age group than between age groups (Lawrence, 1984). As a consequence, employees’ formal and informal exchange and cooperation, such as joint lunches or social activities inside and outside the company, are more likely to occur between same-aged peers, even across team or unit boundaries, leading to sub-group formation and increased lev- els of discrimination. Additionally, increased levels of age-based discrimination might also be triggered by the violation of career time tables (Lawrence, 1984, 1988). This concept is based on the assumption that over time clear age norms develop in an organization concerning which career level an employee should reach at a given age. Based on these implicit age norms, employees are ranked on whether they have reached the adequate career level for their age group. While those employees that are ‘on schedule’ or even ‘ahead of schedule’ are not confronted with perceived discrimination, employees who fall behind the career sched- ule are assumed to perceive higher levels of discrimination. Increasing age diversity due to the demographic change might produce more violations of these implicit age norms (Kunze et al., 2011).

Future studies might pick up on this new level of age diversity research and investigate potential boundary conditions that help companies benefit from the potential of an age-diverse workforce. One potential boundary condition might be pro-age diversity practices, such as organizational efforts to support diversity (Triana and García, 2009; Triana et al., 2010). These pro-diversity organizational procedures and practices should help create an environment that fosters respect for all employees, regardless of their age (Hicks-Clarke and Iles, 2000; Mor Barak and Levin, 2002), and consequently reduce the evolution of an age discrimination climate, which hinders performance in age-diverse companies. Additionally, age-specific HR practices (e.g., Arm- strong-Stassen, 2008; Boehm et al., forthcoming; Elliott, 1995) might also be perceived as a strong orga- nizational statement that, particularly, a key goal of the organization is the avoidance of age discrimination, which in turn will potentially unlock the benefits of age diversity. Kunze and colleagues (2013) found as first study researching boundary conditions on the organizational level of analysis, that age stereotypes of the top management and diversity-friendly HR-policies play a key role for the relationship between age diversity and company performance. Finally, Choi and Rainey (2010) suggested that rewards for strong performance by employees form a necessary boundary condition for the positive linkage between age diversity and company performance.

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How to Manage Age Diversity in the Workplace

In the last section of this chapter, we will try to translate the findings from age diversity research into concrete practical strategies for executives in companies. In particular, we will consider two levels where interventions could take place: (1) the level of team supervisor and (2) the organizational level.

Team Supervisor-Level Strategies

First, as described in the literature review, TFL has been shown to be a positive boundary condition for both the relationship of age diversity with team outcomes (Kearney and Gebert, 2009) and for the relationship be- tween age-based faultlines and team outcomes (Kunze and Bruch, 2010). Following these studies, leaders of age-diverse teams should aim to show high TFL behaviors at the workplace. TFL consists of six distinct sub- dimensions: acting as an appropriate role model, fostering the acceptance of common goals, identifying and articulating a clear vision for the future, setting high performance expectations, providing individualized sup- port for followers, and providing intellectual stimulation for followers (Podsakoff et al., 1996). Through these various behaviors, team supervisors can create a common team identity that superposes all other sub-iden- tities (e.g., those based on age) within a work group (Kunze and Bruch, 2010). Thus, strong TFL leadership behavior might be among the most promising strategies for executives to employ to benefit from their age-di- verse subordinates. This is particularly interesting since numerous studies have shown that TFL is a learnable competence (Barling et al., 1996; Kelloway et al., 2000). Consequently, companies should invest in TFL lead- ership training for their current and future supervisors (e.g., Bass, 1990) and also treat TFL capabilities as a core requirement in recruitment and promotion decisions.

Second, leaders of age-diverse teams should also aim to create maximal interaction between employees from the different age groups. Gaertner and Dovidio (2000), for example, argued that increased interaction and task interdependence are highly likely to foster a common group identity and to lower negative conse- quences of diversity, such as relationship-based conflicts and decreased mutual communication (Pettigrew, 1998). Thus, team supervisors should try to incorporate the necessary interaction inherent in the task as- signment. If team members perform highly interdependent tasks, they are almost forced to cooperate in a productive manner. Additionally, the workplace architecture can be designed to favor interaction. Joint coffee bars, open team offices, and other group-oriented work facilities should increase the possibility of formal and informal team interaction. Finally, off-site activities, such as outdoor trainings and joint leisure activities, can be applied to increase interaction between team members of different ages so as to foster better team out- comes.

Third, when staffing new work teams, supervisors may vary the level of age diversity depending on the type of task. While routine tasks are more efficiently accomplished with age-homogenous teams, non-routine and innovative tasks (e.g., developing new products and strategies) often require at least a certain amount of age heterogeneity. Bowers and colleagues (2000), for example, explained that complex tasks are best suited for age-diverse teams.

Organizational-Level Strategies

First, from an organizational-level perspective, companies should carry out age auditing procedures that em- ploy age-profiling tools for different levels of analysis (Age-Partnership-Group, 2006). Age profiling consists of an assessment of the current age distribution throughout the company and within specific departments and teams. Based on the current situation and assumptions concerning future recruitment and retirement strate- gies, age profiling also allows a forward projection of 5 or even 10 years concerning the age composition of the workforce. In general, age profiling is most valuable for companies if as much detailed information on employees as possible is integrated. Instead of considering age alone, researchers may consider other so-

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cio-demographic data (e.g., gender, tenure), functional data (e.g., current position, salary amount), structural data (e.g., scope of application, growth potential), qualifications data (e.g., formal qualifications, current com- petencies, willingness to participate in training), and individualized data (individual career and development goals). Such specific data can substantially increase the explanatory power of an age-profiling analysis, in addition to offering companies an indication of whether age diversity might be a current or future problem for their teams, departments, or overall productivity.

Second, if age diversity is found to be present in teams or the overall organization, certain measures might be put in place to reach beneficial performance outcomes. Overall, companies should strive to develop a positive (age) diversity climate (Mor Barak et al., 1998). According to the definition offered by Gelfand and colleagues, a positive diversity climate describes ‘employees’ shared perceptions of the policies, practices, and proce- dures that implicitly and explicitly communicate the extent to which fostering and maintaining diversity and eliminating discrimination is a priority in the organization’ (2005: 104). Perceptions of a strong diversity cli- mate have repeatedly been linked to more sustainable integration and smoother collaboration among diverse employees, as well as higher levels of performance (Cox, 1994; Gonzalez and DeNisi, 2009; McKay et al., 2009; McKay et al., 2011).

Top management and the HR department play an important role in shaping such a climate. As Dychtwald and colleagues (2004) noted, HR practices in many firms are often implicitly or explicitly biased against older workers and thus create a negative age-diversity climate. Moreover, as Feldman (1994) pointed out, HR poli- cies indicate the organization's appreciation and affirmation of its older workers and how much the company values their contribution. Thus, companies should try to establish HR measures (recruiting, training, career management) that are non-age biased. It is important that these measures target not only older workers but all age groups in the company to prevent the replacement of a discriminatory culture against older employees with a new one that discriminates against younger age groups.

Conclusion

The demographic change that has resulted in an aging and increasingly age-diverse workforce is one of the major challenges for organizations today and in the coming decades. Particularly, companies have to deal with growing levels of age diversity in their teams, departments, and overall organizations. This chapter has summarized recent findings concerning this pressing issue. We first contrasted the opposing theoretical ratio- nales to explain both positive and negative consequences of age diversity, namely, the information/decision- making perspective (variety) and the processes of similarity-attraction, social identity, token status, and in- equality (separation and disparity). Thereafter, we provided an overview of recent empirical studies inspecting the direct linkage between age diversity and team outcomes, as well as those considering potential bound- ary conditions. This chapter closed by offering perspectives for future research as well as concrete practical recommendations on how to manage age diversity in the workplace. In sum, we hope to have provided a co- herent overview of the current state of the age diversity literature that will fuel both future research in the field and the productive collective engagement of all age groups in companies.

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• team diversity • faultlines • age and aging • diversity • team performance • staff • diversity management

http://dx.doi.org/10.4135/9781446269916.n3

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