EMPLOYEE AGE, HUMAN RESOURCE MANAGEMENT
PRACTICES
BUSI 240-Organizational Behavior 1
Liberty University
2022
EMPLOYEE AGE, HUMAN RESOURCE MANAGEMENT
PRACTICES
Considerable academic and practitioner interest has existed in the relationship between age of
employees and employee performance due to extension of individual lifespan and the fall in birth
rate in developed countries leading to increased proportion of older people outside the workforce
to be supported by a smaller base of working adults (Karpinen, 2011). Developing countries,
unlike developed countries, have high birth rates with majority of the population consisting of
young people, a situation leading to high rate of unemployment and high dependency ratio (Eiker,
2009). Age plays a vital role in varied employee behaviors which determine their performance
(Boulander, 2007). Measurement of employee performance gives an indication of the
effectiveness of an organization to achieve its overall strategic goals and objectives. Age alone is
not sufficient to determine employee performance (Armstrong, 2006). Other factors such as
competence, determined by education/skills level, experience and human resource management
practices have been found to affect this relationship. Booz et al. (2009) examined employee’s age,
powers of an employee and his work experience in an occupation. The study results and those of
previous studies indicate that age and experience exhibit a core linear relationship with
performance. Human resource management (HRM) practices influence employee behaviors which
in turn enhance performance by improving their competency in the international labor market (US
Department of Labor, 2007).
According to the Eiker (2009), in the next ten years, the population structure of the working age is
bound to change significantly. The numbers in the age group (15 – 19) will decline by nine
million (- 17%) while the (50 – 59) age group will increase by 5.5 million and numbers of those
aged (60 – 64) will increase by one million. This is the scenario in developed nations such as the
U.S.A, Canada and Germany. Developing countries have high birth rates and that majority of the
population is made up of young people aged between 12 – 19 years (Karuggah, 2004). This is the
reason for high rate of unemployment and high dependency ratio. The government is forced to
increase health services, education and social welfare. Governments in developing countries,
spend heavily on retirees in terms of social welfare and pensions, but they don’t contribute
significantly to the national income of their countries (Delsen, 2009). Transfer payments in form
of pensions and grants paid for social welfare to retired workers are equally a big problem for
developing countries (Reday, 1998). Retired workers are paid by governments but they contribute
limited returns to the national kitty. This situation is forcing many world economies to reconsider
and start restructuring their policies such that very soon, it is likely that many people over the
present retiring age will have to work (Cole, 2008). This is the idea behind extending the
mandatory retirement age in some countries.
The current study is based on Expectancy Theory, Human Capital Theory and Continuity Theory.
Expectancy theories of Vroom (1964) and Porter (1968), posit that performance does not depend
only on the magnitude of exerted efforts but also on other factors such as individual abilities, traits
and role perceptions which can be influenced by age, skills level and education. In this study, the
implication is that age which determines the magnitude of efforts, is not on its own, an effective
determinant of employee performance unless other factors such as educational level, skills level
and training come in as its moderators. Human capital theory explains that widespread investment
in human capital in terms of education and training creates a skill-base in the labor force
indispensable for economic growth (Borman et al.,1991). Continuity theory posits that
successfully aging individuals maintain positive habits, lifestyles, preferences, and relations in the
middle age and later which maintains or improves their performance (James et al., 2011). It can
therefore be deduced that large amounts of energy exerted by an individual may still result in low
performance if they are not supported by competence and motivational factors. In this study,
employee age, HRM practices and employee competence are believed to influence the
performance of employees more than the individual role of employee age.
Age as an independent variable was selected because many studies such as Lewin (2006) have
demonstrated that age influences a number employee behaviors that determine his/her
performance. HRM practices were selected for this study because they are performance enhancing
activities that influence a wide range of employee behavior at work (Omari, 2012). The behaviors
include, commitment, trust, job satisfaction and organization citizenship behaviors. Employee
competencies were selected because they are general ability descriptions an employee needs in
performing a task or a role in the organization. They are a signal from the organization to
individual employees of the expected areas and levels of performance (Carstenson, 2005).
Employee competencies can be manifested through their education levels, skill levels, levels of
training and experience (Armstrong, 2008). The existing literature, such as Graham (2007) has
established that a relationship exists between employee age and employee performance. On the other
hand a number of studies (such as Omari, 2012) have established a non significant relationship
between employee age and employee performance, implying that age alone is not sufficient to
determine employee performance.
Studies have shown that, on the average, age alone accounts for little variance in work
performance, suggesting that other factors come into play to moderate the relationship
(Davel, 2000).This relationship is weak in the absence of variables such as HRM Practices
and employee competence. The effect of the link moderating between employee age and
employee performance has not been adequately addressed in the existing literature. Expectancy
theorists like Porter, Vroom and Lawler posit that other than magnitude of efforts, performance
also depends on other factors such as individual abilities, traits and role perceptions which
can be influenced by factors such as age, education and skills level. Employee age and
performance are moderated by characteristics and abilities of individuals (including
competence). Many studies use certain employee factors such as age and competence to explain
employee performance. The simultaneous role played by HRM Practices and employee
competence in stepping up employee performance needs to be investigated. The current study
contributed by adding this input to the body of literature.
The focus on employees of state corporations in this study was driven by the fact that this
sector plays a critical role in Kenya’s economic growth and development by providing
essential goods and services at low cost, hence the need to improve the human resources for
better performance in the sector (Omari,2012).The study was carried out in the background
of change in the public sector in Kenya and shifts in management systems affecting
employee performance in the said corporations. The systems are performance contracts,
performance appraisal and performance ranking making the sector competitive (GOK, 2015).
The introduction of performance contracts in state corporations implies that performance is
key and human resources management practices are the basis of improving productivity in
this sector. State Corporations in Kenya are managed by management boards led by a
chairman who is a presidential appointee, a chief executive officer and the permanent
secretary of the parent ministry, treasury permanent secretary and seven other members
appointed by the minister.
They are involved in various economic activities which include mining and manufacturing,
distribution, education, finance, transport, electricity, telecommunications and other services
(Omari, 2012). Poor performance of some state corporations is due to poor corporate
governance, political interference, inadequate funding, political appointments of unqualified
individuals and irrational decisions that are partisan, thus impacting on work outcomes. The
current study focuses on how employee age relates with employee performance as influenced
by the moderating variables namely; HRM practices, and employee competence in Kenyan
State Corporations.
Employee Age
Swarthert (2015) defines employee age as the minimum age of admitting an individual into
employment up to retirement time. The minimum legal working age in a given country or
jurisdiction varies with the type and nature of work (Menounis, 2015). International Labor
Organization (ILO) put the minimum age for admission into employment or work for young
persons, as eighteen years. The contradictory theoretical evidence regarding age in relation to
ability and motivation coincides with mixed results reported by previous research. Boulander
(2007) asserts that as employees advance in age, they gain a wealth of experience and
expertise and can be used to train new and young employees. In acknowledging the wealth of
experience and expertise of older workers, Maitland (2013) notes the absence of experienced
older engineers with discomfort.
Graham (2007) asserts that younger workers are preferred as they are more up to date than
their older counterparts as they can be trained faster and easily adapt to changes. For
developing countries where population is ageing, government spends heavily on retired
employees in terms of social welfare and pensions paid to the retirees who do not contribute
to national income of their countries (Delsen, 2009). Transfer payments in form of pensions
and grants paid for social welfare and to retired workers are equally a big problem to
developing countries (Borman, 1991). Retired workers are paid by governments and in return
contribute no returns to the national kitty. This situation is forcing many world economies to
reconsider and start restructuring their policies such that very soon it is certain that many
people over the present retiring age will have to work (Cole, 2008). This is believed to be the
idea behind extending retirement age. The extension of retirement age in the Kenyan public
service from fifty five to sixty years has aroused interest in studying the linkage between
employee’s age and employee’s performance and the rationale of this structural state
decision.
Age was selected because studies such as Lewin (2006) have shown that age influences a
number of employee behaviors that determine their performance. Based on age, inferences
about people’s attitude and social behavior can be made to determine their performance.
Evaluating and comparing employee age is an everyday pastime in organizations as it is
important for managing employee performance (Barbara, 2006). People’s beliefs, judgments
and notions about age affect a wide range of employment issues, including hiring decisions,
promotion opportunities, placement, compensation, termination and performance. The
reaction of different age groups to the introduction of change in an organization varies
significantly (Omari, 2012). Studies have shown that, on the average, age alone accounts for
little variance in work performance, suggesting that other factors come into play to moderate
the relationship (Davel, 2000). This study focuses on HRM practices and Employee
Competence as moderators of Employee Age. The study focuses on how employee age
relates with employee performance as influenced by these moderating variables namely,
human resource management practices, and employee competence.
Human Resource Management Practices
Human resource management practices are performance-enhancing activities that improve
employee competitiveness and hence performance (Ochoti, 2011). Organizations put in place
varied adopt performance-enhancing human resources management (HRM) practices to
enhance their competitiveness globally (U.S Department of Labor, 2012). HRM practices,
motivate, attract and retain employees to improve their performance and hence organization
productivity (Schuler and Jackson, 1987). Human resource management practices are meant
to enhance human capital which is key in achieving organization objectives and goals
(Delery and Doty, 2010). The efficient application of HRM practices enhances employer and
employee contribution and commitment to the organization (Purcell, 2003).
HRM practices such as, employee participation and empowerment, employee training and
development, adequate and fair compensation, employee welfare benefits, performance
management and performance appraisal motivate employees to better their performance and
increase performance of the organization (Snell and Dean,2007). The selected HRM
practices used in the current study are based on their relevance to the industry selected for
analysis. The practices include employee participation and empowerment, employee training
and development, adequate and fair compensation, employee welfare benefits, performance
management. Academicians and professionals assert that employee performance is
influenced by organization management.HRM practices were chosen for this study because
they influence a wide range of employee behavior which enhances their performance at work
(Omari, 2012). The behaviors include, commitment, trust, job satisfaction and organization
citizenship behaviors. A study conducted in the textile sector of Japan by Hassan (2016),
analyzed the linkage between human resource management practices and employee
performance. The HRM practices were operationalized into performance appraisal, training
and development, employee participation, and compensation. Data analysis was conducted
using regression and correlation techniques. Results indicated that the relationship between
Human Resource Management (HRM) practices and employee performance was statistically
significant. Worker performance increased highly by empowering employees to make
effective and sound decisions (Hassan, 2016).
Other studies have shown that age influences the extent to which individuals respond to their
behaviors (Bertucci, 2006). Various researches have reported significant findings on the
association between firm - level measures of HRM practices and employee performance
(Ochoti, 2011). Uncertainty however remains as to how and to what extent HRM practices
influence the linkage between employee age and employee performance. HRM has a wide
range of practices including employee participation and empowerment, compensation and
benefits (pay), employee welfare benefits (such as housing and medical), training and
development (Skills development) and performance management. This study adopts these
practices as they are relevant to Kenyan State Corporations. The change organizations are
undergoing necessitates examining the above assumptions to establish the extent of the
influence of HRM practices on the linkage between employee age and employee
performance.
