The Risk of Age Discrimination in Potential Appraisals of Employees
The Collaboration
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Industry collaboration between researchers of the Centre for Transformative Work Design and two large companies: A chemical multinational corporation based in Germany, and an organisation active in the financial and insurance services industry in Belgium.
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Serves the mission of the Centre of Excellence for Population Ageing Research (CEPAR) and, specifically, the research stream on ‘Organisations and the Mature Workforce’ led by Prof. Sharon Parker which aims to deliver solutions to one of the major economic and social challenges of the 21st century.
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Jointly funded by the Australian Research Council (ARC) as well as the Flemish Research Council (Fonds voor Wetenschappelijk Onderzoek - FWO).
Industry outcomes
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Provide evidence for and identify actual sources of bias in organisations using statistical analyses to help employers decide where to target the investment of their resources (i.e., shift their focus from promoting procedural fairness in performance appraisals to potential appraisals)
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Build on theoretical knowledge to advise organisations on how to tackle bias (i.e., using a contextualised- rather than a competency-based approach to prevent age bias when identifying employee potential)
Articulate suggestions for organisations and governments about how they can better manage demographic changes in the future (i.e., promote the development of fair appraisal procedures in organizations’ human resource management to break the ‘silver ceiling’ and keep older employees motivated to work longer)
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Research Project Lead
Giverny De Boeck
Other researchers involved: Prisca Brosi, and Nicky Dries
The purpose of this research was to evidence the higher susceptibility of potential appraisals to age and gender bias in comparison to performance appraisals.
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To test our hypothesis empirically, we analysed two large archival datasets, one from a German chemical multinational and one from a Belgian finance company, using regression analyses and structural equation modelling. We also conducted a vignette experiment to replicate our findings, while keeping all other factors constant.
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Our results showed that potential appraisals were biased against older employees who received systematically lower ratings than younger employees, and that this negative age effect was stronger for potential than for performance appraisals. Moreover, age also affected pay raises and promotions in the next year via potential ratings. Our experiment showed that the different scores of older and younger employees could not be attributed to differences in competence level, meaning that they reflected actual bias. For gender, effects were largely absent.
In conclusion, our results suggest that potential appraisals entail a serious risk for age discrimination in organisations, because they structurally limit the career opportunities of older employees, creating a so-called ‘silver ceiling’.