Mastodon

The Pros and Cons of Hiring Older Employees vs. Younger Employees

Ever thought you would one day be in a position where you would have the decision on your hands to make or break someone’s career? Well if you are, here is something that you might come across depending on the nature of your job. This article aims to analyze some of the main factors to consider while picking the right person for the job. At the very outset, I must make it clear that I am referring to older as in more experienced professionals and not just being ageist.

What are the things one could consider? We have tried to lay down factors that could influence one’s decision below in a concise format. Hope it helps you come to a conclusion about your Sophie’s choice.

I have tried to first evaluate the pros of hiring older employees as opposed to younger employees before proceeding to the cons.

1) Experience – for certain jobs, job experience is a huge factor. Experienced employees bridge the gap from teaching from scratch to jumping right into the thick of things.

2) Less supervision – they definitely do not need as much supervision as a just out of college hire.

3) Fewer chances of mistakes – they have made their mistakes and hopefully learned from them.

4) Takes lead – having probably worked at other places before, they feel confident enough to take charge and lead the team.

5) Mentorship – older employees are able (and willing) to mentor younger, less-experienced employees.

6) Clients – older employees might just have a list of contacts and networking that will be useful in the growth of the firm.

7) Patience – apart from the odd temper tantrum, they display more patience to teach and to communicate with the team.

8) Loyalty – it comes with the package.

9) Punctuality – this is one of those old tradition school things but punctuality is common and important to their generation.

The pros of hiring younger employees as opposed to older employees can be listed as follows:

1) Adept at technology – younger employees have grown up in the lap of technology and are therefore much more proficient at it than the older generation.

2) More risk-taking – they just might be more open to the idea of risks (this might not necessarily go down well for the company but they at least had the courage to take that chance. Older employees are more cautious and less open to something and who knows, the risks might pay off).

3) Dynamic – I do know of 60-year-old CEO’s who have been nothing but dynamic all their lives and that is why they are at the top. But younger blood with more ideas, fresh out of college and enthusiastic might be just what is needed to revitalize the company.

4) Flexibility – older employees tend to have their own set of ideas and notions and cannot adapt easily to the changing mindset. Younger employees generally have a flexible attitude because they are more adept at changing (it’s a millennial thing maybe) and can pick up on such changes sooner (without grumbling).

5) Expectation of Salary – the older employees come with some experience and want to be compensated for the fact that their previous skill has saved some training of the employers and therefore they must be compensated for the same. Younger employees are more than happy that they are being paid as the job is a place where they start off and learn (they know that their salary is not going to be through the roof).

6) Physical attribute – though it sounds ageist, it is true that older employees do face certain physical drawbacks as compared to younger employees and the strenuous work can take a toll on their health.

Several more pros and cons could be listed. However, the important take away from this article is that at the end of the day, the circumstance, the company and the post being recruited for is what will ultimately decide as to who stays and who does not.

This article was written by volunteer blogger Riya Prem Raaj and edited by volunteer editor Shan Simpson.

J2DW Launches Titles and Pronouns for Transgender and Gender Diverse Individuals

Journey to Diversity Workplaces Launches Titles and Pronouns for Transgender and Gender Diverse Individuals

J2DW joins companies such as Royal Mail, the Royal Bank of Scotland, HSBC, and numerous others making this change.

For Immediate Release

BARRIE, ONTARIO, 10 OCTOBER 2017 – Journey to Diversity Workplaces (J2DW) is excited to announce the addition of new titles and pronouns to their online applications and databases for transgender and gender diverse individuals.

J2DW’s goal is to promote diversity and inclusion in the workplace. We respect differences ethically, morally, and legally. We want a different kind of workplace where diversity is championed and so is the worker. An organization’s success and competitiveness depends upon its ability to embrace diversity and to realize the benefits of diversity.

It is important that we respect and recognize individuals in our society in a way they wish to be addressed. By doing this, we promote out-of-the-box creativity and respect for those who explore their lives fully in a way that is right for them. We’re proud to take a stand on this.” said Peter V. Tretter, President & CEO of Journey to Diversity Workplaces.

The board of J2DW green-lit the project over the summer and immediately went into beta testing. New titles available include Ind., Mre., Msr., Mx., Myr., Pr., Sai., and Ser. New pronouns available include Ne/Nem, They/Them, Ve/Ver, and Ze/Zir.

Organizations such as Royal Mail, HSBC, the Royal Bank of Scotland, and Oxford City Council have introduced these titles since the start of 2017, and we believe J2DW is one of the first Canadian companies (for-profit or non-profit) to launch these options.

Journey to Diversity Workplaces is a Barrie, Ontario based organization formed under the Canada Not-for-profit Corporations Act in December 2013. Find out more about us at www.j2dw.ca

— 30 —

Contact:

Peter V. Tretter, President & CEO

705-481-7784 ext 2

pe…@j2dw.ca

The facts about incentive pay

In the following essay, I am going to analyze incentives for workers to perform tasks, and thus come up with a conclusion as to what makes the most sense for employers to incentivize their employees with. I will back up my analysis with the mention of two research papers.

The exchange of money for the completion of tasks, the labour market, is arguably one of the most important transactions for the ongoing of our economy. If it did not exist, we would not be able to progress further into developing our world into a better home for the generations to come. And with this importance, comes a concept just as important, keeping employees just as motivated to continue working.

Human nature is such that motivation within us does not last forever, and thus refilling ourselves on a constant dose of motivational fuel is pivotal in the success of our tasks.

There are in general, two types of incentive pay, which are merit pay and bonus pay. Merit pay can be defined as the permanent increase related to performance against a standard that reflection evidence of permanently increased productivity. The term bonus can also be defined similarly as a single period additional pay related to performance that may not be reproducible in the next period without sufficient additional effort. We will examine the advantages and disadvantages of both these pay structures.

Under the umbrella of merit pay is the piece rate, where workers are paid on the basis of the output they produce. Piece rates hold the benefits of workers are motivated to produce more output because of the fact that their wages are directly proportional to their pay, it is a system that attracts good workers due to the fact that more skilled labour will want to join the company because of such a pay structure, and there exist savings of monitoring workers and keeping track of their productivity.

Seeing how effective such a piece rate method of payment is, I am going to support my argument with supporting research. Edward Lazear wrote a paper titled “Performance Pay and Productivity” where he examined how effective the incentive pay of piece rate was in inducing workers to produce more output. His examination of personnel economics uses data from a company called Safelite Glass Corporation, which is an auto glass company. His use of this data derives from the fact that in 1994 and 1995, management in the company changed the compensation from hourly wages to piece rates. This provided the necessary data to analyze how effective the new piece rate was in inducing more output.

His findings can be summarized into the following points:

1. A switch to piece-rate pay has a significant effect on average levels of output per worker. This is in the range of a 44-percent gain.

2. The gain can be attributed to two components. Approximately half of the gain in productivity resulted from the ability of the company to hire a more able workforce.

3. The change to piece rate resulted in both gains in productivity for the firm and benefits for the employees. Employees on average earned 10% higher due to the change.

4. Switching to a piece rate increases the variance in output. More ambitious workers have less incentive to differentiate themselves when hourly wages are paid than when piece-rate pay is used.

Even though these findings are specific to one firm, they provide useful insights into how piece rates can affect employees and firms.

In a different research paper titled “Pay Enough or Don’t Pay At All” by Gneezy and Rustichini, the researchers find that some employees react negatively to the piece rate offered if the wages are not substantial enough.

The researchers set out to figure out whether the default economic theory that incentives should induce performance is realistic in the complex world we live in. The researchers conducted an experiment in a lab where students were asked to answer a few IQ test questions and were told that they would be paid a piece rate related to the number of answers they got correct. They got a base pay for showing up for the test and then the subjects were divided into three groups that were randomly assigned a piece rate.

What the researchers found is that the test subjects perceived the piece rate as follows. The test subjects just offered the base pay and nothing more did the job more effectively than subjects that were offered a small piece rate plus base pay. This is because offering a small piece rate changes the perception of the contract as explained below.

If a zero piece rate is offered, subjects tend to perceive the ‘contract’ as follows: “The experimenter has offered me 60 cents to do a job. Now I know what that job is –answering questions—and it is my job to do it satisfactorily.” Putting this in a different way—subjects interpret this as a gift exchange contract.

If a positive piece rate is offered, subjects tend to perceive the contract more as follows: “The experimenter has offered me 60 cents to show up. I’ve done that. Now he is offering me 10 cents per question to answer questions.

The question of incentive pay is an important question labour economists have been trying to answer for years and we need to strive as a society in figuring out what the most effective way of motivating our employees is. In the above analysis, I briefly touched upon piece rate with some evidence from research, but there are a variety of incentive pay schemes the labour market can take advantage of.

Piece rates can be effectively put to use to induce productivity if used correctly. In the case of the first research paper, the nature of the work determined the success of the piece rate. In the second research case, a high piece rate was effective in inducing higher productivity. The piece rate, if implemented wisely, can be a very important determinant in a company’s labour output.

References
1. Gneezy, Uri, and Aldo Rustichini. “Pay Enough or Don’t Pay at All*.” Quarterly Journal of Economics, vol. 115, no. 3, 2000, pp. 791–810., doi:10.1162/003355300554917.
2. Lazear, Edward. “Performance Pay and Productivity.” 1996, doi:10.3386/w5672.