24.05.2016

"No Future? No way!" - The Future Perspectives of Employees: a Compass for HR Management

Study of the University of Mannheim and Jacobs University Bremen shows: Personnel measures affect employee work satisfaction and corporate loyalty via subjective future perspective.

The future perspective of employees has a central role for personnel management of companies which influences work satisfaction and corporate loyalty. How one’s own future is perceived, whether as a time full of opportunities and chances or as a time full of threatening restrictions, is highly influenced by personnel management and can result in work satisfaction and corporate loyalty.

This is the result of a joint study by the University of Mannheim and the Jacobs University of Bremen. Researchers advise to take future perspectives of and especially older employees into account – particularly in times of demographic change. The results of the study have been published in the newest edition of the renowned “Journal of Organizational Behavior”.

What options does personnel management have in times of demographic change, where businesses are confronted by a fast-aging workforce? “We have known for a long time: When people get older they treat time differently. Young people usually know no time restraints – they want to conquer the future. With increasing age, time becomes more and more precious as people are faced with their own finiteness,” explains psychologist Dr. Jörg Korff, researcher at the Chair of Business Administration, Human Resource Management and Leadership at the University of Mannheim, who is responsible for the study. “What’s new – and this is extremely interesting for HR management – is that the framework in businesses highly influences the perceived future perspective. Businesses are able to manipulate the motivational age of its employees and make them younger, if you will.”

Korff, together with his colleagues, Professor Torsten Biemann from the University of Mannheim and Sven Voelpel, Director of the WDN-WISE Demographics Network from the Jacobs University of Bremen, asked 913 employees from ages 19 to 64 in 76 different business units from 15 different corporations. Next to the future perspective, work satisfaction and corporate loyalty of employees, the activities of personnel management of businesses (training and vocational learning, personnel selection, pay, promotion, employee supervision, variable compensation, job security, employee participation, work time flexibility, complaints and informational politics) were a central topic.

Personnel practices rejuvenates ages of employees

The surprising results of the study show that the future perspective of employees, which strongly accompanies age, is highly influenced by personnel management measures. “When businesses choose their employees transparently and based on objective criteria and offer opportunities for vocational training, let them join decision making and judge them on their performance not their age, employees become younger from a motivational perspective. And this positively influences work satisfaction and corporate loyalty,” Korff sums up. Former research from the United States has shown that young people show motivational priorities which are similar to that of elders in face of life threatening situations like HIV or SARS infections, or in face of extreme unknown situations like the residents of Hong Kong after Great Britain’s transfer of the city to Chinese rule in 1997. If perspectives are lost or their lives are about to end, humans recede to privacy or concentrate on spending their remaining time as useful and comfortable as possible.

Korff and his colleagues were now able to prove important influence possibilities on these age-related changes of perception and behavior in less extreme situations in the job world. These results have important implications for personnel management of fast-aging employees: ”Recruiters who analyze the implications of demographic change of their respective work force are well off if they include older employees in their personnel management systems. Businesses that offer no development possibilities for their employees and no performance-related compensation convey the message that their time in the company is ending. The result is that employees withdraw and in extreme cases quit inside long before they leave the company due to their age,” explains Korff. Researchers believe that the perceived future perspective of employees is very important for the strategic planning of personnel management systems of different age groups of employees.”

View the summary of the article in the "Journal of Organizational Behavior".