Organizational Performance Consequences of Age Diversity : Inspecting the Role of Diversity-Friendly HR Policies and Top Managers' Negative Age Stereotypes

Abstract

This paper seeks to advance the diversity literature by investigating organizational performance consequences of age diversity. Drawing from social-identity and social-categorization theory, we theoretically argue that, in age-diverse companies, age-based subgrouping processes occur, favouring a shared perception of a negative age-discrimination climate. This perceived negative age-discrimination climate in turn negatively relates to organizational performance. As the main contribution, top managers' negative age-related stereotypes and diversity-friendly HR policies are introduced as organizational-level moderators that increase and attenuate, respectively, the social categorization processes affecting performance in age-diverse companies. We utilized structural equation modelling (SEM) to test the proposed hypotheses using a multisource dataset comprising 147 companies. The results supported all hypotheses, indicating that low negative top managers' age stereotypes as well as high diversity-friendly HR policies are potential organizational factors that can prevent the negative relation of age diversity with organizational performance transmitted through the negative age-discrimination climate. These results are discussed in light of their contribution to the diversity literature and social-categorization theory as well as their implication for practitioners.