Age and Work Performance in Nonmanagerial Jobs: The Effects of Experience and Occupational

Type
Author(s): Bruce J. Avolio, David A. Waldman and Michael A. McDaniel
Source: The Academy of Management Journal, Vol. 33, No. 2 (Jun., 1990), pp. 407-422
Published by: Academy of Management
Stable URL: http://www.jstor.org/stable/256331
Accessed: 10-09-2015 11:42 UTC
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? Academy of Management Journal

1990, Vol. 33, No. 2, 407-422.

AGE AND WORK PERFORMANCE IN

NONMANAGERIAL JOBS: THE EFFECTS OF
EXPERIENCE AND OCCUPATIONAL TYPE
BRUCE J. AVOLIO
DAVID A. WALDMAN
State University of New York at Binghamton
MICHAEL A. McDANIEL
Booz, Allen & Hamilton, Inc.
This study examined the relative explanatory powers of age and total
years of experience in an occupation for predicting supervisory ratings
of work performance. As predicted, results indicated that experience
was a better predictor of performance than age. A breakdown of jobs
into five occupational groupingsrevealed a moderatingeffect for occupational type. Findings also showed that age and experience exhibit
nonlinear relationships with performance.

There is a growing awareness that issues regarding the aging of employees will take on increasing importance for human resources management in
upcoming years (McLaughlin, 1989; Rosen, 1988). The percentage of older
employees in the total United States' work force will continue to grow as the
baby boom generation ages. At the same time, fewer younger workers will be
available because of the decline in the number of children born during the
1970s and 1980s referred to as the "baby bust" (McLaughlin, 1989). Signaling those trends, in 1975 the average age of the members of the U.S. work
force was 28 years; by the early 1990s, the average age will jump to 40 years
(Rosen, 1988).
Many employers expect that a shift in the age composition of the work
force will exacerbate promotional bottlenecks at the upper levels of organizations and labor shortages at the entry level. In response to these concerns,
many organizations have begun to confront the problem of promotional bottlenecks by introducing lucrative "buy-out" packages to encourage older
employees to retire early (Howard, 1988).
Other factors promoting the increasing awareness of issues involving
older workers include recent concerns over the financial stability of the
"Social Security" system; enactment of the Age Discrimination in Employment Act of 1967, amended in 1978; problems of worker obsolescence; explosive growth in the number of age discrimination cases filed over the last
ten years (Rosen, 1988; Sparrow & Davies, 1988); and the 1986 removal of
mandatory retirement for most occupations. Such legislation exempts a few

407

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occupations whose incumbents affect public safety, such as airline pilots.

The removal of mandatory retirement by the 1978 and 1986 amendments to
the Age Discrimination in Employment Act has placed the decision to stop
working largely in the hands of older employees themselves. However, there
is growing concern that organizations will employ strategies to pressure out
older employees who refuse to leave their jobs (Howard, 1988; Sparrow &
Davies, 1988). Collectively, these factors highlight the importance of gathering data that might improve understanding of how aging processes affect
work performance.
A more systematic examination of differences in work performance at
different ages and across different occupations could help firms make effective decisions about older employees. The purpose of the current investigation was to address some key questions previous research has not addressed
regarding the relationship of age and work performance.
A THEORY OF AGE AND WORK PERFORMANCE
A theoretical understanding of age and work performance must begin
with a broader framework of the general determinants of an individual's
work performance. Blumberg and Pringle (1982) and Waldman and Spangler
(1989) emphasized a model of work performance in which performance is
the product of ability, motivation, and context (or opportunity). Aging can be
viewed as a dimension along which those factors may systematically change
over time. For example, Rhodes's (1983) model of age-related differences in
work behavior showed how physiological aging processes can negatively
affect the basic cognitive and psychomotor abilities required to successfully
perform work activities. Conversely, previous research has shown how another time-related factor associated with work-related ability, level of work
experience, is positively related to job performance (McDaniel, Schmidt, &
Hunter, 1988; McEnrue, 1988). Schmidt, Hunter, and Outerbridge (1986)
tested a causal model of work performance that included the length of work
experience as a factor in the prediction of performance and reported that
work experience had a direct causal effect on degree of job knowledge.
Degree of knowledge in turn positively affected work performance.
Similar conflicting evidence has been reported on aging and motivational aspects of work performance. Slocum, Cron, Hansen, and Rawlings
(1985) suggested that the deadwood phenomenon often associated with
older employees is at least partially attributable to the prevalence of low
work motivation among them. Conversely, Rhodes (1983) reviewed research
evidence showing tendencies for higher commitment, lower turnover, and
less voluntary absenteeism among older employees than among younger
ones, suggesting that motivational levels were higher for the older employees.
The contradictory theoretical and empirical evidence regarding age in
relation to both ability and motivation coincides with the mixed results that
previous research has generally reported for age and work performance

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Avolio, Waldman, and McDaniel

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(Rhodes, 1983). Recent meta-analyses seeking to address those discrepancies

have shown that, on the average, age alone accounts for little variance in
work performance (McEvoy & Cascio, 1989; Waldman & Avolio, 1986). However, as noted above, two studies have shown length of work experience to
be consistently and positively related to work performance (McDaniel et al.,
1988; Schmidt et al., 1986). Such experience involves the development of
well-practiced work skills that a person can accumulate working in an occupation, perhaps in more than one organization during a career (McDaniel
et al., 1988). Experience defined in this manner is a more comprehensive
time-related indicator of performance than chronological age. One of the
purposes of the current investigation was to compare the power of age and
of experience in predicting work performance. We expected that experience
would enhance the predictive power of age. Thus, in line with recent work
by McEnrue (1988), we expected that
Hypothesis 1: Length of experience will contribute to the
prediction of work performance beyond the contribution
of age.
Context and Aging Processes
In an attempt to explain the variability in previous research findings,
Waldman and Avolio (1986) proposed that occupational type might moderate the relationship of age and work performance. To understand the theoretical reasons for that potential moderation, it is necessary to consider the
third primary determinant of work performance Blumberg and Pringle
(1982) identified-the
job and work environment context. Those researchers
used the term opportunity factors to describe factors external to individuals
that can directly and indirectly affect their work performance. Waldman and
Spangler (1989) called the same factors "context." Direct contextual factors
include the physical environment in which a person works and the availability of the resources (e.g., tools and equipment) necessary to accomplish
tasks effectively. Indirect contextual factors, which affect work performance
by influencing an individual's work-related competence or motivation, may
include job or occupational characteristics and organizational policies
(Waldman & Spangler, 1989).
Other researchers have offered a theoretical framework (Gribbin, Schaie,
& Parham, 1980; Labouvie-Vief & Chandler, 1978) explaining how aspects of
context not only affect short-term performance but also accrue over time and
affect ability and motivation. Acting in a manner similar to the environmental mediating factors that Rhodes (1983) described, contextual factors like
the level of skill and degree of mastery needed for a job may enhance relationships between age and work performance. Jobs that are stimulating or
that enhance skill development over time may positively affect work performance. Conversely, a job that is simple or highly routine may over time
produce an incumbent who is unchallenged, bored, and eventually a belowstandard performer. Consequently, what appears to be a decline in performance with increasing age may be the result of accumulated boredom or

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burnout. Consistent with this argument was Sparrow and Davies's (1988)
report that the strength of the relationship between age and the quality of job
performance depended on the level of a job's complexity. Peak performance
occurred at a significantly higher mean age in jobs involving greater levels of
task complexity. Long-term experience working in such jobs may also help
maintain an individual's cognitive abilities more than experience in less
cognitively engaging jobs (Avolio & Waldman, 1987). Thus, we expected that
an occupational classification scheme taking aspects of complexity and mastery into account would help account for systematic differences in the relationship of age and work performance. In sum,
Hypothesis 2: Occupational type will moderate the linear
relationship between work performance and age or experience. Specifically, age or experience in jobs requiring a
high level of skill or of professional mastery will explain
more variance than will age or experience in less complex
jobs.
Linearity Issues
An important theoretical possibility previous research has often overlooked is that age (or experience) may be nonlinearly related to work performance for many jobs. Schmidt, Hunter, Outerbridge, and Goff (1988) predicted that experience beyond the level needed to perform a job maximally
would not benefit performance and might actually be detrimental. Their
reasoning was that the most important gains in performance attributable to
experience are typically realized early in a career, with returns diminishing
over time. Research evidence to date has provided mixed evidence regarding
the presence of a plateauing effect (Lawrence, 1988; McDaniel et al., 1988;
McEvoy & Cascio, 1989). Remaining unanswered is the question of the generalizability of nonlinear plateauing in work performance in different occupations over peoples' life spans.
The same types of occupational qualities that serve to enhance linear
relationships between work performance and age and experience will also
reduce nonlinear plateauing effects. In jobs requiring high levels of skill and
mastery, the experience learning curve should be more gradual than it is in
less complex jobs, so gains in performance can accrue from lengthy experience. Conversely, in jobs requiring lower levels of skill and mastery, people
should realize performance gains from experience sooner, resulting in a
more rapid plateauing of performance. Moreover, because of the potential for
boredom or burnout associated with such work, the performance pattern
may become negative for older employees. Mathematically, this pattern
could be mapped as an inverted U-shaped function. However, such instances should occur infrequently in work places because most older employees would voluntarily leave such situations to avoid failure or be dismissed or transferred into more suitable positions by their employers. Thus,
Hypothesis 3: Occupational type will moderate the nonlinear relationship between work performance and age or

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Avolio, Waldman, and McDaniel

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experience. Specifically, occupations characterized by

low levels of required skill or professional mastery will
account for more nonlinear variance than occupations
with high skill or mastery requirements.
METHODS
Data Description and Measures
The United States Employment Service, a branch of the Department of
Labor, created the data base used in this research.1 These cross-sectional
data on 24,219 individuals in the U.S. work force were collected between
1970 and 1984. The data base includes information on individuals' personal
characteristics, ability, jobs, and work performance.
Data were collected from individuals employed in the private sector in
a number of the major job categories mentioned in the Dictionary of Occupational Titles (DOT). Occupations include such areas as manufacturing,
clerical work, sales, machinery construction and repair, health care, service,
and technical operations. The data base was originally created as part of a
series of selection validation studies conducted by the United States Employment Service for private industry. The purpose of that validation effort
was to determine if certain cognitive, psychomotor, and perceptual tests
could be used to help companies select employees more effectively. The data
were collected from 111 distinct groups of individuals. To maximize the
amount of data, the effort was designed so that each of the 111 groups
contained individuals with the same DOT job code who worked in a number
of organizations participating in the same validation'study. Across the 111
groups, individuals ranged in age from 18 to 74.
Age and experience. Respondents were asked to give their age on a
self-report form that also included questions on job experience. Anonymity
was assured. The amount of employer-specific job experience was gathered
with "How much experience (in years and months) have you had in your
present job with your present employer?" Total job experience was measured with "How much experience (in years and months) have you had in
your present occupation? Include time with both your present and previous
employers." Most previous research has measured experience with respect
to the number of years an individual worker has performed in a job within
a particular organization (e.g., McEnrue, 1988; Schmidt et al., 1986). With a
few exceptions (e.g., McDaniel et al., 1988), studies have typically not defined experience as the total number of years an individual has accumulated
in a particular occupation, doing the same or similar jobs, perhaps in different organizations. We used the measure of total job experience gathered
by the United States Employment Service because, as was discussed previ1 The United States EmploymentService provided this data base to the currentauthors for
use in this study.

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ously, people may accumulate relevant knowledge and skills across jobs in
different organizational settings that can have an impact on their work performance.
Occupational classification. The 111 jobs were categorized in two ways.
First, we sorted the jobs into five occupational groups paralleling Gottfredson's (1986) occupational taxonomy, in which occupations are categorized
in terms of the work performed or the product produced and the skill and
intellectual levels required. Partitioning jobs into occupations based on
products produced should also improve the comparability of measures of
performance. Second, we gave two judges detailed definitions of the five
occupational categories and asked them to sort cards containing DOT job
descriptions and titles for each job into the categories. The agreement rate
between the two judges was about 81 percent. The two raters reclassified
jobs they initially classified into separate categories. When the raters could
not agree on a job's placement into an occupational group, it was dropped
from further analysis. The result was that 20,632 individuals from 97 of the
original 111 jobs were classified into the five general occupational groupings. A brief description of each occupational category and three representative jobs placed in the category for this research follow: Craft I jobs involve
inspection of finished products, monitoring activities, and perhaps routine
labor activities. Examples are machine tender, garment folder, and quality
control inspector. Craft II jobs involve tasks that require setting up complex
operations, doing fine detail work, operating several machines, using a variety of tools, repairing machinery or systems, and extensive training. Examples are electronics technician, construction equipment mechanic, and
welder. Clerical I jobs involve basic clerical functions like taking dictation,
transcribing and copying data, filing reports, and operating a typewriter.
Keypunch operator, stenotype operator, and inventory checker are examples. Clerical II jobs involve compiling records of transactions, verifying
data, updating filing systems, performing clerical work in searching and
investigating information contained in files, deciding on data to be put in
files, and making calculations and supplying written information from files.
Administrative clerk, medical records clerk, and classified ads clerk are
examples. Service jobs involve dealing directly with the public in providing
information, making suggestions, selling, and completing orders. Transportation agent, general salesperson, and waitress are sample jobs.
Work performance. Supervisors of respondents were asked to provide
performance ratings on six items representing the quantity, quality, and
accuracy of individuals' work and their job knowledge, efficiency, and overall performance. Responses were on 5-point scales. To rate accuracy, for
example, supervisors were asked "How accurate is the work of this
individual?", with responses ranging from "Makes very many mistakes.
Work needs constant checking," to "Rarely makes a mistake. Work almost
never needs checking." The six scales represent common dimensions of
work performance characteristic of a wide range of jobs (Landy & Farr, 1983).
Supervisors were informed that the ratings were being collected for

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Avolio, Waldman, and McDaniel

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research purposes only. They were to keep the ratings confidential and not
show them to anyone in their companies. Supervisors were instructed not to
rate an individual unless that person had been under their supervision long
enough to allow for accurate performance ratings. Other instructions or cautions to supervisors included rating on the basis of typical performance
rather than on the basis of unique incidents and not letting general impressions or personal feelings about a worker affect ratings.
In general, each supervisor provided two sets of ratings, one week apart.
The mean summed value of the ratings collected first was 21.75 (s.d. = 4.26).
The mean summed value for the second set was 21.71 (s.d. = 4.29). Testretest reliability for these ratings was .82. The internal consistency of the first
ratings (x) was .91, and for the second set it was .93. Thus, in order to form
a single, more reliable criterion, we summed the two sets of ratings for the
present analyses. The mean value for this overall score was 43.46 (s.d. =

8.17).
Analyses
Hierarchical polynomial regression analysis (Cohen & Cohen, 1975) was
used to test the hypotheses. For each of the five occupational groupings, we
first entered age into a regression equation predicting work performance. We
entered an age-squared term representing the quadratic function second,
experience third, and an experience-squared term last. If nonlinearity had
been present in the relationships between performance and age or experience, the higher-order squared terms should have accounted for increments
in R2. In addition, a positive beta coefficient would have indicated a potential U-shaped relationship, whereas a negative beta coefficient would have
indicated an inverted U-shaped relationship (Kacmar & Ferris, 1989).
As Cohen and Cohen noted (1975: 100-102), a particular advantage of
the hierarchical regression approach is that it overcomes some of the problems due to multicollinearity among independent variables like age and
experience. Ordering independent variables a priori into a regression equation facilitates the interpretation of the amount of unique, semipartial variance for which they account.
RESULTS
For the overall data, the correlations between age and performance and
experience and performance were .07 and .18, respectively. Table 1 shows
means, standard deviations, and correlations among age, experience, and
performance for each of the five occupational types. Across occupations,
there was a general tendency for experience to be more highly correlated
with performance than was age. In addition, and as expected, there were
differences across occupational types, with higher correlations between performance and age or experience occurring for the craft II and clerical II
categories, which include jobs with more skill complexity than jobs in the

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TABLE 1
Means, Standard Deviations, and Intercorrelations by Occupational Type
Intercorrelations

Variablesa
Craft I
Age
Experience
Performance
Craft II
Age
Experience
Performance
Clerical I
Age
Experience
Performance
Clerical II
Age
Experience
Performance
Service
Age
Experience
Performance

Age x
Experience

Age x
Performanceb

Experience
x
Performancec

Means

s.d.

34.60
5.88
43.68

11.44
6.51
8.05

.60

.06 (-.03)

.13 (.12)

33.25
7.66
42.81

10.63
7.89
8.06

.69

.13 (-.04)

.23 (.19)

29.05
4.68
43.64

10.68
5.08
8.09

.61

-.03 (-.12)

.10 (.15)

29.45
4.79
44.56

10.50
5.59
8.19

.63

.11 (-.04)

.23 (.20)

31.50
5.21
43.89

11.11
5.59
8.47

.59

.05 (-.06)

.12 (.13)

a
Experience and age are reported in years. For the occupational types in the order listed,
N = 3,301, 9,008, 2,125, 2,937, and 3,261.
b
The values in parentheses are the correlations between age and performance with experience controlled.
c The values in
parentheses are the correlations between experience and performance with
controlled.
age

craft I and clerical I categories (Gottfredson, 1986). Table 1 also shows how
the age and performance correlations seemed to drop substantially when
experience was controlled. Conversely, the experience and performance relationships changed very little when age was controlled. The partial correlations confirmed the findings of previous research (Giniger, Dispenzieri, &
Eisenberg, 1983; Schwab & Heneman, 1977).
Table 2 shows the results of the hierarchical polynomial regression analyses. As Hypothesis 1 predicted, for each occupational type, experience
adds significantly to the prediction of performance beyond the contributions
of age and age squared. The R2 terms for age and experience tend to be
highest for craft II and clerical II occupations, showing modest support for
Hypothesis 2. For example, the AR2 experience term for craft I occupations
was .017, as compared to .040 for craft II occupations. Little support emerged
for Hypothesis 3 in that the age-squared and experience-squared terms consistently accounted for a small and uniform percentage of variance across the
five occupational types. One possible exception was that the AR2age-squared

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TABLE 2
Results of Hierarchical Regression Analysisa
CraftI

Predictor
Predictor

R2R2

Variables

Age
Age squared
Experience
Experience squared

.45
-.51
.41
-.26

.004
.012
.029
.037

OccupationalTypes
Clerical I

CraftII
2

222

.004
.008
.017
.008

R2

.34
-.40
.54
-.28

.018
.026
.066
.073

22

.018
.008
.040
.007

.21
-.58
.38
-.21

large
numbrsofpeopeineachgroua
o te

.001
.019
.038
.045

.001
.018
.019
.007

.0
-.16
.5
-.34

w~asdue2at
part
Theleastin
Most R2 values were statistically significant.
exception was age for clerical I and service occu
was due at least in part to the large numbers of people in each group.
a

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Academy of Management Journal

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term for clerical I occupations was slightly higher than the age-squared term
for clerical II occupations.
To help interpret the age-squared and experience-squared effects, we
provide plots of age and experience by performance in Figure 1. We created
five age groups using a categorization scheme similar to one employed by the
U.S. Department of Labor (cf. McLaughlin, 1989). The percentages of individuals in the 24-and-under, 25-29, 30-39, 40-54, 55-and-up age groups
were approximately 27, 21, 25, 21, and 6 percent. This distribution approximately represents the U.S. labor force although, as mentioned previously,
the pattern in recent years reflects a shift toward more representation of the
older groups. We partitioned experience so that similar percentages of individuals would be in the five experience and the five age groups. Figure 1
shows a consistent plateauing effect for both age and experience in relation
to performance across the five occupational types. Generally, there was no
evidence to support the existence of an inverted U-function relationship
between age and performance, although such an effect does appear to be
present for clerical I occupations, where a drop-off in performance is evident
for older employees.
DISCUSSION
The results of this study support the findings of earlier research and add
new information that may help to redirect future research on age and work
performance. In line with previous findings, length of job experience was a
better predictor of work performance than was age (Giniger et al., 1983;
McDaniel et al., 1988; McEnrue, 1988; Schwab & Heneman, 1977). However,
previous research has not been clear on the extent to which occupational
type might serve as a moderator or on the generality and nature of nonlinear
plateauing effects when age and experience are compared (cf., McEvoy &
Cascio, 1989). The present findings showed a modest moderating effect for
occupational type in that both age and experience predicted performance
better for jobs requiring higher levels of complexity or mastery than other
jobs. A consistent, nonlinear plateauing effect emerged for both age and
experience in relation to performance across the five occupational types.
Moreover, for lower-level clerical jobs, some tendency was found for a decline in performance among older employees.
The present study attempted to add to the existing literature by examining occupational differences at a more specific level of analysis than has
been done previously. The two most comprehensive examinations of previous research on age and work performance (McEvoy & Cascio, 1989; Waldman & Avolio, 1986) used a professional-nonprofessional
occupational
breakdown. The authors of both studies admitted that this sort of occupational breakdown might be too general, and each recommended a more detailed analysis of occupational type's effect on the age-performance relationship. Although the present study provided a somewhat more refined breakdown for nonmanagerial work, additional research is necessary for other

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Avolio, Waldman, and McDaniel

1990

417

FIGURE 1
Performance Trends and Occupational Types
50 -

-- ---

48 -

.......

Clerical II
Clerical I
Craft II
. Craft I
-Service
Total

46 a)

,wl~.~

.-?

oo0

...??.

._.

44 -

N
,0

O
0-

"l

?---co

cD

c~

42 -

'^

~~~~r
~ ~~

/;L

C~

40 -

25-29

<25

30-39

40-54

>54

Age
50

48

46

44

42

40

a)

N.

N1

Nl\s

O
a)
CH

/
I

<2

Ii

2-3.9

4-7.9

8-20.9

>20.9

Years of Experience

occupational characteristics that may display potential aging effects. For

example, physically or psychologically stressful work may show more negative or nonlinear effects with regard to the age-performance relationship.
The obtained differences between occupations suggest that there are
probably other aspects of work contexts that may affect ability, motivation,
and performance over time and therefore have an impact on the age and
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418

Academy of Management Journal

June

performance relationship. For example, there may be time-lagged effects

associated with reward systems that individuals experience late in their
careers. Cosier and Dalton (1983) proposed an alternative to the usual view
that equity beliefs are static by suggesting that perceptions regarding the
equity of reward systems can build over time and affect performance. The
implication is that an older employee who has experienced fair reward systems over the years will tend to remain more motivated than an older employee who has not perceived such equity in a reward system. This explanation is consistent with Rosen's (1988) nationwide survey of over 4,000
human resource managers. Rosen reported that respondents saw loss of motivation and complacency as the most important factors in causing mid- to
late-career problems such as obsolescence, resistance to change, and declines in performance.
Much writing dealing with job challenge and obsolescence has also
argued for a focus on contextual effects that can build over time to affect
work behavior (Fossum, Arvey, Paradise, & Robbins, 1986; Howard & Bray,
1988). The implication for future research is that there is a need to come to
a better understanding of the specific types of work experiences and employment practices that may affect the relationship between age and work
performance. To some extent, longitudinal research may be necessary for a
precise understanding of how contextual factors operate over time to affect
performance (Howard & Bray, 1988).
A primary assumption of the current research was that characteristics
associated with an occupation may affect performance over time. However,
another possibility is that better performers get promoted out of lower-level
jobs, so that the older employees who remain are poorer performers. This
pattern may have characterized the 55-and-over age group in the clerical I
occupations, and the possibility deserves closer scrutiny in future research.
Practical Implications
Combined with prior research, the results of this study offer several
implications for human resource management. From an employer's perspective, one advantage of hiring older people is their accumulated experience.
The present findings suggest that although such experience may be important, it may be especially useful if it has been in jobs with high complexity
but may give diminishing returns if it has been in less complex jobs. Maximizing life-span work performance will likely require a more judicious
examination of the types of work experiences people accumulate within and
between occupations.
These results also offer inferences for job design and development. Performance in routine, noncomplex work may flatten or decline more quickly
over time if employees become bored with such tasks. The noncomplex
work represented here included low-level clerical jobs, inspection and monitoring, and repetitive assembly operations. This problem will be compounded as entry-level-worker qualifications rise with an increase in the

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Avolio, Waldman,and McDaniel

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level of education work force members have attained. Similarly, physical or

psychological stress in an occupation may have deleterious effects on performance with increasing age, regardless of the specific tasks performed. For
instance, performance may decline with age in some health care jobs because of burnout rather than because of individual capabilities (Motowidlo,
Packard, & Manning, 1986). Thus, by altering specific tasks within a job or
providing employees with certain developmental opportunities at key
points in their careers (Howard & Bray, 1988), firms may improve work
performance throughout employees' careers.
Running counter to such possibilities is the practice of providing the
more intellectually challenging tasks and developmental opportunities
available to younger employees. Although this strategy is instrumental to the
long-term development of the younger employees, it may have a negative
effect on older employees' ability and their motivation to avoid obsolescence
(Fossum et al., 1986). Exacerbating this problem is the practice of reducing
promotional opportunities for those who have reached certain ages.
Apart from job characteristics themselves, organizational policies may
affect the type of age-performance relationships we observed. In this regard,
organizations need to take a more active role in career planning across people's working life spans. For example, there must be incentives for workers
to maintain and upgrade skills, to avoid unnecessary plateaus, and to minimize skills obsolescence. Rosen (1988) estimated that skill obsolescence
was on the rise in the work force, which represents an important problem for
human resource managers to consider. The absence of policies or procedures
directed toward maintaining high levels of work performance among senior
employees may not only affect those employees, but may also have a negative effect on younger workers. The latter may develop expectations that at
some point in their careers, investment in upgrading skills will no longer be
beneficial (Lawrence, 1988; Rosen, 1988).
Economic realities could weaken the value of orienting human resources programs and organizational policies toward older employees. Evidence exists that in some instances, the ratio of performance to pay is lower
for senior employees (Medoff & Abraham, 1981). Older employees may have
higher salaries than younger ones because of accrued pay increases, partially
due to cost-of-living adjustments, but may not be performing at a comparably
higher level. This will especially be the case when labor-market salaries for
entry-level employees have not increased at commensurate rates. Combined
with the costs of retraining, such conditions could lead to policies that
encourage early retirement rather than training to avoid skills obsolescence.
However, a direct interpretation of the data regarding the relationship of pay
to performance for younger and older workers may be misleading. For example, Andrisani and Daymont (1987) reported that pay raises were nonlinearly related to age for age ranges similar to those included in the current
study. In addition, the single most important factor Andrisani and Daymont
found to account for differences across working life spans in earnings and

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productivity was the investment organizations made in training their workers. Accumulating new skills and upgrading old ones were the single best
predictors of earnings and productivity.
As long as organizations have policies based on the assumption that
younger workers offer more time before retirement in which a firm can
amortize the costs of training and reap its benefits, the likelihood of skills
obsolescence among senior employees remains high. From a purely economic perspective, the question that human resource practitioners must
address is whether the opportunity costs associated with training are more
or less than the opportunity costs associated with improving productivity
across a life span. Andrisani and Daymont's (1987) work demonstrated that
younger employees' earnings and performance may overtake those of older
perhaps
employees because of the direct investment that employers-and
in training. In sum, decisions to retain or
the younger employees-make
hire older employees and to take steps to maximize their performance will
have to be balanced with regard to costs and benefits, legal concerns, and
corporate responsibility regarding the development of all individuals, young
and old alike.
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Bruce J. Avolio received his Ph.D. degree from the University of Akron's psychology
department in 1982 in the area of industrial/organizational/gerontological psychology.
He is currently an associate professor in the Human Resource Management group in the
School of Management at SUNY-Binghamton. His current research interests include the
study of aging and work issues and development of leadership.
David A. Waldman received his Ph.D. Degree from Colorado State University in 1982
in the area of industrial/organizational psychology. He is currently an associate professor in the Human Resource Management group in the School of Management at SUNYBinghamton. His current research interests include the study of aging and work issues,
and leadership in relation to the process of innovation.
Michael A. McDaniel received his Ph.D. degree in the area of industrial/organizational
psychology from George Washington University in 1986. He is currently employed by
Booz, Allen, & Hamilton Inc., located in Bethesda, Maryland. His current research
interests include experience in relation to work performance and drug testing in the
work place.

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