The Impact of the Removal of DRA on the Management of Human Resources - Dissertation Example

?CHAPTER FOUR DATA ANALYSIS AND FINDINGS The aim of this research is to identify the impact of the removal of Default Retirement Age (DRA) on the management of Human Resources in Organisations. So far, the researcher has collected data from 20 respondents who are employed in the human resources department through the use of questionnaire. Among other things, the questionnaire distributed to them sought to find out from them their knowledge and judgment of the impact of the removal of the DRA as pertains to human resource management. In order to ensure clarity, this chapter shall be subdivided into three major components which are presentation and description of data, drawing of key themes and finally discussion and interpretation of data. Presentation and description of data shall be done by complying results from core aspects of the questionnaire. The results shall be presented quantitatively by the use of tables and charts to organize data collected. After this, the researcher shall draw on the flow of information received in the data analysis to build three major themes in relation to the research problem. Finally, the researcher shall discuss and interpret data by grouping the data presented into three to correspond to the themes. The discussion and interpretation shall be done qualitatively by drawing subjective conclusions based on concerns and theories raised by various authors and researchers in the literature review. 4.1 PRESENTATION AND DESCRIPTION OF DATA Based on the purpose of the study and research questions raised by the researcher, responses on six key questions from the questionnaire have been presented and described in this section. Answers to these questions are useful in find out factors that have accounted for the scraping of the DRA, the merits and de-merits that are likely to be associated with the scraping of the DRA, and measures that are needed to be put in place to ensure that the policy of scraping the DRA useful. 4.1.1 What is your level of preference for being served by older people aged 55-65 in organisations? The researcher sought to know how well respondents preferred the serviced of older people aged 55-65 in organisations. This question was to draw an inference on the usefulness of older people in organisations and find out their contribution to the development and daily running of various organisations. The table below presents respondents’ level of preference for being served by older people Table 4.1 Preference for being served by Older People Preference Level Number of Respondents Percentage Very much preferred 3 15 Preferred 2 10 Not preferred 9 45 Not preferred at all 6 30 Total 20 100 From table 4.1, it can be seen that out of the twenty (20) respondents, 15% of them had a high level of preference for being served by older people. 10% of respondents preferred to be served by older people but did not esteem that so much. 45% of respondents did not prefer being served by older people whereas 30% did wished they were never served by older people. The respondents who were aged between 18 and 70 said their preferences were informed by factors as such as working experience, worker ethics and approachability. 4.1.2 Do you support the scraping of DRA? This component of the questionnaire was a build up to the question asked in 4.1.1. In simple terms, the researcher wanted to find out from respondents whether or not they supported the policy of scraping the DRA to enable people to work in organisations till they themselves felt the need to drop. Out of the twenty (20) people who responded to the questionnaire, thirteen (13) of them answered ‘No’ to the question whether or not the DRA should be scrapped. This means thirteen (13) respondents wanted employees to retire at age 65. Seven (7) respondents answered ‘Yes’ meaning they wanted employees to work after age 65. Proportionally, If 20 respondents represent 360°, 13 respondents = 7 x 360 20 = 234° representing ‘No’ On the other hand If 20 respondents represent 360°, 7 respondents = 7 x 360 20 = 126° representing ‘Yes’ The pie chart below summarised responses received from respondents. Figure 4.1: Pie Chart representing views whether or not DRA should have been scraped The pie chart above is in consonance with responses received on respondents’ preference to be served by older people. Just as majority of the respondents did not prefer being served by older people, majority of respondents did not want older people to continue to stay in the working field after age 65; thereby wishing that the DRA was not scrapped. 4.1.3 What Reasons do you have for your choice of scraping or maintaining DRA? This part of the questionnaire was divided into two sections. Reasons given by those in favour of scraping the DRA was separated from reasons given by those who wanted the DRA to be maintained. 4.1.3.1 Reasons for supporting scraping of DRA Respondents raised several reasons as to why they supported the scraping of the DRA. Notable among reasons raised by respondents are the fact that older people have a lot of experience and therefore approach their duties with maturity. Some also argued that at age 65, most people are still energetic and can work as assiduously as they could 20 years back. There were others who also raised issues of the need to meet the harsh economic demands saying earlier retirement put most people within the poverty level considering the fact that once they retire, they begin to earn less than they did when they were in full service. 4.1.3.2 Reasons against scraping of DRA The group of respondents who were against the scraping of the DRA gave such reasons as that maintaining the older folks would create unemployment among the younger generation who are in the most need of employment to settle in life. There were also some who touched on the fact that as people grow beyond 65 their productivity level reduces due to the natural processes of aging. Yet again, some respondents argued that scraping the DRA would affect government policy on pension and could bloat government expenditure on pension. Finally, there were some who said scraping the DRA would deprive the workforce of innovativeness and creativity as the younger generation would not be given the chance to bring on board their ideas and innovativeness. 4.1.4 Which of these Factors, in your opinion accounted for the scraping of the DRA? Based on literature reviewed, it was outlined that government’s decision to scrap the DRA was influenced by several factors. Some of these factors raised in the literature and other factors deduced by the researcher were outlined for the respondents to select which of them they felt was government’s strongest reason for scraping the DRA. The graph below summarised respondents’ opinions. Figure 4.2 Factors for Scraping DRA The data from the graph can be quantified in percentage as for easy description. This has been done in the percentage table below Table 4.2 Factors influencing scraping of DRA Factor for Scraping DRA Number of Respondents Percentage of Respondents Ageing workforce 3 15 Baby boomers 3 15 Income problems 5 25 Value for experience 7 35 Move to satisfy advocates 2 10 Among the possible factors suggested by writers in the literature review, respondents pointed out which of the factors they in their opinion were government’s strongest points for scraping the DRA. 15% each alluded the scraping to the DRA to ageing workforce and baby boomers. To respondents who believed the reason was based on ageing workforce, they believed people are healthier and stronger today at age 65 (Dychtwald et al 2004) than they were 100 years back and so should be made to continue to work. Those who pointed to baby boomers believed that as the population of UK grows to have more older people than younger people (Anon 2006 .pp6), maintaining the DRA would mean having less number of people to fill vacant positions. 25% of respondents pointed to income problems as the strongest factor for scraping the DRA. To them, it was necessary to scrap the DRA so that workers would have adequate retirement incomes. (Sok 2010). Furthermore, 35% respondents believed that government cherished the experience of older people at various work posts and thus wanted to maintain that experience. Finally, 10% of respondents criticized government saying the move to scrap the DRA was done just to please advocates for scraping the DRA. 4.1.5 Effect of scraping the DRA on Human Resource Management The researcher confronted respondents with effects of the DRA on human resource management. Because there were diverse views on whether or not scraping the DRA was necessary, the researcher presented options for the effect of scraping DRA on human resource management in both position and negative terms. The table below presents respondents’ view on the effect of scraping the DRA on human resource management Table 4.3 Effect of scraping the DRA on human resource management Effect Remark Number of Respondents Percentage Rise in salary expenditure Negative effect 3 15 Kills innovativeness Negative effect 6 30 Uncertainty with planning for recruitment Negative effect 4 20 Supplement labour demand Positive effect 5 25 Promote impartation of experience Positive effect 1 5 Reduces cost on training Positive effect 1 5 The table above represents mixed feelings of respondents. This is because respondents view on the effect of scraping of DRA is scattered among all points raised by the researcher. However, it is clear that majority of the respondents opted for negative effects rather than positive effects. One (1) believed that scraping the DRA to make room for employees to work beyond 65 years would affect human resource management positively by reducing the cost involved in training new employees. According to them, the older generation knows how to get things done with very little supervision. Another one (1) person also suggested that scraping the DRA would enhance the transfer of knowledge and experience from the older generation to the younger generation as the two groups work together in the organisation. Five (5) respondents argued that scrapping the DRA would ensure that labour demands are supplemented. In their view, areas of the labour front that need more workers than the demand would benefit from services of old employees. Four (4) respondents lamented that employers will have a lot of difficulty planning for recruitment as they will not be sure when employees will be retiring. To them, this would create unnecessary gaps for positions at the workplace. On the part of six (6) respondents, their argument was that keeping older people at work most would affect human resource management negatively in the sense that it would kill innovativeness as the younger generation are likely to be barred from taking charge of top positions with their ideas when there are older and experienced workers. Finally, three (3) respondents said because working for long years comes with entitlement to huge salaries, scraping the DRA would affect the management of human resource at the labour field negatively because employers would have to raise their expenditure on salary to meet the experience and qualification of older employees. 4.1.6 Measures to make the scraping of DRA Beneficial to Human Resource Management Though the scraping of the DRA has been met mixed reactions with some schools of thought in favour of it and other schools of thought against it, the most essential argument that the labour market would have to cope with the existence of the policy because it is now in force. The best argument should now me on measures to make the policy a blessing rather than a curse. The researcher put forward five major points as measures for making the scraping or DRA beneficial to human resource management. Out of these, respondents were asked to select which of the measures they felt held the key to a beneficial scraping of DRA. The table below represents responses of respondents. Table 4.4 Measures to ensure a beneficial scrap of DRA Measure Number of Respondents Percentage Employers should be authorised to take decision on which employees to retain after 65 based on health conditions and productivity level 6 30 Scraping of DRA should be up to a limited age 8 40 Employees should give one year long notice to employers of their decision to step out to allow for recruitment processes to begin early 1 5 Promotion should cease after age 65 to allow young and energetic employees to take up top positions 3 15 Employees 65 years and above should be given voluntary roles rather than permanent positions 2 10 From the table, it can be observed that majority of the respondents, 40% suggested that scraping the DRA should be up to a limited age meaning after that employees should be forced to retire. This is like saying the retirement age should be raised rather than scraping the DRA. In the view of 30% of the respondents, though the scraping of the DRA should be allowed to stay, the decision as to who should continue working should be taken by employers based on health conditions and level of productivity of employees. 15% of the respondents argued that in other to have an effective human resource management in place, promotion for employees who hit 65 years should be stopped so that younger and energetic employees can take up top positions. To 10% of the respondents, once an employee is 65, he should be given the role of a volunteer rather than a permanent worker. In their view, this would ensure that the younger generation have vacancies to fill in the labour market. Finally, 5% of respondents were of the view that in other for manager not to be faced with the problem of sudden retirement to create human resource lapses, employees who hit 65 years should inform their managers one year ahead of their decisions to retire. 4.2 KEY THEMES OF THE RESEARCH PROBLEM Based on responses gathered by the researcher above, there are three major themes upon which he would want to interpret and discussion the data. Data gathered are drawn from all five aspects of the presentation and description and have been cohered into three as they fit a common theme. The diagram below illustrates the three themes. From the diagram above, the three key themes as relates to the research problem can be deduced as: i. Factors accounting for the scraping of DRA ii. Effects of scraping on human resource management iii. Measures to make scraping of DRA beneficial to human resource management in various organisations. The researcher shall approach the next section of this chapter which has to do with interpretation and discussion of data gathered by grouping all data under the three themes. 4.3 INTERPRETATION AND DISCUSSION OF DATA This section of the chapter offers the researcher the opportunity to interpret and discuss data gathered in the first section of the chapter. The discussion and interpretation shall be done from a qualitative point of view whereby subjective conclusions shall be drawn from the quantitative analysis done in the first section. Though a subject analysis, the researcher shall base the analysis on existing theories and literature reviewed. 4.3.1 Factors accounting for the scraping of DRA Table 4.1 presents respondents’ view on whether or not they preferred being served in various organisations and offices by older people aged 55-65. From the data gathered, 25% of the respondents answered in the affirmative. This implies that there are a good number of people who still have love for services rendered by older people. It can therefore be concluded that the quest by government to scrap to the DRA was partly motivated by the fact that there is high concern among the populace of UK on their preference for older people rendering service to them. This conclusion is reiterated in literature as Michelle Mitchell points out how a session of the UK populace had fought for the scraping of DRA due to their trust in the efficacy of older employees. As quoted, “We have fought a four-year campaign to achieve this historic decision so Age UK is absolutely delighted that the government is finally setting a clear date for the abolition of this arbitrary and unfair law” (BBC News Business, 2010). Apart from the fact that there was general consensus by a session of the population for the scraping of the DRA due to the faith they confined in older employees, figure 4.2 reveals yet another five set of factors that might have caused the scrape. As many as seven (7) out of twenty (20) respondents pointed to the fact that governed cherished the rich experience of older employees. This accession of the respondents is in conformity with the view of Vickerstaff et al, (2003.pp 271-287) who posit that with growing age the marginal productivity of employers keep on decreasing, however, considering, their experience, respect, and position they enjoy much more benefits than any new workers would get by doing the same amount of work. A great number of respondents, five (5) also pointed to income problems as reason for scraping the DRA. As voiced by the Department of Works and Pensions, (2010), Finance is often a key factor in decisions and expectation of retirement. This is to say that keeping people in the workforce for longer period puts them in a position to withstand the global economic hardships. In the view of three (3) respondents, some employees 65 years and above still have the energy to labor on. This claim is supported by Dychtwald et al (2004) who reveal that due to the miracles of technology and medicine, people are now living longer and healthier lives. It is therefore important that as labor vacancy gaps widen, there become a policy such as the scraping to DRA so that employers can fall on the older generation to render needed services. Another set of three (3) respondents were also mindful of the fact that UK’s population has a large percentage of older people as confirmed by the UK forecasts based upon National Office of Statistics which states that there will be more people over the age of 65 than there are those under 16, Anon (2006. pp6). Since this disproportionate demographic rate is inevitable, employers have no other choice than to fall on older people 65 years and above to produce the demands that the labor market seeks. Ignoring the effect of this trend of population growth would mean entertaining the creation of an unnecessarily wide gap as far as labor demand is concerned. There were however a group of respondents who argued that government’s decision to scrap the DRA has no basic factor but is only a move to satisfy critics of the government who fight for the scraping of the DRA. This is a strong allegation but cannot be ignored especially as the literature review reviews that stakeholders such as The Confederation of British Industry (CBI) and The British Chamber of Commerce (BCC) are all not in support of the scrape; yet its implementation. As par the literature review, the Department of Trade and Industry (DTI) had expressed fears prior to the implementation of the policy that abolishing mandatory retirement ages could become a big voter looser in the next general election, Hope (2004). 4.3.2 Effects of scraping DRA on Human Resource Management Figure 4.1 presents respondents view on whether or not DRA should have been scraped. A consensus was not reached because there was no unilateral answer. The diversity in response which saw seven (7) respondents in favor of the scrape and 13 respondents against the scrape mean that there are both positive and negative effects of scraping DRA on human resource management. Human resource management, which has to do with issues concerning people’s performance, hiring, recruitment, compensation, safety, motivation, training among others is an essential component in every organization. Because human resource management has to do with people, the age and capability of employees becomes an important issue for discussion. Policies and decisions that have to do with employees such as the scraping of DRA always have to be critically analyzed to find its pros and cons as is seen in table 4.3 so that based on conclusions drawn from the pros and cons, amendments on policies can be taken. In table 4.3, respondents pointed to what in their view was the most critical effect of scraping DRA on management of human resource in organizations. 15% of the respondents touched on the rise in expenditure for salaries. As reiterated in the literature review, retirement of employees means that a lower level of spending by them. As the labor laws recognizes the experience of employees and base on that to determine the amount of pay employees take, scraping the DRA and allowing people to work for longer number of years would mean that employers; including government would have to inject more expenditure to meet the salary requirement for the experienced workers. This development may lead to a serious imbalance in management of human resources as other aspects of human resource other than rewards and compensation would suffer less expenditure. As is the view of The British Chamber of Commerce (BCC), the removal of default retirement age will leave a very few roles for the younger generation (Robins, 2010). This concern was also shared by 30% of the respondents. This is because whenever positions in the labor market are taken by younger people, they bring on board fresh and dynamic ideas that ensure that the labor market is directed towards current changing innovativeness of society. This is an exceptionally important effect because trend in labor issues continue to change by the day as curriculum of universities change. For this matter, it is always necessary to have fresh minds occupying top positions. The view of 20% of respondents had to do with the concern raised by Han & Moen, (1999.pp. 191-236) who argued that personnel planning would become a difficult process for managers since they will not know when exactly their staff will step down. In human resource management, planning for recruitment is an important issue. If not well curtailed, the issue of abrupt stepping down from duty could greatly affect human resource management negatively. On the other side of table 4.3, respondents gave positive effects of scraping the DRA. 25% of the respondents observed that maintaining employees after age 65 would supplement employment vacancies associated with certain aspects of the labor market. This concern has to be critically examined against the need to fill vacant positions with younger employees rather than older ones, it also has to be examined against the backdrop of unemployment rate in UK which suggests that there is actually more demand for employment than the supply can meet. According to the Office for National Statistics (2011), “The employment rate for those aged from 16 to 64 for the three months to January 2011 was 70.5 per cent” whereas “The unemployment rate for the three months to January 2011 was 8.0 per cent of the economically active population”. This means that it could not wholly be acceptable that there would be a mad rush for people to fill vacancies. 5% of the respondents pointed to the fact that when older people work with younger ones in the same organizations, it allows for the impartation of experience from the older generation to the younger ones. This is an important means on cutting down on cost for external training and refresher courses for younger employees in organizations. The view of the final set of respondents who represent 5% of the total number of respondents touched on an issue that can be incorporated in the just discussed point. According to them, retaining reduces cost of training new employees. 4.3.3 Measures to make the scrap of DRA beneficial to Human Resource Management This theme touches on proactive efforts that can be put in place to ensure that once the scrap of DRA policy has been passed, the labor market and human resource managers for that matter do not suffer the perceived negative effects. In this regard and with reference to table 4.4, 30% of respondents suggested that employers should be authorised to take decision on which employees to retain after 65 based on health conditions and productivity level. This view is in consonance with the view expressed by Federation of Small Businesses (FSB) who maintain that the power to decide which employee continues to stay after 65 years should rest with employers. This suggestion has a lot of implications for the success of the policy in the sense that if the decision to stay on after 65 becomes ‘wholesale’, weak and non-performing employees would abuse the policy, thereby leading to increased agitation at the work place. Already, Hope (2004) allege that tribunals cost UK business a staggering ?163 million each year due to employee relation issues. Again, allowing weak and non-performing employees to stay on may lead to decline in productivity as their health might not permit them to work as assiduously as younger folks would do. 40% of respondents also suggested that the freedom to stay on should be up to a limited age. This suggestion is in line with the view of Trade Unions who advocate that retirement age should be raised to 66. This suggestion may in a way also support the concern of the GMB union who allege that the life expectancy of physical workers is lower than that of the professional staffs, Statton (2010). By placing a sealing age, employees would be saved from reduced life expectancy due to stress of work. 5% of the respondents advise that in other to avoid the gaps in vacancies, employees should give one year long notice to employers of their decision to step out to allow for recruitment processes to begin early. This is an important point in ensuring that recruitment does not become sudden and done in a rush. 15% of the respondents who suggest that promotion should cease after age 65 to allow young and energetic employees to take up top positions have similar concern with 10% of respondents who also advocate employees aged 65 years and above should be given voluntary roles rather than permanent positions. If adhered to, this suggest would be addressing the concern expressed by Kloep & Hendry (2006) who maintain that keeping the older people on their jobs would mean blocking the possible employment opportunities for the new comers in the market. Giving employees aged 65 years and above voluntary rather than permanent positions or keeping them as permanent workers but ceasing their promotions would mean creating an avenue for newcomers and at the same making judicious use of the older folk. REFERENCES Please note that the data analysis must conform to the research themes and literature review and so I relied your literature review [which I consider to be VERY EXCELLENT] and reference to write the data analysis. Going outside it would have meant deviating from the purpose of the study. Thank you for understanding. Anon. (2002). An Ageing population. Labour Market Trends. 110 (6), 277-32 Anon. (2006). Beyond age discrimination to leveraging human capital: Asda, BT and the National Maritime Museum promote age diversity... Human Resource Management International Digest. 14 (3), 6-8. Department of Works and Pensions (2010) Pathways to retirement: the influence of employer policy and practice on retirement decisions. [Online]Norwich: Department of Works and Pensions: Available at: [Accessed 17 January 2011] Dychtwald, K., Erickson, T. & Morison, B. (2004). “It’s Time to Retire Retirement.” Harvard Business Review. March 2004, 48-53. Hope. (2004). DWP rejects retirement age. People Management. 10 (12), 7-8. Kloep, M. & Hendry, I. B. (2006). “Pathways into retirement.” Journal of Occupational and Organizational Psychology, 79, 569-593. Office for National Statistics (2011), National Statistics Online. Available from http://www.statistics.gov.uk/cci/nugget.asp?id=12 Robins, W., 2010. BCC Chief Warns Against Scrapping Default Retirement Age. Citywide. [Online] Available at: http://survey.citywire.co.uk/new-model-adviser/bcc-chief-warns-against-scrapping-default-retirement-age/a437663 [Accessed December 18, 2010]. Sergeant, M. (2003). “Mandatory retirement age and age discrimination.” Employee Relations, 26, 2003, 151-166. Sok, E. (2010). Record unemployment among older workers does not keep them out of the Job market. Issues in Labour Statistics. 10 (4), Stratton,A. (2010). Retirement age plan attacked by unions. Available: http://www.guardian.co.uk/money/2010/jun/24/state-pension-age-rise-plan. Last accessed 10 January 2011. Trade Unions Congress, 2010. Editorial TUC News Events Links Feedback. Age Concerns. [Online] Available at: http://www.tuc.org.uk/the_tuc/tuc-18164-f0.cfm [Accessed December 18, 2010]. Vickerstaff, S. A., Cox, J. & Keen, I. (2003). “Employers and the management of retirement.” Social Policy & Administration, 37, 271-287. APPENDICES QUESTIONNAIRE USED Instruction: Please provide answers to the following questions by ticking appropriate spaces or writing your own answers where applicable. You are assured that this is an academic exercise and your confidentiality is highly assured. Thank you 1. What is your academic qualification? First Degree [ ] Post Graduate [ ] PhD [ ] Other [ ] 2. How long have you been employed? Less than 1 year [ ] 2 – 5 years [ ] 5 – 10 years [ ] 10 years and above [ ] 3. What is your age range? 16 – 25 [ ] 26 – 30 [ ] 31 – 40 [ ] 41 – 50 [ ] 50 – 60 [ ] 61 – 65 [ ] 4. How important do you consider your role at the workplace? …………………………… ……………………………………………………………………………………………. 5. How would you rate your level of knowledge of the default retirement age (DRA)? Very high [ ] High [ ] Relative [ ] Low [ ] Very low [ ] 6. What is your level of preference for being served by older people when you go to any office? Highly preferred [ ] Preferred [ ] Not preferred [ ] Not preferred at all [ ] 7. With your level of preference as stated in question 5, would you say the DRA was worth scraping? Yes [ ] No [ ] 8. Can you briefly explain why you chose your answer for question 6? …………………………………………………………………………………………… …………………………………………………………………………………………… 9. When would you want to retire? Before 65 years [ ] At 65 years [ ] After 65 years [ ] 10. Which of these factors would you say influenced government most to scrape the DRA? Ageing workforce [ ] Baby boomers [ ] Income problems [ ] Value for experience [ ] Move to satisfy advocates [ ] 11. In your opinion, which of these would be the major effect of scraping DRA on human resource management? Rise in salary expenditure [ ] Kills innovativeness [ ] Uncertainty with planning for recruitment [ ] Supplement labour demand [ ] Promote impartation of experience [ ] Reduces cost on training [ ] 12. Which other areas of labor would you say would be affected immensely by the scrape of the DRA and why? …………………………………………………………………………………… 13. In your opinion, which of these bodies would be worse affected by the scraping of the DRA? Employees 65 years and above [ ] Employers in private sector [ ] Government [ ] 14. In your opinion, which of these bodies would benefit most from the scarping of the DRA? Employees 65 years and above [ ] Employers in private sector [ ] Government [ ] 15. In your opinion, which of these measures would best fit as a means of ensuring that the scraping of the DRA becomes beneficial? Employers should be authorised to take decision on which employees to retain after 65 based on health conditions and productivity level [ ] Scraping of DRA should be up to a limited age [ ] Employees should give one year long notice to employers of their decision to step out to allow for recruitment processes to begin early [ ] Promotion should cease after age 65 to allow young and energetic employees to take up top positions [ ] Employees 65 years and above should be given voluntary roles rather than permanent positions [ ] 16. Do you have any other comments on DRA you would want to share with us? Yes [ ] No [ ] 17. If you answered ‘Yes’ in question 15, please state your comment. ………………………………………………………………………………………… ………………………………………………………………………………………… Thank you for your cooperation. Read More