propensity to retire among older executives

Journal of Vocational Behavior 8, 145-154 (1976)

Propensity to Retire Among Older Executives

DOV EDEN and DAN JACOBSON Tel Aviv University

Determinants of a favorable attitude toward retirement were sought in an interview study of 179 top executives, Age 55 and aver in 13 leading Israeli organizations. Relationships between desire to retire and variables known to be associated with labor turnover and with retirement attitudes among blue-collar workers were examined by correlation and multiple regression analysis. It was found that relatively older executives who felt young, healthy, and effective, were most likely to prefer to go on working. Contrary to expectation, features of the job had relatively weak relationships to attitudes toward retirement. Attitude towards retirement appears to be associated more closely with feelings about oneself than with perceptions of the job. Differences between retirement and other types of withdrawal from the job were discussed.

The inverse relationship between job attitudes and withdrawal behavior, and especially between job satisfaction and labor turnover, is one of the most frequently confirmed findings in organizational psychology (Brayfield & Crockett, 1955; March & Simon, 1958; Vroom, 1964; Katz & Kahn, 1966; Porter & Steers, 1973). Withdrawal behaviors studied most in the past have been turnover, absenteeism, and tardiness. Much attention has been devoted to withdrawal because of its cost to the organization, and probably also because its correlation with job satisfaction is reassuring to psychologists disappointed by the lack of a consistent relationship between job attitudes and performance. Retirement, however, is an important type of job withdrawal behavior that has received hardly any attention at all by psychologists, despite its relevance to the lives of nearly all sexagenarian workers.

The decision to retire is perhaps no less important a form of withdrawal from work than is ordinary labor turnover. While turnover may be regarded as a massive labor exchange among participating employers, implying that one

This study was supported by the Fritz Naphtali Foundation. The authors are grateful for the able assistance of Nurit Nirel, and for comments on an earlier draft by Mordecai Eran. Order of authors’ names was assigned alphabetically.

Requests for reprints should be sent to Dan Jacobson, Department of Labor Studies, Tel Aviv University, Ramat Aviv, Tel Aviv, Israel.

14.5

Copyright @ 1976 by Academic Press, Inc. All rights of reproduction in any form reserved.

146 EDEN AND JACOBSON

company’s loss is another’s gain, the decision to retire permanently removes a person who may have productive potential from the world of work. While the individual firm must respond to both turnover and retirement by finding a replacement, the community of employers suffers a collective loss when a productive worker retires, since he is eliminated from the manpower pool. As McFarland (1973) has recently concluded, “Workers between 60 and 75 years of age are functionally able to produce and actually to excel in many occupations because of their judgment, experience and safety of performance” (p. 2). Therefore, society may have a stake in the continued employment of productive retirement-aged persons who wish to continue working. This is particularly true in times of labor shortage.

Older workers are often stereotypically viewed as inevitably less productive despite research findings to the contrary (Welford, 1958; Meltzer, 1965; Heron & Chown, 1967; Butler, 1968; Hear&raw, 1971). Also, wholesale retirement of all employees at the same age may be an administrative convenience since it obviates the need for a terminal selection process. Therefore, companies have largely neglected workers’ attitudes towards retirement as a potential source of costly withdrawal behavior. Furthermore, the few studies in this area have focused on blue-collar or lower-level white- collar workers (Barfield & Morgan, 1969; Jacobson, 1972, 1974; Simpson, Back, & McKinney, 1966; Streib & Schneider, 1971). There has been little research on retirement among managers and elites.

There are several reasons for our interest in managers. First, they have greater discretion in making their own retirement decisions since they are less frequently forced into retirement by collective bargaining contracts or by binding rules and regulations that render retirement compulsory at a given age. Second, since they may be more involved in their jobs (Mannheim, Chomsky, & Cohen, 1972), managers’ attitudes towards retirement should be more influenced by characteristics of their job situation than should those of lower level workers. Finally, the scarcity of trained and experienced managers makes their replacement very costly,

We sought to determine whether turnover and early retirement share a common etiology. Specifically, the objective was to determine which features of the job and the individual influence managers’ attitudes toward retirement. While recent reviews (Schuh, 1967; Porter & Steers, 1973) of the turnover literature show that most of this research has dealt with nonmanagerial production and clerical workers, several studies have been conducted on production foremen, managers, professionals, scientists, and engineers. Al- though the dynamics of executive withdrawal may be somewhat different from that of people in other occupational categories, we expected the kinds of variables found associated with turnover to play a similar role in determining attitudes towards retirement. The more rewarding and satisfying the executive perceives his job to be, the less strain he experiences on the job, the more cohesive his work group, etc., the less he should desire to retire.

PROPENSITY TO RETIRE AMONG OLDER EXECUTIVES 147

METHOD

Sample

Older executive officers from 13 leading Israeli organizations were studied. These organizations included two banks, two construction concerns, two marketing cooperatives, a municipality, a sick fund, and five industrial plants owned by the Histadrut Labor Federation. These 13 organizations were a heterogeneous sample chosen because they were old enough to ensure that some of their executives would be near pension age.

In each organization the top three levels (the top executive officer, his immediate subordinates, and their immediate subordinates) were interviewed if they were Age 55 or over. Thus, interviewees were either within 10 years of the conventional retirement age or beyond it. The sample numbered 220 executives, all men, of whom 179 were successfully interviewed, for a response rate of 81%.

Procedure

Unstructured, in-depth interviews were conducted with several top executives who were not subsequently included in the sample, to explore their attitudes toward retinment and their determinants. The results of these interviews, as well as past findings concerning retirement among other types of employees (Hall, 1953; Saleh & Otis, 1964; Draper, et al. 1967; Barfield & Morgan, 1969; Streib & Schneider, 1971; Mannheim & Jacobson, 1972; Jacobson, 1972, 1974) were the basis for deciding what to measure.

A letter describing the research, its objectives and its sponsors, was mailed to each executive, followed shortly by a phone call to set up a personal interview. Trained graduate students conducted the interviews at the executives’ offices in the spring of 1973.

Measures

Most measures were multiple-item indices. Each index was constructed by computing each executive’s mean score on its several constituent Likert: type items. Index reliabilities shown in Table 1 were estimated by coefficient alpha. For all indices, a high score indicates high standing on the variable named, e.g., high satisfaction and high psychosomatic complaints.

The 24 predictors listed in Table 1 were categorized into six classes reflecting personal factors, work history, job orientation, job characteristics, job reactions, and health. The few predictors not described below were measured by simple, straightforward questions.

Personal factors. Subjective Age was assessed according to true-false answers to the statement, “In recent years I have felt that I am no longer


TABLE 1

Correlations between Potential Predictors and Attitude towards Retirement

Potential predictor Number of items a r

Personal factors Age Subjective age Education Children dependent Marital happiness

Work history Tenure Previous promotions in present organization

Job orientation Work centrality Desire fewer hours Importance of intrinsic factors Importance of extrinsic factors

Job characteristics Extrinsic rewards Intrinsic rewards Peer relations Conflict Overload Ambiguity Hours worked per week

Job reactions Job tension Job satisfaction Self-reported effectiveness

Health Psychosomatic complaints Under physician’s care Self-rated health

1 1

14 .84 .13* 13 20 -.12* 6 .72 -.16*

6 .81 .26+* 1 - .14* 1 - -.15*

- - - - -

- -

.56 -

.76 .66

.63

.79

.57

.74

.74

.76 -

-.30** .22**

-.ll .lO

-.ll

-.07 -.14*

.07 .25**

-508 -.04

-.08 -.14*

.09

.07

.13*

.ll -.12

Nore. n = 179; df vary slightly from variable to variable due to occasional missing data.

*p < .05, one-tail test. **p < .Ol, one-tail test.

young.” Each respondent rated his Marital Happiness on a 5point scale with “most happy” and “most unhappy” as the bipolar labels.

Job orientation. Work Centrality measured the relative importance of the work role to the respondent’s life in comparison to his other roles. Desire Fewer Hours was measured by a single item asking the extent to which the


respondent would like to work fewer hours than at present. Orientation to work was measured by two additional indices, one comprised of questions relevant to job context or extrinsic aspects of the job, such as working conditions, pay, and status, and the second dealing with job content or intrinsic factors. Each of these items was followed by two 5-point Likert scales, one asking how important the item was to the respondent on his job, and the second asking the extent to which it was true of his job. In all, four indices were based on these items. Two assessed the Importance of Intrinsic and Extrinsic Factors to the respondent. The other two measured the extent to which Intrinsic and Extrinsic Rewards were given on the job, and are listed in Table 1 as job characteristics.

Job characteristics. The Peer Relations Index was comprised of three questions asking whether the respondent would choose the same co-workers again, how well he was accepted by his peers, and how he rated the human relations in his section. Following Kahn et al. (1964) three types of role stress, i.e. conflict, overload, and ambiguity, were measured. The Role Conflict Index included items concerning contradictory orders, work on unimportant things, necessity to bypass rules in order to get the job done, duplication of effort, and feeling that things should be done differently. Role Overload was scored high for those who reported lack of means, manpower, and time to get the job ,done, more work than can be done well, and general overload in their job. Role Ambiguity was high if the executive perceived unclarity in objectives, job boundaries, and division of authority.

Job reactions. Job Tension was measured by the extent to which each of a series of potential job stresses bothered the interviewee on his job. These items were taken from the Job Related Tension Index devised by Kahn et al. (1964). Job Satisfaction assessed the extent to which 13 specific descriptors characterized the executive’s job. These included intrinsic, autonomy, status, pay, and social factors. Self-reported Effectiveness was determined by responses to six bipolar scales on which the manager was asked to rate (a) the quality and (b) the quantity of his work and (c) the amount of effort he invests in his job. The respondent rated himself twice on each dimension of effectiveness, once relative to others of his rank and a second time in comparison to himself 10 years earlier. A similar measure was used by Porter and Lawler (1968).

Health. Psychosomatic Complaints included six items gauging the presence of nervousness, headaches, shortness of breath, fatigue, heart palpita- tions, and sudden fear. Similar measures have been used to assess responses to working conditions (Quinn et al., 1971). Single-item measures of health included a question about current medical care and a self-rating of the respondent’s healthIon a S-point scale.

The dependent variable. Attitude towards Retirement was measured by an index comprised of three items measuring (a) whether the respondent


wants to retire before, at, or after 65 years of age, (b) his preferred retirement age if it depended solely upon him, and (c) whether he would prefer to go on working full-time, part-time, or not at all after reaching retirement age (a = .72). A high score on this index means a favorable attitude towards retirement and a desire to leave work at a younger age.

RESULTS

Correlations between each predictor and the index of attitude towards retirement are displayed in Table 1. Half the correlations were significant, and at least one variable in each class was significantly correlated with retirement attitude. Specifically, the older one actually is and the younger one feels, the less one desires to retire. The greater the number of previous promotions in the organization the less the desire to retire. Among job orientation variables, those who preferred fewer work hours at present, perhaps indicating a weak job orientation, do look forward to earlier retirement. However, contrary to expectation, importance of intrinsic and extrinsic factors and work centrality were not correlated with desire to retire.

The more intrinsically rewarding the job, the less the desire to retire. Extrinsic rewards and peer relations were not correlated with attitude towards retirement. Of the three measures of organizational stress, i.e. conflict, ambiguity, and overload, the positive relationship was significant only for overload. The number of hours per week on present job was not significantly correlated with desire to retire.

All the variables in the last two categories in Table 1 were significantly related to attitudes toward retirement in the expected direction. Those who reported high job tension, low job satisfaction, and lower effectiveness on their jobs, were most favorably disposed towards retirement. Significantly more of those who complained of psychosomatic disturbances, were receiving medical care, and rated their health low, preferred to retire early.

Since there were correlations among the predictors listed in Table 1, multiple regression was used to estimate each predictor’s unique weight in determining attitude toward retirement. All variables in Table 1 that were significantly correlated with desire to retire were entered into the multiple regression. The results of this analysis are shown in Table 2. Four of the 12 predictors entered in the analysis (chronological and subjective age, psychosomatic complaints, and self-rated effectiveness) were weighted significantly in the resulting multiple regression equation, yielding a multiple correlation of .52. Those who were most likely to prefer to work on beyond conventional retirement age were the chronologically oldest executives who felt young, healthy, and effective on their jobs. These are all personal factors and job reactions. None of the job history, job orientation, or job characteristics measures obtained a statistically significant beta weight.


TABLE 2

Multiple Regression of Attitude toward Retirement

Predictor P R R2 F

Age Subjective age Psychosomatic

complaints Effectiveness

-.31 .33 .11 23.79** .25 44 .19 11.42**

.20 .49 .24 7.32** -.17 .52 .27 5.26*

Note. Since cases with missing data in any of the variables were eliminated from the analysis, the total degrees of freedom was 144. The variation in degrees of freedom accounts for the slight difference between the multiple correlation at the first stage in this table and the zero-order correlation between age and attitude towards retirement in Table 1. For the regression equation with four predictors, F(4,140) = 12.81, p < .OOl.

*p < .02. **p < .Ol.

The negative association between chronological age and attitude towards retirement could have been spurious, since the sample included a number of respondents beyond the age of 65. These men had to obtain a low score on attitude towards retirement as it was measured in the present study. The correlation and regression analyses were therefore repeated including only those below age 6.5, and essentially the same results were obtained, with only minor and unimportant deviations. In the interests of sample size, the results obtained including all respondents were reported.

DISCUSSION

The strong negative association between age and retirement attitude is in accord with the frequently replicated negative relationship between age and turnover (Porter & Steers, 1973) and the positive relationship between age and employee satisfaction (Gibson & Klein, 1970). The significant beta weight obtained for subjective age indicates that a psychological feeling of youthfulness, over and above actual age, may contribute to executives’ desire to work on beyond pensionable age. If self-rated effectiveness is a valid indicator of performance, its negative beta indicates that low performers desire to leave. Steps taken to retain them may increase the “dead wood” in the organization, and a hands-off policy would be indicated.

Executives’ Attitudes Unaffected by the Job

The most surprising result was the lack of correlation of job orientation and job characteristics with attitude towards retirement. A large body of past


findings shows a consistent negative relationship between job satisfaction and turnover (Porter & Steers, 1973). Furthermore, at least insofar as older blue-collar workers are concerned, a state of stress induced by arduous job demands and difficult working conditions contributes strongly to the desire to find relief from the work situation through retirement (Jacobson, 1972). In the present study, none of the measures of work history, job orientation, job characteristics, or job reactions, with the exception of self-rated effectiveness, was related to retirement attitude strongly enough to be significantly weighted in the regression equation. Measurement inadequacy cannot explain it, since these variables demonstrated sufficient reliability, variance, and correlation among themselves (e.g., role conflict and job satisfaction, r = -.45, p < .OOl; role strain and desire to leave job, r = .40, p < .OOl). The negative correlation between self-rated effectiveness and desire to retire may be consistent with the other findings if one interprets the self-rating to be a measure of job-related self-esteem, a personal factor, rather than of actual performance. Thus, reduced self-esteem may eventuate in a greater desire to escape the esteem- deprecating situation via early retirement.

On the whole then, executives’ attitudes towards retirement appear to be more related to their feelings about themselves, their youthfulness, health and effectiveness, and less related to their perceptions of their jobs. This may be peculiar to Israeli executives. Alternatively, unlike turnover and absenteeism, retirement may be unaffected by factors external to the individual. We may tentatively conclude that the factors which drive workers to job switching do not make them desire retirement.

Independence of Attitudes towards Work and Retirement

The lack of correlation between job characteristics and retirement attitudes could indicate that work and retirement are not necessarily opposite poles of the same attitude continuum, but may rather constitute two independent dimensions (Fillenbaum, 1971). Retirement attitudes may be influenced primarily by nonwork factors. Conceivably, one can have a negative attitude towards both work and retirement or a positive attitude towards both. The latter would exist if, for instance, an executive who liked his job accepted retirement as an appropriate stage in his life cycle, perceived it as an opportunity for self-fulfillment in other fields, or considered that loyalty to the organization and its norms obligated him to facilitate the advancement of younger colleagues by his own withdrawal. Future research should measure expectations and perceptions of retirement itself as an autonomous life situation only partly related to preretirement work experience.

Spillover vs. Compensation

The findings of the present study have some bearing on the issue of the


spillover vs. compensatory relationship between job attitudes and attitudes towards nonwork life. Though positive correlations obtained in past research between satisfaction from the job and from other aspects of life (Iris & Barrett, 1972; Kornhauser, 1965) support the spillover interpretation, we found a significant negative correlation between job satisfaction and attitudes toward retirement. This is evidence that the compensatory relationship holds when the nonwork referent is future nonwork life, i.e., retirement, rather than current nonwork life. Thus, future nonwork compensation for present job woes might be a valid model of worker expectations, while spillover of (dis)satisfaction is current reality. Nonetheless, the present-work/future- retirement compensatory relationship evidenced by the correlation of -.12 between job satisfaction and attitude towards retirement is weak, and much more variance in the attitude towards retirement can probably be explained on the basis of nonwork factors, as explained above.

Future Research

The present study was limited by its correlational design and by the specificity of its sample. Any comparison of the present study’s executives with the lower-level workers of past research could be only suggestive. Future research should compare employees at different occupational levels in the same organizations in terms of determinants of preretirement attitudes using identical measures. A longitudinal design would overcome the causal ambiguity of our correlational analysis. Actual retirement would be a much more convincing dependent variable than reported attitude towards retirement among those still at work. Finally, objective measures should supplement the self-ratings of effectiveness and role stress used in the present study.

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Received: April 17, 1975.

propensity to retire among older executives

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