The Practice Of Employment Discrimination Commerce Essay Example

implemented a forced ranking system where employees were labeled as "A," "B," or "C." Raises and bonuses were given accordingly, with potential termination for consecutive low ratings for "C" employees. Advocates argue that these systems identify and reward high performers while eliminating poor performers, thus improving the workforce's loyalty and competitiveness legitimately. They maintain that this practice is legal, ethical, and serves valid business purposes. Critics contend that forced ranking disproportionately affects older workers, potentially allowing employers to maintain a younger and less expensive workforce while evading age discrimination laws. This raises concerns regarding deliberate and illegal age discrimination practices. In 2003, approximately 34% of U.S. companies, including major ones like General Electric, Cisco Systems, and Microsoft utilized forced ranking systems.
However, recent legal cases have raised concerns about the validity of this practice. In Jones v. Goodyear Tire & Rubber Co., it was determined in 2001 that Goodyear's 10-80-10 ABC ranking system violated Ohio's age discrimination law. Similarly, in Smith v. The City of Jackson case, constabularies and public safety officers accused The City of Jackson of engaging in age discrimination. These officers claimed that individuals over the age of 40 with at least five years of experience received smaller pay increases compared to younger officers under the age of 40 with equivalent experience. The plaintiffs argued that this constituted intentional discrimination based on age and resulted in unfair treatment.

In response to claims regarding disparate impact, the Supreme Court clarified how the Age Discrimination in Employment Act (ADEA) should be applied by ruling that older workers can file lawsuits under ADEA based on disparate impact without having to prove intentional discrimination. This decision has significant

implications for businesses.

To succeed in an age discrimination case based on disparate treatment, plaintiffs must provide evidence of intentional discrimination based on their age.In the past, it has been challenging to prove age discrimination. In 2004, only 3% of the 17,837 complaints filed with the EEOC had reasonable cause for discrimination. However, the Supreme Court's ruling in the Smith case has resolved the division among Circuit courts on age-discrimination cases based on disparate impact theory. This means that more plaintiffs are expected to come forward with age-discrimination claims.

This legal precedent will significantly impact U.S. businesses as they now have to consider potential negative effects on employees over 40 years old. If employers choose to terminate older workers in higher-paying positions to reduce costs, they face a high risk of being charged with age-discrimination under the ADEA using disparate impact theory.

The increased risk and cost of monitoring employment decisions to prevent disparate impact cases will outweigh any anticipated savings from reducing the workforce. Some U.S. companies have previously used ethically questionable methods like forced ranking to exploit loopholes in the ADEA and save money through implicit age discrimination.

However, engaging in such discriminatory practices carries potential legal implications and negative consequences that surpass short-term benefits. To view older workers as assets rather than liabilities, U.S. companies need to reconsider their approach to hiring, engaging, and retaining these individuals.The belief that younger workers are more productive and valuable has led to unethical practices such as forced ranking and illegal discrimination against older employees, all in an effort to control costs and maintain profitability. However, employers must now recognize the forthcoming demographic changes in the workforce if they want

to stay competitive. By 2015, around 30 million workers (20% of the total workforce) will be aged 55 and above, a significant increase from the current percentage of 12%. Consequently, there may be a shortage of up to 5 million skilled younger workers who can take over for retiring baby boomers. Intriguingly, a study conducted by Merrill Lynch discovered that approximately 76% of baby boomers actually desire to continue working after reaching retirement age but on their own terms.Reynolds et al., researchers from the John J. Heldrich Center for Workforce Development, argue that the traditional concept of retirement, which involves completely stopping work and enjoying leisure time with loved ones, is no longer relevant. This change is due to various factors such as inadequate private pension coverage, limited health benefits for retirees, insufficient personal savings for longer life expectancies, better health at older ages, the growth of less physically demanding service sector jobs, and employer demand in anticipation of labor and skill shortages. As a result, older workers are likely to postpone retirement and retired individuals may reenter the labor force. The increasing number of baby boomers reaching retirement age will have a significant impact on the workforce since these experienced and well-trained workers are now eligible to continue working thanks to recent legislation changes including the passing of the ADEA [27], the Senior Citizens' Freedom to Work Act of 2000 [28], and an increase in the age requirement for full Social Security benefits [29]. Therefore, US companies must reconsider their approach towards managing this transformation or risk potential losses as the aging American workforce has the ability to redefine what retirement means.Many US businesses

have prioritized downsizing and cost containment over addressing the larger issue of an aging workforce. However, in order to stay competitive, progressive companies need to reconsider their approach to hiring and supporting older workers. Industries such as aerospace and defense, utilities, healthcare, insurance and financial services, and public education are particularly affected by this demographic shift [30]. Even blue-collar sectors like construction and heavy manufacturing that rely heavily on skilled trades are facing talent shortages in certain areas due to an aging workforce. The good news is that many US companies are starting to understand how to cater to an aging population. They can find ways to attract, employ, and retain older workers for a competitive advantage. One effective method is fostering a culture that values experience [31]. Seasoned employees respond more positively when recruitment ads emphasize qualities like "experience," "knowledge," and "expertise" rather than focusing solely on attributes like "energy," "fast pace," and "fresh-thinking" [32].To effectively engage with mature candidates before their retirement from their current employer, it will be necessary to establish connections with them. Instead of relying on psychometric and verbal reasoning skills, role-playing exercises can be used to assess the abilities of older candidates in handling job-relevant situations [33]. Companies may also need to adjust their training and development activities to help older workers update their skills in information technology, functional subjects, and nonhierarchical management methods.

Creating a welcoming environment through HR and recruitment procedures is important for companies looking to retain older workers. However, job design and the nature of work itself also play a significant role in retaining these workers. Forward-thinking companies should focus on creating attractive job conditions that

encourage older workers to stay rather than leave.

Older workers, especially baby boomers, prefer working with less pressure and more flexibility so they can pursue other interests. ARO Inc., a Kansas City-based business process outsourcer, successfully addressed high staff turnover rates by implementing technological upgrades. This allowed 100 teleworkers to work offsite and improved productivity and growth for the company [34][35][36].Mr. Amigoni accidentally discovered that older workers were more beneficial for his company as they excelled in handling back office tasks related to health insurance claims processing. This led to a 7% reduction in employee turnover and a 15% increase in productivity at Scripps Health in San Diego. The main reason for this improvement was the addition of experienced workers. To attract and retain older employees, the organization implemented flexible schedules and job sharing initiatives. The Career Transition Program (CTP) at Scripps Health quantifies the return on investment of its recruitment and retention efforts, which is crucial in an industry facing a talent shortage. From October 2002 through March 4, 2004, the CTP saved $684,451 by successfully placing employees both internally and externally, with a high success rate for placing mature workers within and outside of the organization. Considering this information, U.S. companies should offer flexible retirement options to tap into the potential of the aging American workforce since traditional retirement with social security and pensions is relatively new after the Great Depression era. A recent study by AARP/Roper Report revealed that only 16% of baby boomers stated they would not work at all during retirement while 80% mentioned they would work at least part-time.There is a need for a more flexible retirement concept compared to

the traditional model post-Great Depression. Companies that previously offered early retirement incentives to reduce costs may now be shifting expenses from employee healthcare accounts to retiree healthcare accounts, in accordance with IRS regulations. While defined benefit plans are currently not allowed to make distributions until employment ends or an employee reaches "normal" retirement age, certain companies like IBM, HP, CVS, and Apple Computer have found ways to restructure their benefits and pension plans. This restructuring allows employees to retire and then return as independent contractors after a specific period of time (e.g., six months), with a maximum limit of 1,000 hours per year [39] [40] [41]. By implementing this flexible retirement agreement, companies can utilize the expertise and experience of senior workers for specific tasks and temporary leadership during executive transitions. For example, Aerospace Corporation has successfully implemented its "Retiree Casual" program by employing retired individuals as independent advisers. They have around 200 retirees currently working under this program with an additional 300 in reserve [42]. Some retirees in this part-time program are so valuable that they need to be removed once they reach the 1,000-hour limit before being rehired through an agency.Some participants in the Aerospace Corp.Retiree Casual Program, who are mainly in their sixties, continue to be involved even beyond the age of 80. George Paulikas, a participant in this program, emphasized its advantages as it allows experienced individuals to remain connected with a respected organization and continue meaningful work at a reduced frequency and intensity. Monsanto offers a similar retirement plan called the "Resource Re-Entry Center," which is available to retired employees who have been out of work for six months [43].

The company encourages directors to utilize retired individuals for job sharing, temporary positions, and filling unexpected absences. It is important to recognize that older workers retain their skills and experience even after retiring. Although they may be more expensive and not as quick or sharp as younger employees when employed full-time, practices such as forced rankings can be seen as unethical acts of age discrimination and potentially illegal. With the Supreme Court acknowledging violations of age discrimination based on disparate impact theory, it would not be wise or cost-effective for employers to dismiss older workers.In addition, due to shifts in the demographic makeup of the US labor force, including a rise in older workers and a shortage of younger replacements, many companies must reevaluate how they view senior employees. By actively recruiting and retaining older workers and providing flexible retirement choices, smart companies in the US can gain a competitive advantage and capitalize on the advantages that come with an aging workforce.