Employee evaluations of occupational pensions

Date02 January 2009
Published date02 January 2009
AuthorOrla Gough,Rod Hick
Subject MatterHR & organizational behaviour
Employee evaluations of
occupational pensions
Orla Gough and Rod Hick
Westminster Business School, University of Westminster, London, UK
Purpose The paper aims to examine the role of an occupational pension in employees’
psychological contracts, the degree to which such pensions influence decisions relating to employee
recruitment and retention, and attitudes of managerial employees to the recent Employment Equality
(Age) Regulations.
Design/methodology/approach – Thirty-six in-depth interviews were conducted with managerial
employees in order to examine the topics described above.
Findings – It is found that the role of an occupational pension in employees’ psychological contracts
is related to age, and that they play a much greater role in the psychological contracts of older
employees. The provision of an occupational pension was found to be more successful in promoting
the retention rather than the recruitment of staff. The managerial employees interviewed were
overwhelmingly supportive of the introduction of the recent Employment Equality (Age) Regulations,
but some expressed scepticism that they would be implemented faithfully by their organisations.
Research limitations/implications – Further research is needed to examine the impact of the
widespread closure of defined benefit pension schemes on employment decisions. The small sample
size used in this research means no claims can be made to external validity.
Originality/value – The original features of the paper are that the authors apply the psychological
contract framework in analysing the degree to which employees value their occupational pensions,
employees themselves are interviewed rather than their employers in assessing the impact of an
occupational pension on recruitment and retention, and the paper provides an early assessment to the
recent introduction of age discrimination.
Keywords Pensions, Psychological contracts,Recruitment, Employee attitudes
Paper type Research paper
The provision of occupational pensions by employers in the UK has a long history,
stretching back to the mid-nineteenth century. Today, occupational pensions play a
central role in providing retirement income in the UK and the extent of such provision
is one of the defining features of the UK’s pension system. Many employers provide
occupational pensions due to the belief that they will facilitate the recruitment and
retention of employees. In addition, by setting a scheme normal retireme nt age prior to
65, such pensions have enabled organisations to compulsorily retire workers and
maintain a benevolent and paternalistic image.
This paper questions the degree to which occupational pensions act to promote
recruitment and retention. Using in-depth interviews, we examine the value that
managerial employees place on their occupational pensions, and assess the extent to
The current issue and full text archive of this journal is available at
The fieldwork for this research was completed as part of an ESRC-funded project, “The impact of
the new MRA on occupational pension schemes and retirement behaviour” (RES-000-22-1542).
Received 30 January 2008
Revised 18 August 2008
Accepted 19 August 2008
Employee Relations
Vol. 31 No. 2, 2009
pp. 158-167
qEmerald Group Publishing Limited
DOI 10.1108/01425450910925300

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