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Diversity

In: Business and Management

Submitted By ebijuno
Words 2808
Pages 12
Abstract
Diversity management practices are specific activities, programs, policies and any other formal processes designed to improve management of diversity via communication, education and training, employee-involvement, career management, accountability and cultural change. Overall, diversity management places emphasis on the development of organizational strategies and cultures that are not only tolerant of diversity but actively encourage flexibility and inclusion (Burke & Ng, 2006; Childs, 2005).

Workforce diversity is increasing and managers need to develop ways to effectively manage the different views and characteristics of the new, diverse workforce. While there has been considerable research exploring the ‘value-in diversity’ approach, many questions remain unanswered. The evaluation of diversity programs remains an area for attention. While many firms have implemented diversity practices, it is difficult to measure the relationship between diversity practices and organizational performance outcomes. Recent research has explored the factors that moderate the relationship between diversity and performance (Grimes & Richard, 2003; Richard, 2000).

Richard (2000: 174) concluded that diversity does add value to a firm but the effects of diversity “are likely to be determined by the strategies a firm pursues and by how organizational leaders and participants respond to and manage diversity”.

Introduction
Diversity is a commitment to recognizing and appreciating the variety of characteristics that make individuals unique in an atmosphere that promotes and celebrates individual and collective achievement. (http://map.ais.ucla.edu/go/1001600)
Examples of these characteristics are: age; cognitive style; culture; disability (mental, learning, physical); economic background; education; ethnicity; gender identity; geographic background; language(s) spoken; marital/partnered status; physical appearance; political affiliation; race; religious beliefs; sexual orientation.
A key tenet of all diversity initiatives is ensuring the creation of a diverse workforce through recruitment, development and upward mobility. Most, if not all, corporate initiatives have a strong component geared toward ensuring a visibly diverse workforce, at all levels, with special emphasis on race and gender. Some of this is compliance driven, but corporate diversity initiatives are increasingly being motivated by the reality of an increasingly diverse labor pool and growing market segments of culturally diverse groups as well as the internal organizational inequities and systemic barriers to the progression or access to those groups.
As we enter the 21st century, workforce diversity has become an essential business concern. In the so-called information age, the greatest assets of most companies are now on two feet (or a set of wheels). Undeniably, there is a talent war raging. No company can afford to unnecessarily restrict its ability to attract and retain the very best employees available.
Generally speaking, the term “Workforce Diversity” refers to policies and practices that seek to include people within a workforce who are considered to be, in some way, different from those in the prevailing constituency. In this context, the following seven predominant factors have motivated companies, large and small, to diversify their workforces:
As a Social Responsibility
Because many of the beneficiaries of good diversity practices are from groups of people that are “disadvantaged” in our communities, there is certainly good reason to consider workforce diversity as an exercise in good corporate responsibility. By diversifying our workforces, we can give individuals the “break” they need to earn a living and achieve their dreams.
As an Economic Payback
Many groups of people who have been excluded from workplaces are consequently reliant on tax-supported social service programs. Diversifying the workforce, especially through initiatives like welfare-to-work, can effectively turn tax users into tax payers.
As a Resource Imperative
The changing demographics in the workforce, that were heralded a decade ago, are now upon us. Today’s labor pool is dramatically different than in the past. No longer dominated by a homogenous group of white males, available talent is now overwhelmingly represented by people from a vast array of backgrounds and life experiences. Competitive companies cannot allow discriminatory preferences and practices to impede them from attracting the best available talent within that pool. An essential part of attracting and retaining qualified, diverse talent is to foster a work environment that does not simply give lip service to awareness of diversity, but actually integrates diversity initiatives into a company’s strategic plans (Cox, 2001; Leach, George, Jackson & Labella, 1995; Thomas, 1991). Thomas (1991) also stated that a critical factor in organizational competitiveness in the new global economy is the ability to function optimally in a diverse environment. Consequently, this trend has garnered the attention of business and industry and the hope is, according to Cox (1994), that these initiatives will enhance working relationships among employees within work environments that are homogenous or heterogeneous (Cox & Beale, 1997).
As a Legal Requirement
Many companies are under legislative mandates to be non-discriminatory in their employment practices. Non-compliance with Equal Employment Opportunity or Affirmative Action legislation can result in fines and/or loss of contracts with government agencies. In the context of such legislation, it makes good business sense to utilize a diverse workforce.
As a Marketing Strategy
Buying power, particularly in today’s global economy, is represented by people from all walks of life (ethnicities, races, ages, abilities, genders, sexual orientations, etc.) To ensure that their products and services are designed to appeal to this diverse customer base, “smart” companies, are hiring people, from those walks of life - for their specialized insights and knowledge. Similarly, companies that interact directly with the public are finding it increasingly important to have the makeup of their workforces reflect the makeup of their customer base.
As a Business Communications Strategy
All companies are seeing a growing diversity in the workforces around them - their vendors, partners and customers. Companies that choose to retain homogenous workforces will likely find themselves increasingly ineffective in their external interactions and communications.
As a Capacity-building Strategy
Tumultuous change is the norm in the business climate of the 21st century. Companies that prosper have the capacity to effectively solve problems, rapidly adapt to new situations, readily identify new opportunities and quickly capitalize on them. This capacity can be measured by the range of talent, experience, knowledge, insight, and imagination available in their workforces. In recruiting employees, successful companies recognize conformity to the status quo as a distinct disadvantage. In addition to their job-specific abilities, employees are increasingly valued for the unique qualities and perspectives that they can also bring to the table. According to Dr. Santiago Rodriguez, Director of Diversity for Microsoft, true diversity is exemplified by companies that “hire people who are different – knowing and valuing that they will change the way you do business.” The University of Tennessee Libraries Diversity Committee Spring 2001; Revised January 2003
Significance of the Problem
Corporate America historically has struggled to communicate to employees who are different that they are valued (Loden & Rosener, 1991; Cox, 1994). Loden and Rosener stated that as a result of our colonial history, most American businesses and institutions have been shaped primarily by the values and experiences of western European white men who basically were, and still are, society’s dominant culture. They theorized that those who are different (e.g., people of color, women, and the disabled) tend to be viewed by the dominant culture as being “less than” or not as valuable as white able-bodied, western males. Thomas (1991) and Cox (1994) concluded that these views can cause employee productivity, staff morale and employer profitability to suffer. Cox (1994) indicated that three factors tend to influence how we deal with those who are different from us. He noted that we tend to treat people who are attractive better than those who are unattractive, that we treat those who communicate the same way we do (language or accent) more favorably than those who don’t, and that the historical legacy of individuals in this country has an impact on how they are perceived and treated. He noted that the effects of slavery and Jim Crow laws (legalized discrimination), which existed in this country from 1619 until 1964, are prevalent in our society today and that most minorities, particularly those of African American descent, have experienced disparate treatment on either a micro or macro level. He defined “micro level” as a situation where an individual has had a personal experience (being followed around in a store, profiled by law enforcement or employment discrimination) and “macro level” as when a person has experienced unequal treatment in a more indirect way (relative or loved one was treated unfairly). Furthermore, Cox (2001) concluded that employees need to understand that working effectively with those who are different from them is a core competency that will be in demand more in the 21st Century.
The changing demographic situation in America and across Europe (increasing number of women entering the labour market, ethnic minorities forming an increasing part of the workforce and the ageing of the working population) will have an effect on the organizations and on society. Another challenge that organizations are also facing is the changing nature of International trade. The free movement of labour across countries means that organizations are employing people from other countries as well. This means that organizations are also dealing with managing diversity not only in their own countries but also in others as they may have people from other countries working together on projects. Therefore much of the work on managing diversity has stemmed from trying to identify what this impact will be and how organizations can prepare themselves for it.
In order to discover the diversity initiatives organizations are implementing and also how successful these initiatives have been, a series of managing diversity survey of organizations throughout the USA has been carried out. The surveys took into consideration initiatives that were considered important in developing a diversity oriented organization. Examples of the initiatives included the following:
1. Having a policy on equal opportunities
2. Equal opportunities as an organizational value
3. Giving fair selection training to recruiters
4. Eliminating the age criteria from the selection process
5. Having criteria for selection and advancement that are open to all
Of the most frequently carried out initiatives many focus on improving the selection and appraisal processes: that is having a formal induction process for all new recruits, eliminating age criteria from selection decisions and giving fair selection training to recruiters. This shows that equal opportunities have become a very important organizational value. It means that people can be accountable, assessed against it and receive feedback on it.
The least frequently carried out initiatives according to the survey include the following:
1. Providing diversity training for staff
2. Assessing managers on managing diversity
3. Assessing all employees on their adherence to the values
4. Setting up employee support groups; e.g. for women and ethnic minorities.
It is clear from the results that many of the least frequently carried out initiatives relate specifically to diversity. This is perhaps not surprising as Diversity is a relatively new concept. Organizations it will appear are making the first tentative steps in taking action in this area.
In an article ‘Academy of Management Executive’, Cox and Blake (1991) examine the relationship between diversity practices and organizational performance outcomes. They focused their attention on six benefits.
1. Cost
2. Resource acquisition
3. Marketing
4. Creativity
5. Problem solving
6. Organisational flexibility
Although Cox and Blake attempted to tie down the benefits of diversity in concrete terms, persuasive examples were provided to support only the first three benefits. Evidence to support the remaining three was less substantial. Lack of evidence does not necessarily imply that the claims about benefits are inaccurate or misleading. For a clearer picture to emerge, the evidence has been broken down into three categories, that is, proven benefits, debatable benefits and indirect benefits. The proven benefits are those that are an unavoidable consequence of becoming a diversity-oriented employer and they include:
 Recruiting from a wide range of talented candidates
 Retaining this talent
 The associated savings from lower turnover and absenteeism
The debatable benefits are those that result from having a mix of people with a wide range of styles, background, personalities in the workforce. The majority of these benefits are indicated in team research and include:
 Increased quality – by managing diversity an organization not only employs the best but also achieves the best from full utilization of its workforce which increases the chances of achieving its quality objectives.
 Improved customer service – managing diversity gets an organization closer to its customers thus improving its customer service.
Indirect benefits are those believed to result when the direct and debatable benefits have been achieved. They are thought to be a logical consequence of having an organization in which the best possible candidates are selected, developed and retained and in which quality of service and output are maximized.
Based on the above, it is clear that by managing diversity, organizations are not only ensuring that they recruit the best but also that the best are promoted and that the potential within each employee is harnessed.

Recommendations/Conclusion
Cox (2001) identified five ways in which diversity could add value to an organization: improved problem solving; increased creativity and innovation; increased organizational flexibility; improved skill variety in the workforce, and improved marketing (e.g. increased customer base). For example, a diverse workforce is supposed to help organizations understand the different needs and values of the cultural groups that comprise their client base (Friday & Friday, 2003; Nishii & Özbilgin, 2007; Wentling, 2000).
For whichever of these reasons that motivates them, it is clear that organisations that diversify their workforces will have a distinct competitive advantage over those that don’t. It is also clear that the greatest benefits of workforce diversity will be experienced, not by the companies that that have learned to employ people in spite of their differences, but by the companies that have learned to employ people because of them.
The Diversity-Oriented organization will have
 a strong, positive mission and core values which make managing diversity a necessary long term business objective for the organization and the responsibility of all employees. The values must reflect the personal and work needs of all employees. Without such a focus a fragmentation of individuals into cliques and separate groups also called a ‘Balkanisation’ (Gordon 1992) of the organization could occur with tension and conflict between them.
 Objective and fair processes. All the processes and systems for example recruitment, selection, inductions, performance appraisals should be audited and continually reaudited to ensure that no one group, ethnicity, sex or type dominates at any level. The criteria for selection and advancement should be openly available to everyone.
 Aware and fair workforce. All employees in the organization should be dedicated to managing diversity. They should understand why diversity is important and what they have to do to make it a reality.
 Increased flexibility not only in terms of working patterns but also in all policies, practices and procedures. The notion of flexibility should be broadened to include all employees, not just those with families. For instance, some organizations provide assistance with childcare, a benefit for only those employees with families. A more fairer approach will be to provide several benefits from which employees would select the most suitable for their needs. This way the work/life needs of the employee are addressed rathe than the work/family need.
 A culture that is consistent and complementary to managing diversity. The diversity oriented organization understands the importance of organizational culture and how this affects individuals within it. As a result it will ensure that all employees have an understanding of how the organization operates, what it values and how it expects its employees to behave.
On the other hand, there are recognized costs associated with managing diversity poorly. When organizations do not manage diversity well, there is increased likelihood of turnover and absenteeism among minority groups. In addition, organizations that do not manage diversity well may be in breach of legislation and may incur associated costs. There are also indirect costs, such as the loss of organizational reputation and inability to attract high-quality employees to the organization (Childs, 2005). If employees perceive themselves as not being valuable to the organization, although their perceptions may not be fact-based, they will tend to not be as innovative, creative, or loyal to the organization.
Companies are being required to compete in the global market place, and many businesses, are deriving more than half of their revenue from overseas markets (Cox, 1994). Our culture (values, attitudes, beliefs, traditions and patterns of thinking) governs our behavior, influences our spending habits, and has an impact on our productivity in the workplace (Cross et al., 1989). Consequently, employers (non-profit and for profit) with strong diversity training initiatives designed to help employees recognize the importance of knowing how to deal effectively with issues of difference, along with understanding and acceptance of those differences, will be more effective at managing diversity, and be at a competitive advantage in the 21st century.

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