It's been said that diversity management “isn't just a moral and legal obligation,” but “it can present a tangible business asset” Spiers 2007. This statement is best understood by defining diversity. In his report to the United Nations on “Diversity at the UN Workplace” Thuraya Ismail defined diversity as “noticeable heterogeneity” that is the “result or condition of being a variable.” Kandola and Fullerton (1998) expanded on the definition by highlighting that, diversity management is a way of “… harnessing these differences” in order to “create a productive environment in which everybody feels valued, where their talents are being fully utilized and in which organisational goals are met.”
This definition assumes that multiple groups are well represented within an organisational surrounding. These groups can comprise of employees of different ages, race, religious or cultural background, sexual orientation, ethnicity, married, single or in civil partnership, able-bodied or not. Thus human resource managers are constantly looking for a way to manage these differences as they affect organisational progress. ref
1.1 Background history - Diversity
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As mentioned, diversity originated from the USA. It started during World War II. After the war, laws on equal opportunity employment and affirmative action emerged as a significant cause in the management of diversity Ref. In spite of these, diversity in the workplace was still far from satisfactory.
1.2 Today's organization and diversity
Today, diversity is still not fully observed at all levels in most organisations. This is in spite of the widely referred paper by Johnson and Packard, (1987) on Workforce 2000. This paper pointed organisations to the essential changes that are needed when dealing with the population and workplace demographics.
By the 1990s, diversity management had gained popularity in the UK, and continues to do so till today, because of the prevailing factors of socioeconomic forces. According to ref workforce diversity management is not a choice but an essential requirement for any organisation with strategic goals, these goals drives competition whilst sustaining and improving the organisations' economic performance in the face of changing expectations and aspirations of society.
1.3 Challenges to Personnel and Human Resource Managers
ref said that the main challenge faced by human resources managers lie in the fact that corporations and government agencies do not consider diversity in the workplace to be part of their strategic planning. Others think that implementing diversity initiatives is too expensive, whilst productivity is slowed, “causing disruption in the workplace. Prejudice and hostile work environments also pose internal stumbling blocks to effectively managing diversity.” Ref
2. Diversity within the business background
Today's organisation must address three issues in order to create a sense of stability within the organisation
1. changing patterns of labour market demographics
2. the increasing globalisation of business
3. changing patterns of work organisation, production and competition.
2.1 Changing patterns of labour market demographics
According to … there is a shortage of young, able-bodied, middle-aged caucasian males that can to meet the demands of the competitive business in today's market. Equally, Gilbert and Stead (1999) predicted, “the proportion of women and ethnic minorities in the workforce has continued to increase.” When combined with the UK aging population, this presents both serious challenges and opportunities for employers.
As such, traditional approaches to employment policies and practices are no longer satisfactory. To access underused segments of the workforce, managers are being forced to make sweeping changes to their approaches to recruitment, reward and retention. … pointed out that in order to avoid high turnover rates in a diverse workforce, managers are creating appropriate culture of inclusion and a comfortable environment where everyone fits in, feels valued and can contribute their best.
Shaw (1993), Gilbert & Ivancevich (2000) supported this view by arguing that, with declining homogeneity in the workforce, it has become necessary for organisations “to develop equal opportunities and diversity management policies to retain the skills of employees with diverse backgrounds in order to protect their competitive position in the marketplace.”
2.2 Increasing globalisation of business
According to ref, the past years have seen countries that make up the Asia Pacific Economic Cooperation (APEC) experienced increased growth in trade and economic cooperation, to the extent that these regions are now thought of dynamic and fastest growing. This has led to changes in the human resources development strategies, with improved emphasis on the “nature of jobs, expanding skill requirements, prospective labour demands and division of labour, and new forms of employment arrangement.” ref
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As a result, international organisation now benefit from a strong labour force, “increased utilisation of the skills and expertise of the scarce human resources, and a greater mobility of skilled professionals and semi-skilled workers in the regional labour market” Tongzon, (1998). And for a multinational corporation, having workforce diversity might help in dealing with the diverse cultures and implement strategies to improve market penetration, and product differentiation through greater innovation or better integration.
2.3 Changing patterns of work organisation, production and competition
The 21st century global market is very competitive, and increasingly orgsanisations need to adopt principles of “flexible specialization” according to Piore & Sabel (1984). This allows for a wide spread of cost reduction, diversification and innovation. Innovation in the sense that organisational rigidities are reduced, and the development of higher levels of adaptiveness and responsiveness to change, more flexibility and fostering teamwork through leaner organisational networks are encouraged. Schoenberger (1997).
3. Workforce diversity - its impact of business performance
Though it can be argued that external forces such as political, social and economic forces have made organisations address the issues of diversity management. Also, it is possible to show that there is a link between diversity and business performance. For example … stressed that, “diversity enhances customer relations and increases market share.” … cited the work of Cox (1993) which showed that “having a diverse workforce leads to increased market share and increased sales to minority-culture groups.” This explains why many customers prefer to buy from people like themselves and from organisations that promote diversity (Morrison 1992).
Bhadury et al (2000) pointed out that diversity contributes to increased market share as it enhances an organisation‘s ability to do business more ssympathetically with “multicultural domestic and foreign customers, thereby increasing customer satisfaction, keeping and gaining market share.” Whilst researching managing diversity at IBM, Thomas (2004) linked the benefits of responding to customer diversity to increase in turnover of IBM. He showed that the outcomes of successful diversity management saw an increase in revenue from $10 million in 1998 to $300 million in 2001, just by partnering with a more diverse group of vendors.
McEnrue (1993) commented that diversity enhances employee relations as studies indicate that businesses that manage diversity successfully not only attract and retain skills, the recruitment cost of organisations that value diversity are 40 per cent less than those who do not embrace workplace diversity. Diversity improves workforce quality and performance in terms of diverse skills, creativity, problem solving and flexibility.
In spite of the above, it is important to point out that diversity management in a workplace environment is not panaceas that automatically provide employers with competitive advantage in the marketplace. For example, Sonia Alleyne et al 2005 showed that companies with a large diverse workforce are far more likely to face lawsuits than comparably small sized companies with no diversity to manage. Thus the negative outcomes of not managing diversity include low morale, ambiguity, conflict and tension, confusion and communication problems. These undermine organisational attachment and reduce effectiveness and workforce cohesion (Chevrier 2003.)
4. Factors influencing the effect of diversity management
The key factors influences on managerial approach to diversity management are: impact of regulation, HR policies and procedures, organisational factors, and managerial capability.
4.1 Impact of regulation
According to Miller & Rowney 1999, the impact of legislation on diversity management showed that an organization might have given little consideration to it; still they need to conform because of regulatory pressures. These legislations include: Equal Pay Act 1970 and 1984, Sex Discrimination Act 1975, Race Relation Act 1976, The Human Right Act 1998 etc.
4.2 Human Resource management
The preceding texts show that diversity management can be viewed from an external and internal frameworks. These frameworks tell us that any organization must displays signs of strengths, weaknesses, opportunities and threats in other to think strategically whilst gaining a competitive advantage in a global market. ref
The driving force behind this strategic thinking it that human capital “are the only source of continuing competitive advantage.” Prahalad & Hamel (1990) This human capital is heterogeneity in nature, and an attempt to manage this diverse workforce must be carefully managed if the organsiation is to succeed. The human resource department was introduced to in the early 1900s in an attempt to manage the human capital as a resource for competitive advantage.
4.2.1 “Hard” and “Soft” HRM
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A “hard” or top-down approach to workforce management defines organisational goals and translates them into HR strategies to determine needs. A “Soft” or bottom-up approach identifies tries to identify the need of employees i.e. investment in skills, training and development in order to make them more committed and loyal to the organisation. These approaches are routinely used to ensure that diversity management policies are built-in into the planning process.
4.2.2 No “Quick-fix soultions”
ref pointed out, “there are no quick-fix solutions” to the management of diversity within an organization. Instead he argued that in order “to effect a meaningful cultural change, assessing or auditing diversity practices is essential to identify and analyse the current situation. Benchmarking is an approach that is commonly used to audit and measure diversity policies and practices. ref
4.3 Organsiational factors
4.3.1 Positioning Diversity
The positioning of diversity management initiatives within an organisational structure is crucial to the effectiveness of diversity as a business tool. ref For example Winterle (…) cited that companies such Mobile Oil Corporation, use a hierarchical organisational structure. They separate equal employment opportunity (EEO) from the management of diversity. Different sections within their human resource department handle these two structures. In contrast, “IBM Corporation created a functional link between diversity and EEO by moving the separate responsible departments to one department.” As Wintele (…) commented with quoting an IBM executive, "moving the functions into one organisation, reporting to the same director, enhances the synergy. The broader the umbrella, the more effective it is." The Cadbury Group, made management of diversity one of several key strategies each business unit must address in their Total Quality Management (TQM) process.
According to ref “Managing the workforce of the future requires flexibility” because it is an effective tool to managing a diverse workforce. Flexibility in work hours, adapting to individual differences, accommodating family responsibilities, rewards and matching individual competencies with job requirements are needed to meet the varying demands of present-day employee. The key people to ensuring success of flex-management are HR managers. ref
4.3.3 Partnerships with Line Managers
Treating line managers and/or supervisors as full partners requires requesting and incorporating their opinions into the organisation's decision-making and education processes. This is to ensure that they are fully committed to all plans that have to be put into operation. Secondly, adding them to the team can be an asset for communicating the need for change and its implications for the work environment.
If not, organisations can seriously undermine their ability to meet productivity goals; ref workforce planning objectives and diversity management plans. By not including supervisors at the conception of workforce planning and diversity decisions, management often forces personnel managers and line supervisors to different ends of the diversity management spectrum,
4.3.4 Education and Training for Line Managers
Overseeing diversity management is critical to human resource managers. To accomplish this, training must be tailored to the organisation's strategy. Inasmuch as embracing diversity is to an organsiations' advantage, “investments are required in training and educating managers and employees to understand diversity.” ref
For example, “line managers are responsible for the day to day activities that determine the relationship between employees and organizations. They are also the bottom line for accountability, an enforcer of workplace culture and a major player in imparting the values of effective diversity management.” ref
20 years since the publication of Workforce 2000 (Johnston & Packard, 1987), diversity has emerged as an increasingly important issue in business management. “Diversity”, “workforce diversity”, and “managing diversity” are now frequently and managers have been presented with a range of innovative ideas by the press media on how to handle a diverse work force (Ferris et al 1994). The constant messages about the need to tackle the experience of a changing workforce are motivating managers and organizations either to create internal diversity training programs or to hire consultants to sensitise employees to differences in race, gender, culture, religion, age, sexual orientation and abilities.
According to Jackson & Ruderman, (1995) “the demographic profile of the workforce in organisations is no longer characterised by homogeneity or mono-culturalism” but has evolved into an amalgamation of diverse people from different multinational backgrounds. And with this level of increasing diversity, comes major implications for managerial practices - emphasise on employee demands, attitudes and values (Choy, 2007). Ref Hofstede (2001) explained, “that differences in people's values, attitudes and behaviours at the national, culture, and regional level has a bearing on the environmental distinctiveness of the particular country or regions to which they belonged.”
Hofstede (1980) postulated four main value dimensions to distinguish the national culture of countries, namely: Power distance, Uncertainty avoidance, Individualism and collectivism, and Masculinity and Femininity. Consequently, organisations need to look away from universalistic approach in their management policies and strategies and concentrate on the need for managers to be culture-sensitive so as to reduce any assumptions of over-generalising management practices and overlooking the different sociocultural characteristics underlying the diverse workforce in organisations.
To ensure organisational staffs are able to relate effectively with cultural differences, management may need to take on board a culturally synergistic approach to manage the influence of cultural diversity ref. This may involve a process in which managers' implement organisational policies, strategies, systems and practices based on the diverse cultural patterns of subgroups within the organisation. At the macro-level of the organisational system, management need create awareness and increase social consciousness emphasise the importance of organisational culture, management responsibility and accountability, and programme content in diversity education in the workplace
At the micro-level of the organisation, management need to integrate and build upon the values and beliefs of the various members of the work team, and develop group strategies that produce better results and solutions, which are more innovative than the single contributions of individual member (Maznevski, 1994, 1995). In other words, diversity would lead to synergistic performance when team members are able to understand and appreciate each other, and capitalise on one another's experiences, knowledge and perspectives. Through effective communication, members would be able to evaluate problems and situations from various viewpoints, determine underlying cultural assumptions and create a common social reality, ascertain and explain culturally synergistic alternative solutions appropriately, and establish agreed-upon norms for interaction (Maznevski, 1994, 1995).