Diversity Workforces Important In Business Workforces Commerce Essay


Diversity workforce is important for the world today as the different composition of workplace can create few positive benefits for workers and organization. Many believe that workers in diverse workforce will be more satisfied in their working environment (Kelley 2006). In 2007, the US labor force was 146 million (Robert 2008) and in the forecast of present trend, the civilian labor force will increase to 158 million and in the future the overall U.S workforce will become more diverse (Desda 2005). The department of labor's Bereau of Labor Statistics projected that by 2010, Asian employees and other countries' employees in the U.S workforce will increase to 36.3%.

The goal of much business strategy is to be able to achieve a sustainable competitive strategy and diversity workforce can create competitive advantage to organization. In order to remain competitive in the marketplace, diversity has to be included in the strategic goal (Meisinger cited in Diversity:More Than Just Representation, 2008,p.8). According to Porter (1990) when a firm sustains profits that are more than average for its business, the firm is said to possessing competitive advantage over its rival and to enable the firm to create superior profits for itself and values to customers. In the 21st century, diversity workforce can help contribute to organization's goal and achieve organization objectives. However, some workers can have bad treatments from the manager. certain manager has bias and stereotyping sight towards certain diverse workforce like minorities and disable workers and react more negatively towards their performance in work and they do not share the equal benefits like normal worker does and this problem will limit the potential of the individual and ultimately impact the potential of the organization (Golnaz et al. 2002). The theory X and Y can help to solve this problem. Theory X manager assume employees are lazy and lack of initiative and the manager itself is lazy as well while theory Y manager prefer to share responsibility and decision making as well as to be delegate with subordinates and theory Y manager will improve superior-subordinate communication which relatively will increase job satisfaction and worker involvement to lead higher productivity and competitive advantage (Euske et al. cited in Golnaz et al. 2002).

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There are 2 basic types of competitive advantages proposed by Porter, cost advantage and differentiation advantage. Competitive advantages will exists when the firm is able to deliver the same benefits as competitor but at lower cost will known as cost advantage and deliver benefits that can exceed rivalry's products as known as differentiation advantage and mostly with the power of the diversity workforce, many diverse ideas will be proposed and later be the idea of differentiation. Porter (1990) says these attributes include access to natural resources, like high grade ores or inexpensive power, or access to highly trained and skilled personnel human resources. Therefore HRM plays an important role in contributing competitive advantage in diversity workforce. Human Resource Management is utilized by individual to achieve organizational objectives. There are five functional areas associated with HRM like staffing, human resource development, compensation, safety and health, employee and labor relations (Wayne 2010). Every organization wants union-free environment but when there's a labor union represents a firm's employees, the human resources activity is often referred as industrial relations which handle the job of collective bargaining.

Diversity can be defined as "any perceived difference among people like age, race, religion, functional speciality, profession, sexual orientation, geographical origin, lifestyle, tenure with the organization or position, and any other perceived difference" (Wayne 2010). Diversity aims to create workforces to mirror the populations and customers that organization serves and it can help to reduce costs and improve financial bottom line (Arlena 2008). Managing diversity is a response to demographic changes like increasing presence of single parents and working mother, women in business, mothers returning to the workforce, dual-career family, workers of color, older workers, people with disabilities, racial minorities and immigrants and more. Diversity management is to ensure that factors are in place to encourage the continued development of a diverse workforce by melding actual and perceived differences among workers to achieve maximum productivity (James et al. 2007). Diversity management is also to pursuit inclusive culture in which newcomers will feel welcomed, and everyone sees the value of his or her job. It also involves in creating supportive culture so that all employees can be effective.

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Managing diversity programs can contribute and obtain benefits to the strategic management of HRM are decreasing in conflict and stress, enhancing productivity of heterogeneous teams or work groups, improvement in morales, job satisfaction and retention. Employees of all cultural and ethnic backgrounds will feel more comfortable to express idea when there is diversity workforce practicing in the organization and diverse ideas can help organization to create products that are more appealing to customers who buy them (Arlena S, 2008). Before HRM wants to implement the diversity management training, the HRM department will have to first examine the needs of diversity workers before providing any different training and skills development to different employees as they have their different needs, if the correct skills are to be developed on employees, they will maximize their contribution on performances to the firm and hence generate more profits.

According to Abraham Maslow's hierarchy need chart (1943), it will show what people are driven by particular needs at particular times, and Maslow (1943) says human needs are arranged in a hierarchy, from the at the bottom up to the top like physiological needs, safety needs, social needs, esteem needs, self-actualization needs. Not all employees with different culture and background will have the same needs in workplace, at any time different workers may be motivated by different factors and it is important to understand all needs pursued by each employee. The manager should be able to recognize the needs criteria and motivate employees to make employees to be loyalty to organization and maximize contribution to company and then maintain competitive advantages by providing different training and skills developing. Specialized training can be provided in learning new skills to capitalize on potential synergies to heterogeneous groups (Yawen et al. 2001). Diversity training is usually targeted to middle managers, first line supervisors and customer services to improve communicating and human relations skills.

In conclusion, diversity management has a place in human resources manage as a response to particular specific issues of concern. Properly design and implement of diversity management can create a broad employment equity strategy to bring changes in organizational culture, employment policies and practices. The intended result for diversity management is to show awareness of differences, improve interpersonal and intragroup communication, attitude change and "human relations" skills (Jeffrey 2005). Successfully implemented strategies will lift firm to superior performance by facilitating the firm with competitive advantage to outperform current or potential players (Passemard et al. 2000).

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Arlena S, January 21 2008, "American Honda Opens Workplace Diversity Office", Automotive News 82, page 90

Desda M, 2005, "Diversifying Demographics", HR Magazine 50 (2005 Anniversary), page 54-58,

Golnaz Sadri and Hoa Tran's, 2002, journal of management development, Managing Your diverse workforce through improved communication, volume 21, issue 3, page 227-237, Emerald Group Publishing Limited

James O. Rodgers and Maureen Hunter, 2007, Handbook of Business Strategy, Effective Diversity Management, Diversity management isn't about managing for a group identity. It's about managing for the individual, volume 4, issue 1, page 222-227, Emerald backfiles

Jeffrey A. Govendo, 2005, Handbook of Business Strategy, "workforce, diversity and corporate creativity, volume 6, issue 1, page 213-218, Emerald Group Publishing Limited

Kelley M Butler, March 2006, "Workplace Diversity Can Increase Employee Loyalty", Employee Benefit News 20, page 16-17

Kimball F, 2000, Leading self-directed work teams: a guide to developing new team leadership skills, McGraw-Hill Professional, 2000

Meisinger S, January 2008, quoted in "Diversity : More Than Just Representation", HR Magazine 53, page 8

Passemard, D & Kleiner, 2000, Management Research News, 'competitive advantage in global industries', vol 23, issue 7/8, page 111-117, Emerald Group Publishing Limited

Robert J. Grossman, May 2008, "Keep Pace with Older Workers," HR Magazine 53, page 38-46

Wayne R Mondy, 2010, Human Resources management, Pearson Education, Inc., 11th edition, Prentice Hall, Upper Saddle River, New Jersey,

Yawen Lai, Brian H. Kleiner, 2001, Equal Opportunities International, How to conduct diversity training effectively, volume 20, page 14-18, MCB UP Ltd

Essay 2 :

Measuring and managing performance is a challenge and one of the keys to gaining competitive advantages. Performance management systems serve strategic, administrative, and developmental purposes; their importance cannot be underestimated. Getting performance management policies and processes right in an organization are crucial to maintaining that organization's competitive advantage. Critically evaluate the issues that managers need to be aware of in an effective performance management system.

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Measuring and managing can be a risk or problem but it is also a key to gain competitive advantages to the organization. The performance systems serve strategic, administrative and developmental purposes and they shall not be underestimated by managers as performance management is the single largest contributor to organizational effectiveness and if the manager ignores performance management, the organization will fail (Tyler 2005). Managers should be aware the importance of training and development (T&D) to be implemented to create an effective performance management system and to smooth budget approval and executive buy-in and help employees to achieve their personal and professional goals and then achieve company's goals to maintain organization's competitive advantages

Performance Management is a goal oriented process directed toward to ensure that organizational processes are in place to maximize the productivity of employees, teams, the organization, and accomplishing organizational strategy which involves measuring and improving the value of workforce. (Performance Management Remains Hot Topic, Technology Plays Larger Role, 2007) Every HR function in business contributes to performance management, training and performance appraisal. Performance appraisal is dynamic, ongoing, continuous process and it is a one-time event each year. Every part of the workers and system like training, appraisal, and rewards are integrated and linked to the purpose of continuous organizational effectiveness (Arneson 2006) and every effort of all workers will be directed towards achieving strategic goals (Ariyachandra et al. 2008) to create and maintain competitive advantages.

The main objective in performance management is to maximize employee's contribution towards achieving objective in firm; therefore changing their attitudes can increase the performance (Varma et al. 2008). Changing behavior is indirectly link to motivation. Motivation is defined as how much effort and persistence a worker will put into job (Jeroen et al. 2007). Managers must be aware of how motivation can help and manage in performance management system to improve effective performance management (Jeroen et al. 2007), organizational culture and organizational development (Mcgregor D, cited in Kimball 2005). Theory X workers is irresponsible and dislikes work while theory Y workers are responsible (Fisher K, 2004). Manager can analyze why the worker is practicing theory X by using Clayton Alderfe's ERG motivation theory to support T&D and provide motivation to theory X workers. ERG stands for three level of needs like Existence for physiological and safety needs, Relatedness for social and external esteem needs, and Growth for self-actualization and internal esteem needs and it was invented based on Maslow's hierarchy need work, it has much common but different in some aspects (Borkowski N,2005). Not all employees will have the same needs and working contribution in workplace and it is important to understand all needs and develop correct skills and training to change their negative behavior in workplace to maximize their satisfaction and working performance to increase organization's competitive advantage. If growth opportunities are not provided, they might regress to relatedness needs.

Performance appraisal is a formal system of review and evaluation for individual or team task performance and it is crucial to the success of performance management (Wayne R, 2010). Performance appraisal can be used on many human resource functional areas like human resources planning, recruitment and selection, training and development, career planning and development, compensation programs, internal employee relations and assessment of employee potential (Wayne R, 2010). There are many performance appraisal methods can be choose among all the appraisal methods, the popular once are 360-degree feed back evaluation methods, rating scales, and critical incident method.

The 360-degree feedback evaluation method is a popular multi-rater evaluation performance appraisal method which involves evaluation inputs from multiple levels as well as external sources within the firm. This method can let people around the rated employee to provide ratings like senior manager, employee himself or herself, subordinates, supervisor, peers, team members, and internal and external members (Drakes S, 2008). Many companies use results of 360-degree programs for succession planning, training, professional development and performance management other than conventional applications (Wayne R, 2010). By shifting the responsibility for evaluation to more than one person, many common appraisal errors can be reduced thanks to the computer software which the rating can be done online quickly and conveniently. The rating scales method is used to rates employees according to defined factors from several scales like 5 to 7 in number which will be categories as outstanding, meets expectations, or needs improvement (Wayne R, 2010). This method allows for the use of more than one performance criterion and it is simplicity in permitting quick evaluations of many employees' performances. The two type factors chosen for evaluation are job-related and personal characteristic. Job-related factors include quality and quantity of works while personal characteristic include behaviors like interpersonal skills and traits for adaptability (Wayne R, 2010). The critical incident method requires to keep a written records of highly favorable and unfavorable employee work actions (Wayne R, 2010). When a "critical incident" occurs and affects the department's effectiveness significantly, the manager will write it down and at the end of the appraisal period, the rater uses these records together with other data to evaluate employee's performance (Wayne R, 2010). This method is more to cover the entire evaluation period.

There are many problems in performance appraisal like appraiser discomfort, lack of objectivity, Halo/Horn, employee anxiety and more. Conducting performance appraisal is a frustrating task to HRM. One of the management guru, Edward Lawler says that appraisal systems neither motivate individuals nor effectively guide their development, instead it will create conflicts between supervisors and subordinates and lead to dysfunctional behaviors (Lawler E III, cited in Human Resources management, 2010). The employee can have very unpleasant experience if the employee were to be questioned why not he or she performed well in the procedure required by manager's high priority workloads. One of the weaknesses of traditional performance appraisal methods is lack of objectives. Factors like attitude, appearance, and personality are difficult to measure in rating scale method and it has too little to do with employee's job performance (Peter P et al. 2009). A halo error occurs when a manager generalizes one positive performance or incident to all aspects of employee performance will result in higher rating while horn error occurs when a manager generalizes one negative performance feature or incident to all aspects of employee performance which result in lower rating. The evaluation process may create anxiety to employee and causing them to discontent, apathy, and turnover.

Conclusion, the managers should be aware that "performance appraisal serves many purposes and improve results and efficiency is increasingly critical in today's globally competitive marketplace" (Kate W et al. 2005). If the managers abandon the only program with performance evaluation, it would turn out to be ill-advised overreaction and impact the performance. In order to maintain effective performance management system, the managers should measure progress by measuring; reporting; discussing and documenting throughout the work cycle to make sure employees can meet their performance expectations. An effective performance appraisal system evaluates accomplishments and initiates plans for development, objectives and goals however, appraisal plan might create potential problem like dissatisfaction as it might not be the best to determine pay increases (John P et al. 2000).

(1100 words)