2

Chapter

Managing Diversity:
Releasing Every Employees Potential

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Ch. 2 Learning Objectives

1. 2. 3. 4. 5. 6. Define diversity and review the four layers of diversity. Explain the difference between affirmative action and managing diversity. Describe the glass ceiling and the four top strategies used by women to break the glass ceiling Review the demographic trends pertaining to racial groups, educational mismatches, and an aging workforce. Highlight the managerial implications of increasing diversity in the workforce. Explain the positive and negative effects of diversity by using social categorization theory and information/decision-making theory. Identify the barriers and challenges to managing diversity. Discuss the organizational practices used to effectively manage diversity as identified by R. Roosevelt Thomas, Jr.
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7. 8.

Your Experience
For school group projects, it has been easier to work with groups we could choose rather than ones the lecturer chose.
1= Strongly Disagree 2 = Disagree 3 = Neutral 4 = Agree 5 = Strongly Agree

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The Four Layers of Diversity

Functional Level/ Classification

Geographic Location Mgmt. Status Marital Status Income Work Content/ Field

Age

Parental Status

Race

Gender

Personal Habits
Recreational Habits

Diversity: the host of individual differences that make people different from and similar to each other.

Personality
Appearance

Union Affiliation

Ethnicity Physical Ability

Sexual Orientation

Division/ Dept./ Unit/ Group

Work Experience

Religion

Work Location

Educational Background
Seniority

Source: L Gardenswartz and A Rowe, Diverse Teams at Work: Capitalizing on the Power of Diversity (New 2-4 York: McGraw-Hill, 1994), p. 33 RENI ROSARI 2008 The McGraw-Hill Companies, Inc. All rights reserved.

Layers of Diversity
First layer Personality Personality is at the center of the diversity wheel. Personality is at the center because it represents a stable set of characteristics that is responsible for a persons identity. Second layer Internal Dimensions a set of internal dimensions as surface-level dimensions of diversity. These dimensions, for the most part, are not within our control, but they strongly influence our attitudes and expectations and assumptions about others, which in turn, influence our behavior. Third layer External Dimensions external influences as secondary dimensions of diversity. They represent individual differences that we have a greater ability to influence or control. These dimensions also exert a significant influence on our perceptions, behavior, and attitudes. The final layer Organizational dimensions such as seniority, job title and function, and work location.
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Test Your Knowledge

Sam is a 55 year-old, male Sales Manager for XYZ corporation. He likes to drive fast cars and is Native American. Which layer of diversity has not been mentioned about Sam?
A. Personality B. Internal C.External D.Organizational
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Affirmative Action And Managing Diversity

Effectively managing diversity requires organizations to adopt a new way of thinking about differences among people. Managing diversity entails recognition of the unique contribution every employee can make. As found at Designer Blinds a 170-employee company located in Omaha, Nebraska, with turnover rate of 167%, effectively managing diversity lowered turnover (8%) and increased productivity and quality. earned the company an Optimas Award for excellence in people management
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at Designer Blinds
Top managers began by viewing recruiting and retention strategically and quantitatively. An entirely new approach to hiring was launched. One aspect was networking with representatives of various cultures, including the local Sudanese community, which had not been well represented in the workforce. Company supervisors and co workers studied the culture and embraced it. The firm also identified Hispanic as the fastest-growing group in the area and made a sincere effort to welcome members of the community and to provide English-as-a-second language classes. The diversification of the workplace has produced good results for several years, especially the last two. Employee efficiency and productivity is skyrocketing, quality is a benchmark for the industry, and turnover has plunged from stratospheric highs to 8% a year.
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Affirmative Action
Affirmative action is an outgrowth of equal employment opportunity (EEO) legislation. Goal: Prevent discrimination
Discrimination: occurs when employment decisions are based on factors that are not job related e.g. organization can not discriminate on the basis of race, color, religion, national origin, sex, age, physical and mental disabilities, and pregnancy 2-9
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Affirmative Action
Affirmative action is an artificial intervention aimed at giving management a chance to correct an imbalance, an injustice, a mistake, or outright discrimination that occurred in the past

Affirmative action focuses on achieving equality of opportunity in an organization Never required to hire unqualified people
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Facts
A recent meta analysis summarizing 35 years of research involving 29.000 people uncovered the following results: 1. Affirmative action plans are perceived more negatively by white males than women and minorities because it is perceived to work against their own self-interest 2. Affirmative action plans are viewed more positively by people who are liberals and democrats than conservatives and Republicans 3. Affirmative action plans are not supported by people who possess racist and sexist attitude
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Facts
Research demonstrated that women and minorities, supposedly hired on the basis of affirmative action,
felt negatively stigmatized as unqualified or incompetent They also experienced lower job satisfaction and more stress than employees supposedly selected on the basis of merit.

Women hired under affirmative action programs felt better about themselves and exhibited higher performance when they believed they were hired because of their competence rather than their gender
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Your Opinion
Have affirmative action programs been good for society?
A=Yes, B=No

Are affirmative action programs still necessary?

A=Yes, B=No

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Managing Diversity
Enables all people to perform up to their maximum potential. It focuses on changing an organizations culture and infrastructure such that people provide the highest productivity possible
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MANAGING DIVERSITY
Managing diversity is building inclusive work environment that allows everyone to reach their full potential Affirmative action: program commits the organization to hiring and advancing minorities and women

Affirmative Action
Create upward mobility for minorities and women

Valuing Differences Build quality relationships with respect for diversity

Managing Diversity
Achieve full utilization of diverse human resources

Multicultural organizations from affirmative action to managing diversity

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Managing Diversity
Managing diversity creating organizational changes that enable all people to perform up to their maximum potential How can managing diversity be a competitive advantage?

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Diversity and Competitive Advantage

How does your organization leverage diversity for a competitive advantage?

My organization doesn't actively leverage diversity Increasing innovation through diverse employees Meeting needs of diverse customers Leadership development for all employees 0% 10% 20%

30% 34% 39% 40% 30% 40%

% Respondents out of 310

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Business Case for Workplace Diversity

Direct Link: Expanding customer base with diverse workforce
DuPont a drug they produce was low in the Hispanic market Hispanic manager noticed the label was only in English; they had it translated and sales improved Significant increase in minority-owned franchises
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Business Case for Workplace Diversity

Indirect Link: Retaining Employees
Nortel lost revenue due to turnover Turnover cost - $55,000 average cost per employee Attracting and keeping talent a key aspect of workplace diversity has a significant impact on the bottom line.
Taken from Workplace Diversity: Leveraging the Power of Difference for Competitive Advantage 2005 SHRM Research Quarterly 2-19
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Building the Business Case for Managing Diversity

The rationale for managing diversity goes well beyond legal, social, and moral reasons.

The primary reason for managing diversity is the ability to grow and maintain a business in an increasingly competitive marketplace
IBM, PepsiCo, Nordstorm hiring and promoting diverse employees in order to help create and market products to a broader and more diverse customer base
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Building the Business Case for Managing Diversity

Organizations cannot use diversity as a strategic advantage if employees fail to contribute their full talents, abilities, motivation, and commitment. It is thus essentials for an organization to create environment or culture that allows all employees to reach their full potential. Managing diversity is a critical component of creating such an organization
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Reviewing the demographic trends that are creating an increasingly diverse workforce.
Workforce demographics statistical profiles of the characteristics and composition of the adults working population, are invaluable human resource planning aid. General population demographics give managers a preview of a values and motives of current and future employees.

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Four demographic-based characteristics of the workforce that have implications for organizational behavior 1. Women are encountering a glass ceiling 2. Racial groups are encountering a glass ceiling and perceived discrimination 3. There is a mismatch between workers educational attainment and occupational requirements 4. The workforce is aging
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Increased Workforce Diversity Women

Glass Ceiling Invisible barrier blocking women and minorities from top management positions Women CEOs (as of 2/2007): 10 of Fortune 500 23 of Fortune 1000

What helps break the ceiling?

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Increased Workforce Diversity - Women

Research by surveying 461 executive women held titles of vice president or higher in Fortune 1000 companies and all of the Fortune 1000 CEOs Respondents were asked to evaluate 13 different career strategies to break through the glass ceiling Finding: The top 9 strategies were central to the advancement of these female executives
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Increased Workforce Diversity - Women

Within this set, however, 4 strategies were identified as critical toward breaking the glass ceiling: 1.Consistently exceeding performance expectation 2.Developing a style with which male managers are comfortable 3.Seeking out difficult or challenging assignments 4.Having influential mentors

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Increased Workforce Diversity - Women

The CEOs and female executives differed in their assessment of the barriers preventing women from advancing to positions of corporate leaders.

CEOs concluded that women do not get promoted because: 1. They lack significant general management or line experience 2. Women have not been in the executive talent pool for a long enough period of time to get selected
The female executive indicated that: 1. Male stereotyping and preconceptions 2. Exclusion from informal networks were the biggest inhibitors to their promotability
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Increased Workforce Diversity - Women

It is important to sensitize CEOs to the corporate culture faced by female employees

Breaking the glass ceiling will only occur when senior management has a good understanding of the unique experiences associated with being in the minority

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Increased Workforce Diversity - Race

Racial minorities are growing 2006 1,016 race-based charges of discrimination to EEOC
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Education and Personal Income

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Mismatch between Education Attainment and Occupational Requirements

3 trends suggest a mismatch between educational attainment and the knowledge and skills needed by employers 1. Recent studies show that college graduates, while technically and functionally competent, are lacking in terms of teamwork skills, critical thinking, and analytical reasoning 2. There is a shortage of college graduates in technical fields related to science, math, and engineering 3. Organizations are finding that high school graduates working in entry level positions do not possess the basic skills needed to perform effectively
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Mismatch between Education Attainment and Occupational Requirements

The key issue confronting organizations in the US and any country that wants to compete in global economy, is whether or not the population has the skills and abilities needed to drive economic growth. The mismatch between educational attainment and occupational requirements have both short and long term implications for organization and countries alike.

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Increased Workforce Diversity - Age

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Generational Differences

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Aging Workforce: Challenges

Career Plateauing: when the probability of being promoted is very small Elder care helping older workers care for aging parents Keeping older workers engaged and current

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Managerial Implications - Gender

Provide developmental assignments to women Facilitate the labyrinth-like path to career success Women should:
Be exceptionally competent & seek out mentors Build social capital Assist work/life balance by delegating housework Improve negotiating skills Take credit for accomplishments Create a partnership with spouse to be mutually supportive Balance need to be assertive and communal
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Managerial Implications Race & Education

Race
Provide meaningful mentoring relationships to people of color

Education-based
Encourage students to become educated in technical fields Provide remedial skills training

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Managerial Implications Age

Provide challenging work assignments that make a difference to the firm Give the employee considerable autonomy and latitude in completing a task. Provide equal access to training and learning opportunities when it comes to new technology. Provide frequent recognition for skills, experience, and wisdom gained over the years. Provide mentoring opportunities whereby older workers can pass on accumulated knowledge to younger employees. Ensure that older workers receive sensitive, high-quality supervision Design a work environment that is both stimulating and fun. 2-38
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Pros and Cons of Diversity

Social categorization theory

Similarity leads to liking and attraction

The more homogeneous a work group, the higher the member commitment and group cohesion, and the lower the amount of interpersonal conflicts Homogeneity is better than heterogeneity in terms of affecting work-related attitudes, behavior, and performance.
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Pros and Cons of Diversity

Information/Decision-Making Theory

Diversity leads to better taskrelevant processes and decisionmaking

Diversity groups should outperform homogeneous groups . The logic of this theory was described as follows: The idea is that diverse groups are more likely to possess a broader range of task-relevant knowledge, skills, and abilities that are distinct and nonredundant and to have different opinions and perspectives, on the task at hand. This not only gives diverse groups a larger pool of resources, but may also have other beneficial effects 2-40
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A Process Model of Diversity

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Effects of Diverse Work Environments

Gender and racial diversity in a work group

fosters more interpersonal conflict which leads to

lower job satisfaction, higher turnover, and lower productivity

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Effects of Diverse Work Environments

Demographic faultline Hypothetical dividing lines that may split a group into subgroups based on one or more attributes Diverse groups had positive outcomes when. members were open-minded, discussed and shared information, and displayed integrative behavior
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Managing Diversity

What can organizations do to facilitate the POSITIVE outcomes of diversity?

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Because there are both positive and negative outcomes associated with diverse workgroups, organizations need to focus energy towards maximizing the beneficial outcomes. They can do this by: Targeting training on interpersonal processes and group dynamics (influence, conflict management, communication) Find ways to ease tensions. Rewarding the achievement of common objectives.
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Challenges to Managing Diversity

What barriers exist for organizations trying to manage diversity?

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Barriers and Challenges to Managing Diversity

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Inaccurate stereotypes and prejudice Ethnocentrism Poor career planning An unsupportive and hostile working environment for diverse employees Lack of political savvy on the part of diverse employees Difficulty in balancing career and family issues Fears of reverse discrimination Diversity is not seen as an organizational priority The need to revamp the organizations performance appraisal and reward system Resistance to change
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Thomass Generic Action Options

Responses to handling diversity issues: Option 1: Include/Exclude Option 2: Deny Which ones are Option 3: Assimilate most effective for managing diversity? Option 4: Suppress Option 5: Isolate Option 6: Tolerate Option 7: Build Relationships Option 8: Foster Mutual Adaptation
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Conclusion about Action Options

Exclusion, denial, assimilation, suppression, isolation, and toleration least preferred options Inclusion, building relationships, and mutual adaptation preferred strategies Mutual adaptation is the only approach that unquestionably endorses the philosophy behind managing diversity It is important to note that choosing how to best manage diversity is a dynamic process that is determined by the context at hand.
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Strategic Value of Diversity

Gallup survey conducted in late 2005 found: 15% of US workers experienced discrimination in the workplace over the past year Positive perceptions of the companys diversity efforts was related to:
Satisfaction with the company Likelihood of staying with the company Probability of recommending the company to others

Source: Employee Discrimination in the Workplace, The Gallup Poll, 11/10/05

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Diversity Training
What is diversity training? Why do companies invest in it? What types of diversity training are most effective? Awareness or Skills/Behavioral?

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Diversity Management: Two Major Approaches to Training

Awareness-Based Diversity Training Skills-Based Diversity Training
develop new diversity skills strengthen current diversity skills

increase knowledge, awareness, and sensitivity challenge existing assumptions eliminate stereotypes

Improved quality of interaction with people from diverse groups

Levels of morale, productivity, and creativity are raised
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Organizations competitive position is enhanced

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Diversity management
1. Focus on a range of differences between people not stereotypes 2. Managers should not treat someone as special because s/he is a member of a certain group 3. Managing diversity requires total management support
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