INTRODUCTION
The long-term success of any
business or organization calls for a diverse body of talent that can bring
fresh ideas, perspectives and views to their work. The challenge that diversity
poses, therefore, is enabling your managers to capitalize on the mixture of
genders, cultural backgrounds, ages and lifestyles to respond to business
opportunities more rapidly and creatively.
If
organizations exist to unite diverse perspectives, capabilities, and talents in
pursuit of common purposes and mutually beneficial results, why do they stifle
diversity, seek sameness, discourage individuality, promote conformance, reward
uniformity, and punish nonconformity? Because managing diversity is harder than
managing uniformity, managing diversity is more challenging, expensive, time
consuming, demanding, stressful, and prone to fail. A
truly diverse organization or work environment, unified through common vision and
purpose is healthy, strong, innovative, dynamic, and capable of blending a
multiplicity of perspectives, experiences, and abilities, and it is able to
weather significant competitive challenges. However, an abundance of research
and experience shows that organizations and work environments with high levels
of required uniformity inevitably stifle creativity and innovation, retard
initiative-taking, prevent widespread accountability for results, limit freedom
to expand and create value, and weaken individual motivation, commitment and
fulfillment.
DEFINITION
Diversity refers to differences in
various defining personal traits such as age, gender, race, marital status,
ethnic origin, religion, education and many other secondary qualities. Diversity is generally
defined as acknowledging, understanding, accepting, valuing, and celebrating
differences among people with respect to age, class, education, ethnicity, gender, physical and mental ability,
race, sexual orientation, spiritual practice, and public assistance status
(Esty, et al., 1995). Organizational diversity in the
workplace refers to the total makeup of the employee workforce and the amount
of diversity included. Organizations
and their management teams often define diversity too narrowly by tolerating,
rather than embracing, government guidelines about inclusion of gender, racial,
and sexual diversity in the workplace; focusing on the avoidance of legal
risks, rather than the benefits of diversity; and doing the minimum necessary,
rather than the maximum, to promote diversity. In the end, they promote
uniformity rather than diversity, and understand only those customers who are
most like their employees.
1.1
BACKGROUND
ON ORGANIZATIONAL DIVERSITY
Organizational
diversity exists when companies hire employees from various backgrounds and
experiences. Many companies see workplace diversity as an investment toward
building a better business. Although workplace diversity provides many
benefits, it also poses many challenges to employees and managers. To reap the
benefits of workplace diversity, employees and managers must understand the
challenges and know how to effectively deal with them.
Closely related to organizational
diversity is the prominent topic of diversity management. This refers to the
human resource and management process of proactively planning to optimize
benefits of diversity while down playing challenges. Traits of diversity
management usually include sensitivity training and cultural awareness. Some
companies include diversity training for all new employees as part of initial
orientation and training. Highly diversified organizations often have ongoing
diversity management programs. Along with providing training, company leaders
need to set the tone for a highly functioning diverse workplace. This means
setting the tone from the top by rewarding employees for involvement in
diversity programs and supporting tolerance and acceptance of diversity. Some
employers also participate in or financially support diversity awareness
programs in the communities in which they operate. Finally, company leaders
need to promote a non-discriminatory work environment.
2.0
EMPIRICAL REVIEW
There
are different economic forces underlying the relationship between workforce
diversity and productivity. As highlighted by Alesina and La Ferrara (2005),
these forces may derive from: individual preferences (either people may
attribute positive utility to the well-being of members of their own group or
they may value diversity as a social good), and individual strategies (even
when people have no taste for or against diversity) may be more efficient,
notably in the presence of market imperfections. Lazear (1999) follows the
production function approach and develops a theoretical model in which a global
(i.e. multinational) firm is presented as a diverse (i.e. multi-cultural) team.
He argues that labour diversity is beneficial for firm performance if skills and
information sets are grouped specifically. More precisely, he demonstrates
theoretically that the gains from diversity are greatest when three conditions
are fulfilled:
a)
Individuals
have completely different skills and information sets.
b)
The
different skills and information sets are all relevant for the tasks that have
to be performed within the firm, and
c)
Individuals
are able to communicate with each other.
Young
workers are thought to learn faster (Skirbekk, 2003) and to have better
cognitive and physical abilities (Hoyer and Lincourt, 1998), while older
workers are typically considered to have more job experience and knowledge
about intra-firm structures, relevant markets and networks (Czaja and Sharit,
1998; Grund and Westergaard-Nielsen, 2008). Given that these complementary
skills are relevant for most firms, Lazear’s (1999) model suggests that age
diversity may generate some gains. However, the net effect on productivity will
only be positive if these gains outweigh additional communication costs (and
difficulties related to emotional conflicts) incurred by a more diverse
workforce. It has repeatedly been argued (see e.g. Lazear, 1999; Jehn et al.,
1999) that this condition is unlikely to be satisfied for demographic diversity
(heterogeneity in terms of age, gender or ethnicity) but may well be fulfilled
for educational (i.e. task-related) heterogeneity. The latter may indeed
enhance efficiency if there is sufficient mutual learning and collaboration
among workers with different educational backgrounds (Hamilton et al., 2004).
Kremer (1993) develops the O-ring production function based on the assumption
that quantity and quality of labour cannot be substituted. The underlying
intuition is that many production processes involve a large number of tasks and
that a small failure in one of these tasks may lead to a strong decrease in
production value. Kremer gives the example of a company that may go bankrupt
due to bad marketing, even if product design, manufacturing and accounting are
excellent. With this type of production function, it can be shown that
profit-maximizing firms should match workers of similar skills/education
together. Task-related heterogeneity would thus hamper productivity.
2.1
CULTURAL
DIVERSITY AND ORGANIZATIONAL PRODUCTIVITY
Cultural
diversity involves the differences in the composition of members of an
organization in terms of nationality, race, color, gender, creed, religion or
age --- in other words, an array of culture found among people from diverse
backgrounds. Organizational behavior refers to the nature of interactions among
people and groups within an organization. The positive influence of cultural
diversity facilitates members of the organization to build relationships and
acknowledge each other regardless of their differences of origin and
background.
A
typical organization has an extensive range of people who have cultural and
personal differences. A small business interested in fostering cultural
diversity among its employees endeavors to create mutual respect for the
different cultures, along with enabling personnel to reach their full
potential. Acknowledging diverse cultures enables the organization to
positively influence the organizational behavior that, in turn, enhances the
performance and productivity of the organization. The business should portray
the cultural diversity aspect of the organization in the mission statement.
2.2
ETHNIC AND RACIAL
DIVERSITY
The present study, with a focus on ethnic and racial
diversity, tested an implicit assumption of diversity studies that diversified
workforces perform better and bring more benefits to organizations. Using data
from 464 police departments of cities with more than 50,000 residents, this
study found decreased crime control performance and increased employee turnover
as workforces became more diversified. According to the findings in this study,
managers are advised to consider introducing diversity management practices to
reduce negative results of being diverse while protecting and increasing the
benefits derived from diversity to make diversified workforces help enhance
organizational productivity.
According to the findings in this study, managers are
advised to consider introducing diversity management practices to reduce
negative results of being racially diverse while protecting and increasing the
benefits derived from racial diversity to make diversified workforces help
enhance organizational productivity.
2.3
AGE DIVERSITY
AND ORGANIZATIONAL PRODUCTIVITY
Although,
the effect of aging on individual productivity has been analyzed frequently,
organizational productivity effects, which are more than the sum of individual
productivities, have not. Furthermore, we do not only address the effect of
changes in average age but also of changes in age diversity on organizational
performance. We make a theoretical contribution by introducing a simple
economic model to study the effects of workforce heterogeneity on company
performance.
Although
previous research has often found declining individual productivity effects
with increasing age, we find that organizational productivity does not
necessarily decline with average workforce age, particularly if changes in age
diversity and type of tasks are controlled. We also find that an increase in
age diversity can have substantial positive productivity effects, particularly
in innovative and creative companies.
3.0 DIVERSITY IS A LUBRICANT IN THE WHEELS OF
ORGANIZATIONAL PRODUCTIVITY
Diversity
is a lubricant in several organizational workforce and productivity because it
has some beneficial influences on organizational behavior. This is supported by
the explanation of the “Positive Influence of Cultural Diversity in Organizational Behavior”.
Cultural diversity involves the
differences in the composition of members of an organization in terms of
nationality, race, color, gender, creed, religion or age --- in other words, an
array of culture found among people from diverse backgrounds. Organizational
behavior refers to the nature of interactions among people and groups within an
organization. The positive influence of cultural diversity facilitates members
of the organization to build relationships and acknowledge each other
regardless of their differences of origin and background. Some of the positive
influence of diversity on organizational behavior and productivity are written
below:
i.
Define and
Establish Cultural Diversity
A typical organization has an
extensive range of people who have cultural and personal differences. A small
business interested in fostering cultural diversity among its employees
endeavors to create mutual respect for the different cultures, along with
enabling personnel to reach their full potential. Acknowledging diverse
cultures enables the organization to positively influence the organizational
behavior that, in turn, enhances the performance and image of the organization.
The business should portray the cultural diversity aspect of the organization
in the mission statement.
ii.
Transforming
Organizational Behavior
The patterns of behavior in the
organization are influenced by the nature of interactions and degree of
diversity within the organization. The business, therefore, should seek to
create an organizational culture that not only enhances the diversity of its
workforce composition but also boosts individual performance. The positive
influences of cultural diversity not only enable the organization to increase
the scope of its reach --- the business also receives favorable exposure from
every sector of the population due to its multicultural approach.
iii.
Influencing
Cultural Diversity
Cultural diversity is geared toward
having a deep respect and understanding of the various people in the organization.
This aspect of the organization is strengthened by having feedback, teamwork,
team-building activities and interpersonal communication. During such
engagements, individuals are able to interact and appreciate each other's
culture; consequently, an accommodating culture and organizational behavior is
established within the organization.
iv.
Sustaining
Positive Influence Programs
Programs for positive influence
should always be adjusted to suit the dynamic nature of interactions among
people. Establish regular forums and educational programs in which participants
are trained to be sensitive to and appreciate cultural diversity, as well as in
maintaining desirable organizational behavior. Regularly post motivational
quotes and messages of cultural diversity on public bulletin boards.
Concentrate on creating programs that internalize cultural diversity into the
organization's behavior.
3.1
BENEFITS OF
DIVERSITY ON ORGANIZATION PRODUCTIVITY
Organizations are recognizing the
need and importance of investing in diversity and inclusion as part of their
overall talent management practices and to continually challenge their
organizations to make the connection between those principles and their
corporate performance. Diversity is especially crucial in today’s global
marketplace, as companies interact with different cultures and clients.
The payoffs touch every area of the business by potentially resulting in
increased creativity, increased productivity, new attitudes, new language skills, global understanding,
new processes, and new solutions to difficult problems. Greater agility, better
market insight, stronger customer and community loyalty, innovation, and
improved employee recruitment and retention. The organizations that fail
to see the importance of Diversity and inclusion might find themselves unable
to attract and retain the kinds of customers, employees, and business partners
that constitute our changing world in 5 to 10 years.
3.2
ADVANTAGES OF DIVERSITY IN THE WORKPLACE
i.
Increased
Productivity
Diversity and Inclusion brings in
diverse different talents together working towards a common goal using
different sets of skills that ignites their loyalty and increases their
retention and productivity.
ii.
Diverse
Experience
Co-workers with diverse cultural
backgrounds bring unique experiences and perceptions to the table in groups and
work teams. Pooling the diverse knowledge and skills of culturally distinct
workers together can benefit companies by strengthening teams' productivity and
responsiveness to changing conditions. Each employee in a diverse workplace
possesses unique strengths and weaknesses derived from their culture in
addition to their individuality. When managed properly, diversity in the
workplace can leverage the strengths and complement the weaknesses of each worker
to make the impact of the workforce greater than the sum of its parts.
iii.
Learning
And Growth
Another advantage of workplace
diversity is the opportunity for employees' personal growth. Being exposed to
new ideas, cultures and perspectives can help individuals to reach out
intellectually and gain a clearer view of their surroundings and their place in
the world. Spending time with culturally diverse co-workers can slowly break
down the subconscious barriers of ethnocentrism and xenophobia, encouraging employees
to be more well-rounded members of society.
iv.
Increased
Creativity and Problem Solving Abilities
With so many different and diverse
minds coming together many more solutions will arise as every individual brings
in their way of thinking, operating and solving problems and decision making.
v.
Attract
and Retain Talent Diversity adds a competitive edge
to any organization. Feeling included and appreciated increases loyalty
and feeling of belonging. Language skills pool is increased and propels
organization forward either to compete in the International global world or to
increase its diverse customer base.
vi.
Best
Available Talent
Companies that hire from diverse
groups of people can hire workers from the best available pool of talent,
according to the article titled "Workforce Diversity: Changing the Way You
Do Business" at diversityworld.com. Older workers can bring experience and
a strong work ethic to a company. Workers from other countries, such as India,
China and Japan, often have an exceptional education, here or abroad, in
science and more technical fields. Whatever the case, companies that provide
equal opportunities to all workers can select, interview, screen and hire the
most educated and experienced workers.
vii.
More
Effective Execution
Companies that hire the best talent
from a diverse group of employees can operate more effectively than
less-diverse companies. The best available talent means a company’s collective
education and experience are greater than most competitive companies. Also,
companies that hire more diverse employees tend to inspire their workers to
perform to the best of their ability, according to multiculturaladvantage.com.
In addition, more experienced and educated people tend to be better at
planning, time management, goal setting, work delegation and projects completed
on time.
viii.
Communication
Issues
Diversity can strengthen your company's relationships with
specific customer groups by making communication more effective. Customer
service representatives can be paired up with customers from their specific
demographic, making the customer feel comfortable with the representative, and
thus with the company. A number of companies in the southwest United States,
for example, prefer to hire bi-lingual customer service reps to deal with Spanish-speaking
customers in their native language.
ix.
Build
Synergy in Teams and Enhances Communication Skills:
Diversity brings in new attitudes
and processes that profit the whole team.
x.
Applying
the proper diversity and inclusion management strategies does not only save
money on litigation expenses generated by discrimination lawsuits but is
the right thing to do for the organizations.
The advantages of diversity
embracing affects the base line revenues of any organization and can be the
make or break of any business. Ignoring the effects or the existence of
diversity in this global new market will only keep organizations back loosing
on all the productivity and most important profitability of any business and
its core of existence.
4.0
SUMMARY, RECOMMENDATION
AND CONCLUSION
4.1 SUMMARY
Diversity means differences, difference of age, sex,
race, religion and culture etc. People with different demographic differences
working in the organization makes diverse workforce. And it is becoming more
important for the organizations to know about these differences and how to
manage it. Diversity is also the common issue in the workforce
environment, in some companies employees often get discriminated or
misunderstood because of the diverse features. (Sacco, Joshua, Schmitt, Neal,
2005)
The world is becoming smaller every day. The
Internet, mass media, telecommunications and mass transportation have all
contributed to the shrinking of international market. Because of these
technologies, there is a continuing necessity for companies to address the
needs of a very diverse market so that they can be competitive. Companies
must now ask themselves what they can do to increase the number of customers
for which they serve while determining the needs of these customers. This
business process makes diversity a crucial part of a company’s growth and
operation.
As companies are becoming more and more diverse it’s
becoming more and more important for companies to understand and manage it. The
people of different background, races, religion creates diverse workforce.
There is an importance of having diverse workforce to provide better
performance. There are perspectives of managing the diverse workforce, which
require organization leaders and managers of being responsible of attaining better
diverse workforce.
4.2
RECOMMENDATIONS
Organizations
need to define what diversity means to them,
for most organizations it
involves creating an inclusive organization where the differences of all people
are respected, valued and utilized towards achieving a common goal. Differences
people bring to the work environment include race, gender, sexual orientation,
religion, age, geographic background, education, economic background and
thinking and communication styles.
Implementation
Although on paper workplace diversity may seem like a
good idea, many companies experience challenges when attempting to implement
changes. Employers must develop strategies for implementation, analyze results
and make necessary changes if results do not meet the established goals. The
implementation process may present challenges to everyone involved, and
frustrations may arise because implementation is not as smooth as expected. To
help with implementation, employers may decide to hire experienced
professionals who specialize in workplace diversity. Experienced professionals
understand the challenges and know how to handle them.
Managing Diversity
Once workplace diversity is implemented, companies
must effectively manage the changes in policies. This presents a challenge for
many organizations. Challenges in managing workplace diversity can stem from
several reasons, such as taking the wrong approach to solving diversity issues.
For example, a company may adopt affirmative action policies in an attempt to
solve diversity problems. Affirmative action is about giving opportunity to
previously disadvantaged workers. Hiring based solely on race may not solve
diversity issues. According to Lawrence Herzog, managers face challenges when
new employees from diverse backgrounds interact with long-standing employees.
Many companies offer training programs to managers to help them effectively
manage their newly diverse departments. Effective managers are aware that
certain skills are necessary for creating a successful, diverse workforce. First,
managers must understand discrimination and its consequences. Second, managers
must recognize their own cultural biases and prejudices (Koonce, 2001).
Diversity is not about differences among groups, but rather about differences
among individuals. Each individual is unique and does not represent or speak
for a particular group. Finally, managers must be willing to change the
organization if necessary (Koonce, 2001). Organizations need to learn how to
manage diversity in the workplace to be successful in the future (Flagg, 2002).
Opposition to Change
Although workplace diversity benefits an organization
as a whole, some employees and managers may not react positively to changes
made. Employees who oppose workforce diversity usually reject new ideas and make
work environments more difficult. If the company doesn't handle opposition
properly, workplace diversity initiatives may not provide the intended benefits
to the company. To deal with opposition, companies should explain the reasons
for diversity and what benefits changes in diversity bring to management and
employees. Alleviating fears some people possess about workplace diversity may
reduce much of the opposition.
Clarity about the Specific Benefits of Diversity to
Success
It's important that employees are representative of
their client base so they can understand their needs and know how to serve
them. It does not mean that people of one culture, gender, age, etc, only work
with those respective populations. It means that the organization as a whole is
better able to relate to a larger population. This creates better working
relationships, and helps avoid miscommunication based on cultural differences
and ignorance about other groups. It saves time and money and having to do
things over. For Lucy Shelby at RCAC in Portland, having a well rounded
understanding about the cultures of her clients can help build stronger
relationships and give more loans to communities for building new affordable
housing. She says, "I want to understand how people think and feel before
we talk about filling housing needs or building leadership capacity.
4.3 CONCLUSION
A diverse workforce is a reflection of a changing
world and marketplace. Diverse work teams bring high value to organizations.
Respecting individual differences will benefit the workplace by creating a
competitive edge and increasing work productivity. Diversity management
benefits associates by creating a fair and safe environment where everyone has
access to opportunities and challenges. Management tools in a diverse workforce
should be used to educate everyone about diversity and its issues, including
laws and regulations. Most workplaces are made up of diverse cultures, so
organizations need to learn how to adapt to be successful.
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Challenge of Managing a Diverse Workplace; Lawrence Herzog
Insight into
Diversity: Challenges of Diversity in the Workplace
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