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.

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.

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.

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.

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.

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.

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.

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.

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 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 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.

4.1       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.


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.

Alesina, Alberto, and Eliana La Ferrara. 2005. “Ethnic Diversity and Economic Performance.” Journal of Economic Literature 43(3): 762-800.
Arellano, Manuel, and Olympia Bover. 1995. “Another Look at the Instrumental Variable Estimation of Error-components Models.” Journal of Econometrics 68(1): 29-51.
Arellano, Manuel, and Stephen Bond. 1991. “Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations.” Review of Economic Studies 58(2): 277-97.
Arun, Shoba, and Thankom Arun. 2002. “ICTs, Gender and Development: Women in Software Production in Kerala.” Journal of International Development 14(1) : 39-50.
Aubert, Patrick, and Bruno Crépon. 2003. “Age, salaire et productivité: La productivité des salariés décline-t-elle en fin de carrière? ” Economie et statistique 368: 95-119.
Bandura, Albert. 1997. Self-efficacy: The Exercise of Control. New York: Freeman.
Business Training Media: How Should Opposition to Diversity Initiatives Be Handled?
Donald Clark: Leadership and Organizational Behavior
H. Careers; The Challenge of Managing a Diverse Workplace; Lawrence Herzog
Insight into Diversity: Challenges of Diversity in the Workplace
San Diego Community College; Diversity in the Workplace: Benefits, Challenges and Solution; Josh Greenberg; Cultural Diversity as Human Capital; Jesse B.T. Marsh
UNESCO: What Is Cultural Diversity?
Wiley: The Challenge of Managing Diversity
Share on Google Plus


The publications and/or documents on this website are provided for general information purposes only. Your use of any of these sample documents is subjected to your own decision NB: Join our Social Media Network on Google Plus | Facebook | Twitter | Linkedin