Introduction
According to Spiers (2007), diversity management is not just a moral and legal obligation, but also a tangible business asset. Thuraya Ismail's report to the United Nations defines diversity as noticeable heterogeneity resulting from variability. Kandola and Fullerton (1998) build on this definition by stating that diversity management addresses these differences in order to create an environment where everyone feels valued, their talents are utilized, and organizational goals are achieved. This assumes good representation of various groups such as employees of different ages, races, religions or cultural backgrounds, sexual orientations, ethnicities, marital statuses (married, single or in civil partnerships), and physical abilities. Therefore, human resource managers constantly seek ways to manage these differences for organizational progress.
Background history - Diversity
The concept of diversity originated from the USA.
It began during World War II, when Tor
...ahs on equal opportunity employment and affirmative action began to emerge as significant efforts towards promoting diversity Ref. However, despite these efforts, diversity in the workplace remained unsatisfactory.
The Current State of Organization and Diversity
Today, diversity is still not fully realized at all levels in most organizations. This is despite the well-known publication by Johnson and Packard, (1987) on Workforce 2000.
This paper highlights the necessary changes that need to be made when dealing with population and workplace demographics. By the 1990s, diversity management had become popular in the UK and continues to be today due to socioeconomic factors. According to ref, workforce diversity management is not optional but essential for any organization with strategic goals. These goals drive competition and improve economic performance in the face of changing societal expectations.
Challenges for Personnel and Human Resource Directors
ref states that
the main challenge faced by HR directors is that corporations and government agencies do not consider workplace diversity to be a part of their strategic planning.
Some argue that the implementation of diversity initiatives is seen as too costly and results in decreased productivity, leading to workplace disruptions. Prejudice and hostile work environments also hinder effective diversity management.
Diversity in the business context
Modern organizations must address three issues to establish stability within the company:
- The changing demographics of the labor market
- The increasing globalization of business
- The evolving patterns of work organization, production, and competition.
The changing demographics of the labor market
According to ..., there is a shortage of young, able-bodied, middle-aged Caucasian males who can meet today's competitive market demands. Additionally, Gilbert and Stead (1999) predicted that "the proportion of women and ethnic minorities in the workforce will continue to increase." This, along with an aging population in the UK, presents significant challenges and opportunities for employers. Consequently, traditional approaches to employment policies and practices are no longer sufficient.
Directors have had to make extensive changes to their recruitment strategies, compensation plans, and employee retention efforts in order to tap into untapped segments of the workforce. It is stressed that establishing an inclusive company culture and a welcoming environment where individuals feel accepted, valued, and able to contribute their best is essential for preventing high turnover rates in a diverse workforce. This perspective is supported by Shaw (1993) and Gilbert & Ivancevich (2000), who argue that organizations must implement equal opportunity and diversity management policies as workplace homogeneity decreases in order to retain skilled employees from diverse backgrounds and protect their competitive position in the
market. The increasing globalization of business is also emphasized. Over time, the Asia Pacific Economic Cooperation (APEC) countries have experienced significant growth in trade and economic collaboration, positioning these regions as thriving and rapidly expanding.The changes in human resources development schemes have resulted in various transformations, including the nature of occupations, skill requirements, labor demands, division of labor, and employment arrangements. Global organizations now have the advantage of a skilled workforce that efficiently utilizes scarce human resources and allows for increased mobility of skilled professionals and semi-skilled workers within the regional labor market (Tongzon, 1998). Multinational corporations benefit from workforce diversity as it aids them in navigating different cultures and implementing strategies to improve market penetration and product differentiation through innovation or enhanced integration.
Changing forms of work administration, production and competition
The planetary market in the twenty-first century is highly competitive, and organizations must increasingly adhere to the principles of "flexible specialization" as proposed by Piore & Sabel (1984). This allows for a wide range of cost reduction, diversification, and innovation. Innovation refers to the reduction of organizational rigidity and the development of higher levels of adaptiveness and responsiveness to change, promoting flexibility and teamwork through leaner organizational networks (Schoenberger, 1997).
Workforce diversity - its impact on business performance
Although it can be argued that external factors such as political, social, and economic forces have compelled organizations to address diversity management issues, it is also possible to demonstrate a link between diversity and business performance.
The text emphasizes the importance of diversity in various areas, such as client relations, market share, and employee relationships. It mentions that diversity leads to increased market share and sales to minority-culture groups,
as demonstrated by Cox (1993). Clients prefer to buy from organizations that promote diversity, according to Morrison (1992). Diverseness also contributes to increased market share by allowing organizations to better understand and meet the needs of multicultural clients, as highlighted by Bhadury et Al (2000). Thomas (2004) discovered that managing diversity at IBM resulted in a significant increase in turnover. Successful diversity management also attracts and retains skilled employees, as indicated by McEnrue (1993), who found that businesses valuing diversity have lower recruitment costs compared to those that do not embrace workplace diversity.Diversity in a workplace environment has positive effects on workforce quality and public presentation. It enhances diverse skills, creativity, problem-solving, and flexibility. However, it is crucial to note that diversity management alone does not guarantee employers a competitive advantage in the market place.
Sonia Alleyne et Al 2005 demonstrated that companies with a large diverse workforce are more likely to face challenges compared to smaller companies without diversity management. The negative consequences of not managing diversity include low morale, ambiguity, conflict and tension, confusion, and communication problems. These issues undermine organizational attachment and reduce effectiveness and workforce coherence (Chevrier 2003).
Factors influencing the impact of diversity management
The key factors affecting the approach to diversity management are the impact of regulation, HR policies and procedures, organizational factors, and managerial capability.
Impact of regulation
According to Miller & Rowney 1999, the impact of legislation on diversity management reveals that while an organization may have given little consideration to it, they still need to comply due to regulatory pressures.
These are the statute laws that include: Equal Pay Act 1970 and 1984, Sex Discrimination Act 1975, Race Relation Act 1976, The
Human Right Act 1998 etc.
Human Resource direction
The preceding texts indicate that diversity management can be perceived through external and internal models. These models highlight the importance of organizations identifying their strengths, weaknesses, opportunities, and threats in order to strategically compete in the global market. Reference is made to the belief that human capital is the sole source of ongoing competitive advantage (Prahalad & Hamel, 1990). This human capital is inherently diverse, and effectively managing this diverse workforce is crucial for organizational success. To address this need, the introduction of the human resource department in the early 1900s aimed to manage human capital as a resource for competitive advantage.
"Hard" and "Soft" HRM - The concept of "hard" or top-down HRM entails establishing organizational goals and devising corresponding HR strategies. Conversely, the idea of "soft" or bottom-up HRM emphasizes understanding employee needs, including investing in skills, training, and development to enhance their commitment and loyalty towards the organization. These approaches are commonly employed to integrate diversity management policies into the planning process.
No "Quick-fix solutions"
The reference point out that there are no quick-fix solutions to the direction of diversity within an organization. Instead, he argues that it is essential to measure and scrutinize diversity practices in order to bring about meaningful cultural change. Benchmarking is often used to examine and measure diversity policies and practices. (ref)
Organizational factors
Positioning Diversity
The placement of diversity management initiatives within an organizational structure is crucial to the effectiveness of diversity as a business tool. For example, Winterle (…) mentions that
companies like Mobile Oil Corporation use a hierarchical organizational structure. They separate equal employment opportunity (EEO) from the management of diversity.
Different subdivisions within the human resource department manage the two constructions differently. In contrast, IBM Corporation combined the responsible sections for diverseness and equal employment opportunity (EEO) into one department. This decision was made to enhance synergy and effectiveness, as stated by an IBM executive. The Cadbury Group also made diversity management a key strategy in their Total Quality Management process.
Flex-management
According to the reference, managing the workforce of the future requires flexibility. Flexibility in work hours, accommodating individual differences, addressing family responsibilities, providing rewards, and matching individual skills with job demands are all necessary to meet the evolving needs of contemporary employees.
The key individuals in guaranteeing the success of flex-management are HR directors.
Partnerships with Line Directors
Treating line directors and/or supervisors as equal partners involves seeking and incorporating their opinions into the organization's decision-making and instructional processes. This is to ensure that they are fully committed to implementing all necessary plans. Additionally, including them in the team can be beneficial for communicating the need for change and its impact on the work environment.
Nonetheless, if administrations fail to include supervisors in work force planning and diversity decisions, they can seriously hinder their ability to meet productivity goals and effectively implement diversity management programs. This puts a burden on human resource directors as overseeing diversity management is crucial. Therefore, customized training is necessary to align with the organization's strategy. Embracing diversity is advantageous, but it requires investments in educating and training both directors and employees in order to foster understanding of diversity. For instance, line directors play
a vital role in shaping the employee-organization relationship through their daily activities.
Managers not only hold accountability but also contribute to workplace culture and play a crucial role in effective diversity management. The concept of diversity has gained immense significance in business management over the past two decades. Terms like "diversity," "workforce diversity," and "managing diversity" have become commonplace, presenting managers with various strategies for handling a diverse workforce. Media outlets advocate for internal diversity training programs or hiring consultants to promote awareness about differences in race, gender, culture, religion, age, sexual orientation, and abilities. Organizations no longer have a homogeneous or mono-cultural workforce; instead, they consist of individuals from diverse international backgrounds. This increasing diversity significantly impacts managerial practices as it highlights the importance of addressing employee needs, attitudes, and values.
Hofstede (2001) asserts that variations in values, attitudes, and behaviors among people at the national, civilization, and regional level shape the unique environmental characteristics of specific countries or regions. In his earlier work (Hofstede 1980), he proposed four primary value dimensions for distinguishing between national cultures across different countries.
: Power distance, Uncertainty avoidance, Individualism and Collectivism, and Masculinity and Femininity. Therefore, organizations should shift away from a universalistic approach in their management policies and focus on the importance of managers being culture-sensitive. This will help reduce assumptions of generalized management practices and overlook the various sociocultural aspects inherent in the diverse workforce within organizations.
Conclusion
To ensure effective interconnection between organizational staff and cultural differences, management may need to adopt a culturally interactive approach to managing the impact of cultural diversity ref. This could involve implementing organizational policies, strategies, systems, and practices that
are based on the diverse cultural patterns of subgroups within the organization.At the macro-level of the organizational system, the importance of organizational culture, direction duty, and answerability, as well as programme content in diverseness instruction in the workplace, is highlighted. At the micro-level, it is necessary for management to incorporate and build upon the values and beliefs of individual team members. This involves developing group strategies that generate better outcomes and solutions compared to those produced by individual members alone. Ultimately, diversity leads to enhanced performance when team members are able to understand and appreciate each other, while leveraging their experiences, knowledge, and perspectives.
Members can effectively communicate to assess issues and situations from different perspectives, identify underlying cultural assumptions, establish a shared social reality, appropriately determine and explain culturally interactive alternative solutions, and establish agreed-upon norms for interaction (Maznevski, 1994, 1995).
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