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.
Diversity in Workplace
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)
Diversity is increasing everyday in everyday in every organization; In America 1 in 4 Americans belongs to a minority or is foreign-born. Women, who currently make up less than half the work force, are expected to fill 65 percent of the jobs created during this decade. Whether you are a business owner, executive, salesperson or customer- service professional, and your success will increasingly depend on your ability to function in a culturally diverse marketplace. Over the next decade, companies realize that they must have a diverse workforce and that each member of that workforce must truly embrace principles of diversity to realize the longevity, growth, and increased profits (Outtz, James L, 2004). Women, people of color, and immigrants will soon hold almost three- quarters of all jobs in this country
Diversity in the workplace is a topic that many industries and organizations spend an abundant amount of time and training on in order to ensure its presence. Today’s workplace is more diverse than it has ever been in history. While the workforce has made strides in the direction of equality, it is still far from attaining total equality in the workplace. A company must value diversity. The main objectives of valuing diversity include awareness, education, and positive recognition of the differences among people in the workforce. Organizations are increasingly emphasizing group work or teamwork as a source of competitive advantage in a diverse workforce. It has been suggested that such organizations must target their recruitment efforts at applicants who are both diverse and amenable to working in teams (Rau, Hyland 2003).
A cultural environment must allow differences to be celebrated instead of merely tolerated. All employees must understand the competitive and moral advantages of diversity. They must respect and support cultural diversity through the recognition of cultural and religious holidays, observances, practices, and diet restrictions. We are not where we once were, but we are not yet where we should be (Outtz, James L, 2004). In an ideal world, every person is treated equally when it comes to receiving a job, advancing in their career, and being treated fairly in the workplace. In reality, we know this is not the case. Unfortunately our reality is unfair treatment in regards to an individual’s gender, race, culture, ethnic origin and lifestyle. These discriminations still exist in salary decisions, hiring, firing, and promotions.
In order to effectively manage diversity, and recognize it as a source of strength and not one of conflict, one would need to be educated and reprogrammed to accept and embrace diversity. Society as a whole is programmed to embrace sameness and frown upon assortment. Managers and the powers that be must be taught to appreciate and draw on differences because unfortunately it does not come naturally for most people. America’s past should teach America’s today that success lies within diversity. In order to achieve ultimate success, diversity is a necessity. Workforce diversity is a fact of organizational life. It is also a key concern for theory and practice in organizational behavior (van-Knippenberg, De-Dreu, Homan, 2004).
Diversity is important to companies because with a diverse environment people can benefit and learn from others’ ideas. Other reasons for the importance of diversity to many organizations are the recognition of differences as prerequisites for high performance and continuous improvement, enhancing the effectiveness and creativity of the organization, and valuing conflicts as opportunities for more effective decision-making and problem solving (Outtz, James L, 2004). Diversity has a major impact on our behaviors in the work place.
Many organizations are placing primary emphasis on people who fit their cultures when hiring. The reasoning is that if the people have the “right” attitude, they will more than likely understand and adapt to the goals and expectations of the organization. The necessary skills can be taught. That is a lot easier than hiring people with the right skills but wrong attitude probably cannot be changed. Many organizations have determined what it takes to succeed in their companies.
There is an underlying problem that is promoting racism. It is the fact that a lot of people believe, and try to make they believe, that racism no longer exists. Many people today live their lives oblivious to what is happening in the world around them, often trying to convince themselves that racism is not a problem in their world. (Grano, J. J, (1999)
Diversity calls for the recognition of the contributions that individuals can make as individuals, not just as members of legislatively designated groups. Diversity requires the management of organizations to be very inclusive, not just tolerating those who are different but also celebrating those differences. It calls for the opening of non-traditional occupations to men and women of all creeds, colors, religions, races and social groupings and for making reasonable accommodations the workplace and work life for this to happen. Diversity calls for diversity beyond just gender, race, or physical and intellectual abilities to include diversity in opinions, sexual preferences, social customs and mores, and other aspects of the variations in lives and lifestyles. There is a compelling generic business case for achieving and managing diversity in the workplace. Diversity can help organizations: identify and capitalize on opportunities.
Diversity programs are considered to be good investments whose returns have been very beneficial to organization. Successful professionals are learning to demonstrate the contribution of diversity programs to the business on macro and micro levels. We have to remember that having a diversified workforce is not something a company should have; actually it is some thing that has happened or is soon going to happen due to the fact that we have a more diversified population. Diversity in the workplace is becoming more and more prevalent. Corporations in all industries are encouraging minorities, women, elderly workers, and people with disabilities as well as foreign workers to join the dominant workforce in the workplace. Diversity of the workforce is clearly here to stay. Business owners and managers, experts say, will still need to maintain or step up efforts to recruit and advance ethnic minorities each year. Essentially, because having a diverse work force a gives the company a lot more advantages to their competitors.
People of different ethnic backgrounds possess different attitudes and values. Cultural differences determine the observed differences in work attitudes. An organizations culture determines the ability of members from other groups to perform within the organization. Individuals from minority groups face challenges everyday dealing with prejudice, discrimination, and stereotyping. Prejudice is defined as an adverse opinion or judgment formed beforehand or without full knowledge or complete examination of the facts; a preconceived idea or bias (Sacco, Joshua, Schmitt, Neal, 2005).
Discrimination can include bias towards a person based on their group identity. Minority group size may determine the level of determination. In fact, a recent survey found that nearly half of Black job seekers indicated that the racial composition of the prospective workforce is a factor in their decision making process. (Grano, J. J, 1999)
Workforce diversity is a necessity for clarity and efficiency of all organizations. In order to make this work, strategies must be put into place to make the each organization become a multicultural, diverse workplace. This process begins with managers but must include assistance from employees within the corporation.
In today’s global market, diversity is a must. Traditional barriers are being broken down, and for many companies cross border trade is essential for the company’s success and growth. A decade ago Japan, Europe and North America were responsible for over 80% of global commerce, but new markets are opening up throughout the world and these have brought increased opportunity and also competition. In addition, rapid developments in technology such as the Internet have made new markets accessible to even the smallest of companies.
The growing markets of Latin America, Asia and Central and Eastern Europe are now playing an ever more important role in global buying, selling and manufacturing. Diversity within a company can help the firm better understand the culture, customs, and the way of doing business internationally. Customers also prefer to do business with a workforce that which they can identify, and that have a strong commitment to their community.
A company is also encouraged to adopt diversity programs to stay out of legal trouble. Many companies are under legislative mandates to be non-discriminatory in their employment practices. Non-compliance with Equal Employment Opportunity or Affirmative Action legislation can result in fines and/or loss of contracts with government agencies (Diversity Guidelines). In the context of such legislation, it makes good business sense to make use of a diverse workforce.
In 1996, Texaco agreed to allocate $35 million for a task force to implement changes in their human resources programs after being sued for racial discrimination. The plan included revising company recruitment and hiring procedures to reflect diversity in the workforce, focusing on career development and retention of current employees, and increasing the number of women, and minority owned business partners.
Advantages and Disadvantages of Workplace Diversity
Diversity is beneficial to both associates and employers. Although associates are interdependent in the workplace, respecting individual differences can increase productivity. Diversity in the workplace can reduce lawsuits and increase marketing opportunities, recruitment, creativity, and business image. In an era when flexibility and creativity are keys to competitiveness, diversity is critical for an organization’s success. Also, the consequences (loss of time and money) should not be overlooked.
There are many advantages to having a work environment that is diverse. A company that is prepared for changes in demographics is prepared for the market changes as well as the changes in the pool of applicants. Having a diverse workplace creates an increase in attracting and retaining the most qualified candidates. Diversity programs within corporations improve corporate culture, help in recruitment, and help foster better client relations.
Diversity in the workplace is thought to increase shareholder value. Diverse knowledge and experiences can aid in generating profits. Diversity is a concept that is seen as having the potential to understand the international market, represent different customer bases, contribute diverse operational skills and help with decision-making and diverse age and experience provide different perspectives. Race and gender also provide crucially different views in the workplace. (Chatman, Jennifer, Charles A, 2004)
Having inside information on how to communicate and what a community wants in a product is a great asset. A multicultural company can penetrate and widen their markets with the knowledge of political, social, legal, economic, and cultural environments. Further, having someone within the organization who can negotiate and speak the language of the country is a very valuable asset to the corporation.
Despite the powerful advantages possessed by the multicultural organization, diversity is nevertheless not a panacea and not without its drawbacks. With the benefits of diversity come organizational costs. Too much diversity in problem-solving groups can be dysfunctional. Diversity increases ambiguity, complexity, and confusion. Diverse organizations may have difficulty converging meanings, may find it hard to reach a single agreement, and have difficulty agreeing on courses of action.
In many organizations, diversity can produce negative dynamics such as ethnocentrism, stereotyping and cultural clashes. These negative dynamics can in turn combine with imbalanced power structures to create work disadvantages for women and minorities. In traditional, assimilationist-oriented organizations, cultural differences between majority and minority group members create barriers to full participation of minority members. For example, Tsui, Egan & O’Reilly (1992) analyze 151 workgroups and find increasing work-unit diversity to be associated with lower levels of psychological attachment among group members. If leaders ignore or mishandle diversity, it may detract from performance. Poorer work outcome includes affective and achievement outcomes and these in turn adversely influence first-level organizational measures such as productivity, absenteeism, and turnover. (Grano, J. J, 1999)
Homogeneous groups often outperform culturally diverse groups, especially where there is a serious communication problem. Heterogeneous work teams often under-perform homogeneous teams because they do not allow each member to make a special contribution to the work effort. Cross-cultural training is necessary to enable culturally diverse groups to live up to their potential and overcome communication difficulties. For example, a study of the performance of both culturally homogeneous and culturally diverse groups over a 17-week period initially finds homogeneous groups to score higher on both process and performance effectiveness.
Over time, however, intragroup communications improve and the differences between the groups converge. By the 17th week, there is no difference in overall performance of the two groups, and the heterogeneous group scores higher on two task measures.
The diversity movement has the potential to polarize different social groups and harm productivity while breeding cynicism and resentment, heightening intergroup frictions and tensions, and lowering productivity just the opposite of what managing diversity is intended to accomplish (Chatman, Jennifer, O’Reilly, 2004). Ignorance of cultural differences is a source of ineffectiveness in the work performance of diverse work groups. Likewise, knowledge of the cultural differences in diverse workgroups should enhance work relationships and work team effectiveness.
Higher turnover and absenteeism are problems faced by diverse organizations. Research reveals that turnover for blacks in the US workforce are 40% greater than for whites. Corning Glass reports that between 1980-1987 turnovers among women in professional jobs is double that of men and the rate for blacks are 2.5 greater than whites. Schwartz (1989) finds a two-to-one turnover rate of women in management, while Scott & McClellan (1990) find similar gender differences. Meisenheimer (1990) shows women have 58% higher absentee rates. Using 20 actual work units, O’Reilly, Caldwell, & Barnett (1989) explore the relationships among multiculturism, social integration, and individual turnover. Results suggest heterogeneity in group tenure is associated with lower levels of group social integration which, in turn, is negatively associated with individual turnover. Consequently, outgroup members are the individuals more likely to leave the organization. (Stanford Report, 2000)
With all of the positive aspects that multiculturalism brings a company, there are a few disadvantages. Many people feel threatened by working with people of a different age, sex, or culture. First, there is an increase in the cost of training. This increase comes from costs associated with seminars, programs and lectures given to promote diversity in the corporation. These types of training are given to all levels of staff within the organization (Outtz, James L, 2004). They teach employees how to accept the personalities and ideas or thoughts of others. These programs also teach one how to deal with conflicts and prejudice in a professional and civil manner.
Another disadvantage a company may encounter is reverse discrimination. This is a feeling that is associated with affirmative action policies. It is a major argument against such policies. Reverse discrimination is a claim by white males that they have been unfairly discriminated against. They claim they are equally or more qualified for the position, yet were passed over for a minority to receive the job. This can cause lawsuits in some cases, but mostly a sense of rejection by other workers in the company toward the minority who received the position.
In the absence of effective diversity management, culturally diverse workgroups may have certain dysfunctional outcomes such as miscommunications, longer decision times, lower member morale and lower team cohesiveness than culturally homogeneous workgroups. The negative consequences of diversity can reduce creativity and innovation, problem solving, and workgroup cohesiveness. As a result, these negative consequences can reduce market share, profitability, and achievement of organizational goals. (Outtz, James L, 2004)
In conclusion diversity in workforce is growing in all countries special USA, Canada and Europe. With having more diverse work environment organization can produce better performance. It is important for the companies to know diversity and how to handle the issues relating to it. Also the need of the diverse workforce is getting more not only because there are different people but also because they can produce better results with having different types of people working. Leaders in the organizations should learn diversity (differences of gender, age, sex and religion in their work environment and also to communicate will between them) and how to manage it effectively.