MANAGING DIVERSITY

As organizations become more aware of both the advantages and inevitability of diversity in the workplace, they are finding that the advantages do not happen automatically—sensible management of diversity is necessary.

For example, failure to manage the potential difficulties associated with diversity can lead to the following problems:

• Higher turnover costs: The turnover rate for African Americans in the United States is 40% higher than for whites, and women turn over twice as often as men. The lack of opportunity for career growth is a primary reason why professionals and managers in these groups leave their jobs.

• Higher absenteeism costs: Similarly, absenteeism is often higher for women and for minority-group men. This costly absenteeism is related to many minority individuals feeling that they are not being valued by the organization. For women workers who are mothers, the lack of work/family balance also has significant effects on absenteeism.

• Lawsuits: Employee plaintiffs win two-thirds of the discrimination lawsuits filed. The average jury award is $600,000. Failure to train and monitor managers’ behaviors in this area can be quite expensive.

• Failure to compete well for talent: Recruiting and retaining diverse employees is more difficult. Companies cited as the best places to work for women and minorities tend to be more successful in attracting and retaining the best employees in these labor market segments.

• Reduced organizational performance: The often-mentioned potential business advantages of diversity—better marketplace understanding, creativity and problem solving, and global effectiveness—simply do not happen unless the diverse workforce is given the opportunity and means to contribute to these goals. 

1. COMMON COMPONENTS OF DIVERSITY MANAGEMENT EFFORTS

There are many different sources of advice and opinions about how to approach the challenges of diversity in an organization.

Figure summarizes the most commonly cited components of diversity management efforts.

Major Components of Successful Diversity Management 

For diversity to succeed, it should be approached from the standpoint of its advantages. Training, diversity committees, promotion, and mentoring are all common means for achieving the positive benefits from diversity. Establishing management accountability for diversity can take many forms.8 Tying bonuses to performance in diversity is a powerful approach. Many organizations, including Allstate Insurance Company, also survey employees on how well their managers are doing on diversityand the resulting index determines 25% of each manager’s bonus.


2. PREVALENCE OF DIVERSITY PROGRAMS

Larger organizations are more likely to have diversity programs. Roughly threefourthsof the Fortune 500 companies have diversity programs, and another 8% were planning to implement programs, according to a survey by the Society for Human Resource Management. However, only about 50% of the firms have a mechanism in place to measure the impact of the programs. Smaller companies have diversity programs as well, but only about one-third of the smaller companies have such programs. Diversity training is most commonly found in companies with diversity programs. Approximately 90% of the larger organizations surveyed include diversity training, with middle managers being most often trained. However, for several reasons (discussed next) the effectiveness of diversity training is uncertain.


3. DIVERSITY TRAINING

Diversity training seeks to eliminate infringements on legal rights, and to minimize discrimination, harassment, and lawsuits.

Approaches to such training vary but often include at least three components.

• Legal awareness: Focuses on the legal implications of discrimination. Diversity training typically addresses federal and state laws and regulations on equal employment, and examines consequences of violations of those laws and regulations.

• Cultural awareness: Attempts to deal with stereotypes, typically through discussion and exercises. The desired outcome is for all participants to see the others as valuable human beings.

• Sensitivity training: Aims at “sensitizing” people to the differences among them and how their words and behaviors are seen by others. Some training includes exercises containing examples of harassing and other behaviors. These exercises are designed to show white males how discrimination feels.

Although diversity training is designed to correct problems, in many cases it appears to have made them worse. In both public- and private-sector organizations, very mixed reviews about the effectiveness of diversity training suggest that either the programs or their implementations are suspect.


Common complaints are:

• Diversity training tends to draw attention to differences, building walls rather than breaking them down.
• Diversity training without other initiatives (such as accountability) becomes meaningless.
• The diversity training is viewed as “politically correct,” which is an idea that lacks credibility for a significant proportion of the workforce.
• Diversity training is seen as focused on “blaming” majority individuals for past wrongs by those with an “axe to grind.”

Some argue that diversity training has failed, pointing out that it does not reduce discrimination and harassment complaints, often produces divisive effects, and does not teach the necessary behaviors for getting along in a diverse workplace.

This last point, focusing on behaviors, seems to hold the most promise for making diversity training more effective. One statement capturing this focus said, “Employers are not liable for the beliefs of their employees. But employers are responsible for the illegal behavior and conduct of their employees.” Teaching appropriate behaviors and skills in relationships with others is more likely to produce satisfactory results than focusing just on attitudes and beliefs among diverse employees.