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Chapter 02 - Managing Diversity: Releasing Every Employee's Potential
2-1
CHAPTER TWO: Managing Diversity: Releasing Every Employee's Potential
LEARNING OJBECTIVES
See Slides 2-2, 2-3
When you finish studying the material in this chapter, you should be able to:
• Define diversity and review the four layers of diversity.
• Explain the difference between affirmative action and managing diversity.
• Explain why Alice Eagly and Linda Carli believe that a woman’s career is best
viewed as traveling through a labyrinth.
• Review the demographic trends pertaining to racial groups, educational
mismatches, and an aging workforce.
• Highlight the managerial implications of increasing diversity in the workforce.
• Describe the positive and negative effects of diversity by using social
categorization theory and information/decision-making theory.
• Identify the barriers and challenges to managing diversity.
• Discuss the organizational practices used to effectively manage diversity as
identified by R Roosevelt Thomas Jr.
CHAPTER SUMMARY
Chapter 2 defines diversity and discusses the various layers of diversity. This chapter
builds the business case for managing diversity by discussing the trends contributing to
increasing diversity, by exploring the managerial implications of diversity and by
identifying the positive and negative effects of diversity. Barriers and challenges
associated with managing diversity are described. Finally, organizational practices
used to effectively manage diversity are discussed.
Diversity represents the multitude of individual differences and similarities that exist
among people. Diversity results from variables that can potentially differentiate between
people and encompass the collective mixture of differences and similarities. Diversity
may be divided into four layers: personality, internal, external, and organizational
dimensions. Personality represents a stable set of characteristics that is responsible for
a person’s identity. Internal dimensions include age, race, ethnicity, gender, physical
ability, and sexual orientation. External dimensions are personal characteristics that
can be changed. They include religion, income, work experience, geographic location,
Chapter 02 - Managing Diversity: Releasing Every Employee's Potential
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marital status, parental status, personal habits, recreational habits, appearance and
educational background. Organizational dimensions include seniority, job title, work
location, work content, work department, union affiliation and management status.
Affirmative action is an outgrowth of equal employment opportunity legislation. It is an
artificial intervention aimed at giving management a chance to correct an imbalance, an
injustice, a mistake, or outright discrimination that occurred in the past. Although
affirmative action programs created opportunities for women and minorities, they are
perceived negatively by white males and have been found to negatively affect women
and minorities. In contrast, managing diversity enables people to perform up to their
maximum potential. Managing diversity entails recognition of the unique contribution
every employee can make. Effectively managing diversity requires organizations to
adopt a new way of thinking about differences among people. Successful diversity
management focuses on altering an organization’s culture and infrastructure to enable
people to perform up to their maximum potential. Successful management of diversity
requires education, enforcement, and exposure to others.
Several demographic trends are creating an increasingly diverse workforce. First, more
women are breaking though the glass ceiling, the barrier or roadblock that prevented
women from advancing to higher level positions, but must now navigate a labyrinth with
twists, turns, and obstructions on their path to career success. Second, racial groups
are encountering a glass ceiling and perceived discrimination. Third, there is a critical
mismatch between workers’ educational attainment and occupational requirements.
Finally, there are generational differences in the workforce and the workforce is getting
older. Generational differences between the Traditionalists, Baby Boomers, Gen Xers,
Millennials and Gen 2020 are summarized in Table 2-1. These diversity trends carry
distinct managerial implications. To attract the best workers, companies must adopt
policies that meet the needs of diverse workers.
Research shows that there are both positive and negative effects of diversity on
important work outcomes. There are two major theoretical approaches that help us
understand the effects of diversity in the workplace. Social categorization theory holds
that similarities and differences are used as a way to categorize people into groups.
People tend to favor in-groups relative to out-groups. The social categorization model
supports the idea that group homogeneity is better than group heterogeneity in terms of
affecting work-related attitudes, behavior, and performance. In contrast,
information/decision-making theory predicts the opposite and contends that diversity
leads to better task-relevant processes and decision making. Interestingly, research
supports both theories. Research shows there can be a negative relationship between
diversity dimensions and the quality of interpersonal processes and group dynamics but
a positive relationship between diversity dimensions and task-relevant processes and
decision making. Figure 2-3 further explores the relationship between diversity and
important work outcomes.
Organizations encounter a variety of barriers when attempting to implement diversity
initiatives. The most common barriers to successful implementation of diversity
Chapter 02 - Managing Diversity: Releasing Every Employee's Potential
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programs are: inaccurate stereotypes and prejudice, ethnocentrism, poor career
planning, a negative diversity climate, an unsupportive and hostile working environment,
lack of political savvy, difficulty balancing career and family issues, fears of reverse
discrimination, diversity not seen as an organizational priority, the need to revamp the
organization's performance appraisal and reward system, and resistance to change. R
Roosevelt Thomas Jr. identified eight generic action options that can be used to
address diversity issues including: include/exclude, deny, assimilate, suppress, isolate,
tolerate, build relationships, and foster mutual adaptation. Exclusion, denial,
assimilation, suppression, isolation, and toleration are among the least preferred options
while inclusion, building relationships, and mutual adaptation are the preferred
strategies.
LECTURE OUTLINE
I. Defining Diversity
i) Diversity Overview
(1) Diversity: the multitude of individual differences and similarities that exist
among people. See Slide 2-4
(2) Diversity pertains to the host of individual differences that make all of us
unique and different from others.
ii) Layers of Diversity
(1) A team of diversity experts identified four layers of diversity to help
distinguish the important ways people differ, as shown in Figure 2-1: The
Four Layers of Diversity: See Slide 2-5
(i) Personality is at the center of the diversity wheel since it is a stable
set of characteristics that is responsible for a person’s identity.
(ii) The next layer consists of a set of internal dimensions that are
referred to as the primary dimensions of diversity, including age,
gender, sexual orientation, physical ability, ethnicity, and race.
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(iii)The next layer of diversity is composed of external influences which
are referred to as secondary dimensions of diversity, including
geographic location, income, religion, and marital status.
(iv)The final layer includes organizational dimensions such as
seniority, job title and function, and work location.
iii) Affirmative Action and Managing Diversity
(1) Affirmative Action
(a) Discrimination: occurs when employment decisions about an
individual are due to reasons not associated with performance or are
not related to the job. See Slide 2-7
(b) Affirmative action: an artificial intervention aimed at giving
management a chance to correct an imbalance, an injustice, a
mistake, or outright discrimination that occurred in the past. See
Slide 2-6
(c) Affirmative action does not legitimize quotas. Quotas are illegal unless
imposed by the courts in certain situations.
(d) Although affirmative action created opportunities for women and
minorities, it does not foster the type of thinking that is needed to
effectively manage diversity.
(e) Affirmative action programs can negatively affect the women and
minorities expected to benefit from them.
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(2) Managing Diversity
(a) Managing diversity: creating organizational changes that enable all
people to perform up to their maximum potential. See Slide 2-8
(b) Managing diversity focuses on changing an organization’s culture and
infrastructure such that people provide the highest productivity
possible.
(c) The Real World/Real People: Sodexo Ranked as Best Company
for Managing Diversity profiles Sodexo which has been honored for
how it manages diversity.
(d) Research by Ann Morrison identified three strategies for successfully
managing diversity, including education, enforcement and exposure.
II. Building the Business Case for Managing Diversity
i) Building the Business Case Overview See Slide 2-9
(1) The primary reason for managing diversity is the ability to grow and
maintain a business in an increasingly competitive marketplace.
(2) Organizations cannot use diversity as a strategic advantage if employees
fail to contribute their full talents, abilities, motivation, and commitment.
ii) Increasing Diversity in the Workforce See Slide 2-11
(1) Increasing Diversity in the Workforce Overview
(a) Workforce demographics: statistical profiles of the characteristics
Chapter 02 - Managing Diversity: Releasing Every Employee's Potential
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and composition the adult working population. See Slide 2-10
(b) Workforce demographics enable managers to anticipate and adjust for
surpluses or shortages of appropriately skilled individuals.
(c) General population demographics give managers a preview of the
values and motives of current and future employees.
(2) Women Navigate a Labyrinth After Breaking the Glass Ceiling
See Slides 2-13, 2-14, 2-15
(a) Glass ceiling: an absolute barrier or solid roadblock that prevented
women from advancing to higher level positions. See Slide 2-12
(b) There are a variety of statistics that support the existence of a glass
ceiling, but recent research shows that women have finally broken
through the glass ceiling.
(c) There are now more female CEOs and more women in managerial,
professional, and related occupations.
(d) Women have made great strides in terms of educational attainment,
holding seats on boards of directors of Fortune 500 firms, obtaining
leadership positions in educational institutions, and receiving federal
court appointments.
(e) Women’s careers have become far more successful than they were in
the past but a woman’s career may follow a pattern characteristic of
traveling through a labyrinth, with the path to success containing twists,
turns, and obstructions.
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(f) The Real World/Real People: CareFirst BlueCross BlueShield
Helps Employees Move Up the Career Ladder profiles the actions of
one firm to help women navigate their way through the maze of career
success.
(3) Racial Groups are Encountering a Glass Ceiling and Perceived
Discrimination See Slide 2-16
(a) Figure 2-2: Percentage Change in US Population by Race shows
the percentage change in US population between 2000 and 2050 by
race. See Slide 2-17
(b) The so-called minority groups will constitute approximately 55% of the
workforce in 2050 according to the Census Bureau.
(c) Minority groups are experiencing their own glass ceiling.
(i) Minorities are advancing even less in the managerial and
professional ranks than whites.
(ii) The number of race-based charges of discrimination that were
deemed to show reasonable cause by the U.S. Equal Employment
Opportunity Commission increased dramatically from 1995 to 2008.
(iii)Minorities tend to earn less personal income than whites.
(iv)A number of studies showed that minorities experienced more
perceived discrimination, racism-related stress, and less
psychological support than whites.
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(4) Mismatch between Educational Attainment and Occupational
Requirements
(a) Three trends suggest a mismatch between educational attainment and
the knowledge and skills needed by employers:
(i) College graduates, while technically and functionally competent,
are lacking in terms of teamwork skills, critical thinking, and analytic
reasoning.
(ii) There is a shortage of college graduates in technical fields related
to science, math, and engineering.
(iii)Organizations are finding that high school graduates working in
entry-level positions do not possess the basic skills needed to
perform effectively.
(b) Illiteracy costs corporate America around $60 billion a year in lost
productivity.
(c) The mismatch between educational attainment and occupational
requirements has both short- and long-term implications for
organizations and countries alike.
(5) Generational Differences in an Aging Workforce See Slide 2-18
(a) America’s population and workforce are getting older.
(b) In 2011, half of the U.S. workforce was over 50 years of age, and 80%
will be over 50 by 2018.
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(c) An aging population in the United States underscores a potential skill
gap in the future as employers lose the skills, knowledge, experience,
and relationships of retired employees.
(d) The Real World/Real People: CVS Caremark Implements
Programs to Retain and Transfer Knowledge of Older Employees
profiles the actions taken by CVS Caremark to keep older employees
from retiring and to transfer their knowledge to other employees.
(e) Multiple generations of employees are working together and managers
must deal effectively with generational differences in values, attitudes,
and behaviors.
(f) Table 2-1: Generational Differences presents a summary of
generational differences that exist across commonly labeled groups of
people: Traditionalists, Baby Boomers, Gen Xers, Millennials also
knows as Gen Ys, and the forthcoming Gen 2020 group. See
Slide 2-19
(g) Conflicting traits across the generational groups are likely to create
friction, such as how the workaholic and competitive nature of
Boomers is likely to conflict with the entitled and work-life balance
perspective of Millennials.
(h) The results of two recent meta-analyses suggest that older employees
can make valuable contributions in today’s organizations.
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iii) Managerial Implications of Demographic Diversity
(1) Managerial Implications of Demographic Diversity Overview
(a) It is important for organizations to draw the best talents and motivation
from employees given the globally based and technologically
connected nature of business.
(b) Organizations need to hire, retain, and develop a diverse workforce
that provides a deeper pool of talent and unique perspectives that help
the organization identify and meet the needs of a diverse customer
base.
(c) To attract and retain the best workers, companies need to adopt
policies and programs that meet the needs of all employees.
(d) Day care, elder care, flexible work schedules, and benefits such as
paternal leaves, less-rigid relocation policies, concierge services and
mentoring programs are likely to become more popular.
(2) Managing Gender-Based Diversity See Slides 2-20, 2-21
(a) Special effort is needed to help women navigate through the labyrinth
of career success.
(b) Organizations can provide women the developmental assignments that
prepare them for promotional opportunities.
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(3) Managing Racially Based Diversity See Slides 2-22, 2-23
(a) Organizations are encouraged to educate employees about negative
stereotyping regarding people of color, particularly when it comes to
selecting and promoting leaders.
(b) Managers should consider progressive methods to recruit, retain, and
integrate racial minorities into their organizations.
(4) Managing Education-Based Diversity
(a) The mismatches between the amount of education needed to perform
current jobs and the amount of education possessed by members of
the workforce will create a shortage of qualified people in technical
fields.
(b) Underemployment among college graduates threatens to erode job
satisfaction and work motivation.
(5) Managing Age-Related Diversity
(a) Organizations can take advantage of the human and social capital
possessed by older employees by implementing programs that
encourage employees to stay employed and transfer their knowledge
to others.
(b) The Real World/Real People: BMW Effectively Redesigns Its Plant
in Bavaria profiles the actions of one company to help older
employees cope with the demands of physically demanding jobs.
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(c) To motivate and retain an aging workforce, organizations can:
See Slides 2-24, 2-25
(i) Provide challenging work assignments that make a difference to the
firm.
(ii) Give the employee considerable autonomy and latitude in
completing a task.
(iii)Provide equal access to training and learning opportunities when it
comes to new technology.
(iv)Provide frequent recognition for skills, experience and wisdom
gained over the years.
(v) Provide mentoring opportunities whereby older workers can pass
on accumulated knowledge to younger employees.
(vi)Ensure that older workers receive sensitive, high-quality
supervision.
(vii) Design a work environment that is both stimulating and fun.
(d) Generational differences can affect employee motivation and
productivity.
(i) Traditional and Boomer managers are encouraged to consider their
approach toward managing the technologically savvy Gen Xers and
Gen Ys.
(ii) Restricting access to social media will not work in the long run if an
employer wants to motivate younger employees.
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(e) The shortage of skilled employees in the future underscores the need
for organizations to recruit Millennials.
iv) The Positive and Negative Effects of Diverse Work Environments
See Slides 2-28, 2-29
(1) Social Categorization Theory
(a) Social categorization theory: contends that similarity leads to liking
and attraction. See Slide 2-26
(b) Social categorization theory holds that that similarities and differences
are used as a basis for categorizing self and others into groups and
individuals are categorized as in-group members or members of out-
groups.
(c) People tend to like and trust in-group members more than out-group
members and thus generally tend to favor in-groups over out-groups.
(d) Social categorization theory supports the idea that homogeneity is
superior to heterogeneity in terms of affecting work-related attitudes,
behavior, and performance.
(2) Information/Decision-Making Theory
(a) Information/decision-making theory: contends that diversity leads to
better task-relevant processes and decision making. See Slide 2-
27
Chapter 02 - Managing Diversity: Releasing Every Employee's Potential
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(b) This perspective contends that diverse groups should outperform
homogenous groups since diverse groups are more likely to possess a
broader range of task-relevant knowledge, skills, and abilities that are
distinct and nonredundant and to have different opinions and
perspectives on the task at hand.
(c) Research supports the notion that diversity can promote creativity and
improve a team’s decision making.
(3) Reconciling the Effects of Diverse Work Environments
(a) Diversity is associated with both positive and negative outcomes.
(b) Figure 2-3: A Process Model of Diversity summarizes the process
underlying both the positive and negative effects associated with
diversity. See Slide 2-31
(c) There seems to be a negative relationship between diversity
dimensions and the quality of interpersonal processes and group
dynamics.
(d) In contrast, there seems to be a positive relationship between diversity
dimensions and task-relevant processes and decision making.
(e) Demographic fault line: a hypothetical dividing line that splits groups
into demographically based subgroups. See Slide 2-30
(f) To reduce the potential negative effects of diversity:
