CHAPTER 8
Managing a New and Diverse Workforce
Learning Objectives
After studying this chapter, the student should be able to:
1. Discuss the nature of diversity, and distinguish between diversity management and equal
employment opportunity, and affirmative action.
2. Identify and describe the major dimensions of diversity in organizations.
6. Relate human resource management to social issues.
Chapter Outline
Opening Case: Dealing with Differences
The Americans with Disabilities Act of 1990 (ADA) forbids discrimination on the basis of
disability and further requires that employers make reasonable accommodation for disabled
employees. Moreover, by employing a diverse workforce, they are often better able to engage
with and understand a larger customer base.
coordinates health-care strategies and operations at the Department of Defense.
In addition to the hardware, software, and peripherals that help people like Rick and David
perform jobs requiring computer access, assistive technology includes low-tech equipment such
Introduction
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Chapter 8:Managing a New and Diverse Workforce
This chapter is primarily about workforce diversity in organizations. Other new challenges
entrepreneurship.
I. The Nature of Workforce Diversity
A. The Meaning of Workforce Diversity
Diversity exists in a group or organization when its members differ from one another along
B. Trends in Workforce Diversity
Organizations today are becoming increasingly diverse along many different dimensions.
Several different factors have accounted for these trends and changes. Changing
Organizations that have opened offices and related facilities in other countries have had to
deal with different customs, social norms, and mores. As employees and managers move from
assignment to assignment across national boundaries, organizations and their subsidiaries
C. Diversity Management versus Other Concepts
Equal employment opportunity means treating people fairly and equitably and taking
actions that do not discriminate against people in protected classes on the basis of some illegal
criterion. But diversity management places a much heavier emphasis on recognizing and
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Chapter 8:Managing a New and Diverse Workforce
Similarities among People at Work
Regardless of how different people appear to be, almost all employees share some
Differences among People at Work
Common differences include characteristics such as gender, ethnicity, and age. But the list
of differences among individuals is much longer and ranges from religious beliefs to
dietary preferences to political philosophies.
Identical Treatment Versus Equitable Treatment
The real essence not only of Title VII but also of the more contemporary perspective on
workforce diversity is that it is appropriate to acknowledge differences among people as
The American Disabilities Act (ADA) presents a serious challenge to managers who try to
balance treating everyone the same with treating everyone equitably. The ADA specifically
II. Dimensions of Diversity
A. Age Distributions
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Chapter 8:Managing a New and Diverse Workforce
The average age of U.S. workers is gradually increasing and will continue doing so for the
next several years. Another factor that contributes to workforce aging is improved health and
B. Gender
As more and more females have entered the workforce, organizations have subsequently
experienced changes in the relative portions of male to female employees. Figure 8.3
highlights these trends in gender composition (as well as ethnicity) in the workplace.
C. Ethnicity
A third major dimension of cultural diversity in organizations is ethnicity, or the ethnic
composition of a group or organization. The biggest changes, over the years, have involved
whites and Hispanics. The percentage of African-Americans has remained relatively stable
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Chapter 8:Managing a New and Diverse Workforce
D. Disability
Unlike other dimensions of diversity, reactions to persons with disabilities vary dramatically
as a function of several dimensions of the disability. One of these dimensions is termed
E. Other Dimensions of Diversity
One of these is sexual orientation. Only twenty of the fifty U.S. states (and the District of
Columbia) have laws protecting against discrimination on the basis of sexual orientation and
sexual identity.
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Chapter 8:Managing a New and Diverse Workforce
HR in the 21st Century: Diversity and Native Americans
Diversity initiatives seldom include Native Americans. But while different tribes each have
their own issues and are actually quite heterogeneous, there are some issues that face all Native
Americans. According to current census data there are 5.2 million Native Americans living in
the United States (including American Indians and Alaska Natives), and this number is
projected to grow to 8.6 million by 2050.
Native Americans face many of the same challenges confronting other minority groups,
including stereotypes, prejudice, and bias, as well as the relative lack of quality education,
poverty, early parenthood, and substance abuse. Diversity efforts targeted at Native Americans
deserve more attention because Native Americans have a great deal to offer modern business.
They clearly deserve more attention as the target of diversity initiatives.
III. The Impact of Diversity on Organizations
No doubt organizations are becoming ever more diverse. Diversity provides both opportunities
and challenges and plays several important roles in organizations today.
A. Diversity and Social Change
Diversity in organizations both facilitates and is facilitated by social change in the
B. Diversity and Competitiveness
In general, six arguments have been proposed for how diversity contributes to
competitiveness. These six arguments are illustrated in Figure 8.4.
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Chapter 8:Managing a New and Diverse Workforce
• The cost argument suggests that organizations that learn to cope with diversity will
generally have higher levels of productivity and lower levels of turnover and
absenteeism.
C. Diversity and Conflict
Diversity in an organization can also become a major source of conflict for various reasons.
One potential avenue for conflict is when an individual thinks that someone has been hired,
promoted, or fired because of his or her diversity status.
D. The Bottom Line on Diversity
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Chapter 8:Managing a New and Diverse Workforce
Despite the arguments, the data supporting the positive effects of diversity on organizational
outcomes is not as clear as one might believe. This has led some scholars to propose a
IV. Managing Diversity in Organizations
A. Individual Strategies for Dealing with Diversity
One key element of managing diversity in an organization consists of four key actions that
individuals themselves can take.
• The first element in the strategy is understanding the nature and meaning of diversity.
B. Organizational Strategies for Dealing with Diversity
Individuals can play an important role in managing diversity, but the organization itself must
also play a fundamental role.
Organizational Policies
Obviously, the extent to which an organization embraces the premise of equal employment
opportunity determines to a large extent the potential diversity within an organization.
Another aspect of organizational policies that affects diversity is how the organization
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Chapter 8:Managing a New and Diverse Workforce
Organizational Practices
In general, the idea is that diversity is characterized by differences among people, so
organizations can manage that diversity more effectively by following practices and
Diversity Training
Many organizations are finding diversity that training is an effective means for managing
diversity and minimizing its associated conflict. Diversity training is specifically designed
Organizational Culture
An organization that really wants to promote diversity must shape its culture so that it
clearly underscores top management commitment to and support of diversity in all of its
C. The Multicultural Organization
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Chapter 8:Managing a New and Diverse Workforce
A multicultural organization is one that has achieved high levels of diversity, one that can
capitalize fully on the advantages of the diversity, and one that has few diversity-related
problems. One recent article described the six basic characteristics of such an organization.
This perspective is shown in Figure 8.5.
• The multicultural organization is characterized by pluralism. Every group represented in
V. Managing Knowledge Workers
In today’s economy, many organizations are now really trading in knowledge, and this presents a
special set of challenges for the HR manager. Investment firms are selling their special
knowledge about how to manage a portfolio and plan for retirement or some other goal,
consulting firms are selling expertise in dealing with the many management problems that face
organizations, and many other types of businesses are actually dealing primarily in knowledge
rather than goods or services. With these shifts also came the recognition, that knowledge was
also a commodity within an organization that needed to be leveraged and managed.
A. Organizational Learning
Organizational learning refers to the process by which an organization “learns” from past
mistakes and adapts to its environment. First, the process begins with individual learning and
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Chapter 8:Managing a New and Diverse Workforce
Organizational memory refers to the collective, institutional record of past events. Some of
these events and processes are written down or stored electronically so that a physical record
B. Knowledge Workers
Employees who add value simply because of what they know are usually referred to as
knowledge workers, and how well these employees are managed is seen as a major factor in
determining which firms will be successful in the future. They tend to work in high
Perhaps the biggest challenge facing firms that employ knowledge workers is figuring out
how to attract and retain them. The growing demand for knowledge workers has resulted in
firms introducing regular market adjustments to pay in order to retain those employees.
Without such adjustments or bonuses, once an employee accepts a job with a firm, he or she is
more subject to internal labor market, which is not likely to grow as quickly as the external
market for knowledge workers.
VI. Human Resource Management and Social Issues
Employees, especially younger employees in the twenty-first century, are more interested in
social issues than employees have been for quite some time. There is an increasing awareness