Diversity Management The Challenges And Opportunities
The knowledge of our theoretical studies is absolutely incomplete without
its proper implementation and application in today’s diversified corporate
With profound sense of gratitude and regard, we convey our sincere thanks
to our teacher, Dr. Shuchi Agarwal for her valuable guidance and the
confidence she instilled in us, that helped us in completion of the project
report. We would like to thank her for providing the basic knowledge of
Organizational Behavior, project topic & the methodology to be used for
preparing the report.
An undertaking of study like this is never an outcome of efforts put in by a
single person; rather it bears imprint of number of persons who directly or
indirectly helped us in completing the study.
Why Manage Diversity?
Indian and USA Context
2. Managing Workforce Diversity as
3. World Best Companies to work for(Fortune Magazine)
4. How to Manage Diversity in an Organization?
5. Diversity Policy
Ways to ensure that Diversity program is successful
Policies that support Diversity at HP
6. A Case Study : Diversity at IBM
The Challenges & Opportunities
Diversity is ubiquitous. We all are aware of it since decade‟s .No two persons
are similar. The world has been and is a stage of huge mix of people with
different backgrounds, religion, castes, race, culture, behavior, age, marital
status, nationality, educational qualification, political affiliation, levels of
ability, personality, gender and many more which vary across the globe. Other
sources of differences include socio - economic background of individuals,
membership and non membership of unions, forms and quality/quantity of
education, period and nature of employment, drives to work, and work styles.
Work place diversity therefore, intends to also consist of social, economic and
political visible and non visible differences which might not have a direct
creational origin from the work place, but certainly have direct impact on work
attitude and performance at the work place. Diversity itself relates to the fact
that we are all unique individuals.
Organizations are becoming increasingly cosmopolitan. A typical
organization is emerging as a place of diverse workforce in terms of gender,
race and ethnicity. One can find a Shastri rubbing shoulders with a khan, both
jostling with a Gowda, and all shaking hands with a Singh. Then there are
physically handicapped, gays and lesbians, the elderly and even people who are
Though they work together, they maintain their distinct identities, diverse
culture and separate lifestyles. Managers of today must learn to live with these
diverse behaviors. Diversity, if properly managed, can increase creativity and
innovation in organizations as well as improve decision making by providing
different perspectives on problems.
Diversity mainly came into the picture when globalization came in 1990-91.As
the wave of globalization sweeps across the organizations, there is a
convergence of workforce from diverse countries, cultures, values, styles etc
.Such convergence of distinctly different people presents tremendous
opportunities as well as challenges. Organizations can derive unassailable lead
in the marketplace when they have in place effective Human Resource
Management practices and diversity initiatives that accepts differences, values
equality and creates preferred places to work
And as we enter the 21st century, workforce diversity has become an essential
business concern. In the so-called information age, the greatest assets of most
companies are now on two feet (or a set of wheels). Undeniably, there is a
talent war raging. No company can afford to unnecessarily restrict its ability to
attract and retain the very best employees available.
A management system which eliminates the differences found in a
multicultural workforce in a manner which results in the highest level of
productivity for both the organization and the individual. In simple words
managing diversity means managing people in the best interest of employee
as well as employer.
Managing diversity is an on-going process that explore the various
talents and capabilities which a diverse population bring to an organization,
community or society, so as to create a wholesome, inclusive environment,
that is “safe for differences,” enables people to “reject rejection,” celebrates
diversity, and maximizes the full potential of all, in a cultural context where
everyone benefits from Multiculturalism, as the art of managing diversity, is
an inclusive process where no one is left out.
Earlier, the management followed melting pot approach to
differences in workforce. It was assumed that people who were different would
somehow manage with the majority group. But it is now recognized that
employees don‟t set aside their values, beliefs, lifestyles, preferences, etc when
they come to work. Therefore, it is desirable to recognize and value such
differences by adapting management practices to different life and work styles,
etc of the diverse group.
Diversity management involves creating a supportive culture where
all employees can be effective. In creating this culture it is important that top
management strongly support workplace diversity as a company goal and
include diversity initiatives in their companies' business strategies. It has
grown out of the need for organization to recognize the changing workforce
and other social pressures that often result.
Why Manage Diversity
There are various reasons explaining the need to manage diversity. They are:
A large number of women are joining the work-force.
Work-force mobility is increasing.
Young workers in the work-force are increasing
Ethnic minorities' proportion constantly in the total work-force is
International careers and expatriate are becoming common.
Diversity can be seen through these figures in Indian context
Over 400 million women are employed in various streams
Around 30 percent of the workforce in the IT sector is women
Socially disadvantaged people (scheduled casts/tribes, etc.) have entered
organizations as a result of a policy of reservations and concessions.
Old employees have grown in number because of improved medical and
IT Industries like Infosys, TCS and Wipro are actively recruiting foreign
nationals and women, both by choice and design.
Bharti Enterprise has mandated their recruitment agencies to have a 25-30%
percentage of women candidates at the interview stage.
Diversity in companies is no longer about being melting pots, but being salad
bowls,quot; according to Grady Searcy. quot;We want people to retain their identity yet
be integrated into the company Currently, 7.5 per cent of our workforce
consists of non-Indians,quot; said Mr. S Padmanabhan, Executive Vice President
and head Global human resource, TCS said while speaking at the Nasscom HR
Summit on `The War for Talent'. The Indian workplace is no different from
global MNCs.TCS has announced plans to hire about 4,000 people from across
A majority of HLL customers are women but till 2000 women constituted just
5% of its management. Alarmed by that number, the company put in place a
plan to hire more women. It looked at companies like ICICI , which had a far
better representation of women in their workforce. HLL started several
initiatives like a six-month fully paid maternity leave as well as a five-year
• By 2050 the percentage of Hispanics will grow from today‟s 11 percent of
workforce to 24 percent
• Blacks from 12.5 to 14 percent
• Asians from 5 percent to 11.5 percent
• The 55 + age group which currently makes 13 percent labour force will
increase to 20.5 percent by 2014
• The white non-Hispanic percentage of the population has decreased from
77.7 percent in 1990 to 73.1% in 2000 and it is projected to decrease
further to 69.2% by 2010.
• Number of female workers have increased from 29.6 percent in 1950 to
46.7 percent in 2003 and are projected to increase to 47% by 2010
• Currently, as per ILO report, 45% of world women population aged (15-64)
Challenges in Managing Employee Diversity
Diversity presents managers with following set of challenges:
1. Individual versus Group Fairness: This issue is closely related to the
“difference in divisive versus better” i.e. how far management should go
in adapting HR programs to diverse employee groups.
2. Resistance to Change: Long established corporate culture is very resistant
to change and this resistance is a major roadblock for women and
minorities seeking to survive and prosper in corporate setting.
3. Resentment: Equal Employment Opportunities (EEO) was imposed by
government rather than self initiated. The response to this forced change
was in many cases grudging compliance.
4. Group Cohesiveness and Interpersonal Conflict: Although employee
diversity can lead to greater creativity and better problem solving; it can
also lead to open conflict and chaos if there is mistrust and lack of
respect among groups. This means that as organizations become more
diverse, they face greater risks that employees will not work together
effectively. Interpersonal friction rather than cooperation may become
5. Segmented Communication Networks: It has been seen that most
communication in the organization occurs between people with some
similarities either by way of gender or by way of same place.
6. Backlash: Some group in the organization feels that they have to defend
themselves against encroachments by those using their gender or
ethnicity to lay claim to organizational resources .Thus, while women
and minorities may view a firms cultural diversity policy as a
commitment to improving their chances of advancement.
7. Retention: The job satisfaction levels of women and minorities are often
lower than those of majorities. Therefore it becomes difficult to retain
such people in an organization.
8. Competition for Opportunities: Already, there are rising tensions among
the disadvantaged groups jockeying for advancement. Employers are
being put into the uncomfortable position of having to decide which
disadvantaged group is most deserving.
Diversity as an Asset
Diversity in the work force was previously thought to lead to garbled
communications, conflict, and a less efficient workplace. Today, many firms
realize that diversity can actually enhance organizational effectiveness.
a) New Products and Services: Diversity generates ideas in geometric
progression fuelling greater creativity and innovation. It can stimulate
consideration of less obvious alternatives. This results in flurry of new
products and services to meet the customer‟s expectation and needs.
b) Better teamwork: Organizations are operating in such a fashion that it is
impossible to function without teamwork. Interacting with diverse
workforce is leading to better ideas and enhancing the morale and
motivation in the organization
c) Better Image: Companies that have diverse workforce are having better
image, reputation and patronage than those who do not encourage
diversity. This has huge impact on expansion of business as it can reduce
the talent crunch by targeting the diverse groups.
d) Effective and Happy workforce: Adept handling of diversity can multiply
motivation and enhance productivity due to the satisfaction employees
enjoy on being treated fairly, valued equally and given dignity at
workplaces. It reduces the chances of absenteeism and attrition too as the
undue stress, unnecessary frustration or low morale due to being
insensitive, discriminatory etc gets drastically reduced. Hence, many
organization are charting diversity initiative not merely to comply with
legal obligations but reap the business benefits especially in term of better
recruitment and higher retention among the talented workforce
e) Expansion of Markets: Globalization has brought together heterogeneous
teams to enhance the problem solving capabilities and produce creative
solutions leading to expansion of business landscape.
Worlds Best Companies To Work For
( Fortune 500 Magazine)
Women Has Non Discrimination Policy that
Company Name Rank
to Men includes Sexual Orientation?
Google 1 36 33 Yes
Quicken Loans 2 19 44 Yes
Wegmans Food Markets 3 15 53 Yes
Edward Jones 4 6 65 Yes
Genentech 5 44 50 Yes
Cisco Systems 6 41 25 Yes
Starbucks 7 35 66 Yes
Women to Men Ratio
Google Quicken Wegmans Edward Genentech Cisco Starbucks
Loans Food Jones Systems
According to the above mentioned data, we can analyse that best companies
(to work for) works with diverse group of people. Google, ranked first by
fortune500 magazine, employs about 36 % minority people and 33 % women‟s
in its workforce. Comparatively Edward Jones and Starbucks, ranked fourth
and seventh respectively accounts for more than 60% women manpower. Each
of these companies has non discrimination policy which is followed strictly so
as to ensure equity. This represents their efforts to recognize diversity and
make use of it in a positive manner i.e. as a company‟s asset
How to Manage Diversity in an Organization
Diversity can be managed in an organization by taking following steps:
i. Embrace Diversity: Successfully valuing diversity starts with accepting
the principle of multiculturalism. Accept the value of diversity for its own
sake not simply because you have to. The acceptance must be reflected
in actions and words.
ii. Recruit Broadly: When you have job openings, work to get a diverse
applicant pool. Avoid relying on referrals from current employees, since
this tends to produce candidates similar to existing work force. An
exception is that if the present workforce is fairly diversified then there
is no harm in accepting referrals from current employees.
iii. Select Fairly: Make sure your selection process does not discriminate.
Particularly ensure that selection tests are job related.
iv. Provide Orientation and Training: Making the transition from outsider
to insider can be particularly difficult for non-traditional employees.
v. Sensitize all Employees: Encourage all employees to embrace diversity.
Provide diversity training to help all employees see the value in diversity.
vi. Strive to be Flexible: Part of valuing diversity is recognizing that
different groups have different needs and values. Be flexible in
accommodating employee requests.
vii. Seek to Motivate Individually: A manager or the superior must be aware
of the back ground, cultures, and values of employees. The motivation
factors for a full time working mother to support her two young children
are different from the needs of a young, single, part-time employee or an
older employee who is working to supplement his or her retirement
viii. Reinforce Employee Differences: Encourage employees to embrace and
value diverse views. Create traditions and ceremonies that promote
diversity. Celebrate diversity by accentuating its positive aspects. But
also be prepared to deal with the challenges of diversity such as mistrust,
miscommunication, and lack of cohesiveness, attitudinal differences and
ix. Involve all when Designing the Program: Involve as many employees
from every level in the organization as you can when designing a
diversity initiative. This gets people talking about the program and
promotes ownership and buy-in.
x. Avoid stereotypes: Stereotypes are pre conceived notions which a person
holds for particular person. They are beliefs that all members of specific
groups share similar traits and are likely to behave in the same way.
Stereotypes create categories and then fit individuals into them. Holding
Stereotypes are harmful for several reasons. A person may be
misunderstood early in an interaction. Contributions may be limited and
specific strengths or talents may be overlooked because they do not seem
prominent in the given stereotypical category. On the other hand, poor
performance can be overlooked in an individual because they belong to a
stereotypically desirable group. By allowing stereotypes to manage people
we create natural divisions within the organization. Managers can combat
this by mixing teams, creating smaller mixed teams for subtasks,
monitoring all team members‟ progress and allowing individuals to
volunteer for roles rather than being cast into their default role as
defined by their stereotypical category.
In the current scenario in metro cities and corporate companies there are very
few problems with minority or traditional sector of employees are treated
differently. For that matter it does not reflect in the working at all making the
managerial task easier. We can say differential treatment continues in the
government sector due to political orientations and it is not the minority or
backward but majority and so called forward classes are the sufferers. This also
must be eliminated and only one class must get the support that is an
economically backward class belonging to minorities, all castes and creed.
Today the attrition rate of every corporate sector is high due to lack of proper
diversity program/policy. It is more challengeable since we are in global
village. Before we look to hire diverse candidates, we must be sure that our
organizational culture and environment support diversity, otherwise retention
will become a challenge
The purpose of the Diversity Policy is to encourage an atmosphere in which all
staff embrace the benefits of working in a diverse community and to provide a
framework for the fair and equitable treatment of all employees, job
applicants, customers, suppliers and visitors irrespective of their individual
differences or any personal characteristics.
Following are 10 ways to ensure that our diversity program is successful
1. Make it strategic: Incorporate diversity into your business strategy and
communicate the professional “business sense” and leadership
commitment to diversity; make training only a part of the overall
diversity program; revisit existing policies and programs to ensure they
align with and support your vision for diversity.
2. Make it measurable: Know your baseline: How do your current employees
feel about your environment - Is it inclusive? Do they feel they are part of
the company team? Do they feel their input is welcome? Periodic climate
surveys and ongoing exit interview surveys can provide you with valuable
information with which to measure your program's effectiveness.
3. Make it relevant to your customers/clients: Who are your current
customers/clients? Who might your new customers/clients be and what
are their interests? How might you position your organization to meet the
needs of an increasingly diverse market?
4. Make it inclusive:Make your program applicable to all employees of the
organization, rather than targeting people of color, women and/or
5. Make sure there's accountability: Assign responsibility to a core team of
leadership professionals for the development and implementation of
strategic action plans
6. Make it experiential: Roll out development programs that enable
participants to draw from real world examples and engage in interactive
exercises so that they can “try-on” new concepts and build new skills.
7. Make it unifying:Rather than polarizing or alienating, which many
diversity programs tend to be as they recreate social inequities
8. Make it standard:Role model an appreciation of differences from the top
down; the message must stem from leadership and business vision, and be
modeled by senior executives.
9. Make it collaborative: Encourage accountability and ownership of the
responsibility for fostering an inclusive environment by all managers and
staff throughout the organization.
10. Make it comprehensive: Cover the basics, like rolling out compliance
training and developing anti-harassment and anti-bias policies, but be
sure to assign critical importance to the development of intercultural
competence and the associated skills.
Policies that support Diversity at HP
No Discriminating Policy
Electronic job posting
Harassment-free work environment
Employee network groups
Open Door Policy
Education Assistance Program
Employee Assistance Program (EAP)
Management by objective (MBO)
Share in company's success
Provide development opportunities
Flexible work hours
Safe and pleasant work environment
A Case Study : Diversity at IBM
The case examines the diversity and talent management practices of the US-
based IBM, the leading IT Company in the world. IBM figured in the Fortune
magazine's list of quot;America's Most Admired Companiesquot; in the year 2004. It
was appreciated for recruiting and retaining the best talent across the
world. IBM actively encouraged recruiting people from various social and
cultural backgrounds irrespective of their age, sex or physical status. In the
same year, IBM had developed a talent marketplace to effectively manage
its workforce. The marketplace supported employees to find the most
suitable job across different organizational units within the company.
1. To provide an understanding of diversity and its significance at the
2. To provide insights on how an organization can leverage diversity to gain
In the year 2004, IBM was listed among the top 10 companies on Fortune
magazine's list of quot;America's Most Admired Companies.quot; The ranking was
based on eight variables like employee talent, innovation, use of corporate
assets, social responsibility, quality of management, financial soundness,
long-term investment value, and quality of products/services
Fortune was appreciative of IBM for recruiting and retaining the best talent
across the world. Analysts attributed IBM's success to its skilled diverse
workforce that included people from almost all the countries in the world.
Workforce diversity at IBM
Diversity at the work place in the US originated from the concept of EEO
(Equal employment Opportunity) in the 1940s. At IBM, Watson Jr. issued the
first equal opportunity policy letter in 1953. Later, it came under
government compliance under the Civil Rights Act of the US in 1964.
With the onset of „globalization' in the 1980s, organizations initiated efforts
to broaden their marketplace. In an attempt to sustain themselves amidst
the continuously increasing competition, they started doing business across
the world. This trend made it important for them to focus on diverse
cultures across borders in order to offer products and services that suited
the specific needs of different markets...
Recruiting people with disabilities
IBM had a well-structured plan in place for recruiting and training people
with disabilities. The recruitment specialists and hiring managers are
specially trained for this purpose. In each business unit, IBM had „line
champions' - the managers experienced in hiring and working with people
with disabilities - to facilitate the recruitment process. The company also
worked with various educational institutions for campus recruitment of
such candidates .IBM has a diversity website where prospective candidates
with disabilities could submit their resumes directly...
Women at workplace
IBM started recruiting women professionals well before the Equal Pay Act,
1963. A letter issued by Watson Sr. in 1935 stated, quot;Men and women will do
the same kind of work for equal pay. They will have the same treatment,
the same responsibilities, and the same opportunities for advancement.quot;
IBM's management has made efforts to find out what are the specific needs
of its women employees and provided women-friendly facilities accordingly.
This improved the productivity(of women) even while maintaining a proper
balance between work and family life.
IBM treats diversity as a part of its business strategy. It Have employees from
different social and cultural strata which helps them to understand and serve
its customers better.
A diverse workforce is a reflection of a changing world and marketplace.
Diverse work teams bring high value to organizations. Respecting individual
differences will benefit the workplace by creating a competitive edge and
increasing work productivity. Diversity management benefits associates by
creating a fair and safe environment where everyone has access to
opportunities and challenges. Management tools in a diverse workforce should
be used to educate everyone about diversity and its issues, including laws and
regulations. Most workplaces are made up of diverse cultures, so organizations
need to learn how to adapt to be successful practices.
Diversity, if positively managed, can increase creativity and innovation in
organization as well as improve decision making by providing different
perspectives on problems. When diversity is not managed properly, there is a
potential for higher turnover, more difficult-communication, and more
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Rao V.S.P; Human Resource management
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U.S. Labor Review
Section C (Roll Number 61 to 70)
1. Shruti Bhatia (Group Leader)
2. Sonal Khandelwal
3. Sukriti Harit
4. Sarthak Taneja
5. Shiva Kant Yadav
6. Shweta Shilpi Das
7. Shamita Paul
8. Satish Jangra
9. Shadab Anwar Siddiqui
10. Sunny Khatuja