Diversity Management The Challenges And Opportunities

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Managing Diversity

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Diversity Management The Challenges And Opportunities

  1. 1. 1
  2. 2. ACKNOWLEDGEMENT The knowledge of our theoretical studies is absolutely incomplete without its proper implementation and application in today’s diversified corporate world. 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. 2
  3. 3. CONTENTS 1. Diversity  Introduction  Managing Diversity  Why Manage Diversity?  Indian and USA Context 2. Managing Workforce Diversity as  A Challenge  An Asset 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 7. Conclusion Bibliography 3
  4. 4. Diversity Management The Challenges & Opportunities Introduction 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 significantly overweight 4
  5. 5. 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. 5
  6. 6. Managing Diversity 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. 6
  7. 7. 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 increasing.  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 health care.  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 7
  8. 8. 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 the world. 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 sabbatical. IN USA • 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) are employed. 8
  9. 9. 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 the norm 9
  10. 10. 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. 10
  11. 11. 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. 11
  12. 12. 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. 12
  13. 13. Worlds Best Companies To Work For ( Fortune 500 Magazine) Women Has Non Discrimination Policy that Minorities Company Name Rank (Percentage) to Men includes Sexual Orientation? Ratio 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 70 60 50 40 30 Minorities Women to Men Ratio 20 10 0 Google Quicken Wegmans Edward Genentech Cisco Starbucks Loans Food Jones Systems Markets 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 13
  14. 14. 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. 14
  15. 15. 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 income. 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 stress. 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. 15
  16. 16. 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. 16
  17. 17. Diversity Policy 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 17
  18. 18. 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 disabled employees. 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. 18
  19. 19. 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)  Open communications  Management by objective (MBO)  Share in company's success  Provide development opportunities  Flexible work hours  Safe and pleasant work environment 19
  20. 20. 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. Issues 1. To provide an understanding of diversity and its significance at the work place. 2. To provide insights on how an organization can leverage diversity to gain competitive advantage. Introduction 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 20
  21. 21. 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... 21
  22. 22. 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. 22
  23. 23. Conclusion 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 interpersonal conflicts. 23
  24. 24. BIBLIOGRAPHY HRM Review, The Icfai University Press, Managing Diversity, Nov(2007) Luthans, Fred ; Organisational Behavior www.mindtools.com Aswathappa K & Dash Sadhna; International Human Resource Management Robbins, Stephen; Organisational Behavior Rao V.S.P; Human Resource management Mejia L, Balkin D.V and Cardy L; Managing Human Resources www.Financialexpress.com U.S. Labor Review 24
  25. 25. Submitted By 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 25

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