Workforce diversity can have both positive and negative impacts on organizational effectiveness. Positively, diverse workgroups may be more innovative and make better strategic decisions. However, diversity can also increase conflict, reduce cohesion, and increase employee turnover. The document reviews different perspectives on diversity and potential conflicts caused by diversity in workgroups. It also discusses how diverse teams differ from homogeneous teams. The methodology section describes how the author collected data from a bank in Nigeria to analyze the relationships between cultural diversity, employee productivity, and performance bonuses under different workgroup contexts. The findings showed some diversity factors like gender negatively impacted productivity while others like age positively impacted bonuses. The recommendation is that companies are unlikely to see direct benefits of diversity and must effectively manage

1. THE IMPACT OF WORKFORCE
DIVERSITY ON
ORGANIZATIONAL EFFECTIVENESS

2. INTRODUCTION
• the quality or state of having many different forms, types, ideas
OR
• the state of having people who are of different races or who have different cultures in a group or
organization
• Globalization web increase demographic diversity in the workforce
• Increased competition demand from workgroups to generate innovations, flexibility, and quick
decision making for sustained business success
• Demographic changes and laws aimed at promoting fairness in recruitment practices are urging
diversity within work teams

3. INTRODUCTION
• Diversity as multi-ethnic (previous studies)
• work place (workforce) diversity is found to have a contrasting dual implication on
organizational effectiveness.
• Milliken and Martins (1996) opines that
'diversity appears to be a double-edged sword, increasing the opportunity for
creativity as well as the likelihood that group members will be dissatisfied and fail to
identify with the group’

4. INTRODUCTION
One side
Other side
• Greater innovation
• increase conflict
• improved strategic decision making
• reduce social cohesion
and
• organizational performance
and
• increase employee turnover
business organizations are contending with the challenges of effectively managing a diverse workforce

5. RESEARCH HYPOTHESES
(1) Workgroups that are demographically diverse are likely to be less effective in
workgroup contexts that emphasize competition oriented cultures than in contexts that
do not emphasize competition-oriented cultures.
(2) Workgroups that are demographically diverse are likely to be more effective in
workgroup contexts that pursue growth oriented business strategies than in contexts
that do not pursue growth-oriented business strategies.

6. LITERATURE REVIEW
• Workplace diversity is a complex, controversial, and political phenomena
(Janssens & Steyaert, 2003)
Perspective about Diversity
Nkomo,1995
Broad perspective
Narrow Perspective

7. NARROW PERSPECTIVE
• Diversity should be restricted to specific cultural categories such as race and gender
• Diversity based on race, gender and ethnicity differ from the diversity based on
organizational function, abilities or cognitive orientation
So,
• Narrow concept is deficient as cultural diversity dimension interacts with other
dimension of diversity

8. BROAD PERSPECTIVE
• Encompasses all the possible ways people can differ
Race, gender, age
and other
demographic
categories
Values, abilities, orga
nizational
function, tenure, pers
onality

9. demographic
characteristic
CLUSTER CLASSIFICATION
McGath, Berdahl & Arrow (1995)
personal,
cognitive and
attitudinal
styles
values,views
and attitudes
workplace diversity
Status in the
organization
task-related
knowledge,
skills and
capacities

10. social
categorization (turner)
similarity/attraction
theory
• categorization of
people based on
salient attributes like
gender, ethnicity or
age
• result in stereotyping
on the basis of these
differences
• Asserts that similarity on
salient and non-salient
attributes like race or
values increases
interpersonal
attraction and
attachment
information and
decision-making
theory
• examines the impact
of distribution of
information and
expertise on workteams

11. CONFLICTS BY DIVERSITY
• Disrupt group dynamics
• Out-group members evoke more disliking, distrust, and competition than in group
members
• the perception of a salient quality (e.g., race) more or less inevitably triggers a
corresponding categorization
• Biases seem to unfold automatically
• Linguistic or paralinguistic differences may foster miscommunication and
misunderstanding
• Problematic formation of sub-group (“us” versus “them”)

12. DIVERSE TEAM VS. HOMOGENOUS TEAMS
• Relative to homogeneous
• Dissimilar belief structures
groups, members of diverse work-
i.e., priorities, assumptions
groups display less attachment to each
about future events, and
other
understandings of alternatives
• Show less commitment to their
respective organizations
• Communicate less with one
another, miss work more often
• Experience more conflict
based on previous training and
Experiences
• divergent preferences and
interpretations of tasks

13. THE CONTROVERSY
Whether or not there is a positive connection
Between
WORKPLACE DIVERSITY AND ORGANIZATIONAL
PERFORMANCE
Still persists

14. METHODOLOGY
• Gleaned both from primary and secondary data sources
• Random sample of work teams within the bank’s 62 branch network in Lagos Island
and Mainland, using questionnaires
• Sample size surveyed is 120 work-teams
Dependent
variable
• Response rate to the survey was 40%
Cultural Diversity
independent
variable
Performance Measure

15. FINDINGS
• Gender is negatively related to both employee productivity and performance bonus,
but is significantly related to employee productivity
• Age is positively related to employee productivity, and it is significantly positive in
its correlation to performance bonus
• Ethnicity is insignificantly negative in its relationship to both employee productivity
and performance bonus
• Tenure is insignificantly positive in its correlation to employee productivity, and is
not related to Bonus
• In terms of the moderating effects of workgroup contexts (competition oriented
workgroup culture, and growth-oriented strategy) of diversity factors, the research
results indicate that context effect is insignificant.

16. RECOMMENDATION
&
CONCLUSION
• Diversity sometimes is associated with effectiveness, other times with negative
outcomes, and often it has no effects at all.
• Company executives are not likely to see a direct positive relationship between
workforce heterogeneity and organizational effectiveness.
• The effects are likely to be determined by the strategies a firm pursues and by how
organization leaders and participants respond to and manage diversity
The impact of workforce heterogeneity on organizational effectiveness when
moderated by workgroup contexts is minimal

17. Thank you!