Preview Extract
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. 3. Discuss the primary impact of diversity on organizations. 4. Describe individual and organizational strategies and approaches to coping with diversity and discuss the multicultural organization. 5. Discuss the basic issues in managing knowledge workers. 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. Rick, a construction engineer who broke his back in an auto accident, is a paraplegic suffering from vocal-cord damage. However, he holds a productive job, managing complaints for building-construction projects. David, whose job requires speech-recognition software and a trackball mouse to compensate for impaired manual dexterity and verbal communication, 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 as walkers and wheelchairs—much of which makes accommodating disabled workers less expensive than one might think. Both Rick and David suffer from permanent disabilities, but experts estimate that as many as 20 percent of Americans will experience some form of physical disability at some point in their careers or lives. Introduction This chapter is primarily about workforce diversity in organizations. Other new challenges facing organizations today, and some of these will be addressed here as well. One of these is managing knowledge in organizations, and discuss issues involving managing knowledge workers. Some challenges are involved with managing human resources while trying to address social concerns, including some discussion of human resource management and social 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 one or more important dimensions. Diversity should be conceptualized as a continuum and thought of in terms of degree or level of diversity along relevant dimensions. 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 demographics in the labor force is one such factor. A related factor that has been contributed to diversity has been the increased awareness by organizations that they can improve the overall quality of their workforce by hiring and promoting the most talented people available regardless of gender, race, or any other characteristics. Another reason for the increase in diversity has been legislation and legal actions that have forced organizations to hire more broadly. 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 within each country become more diverse. Closely related to this pattern is a recent increase in immigration into the United States. As illustrated in Figure 8.1, for example, immigration declined steadily from 1900 until 1930 but has been increasing since that time, except for a slight dip in the last decade. 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 appreciating differences among people at work and attempting to provide accommodation for those differences to the extent that is feasible and possible. Similarities among People at Work Regardless of how different people appear to be, almost all employees share some fundamental similarities. For example, most people work to satisfy some set of needs that almost always have financial bases. Most people have a desire to be treated with respect and dignity by their employer. And most people have a capacity for being reasonable and understanding when confronted with reasonable behavior by others. 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 long as people are treated fairly. Religious differences may cause an employer to adapt holidays, work hours, cafeteria menus, and so on, to accommodate different values and preferences. Men and women are also fundamentally different in various ways that cannot be ignored. On average, men have greater muscle mass than do women and can lift heavier weight. And women have the biological capacity to bear children. Consequently, men and women may need fundamentally different treatment in work organizations. 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 states that an organization cannot discriminate against a person with disability as long as he or she can perform the essential functions of the job with or without a reasonable accommodation. II. Dimensions of Diversity A. Age Distributions 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 medical care: As a result, people can remain productive and active for longer periods of time. Combined with higher legal limits for mandatory retirement, more and more people are working beyond the age at which they might have retired a few years ago. Older workers tend to have more experience, may be more stable, and can make greater contributions to productivity. As shown in Figure 8.2, accident rates are substantially higher for older workers than younger workers up to age 54. 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. These trends aside, a significant gender-related problem that many organizations face today is so-called glass ceiling. The term describes a real and subtle but nonphysical barrier that keeps many females from advancing to top management positions in many organizations. The average pay of females in organizations is lower than that of males. Although the pay gap is gradually shrinking, inequalities are still present. One reason is that some male managers are still reluctant to promote female managers. Another is that many talented women choose to leave their jobs in larger organizations and start their own businesses. And some women choose to suspend or slow their career progression to have children. 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 (10.9 percent in 1990, 11.8 percent in 2000, and 12.7 percent in 2010), while Asian Americans and others represent 6.1 percent of the U.S. workforce in 2010, up from 4.7 percent in 2000 and 3.7 percent in 1990. As with women, members of the African American, Hispanic, and Asian American groups are generally underrepresented in the executive ranks of most organizations today, as well as in several different occupational groups. Their pay is also lower than might be expected. Table 8.1 shows trends in different occupations for African Americans and Hispanics. 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 “origin”; that is, if the disability is perceived as being avoidable (for example, someone being injured while driving drunk), coworkers are likely to react more negatively to a disability than when the problem was unavoidable (for example, a person who was born blind). A second dimension is the aesthetic aspect of the disability, with disabilities that are more disfiguring being perceived more negatively. A third and critical dimension refers to the nature of the disability itself. Disabilities related to stress or to back injuries are not as physically obvious and so, when individuals with these disabilities request and are granted an accommodation, resentment by coworkers is more likely. 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. Religious diversity is, of course, a more universal concern and, in recent years, one religious group has been the target of considerable discrimination in many parts of the world, and so religion presents a special challenge for diversity. In addition to sexual orientation and religion, other dimensions of diversity are also relevant. For instance, single parents, people with special dietary preferences (e.g., vegetarians), and people with different political ideologies and viewpoints also represent meaningful dimensions of diversity in today’s organizations. Another dimension of diversity that is seldom discussed is Native American Standing.
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. Since 1871, American Indians have been considered wards of the U.S. government and, although we are now more sensitive to the history of how the U.S. government treated Native Americans, images of “cowboys and Indians” are still part of society—as reflected in recent debates over using names and images associated with their culture as names, mascots, and logos for sports teams. As a result, diversity initiatives aimed at Native Americans face unique challenges. One grows out of the tension between assimilation and the desire to maintain a strong Native American and tribal identify. Another challenge stems from the fact that for many Native Americans there is no clear definition of religion—religious beliefs are part of their way of life and cannot be separated. 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 environment. Another way in which organizations affect social change is through the images they use to promote themselves and their products. 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. 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. The resource acquisition argument for diversity suggests that organizations that manage diversity effectively will become known among women and minorities as good places to work. The marketing argument suggests that organizations with diverse workforces will be able to understand different market segments better than will less diverse organizations. The creativity argument for diversity suggests that organizations with diverse workforces will generally be more creative and innovative than will less diverse organizations. Related to the creativity argument is the problem-solving argument. Diversity carries with it an increased pool of information. But in a more diverse organization, the unique information is larger. The systems flexibility argument for diversity suggests that organizations must become more flexible as a way of managing a diverse workforce. 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. Another source of conflict stemming from diversity is through misunderstood, misinterpreted, or inappropriate interactions between or among people or different groups. Some evidence suggests that conflict may be especially pronounced between older and younger women in the workplace. Older women may be more likely to have sacrificed family for career and to have overcome higher obstacles to get ahead. Younger women, on the other hand, may find that organizational accommodations make it relatively easy for them to balance multiple roles and also may have a less-pronounced sense of having to fight to get ahead. Conflict can also result from other elements of diversity. It can arise as a result of fear, distrust, or individual prejudice. Members of the dominant group may worry that newcomers from other groups pose a personal threat to their position in the organization. D. The Bottom Line on Diversity 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 nonlinear relationship between diversity and such outcomes as conflict and firm performance. However, when a firm becomes truly diverse, to such an extent that there really are no identifiable “minority groups” within the workforce, the positive results of diversity can be truly maximized while most of the problems disappear. 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. Related to understanding is empathy. People in an organization should try to understand the perspective of others. A third related individual approach to dealing with diversity is tolerance. A final individual approach to dealing with diversity is communication. Problems often become magnified over diversity issues that relate to diversity. For communication to work, it must be two-way. 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 responds to problems that arise from diversity. If the organization’s mission statement articulates a clear and direct commitment to diversity, everyone who reads that mission statement will grow to understand and accept the importance of diversity, at least to that particular organization. As a result of some of these issues, people have argued that increased diversity should not be a major goal of most organizations. These individuals are not necessarily arguing that diversity is not worth achieving but simply that so many problems are associated with increased diversity that it should not be a major focus of organizations. 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 procedures based on flexibility rather than rigidity. Benefits packages, for example, can be structured to accommodate individual situations. Flexible working hours can help an organization accommodate diversity. Differences in family arrangements, religious holidays, cultural events, and so forth, may each require that employees have some degree of flexibility in their work schedules. An organization that truly values diversity will make every reasonable attempt to accommodate such a need. Even if diversity exists within the broader organizational context, an organization that does not reflect diversity in groups like committees and teams implies that diversity is not a fully ingrained element of its culture. Increasing board diversity would be a useful step in making any company more inclusive. 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 to enable members of an organization to function in a diverse workplace. This training can take various forms. Men and women can be taught to work together more effectively and can gain insights into how their own behaviors affect and are interpreted by others. Similarly, white and black managers may need training to understand each other better. Some organizations go so far as to provide language training for their employees as a vehicle for managing diversity. 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 forms throughout every part of the organization. With top management support, and reinforced with a clear and consistent set of organizational policies and practices, diversity can become a basic and fundamental part of an organization. C. The Multicultural Organization 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 an organization works to understand every other group better. The multicultural organization achieves full structural integration. Full structural integration suggests that the diversity within the organization is a complete and accurate reflection of the organization’s external market. The multicultural organization achieves full integration of its informal networks. This characteristic suggests that no barriers to entry and participation in any organizational activity exist. The multicultural organization is characterized by an absence of prejudice and discrimination. This will take place not to comply with regulation but because of the lack of bias. In the multicultural organization, no gap in organizational identification is based on a cultural identity group. The multicultural organization experiences low levels of intergroup conflict. 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 change. Second, whereas the individual learning process is cognitive, organizational learning depends more on social processes and the sharing of information. There is a strong belief that organizations that can manage this change—that is, organizations that can acquire information and adapt—can gain significant competitive advantage over their competitors. Furthermore, a firm can gain important new knowledge as a result of a merger or acquisition. 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 exists for a merger, a change caused by legislation, or any other event from which someone might have learned a lesson. These physical records then serve as the organizational memory. In many cases, however, such information is not formally recorded. 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 technology firms and are usually experts in some abstract knowledge base. They often believe that they have the right to work autonomously, and they identify more strongly with their profession than they do with any organization. But these employees require extensive and specialized training, and not everyone is willing to make the human capital investments necessary to move into these jobs. Compensation and career-development policies for knowledge workers must also be specially tailored. 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. Of course, the growing demand for these workers also results in organizations going to rather extreme measures to attract them in the first place. The market for knowledge workers is not as hot as it once was, and these bidding wars are a thing of the past. 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 that the needs of the organization can be met while addressing the needs of employees or of a society as a whole, and there is also an increasing concern with social issues in general. These key social issues are shown in Figure 8.6. A. Prison Labor Many do not spend a lot of time thinking about what prison inmates do with their time, but in most cases they work at jobs inside the prisons. This is a source of concern for the U.S. labor movement, but it is increasingly a source of concern for human resource managers as well. Many of these inmates work at paid jobs, but they earn somewhat less than workers on the outside. First, the number of prisoners involved has been changing. Second, the laws regulating where and how the goods produced by inmate labor can be sold have been changing, thus making it easier to sell products produced by inmates on the open market. The fact that goods produced at such a low cost can compete openly with goods produced by workers who are paid a minimum wage is potentially a serious threat to the jobs of low-paid, unskilled workers in the general population. In fact, some critics argue that prison labor contributes little to the gross domestic product but substantially affects the employment opportunities and wages of high school dropouts in this country. B. A Living Wage There are proponents in the United States who suggest that one should work instead toward paying employees a “living wage”—that is enough to allow a family to live above poverty level. In fact, this is what several states have done. The challenge, then, is how one should determine what someone is paid. The traditional human resource management approach would be either to conduct some type of job evaluation or do a survey to determine the “going rate” in a given market. The living wage movement would suggest that this is not adequate and that organizations owe their employees the ability to live a reasonable life. C. Immigration Congress had been debating how to deal with the large number of illegal immigrants in the United States, and many people were angry. This was also an important issue for HR managers because much of this work touches on issues that are important for immigrants, both legal and illegal. The concerns during 2006 were specifically with illegal immigrants. These are people who have entered the country illegally but who are living (and often working) in this country. These workers are typically willing to accept lower wages, and they are usually in no position to complain about their working conditions, which makes them perfect targets for anyone who wishes to exploit them. One problem is that U.S. citizens (or legal immigrants) who need to work to support their family will either not find jobs or will be forced to work for lower wages because an employer can always go to illegal immigrants if necessary, even though these illegal immigrants cannot really support their families on the wages they earn. D. Social Responsibility and Social Entrepreneurship Corporate social responsibility (CSR) is one label that has been frequently used to describe a dedication to build organizations that are accountable, responsible, transparent, and ecologically sustainable. Today, there is recognition that one must integrate environmental concerns with every aspect of a firm’s strategic management. The ongoing challenge is balancing these concerns for the environment with the responsibility to other stakeholders to make a profit, but recent years have seen much more emphasis on being “green”—that is reducing carbon footprints and finding ways to actually help the environment while still making a profit. Finally, one should note the concept of social entrepreneurship. Many scholars and writers use this term differently, but it generally refers to applying business and entrepreneurial skills and tools to deal with social problems. Instructor Manual for Human Resources Angelo Denisi, Ricky Griffin 9781285867571
