Managing Diversity: Releasing Every Employee’s Potential

Chapter

McGraw-Hill/Irwin

2

Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.

© 2008The McGraw-Hill Companies, Inc. All rights reserved.

Ch. 2 Learning Objectives

1. Define diversity and review the four layers of diversity.

2. Explain the difference between affirmative action and managing diversity.

3. Explain why Alice Eagly and Linda Arlie believe that a women’s career is best viewed as traveling through a labyrinth.

4. Review the demographic trends pertaining to racial groups, educational mismatches, and an aging workforce.

2-2

Ch. 2 Learning Objectives (con’t)

5. Highlight the managerial implications of increasing diversity in the workforce.

6. Describe the positive and negative effects of diversity by using social categorization theory and information/decision-making theory.

7. Identify the barriers and challenges to managing diversity.

8. Discuss the organizational practices used to effectively manage diversity as identified by R. Roosevelt Thomas, Jr. 2-3

Understanding Diversity

Diversity: Host of individual differences that make us similar and different from each other Please stand up…..

If the statement made doesn’t pertain to you have a seat!

If a statement does describe you, stand up again!

2-4

The Four Layers of Diversity

Functional Level/ Classification Geographic Location Mgmt.

Status Marital Status Age Income Work Content/ Field Parental Status Race Union Affiliation Appearance Ethnicity Personal Habits Personality Sexual Orientation Recreational Habits Work Experience Physical Ability Religion Educational Background Work Location Seniority Division/ Dept./ Unit/ Group Source: L Gardenswartz and A Rowe, Diverse Teams at Work: Capitalizing on the Power of Diversity (New York: McGraw-Hill, 1994), p. 33 2-5

Test Your Knowledge

Sam is a 55 year-old, male Sales Manager for XYZ corporation. He likes to drive fast cars and is Native American. Which layer of diversity has not been mentioned about Sam?

A.

Personality B.

Internal C.

External D.

Organizational 2-6

Affirmative Action

Goal: Prevent

discrimination

Never required to hire unqualified people

Your Opinion

Have affirmative action programs been good for society?

• A=Yes, B=No Are affirmative action programs still necessary?

• A=Yes, B=No 2-7

Managing Diversity

Enables all people to perform up to their maximum potential.

How can managing diversity be a competitive advantage?

2-8

Increased Workforce Diversity - Women Glass Ceiling • Invisible barrier blocking women and minorities from top management positions Women CEO’s (as of 2008): • 12 of Fortune 500 • 24 of Fortune 1000 2-9

Navigating a Labyrinth Women have made great strides in organizational power and influence Labyrinth – maze, difficult to find one’s way Women’s careers have similar twists, turns and obstructions 2-10

Increased Workforce Diversity - Race Racial minorities are growing • 2007 – 998 race based charges of discrimination to EEOC 2-11

Education and Personal Income

2-12

Does the US have the skills to compete?

World’s population of college students • 30% 30 years ago – now 14% American students place in the middle to bottom of the pack in comparison to international counterparts in achievement in • Math • Science • General literacy 2-13

Increased Workforce Diversity - Age

2-14

Generational Differences

2-15

Your Experience

For school group projects, it has been easier to work with groups we could choose rather than one’s the professor chose.

• 1= Strongly Disagree • 2 = Disagree • 3 = Neutral • 4 = Agree • 5 = Strongly Agree 2-16

Managerial Implications - Gender

Provide developmental assignments to women Facilitate the labyrinth-like path to career success Women should: • Be exceptionally competent & seek out mentors • Build social capital • Assist work/life balance by delegating housework • Improve negotiating skills • Take credit for accomplishments • Create a partnership with spouse to be mutually supportive • Balance need to be assertive and communal 2-17

Managerial Implications – Race & Education

Race • Provide meaningful mentoring relationships to people of color Education-based • Encourage students to become educated in technical fields • Provide remedial skills training 2-18

Managerial Implications – Age

Provide challenging work assignments that make a difference to the firm Give the employee considerable autonomy and latitude in completing a task.

Provide equal access to training and learning opportunities when it comes to new technology.

Provide frequent recognition for skills, experience, and wisdom gained over the years.

Provide mentoring opportunities whereby older workers can pass on accumulated knowledge to younger employees.

Ensure that older workers receive sensitive, high-quality supervision Design a work environment that is both stimulating and fun.

2-19

Pros and Cons of Diversity

Social categorization theory • Similarity leads to liking and attraction Information/Decision-Making Theory • Diversity leads to better task-relevant processes and decision-making 2-20

A Process Model of Diversity

2-21

Effects of Diverse Work Environments

Gender and racial diversity in a work group fosters more interpersonal conflict which leads to lower job satisfaction, higher turnover, and lower productivity 2-22

Effects of Diverse Work Environments

Demographic faultline • Hypothetical dividing lines that may split a group into subgroups based on one or more attributes Diverse groups had positive outcomes when….

• members were open-minded, discussed and shared information, and displayed integrative behavior 2-23

Managing Diversity What can organizations do to facilitate the POSITIVE outcomes of diversity?

2-24

Challenges to Managing Diversity

What barriers exist for organizations trying to manage diversity?

2-25

Thomas’s Generic Action Options

Responses to handling diversity issues:

Option 1: Include/Exclude Option 2: Deny Option 3: Assimilate Option 4: Suppress Option 5: Isolate Option 6: Tolerate

Which ones are most effective for managing diversity?

Option 7: Build Relationships Option 8: Foster Mutual Adaptation 2-26

Chapter

2 Managing Diversity: Releasing Every Employee’s Potential Supplemental Slides

© 2008The McGraw-Hill Companies, Inc. All rights reserved.

Women Gain (Hidden) Ground in Boardroom Board membership data conceals real gains in progress

Lead Directors 2001 – 1.8% 2007 – 8.1% 80% of Fortune 500 boards have at least one woman 2007 - 76 had three women – up 34% from 2001 9% Percentage of women on crucial committees (e.g., Audit, Compensation, corporate governance Source: Dalton, D. Women Gain (Hidden) Ground in the Boardroom, Harvard Business Review, January, 2009. 2-28

Women Gain Ground in Boardroom (con’t)

What factors might contribute to this trend?

What can organization’s do to improve representation on boards and improve the influence of diverse perspectives?

What are some group dynamics that marginalize the impact of certain individuals?

2-29

The Mid-Life Crisis: An Opportunity?

People are living longer, requiring the need to think hard about one’s career in later years Mid-life crises often start with concern over physical limitations but can grow into a deeper exploration of one’s desire for personally fulfilling work Organizations can assist by • helping people plan their second careers • funding continuing education for personal development; not just improved job performance Organizations benefit by retaining talented, knowledgeable, and engaged employees who can help mentor younger generations Source: Strenger, C. & Ruttenberg, A. The Existential Necessity of Midlife Change, Business Review , February 2008.

Harvard 2-30

The Mid-Life Crisis: An Opportunity?

(con’t) Have you or anyone you know gone through a mid-life career transition? What was that experience like? How did their organization help or hinder their progress towards their second career?

How might you measure the impact or benefit of programs to improve retention and engagement of older employees?

Source: Strenger, C. & Ruttenberg, A. The Existential Necessity of Midlife Change, Business Review , February 2008.

Harvard 2-31

EEOC: Train Managers on Harassment

Court cases almost 13 years ago, provided employers an opportunity to defend themselves against harassment charges BUT still many managers don’t know what to do if accused of harassment Organizations need to: • • • Train managers on harassment laws Have policies in place to handle harassment claims Conduct proper investigations Source: Deschenaux, J. EEOC: Train Managers on Harassment, 2008 HR Magazine , May 2-32

EEOC: Train Managers on Harassment (con’t)

What types of policies or procedures exist at places you’ve worked?

What is your experience with them?

What are the obstacles in communicating this type of information in your organization? Source: Deschenaux, J. EEOC: Train Managers on Harassment, 2008 HR Magazine , May 2-33

Illegal Immigration

22,186,393 No. of illegal immigrants in US 4,717,100 No. of children of illegal's in public schools Impact on Business?

11,079,244 Skilled jobs taken by illegal immigrants 394,637 No. of illegal immigrants incarcerated

Source: http://immigrationcounters.com

/; extracted 6/1/2009 2-34

Impact of Restrictions on Immigration?

Bill Gates to Congress • • Ensure highly trained immigrants have ability to work in US Will hinder the US’s ability to compete globally if we limit our ability to innovate • Need to improve federal funding for science and mathematics education • Argues that at Microsoft every highly trained immigrant created other jobs at Microsoft Source: Boles, C. Last Call? Gates Pushes Globalism in Remarks, Wall Street Journal, p. B3, 3/13/2008 2-35

Generations in the Workplace

We now have 4 generations represented in the workforce • Matures 1901-1943 • Baby Boomers 1943-1960 • Gen X 1960-1980 • Gen Y 1980-2000 2-36

The Millenials are Coming

“Generation Y, at nearly 80 million strong, outnumbers the 78.5 million baby boomers and 48 million Generation X-ers, so it’s to an employer’s benefit, to learn how to deal with them.” (Gurchiek, 2008) Morley Safer reports on how the Millenials, also known as Generation Y, are impacting the workforce today Watch the 60 Minutes video, The Millenials are Coming” Source: Gurchiek, K. (2008) Survey: Generational Conflicts Aggravate Talent Shortage, SHRM HR News.

2-37

Multi-Generational Workforce

• • Company’s who maximize cross generational communication improve knowledge transfer yielding Better competitive position Increased learning and development of employees Source: Kovary, G. (2008). How to Get, Keep, and Grow all Four Generations. 60 th IL. Annual SHRM Conference, Chicago, 2-38

Benefits of Hiring Older Workers

Punctuality is a non issue Need for motivation is less An end to workplace politics Good customer service skills Less turnover Hiring Older Workers Good role models 2-39 Source: Work is the New Retirement, Training , March/April 2009, vol. 46.

Managing Diverse Schedules

% of companies allowing flexible schedules at least 20% of time

Small 80% Medium 60%

Source: Best Small and Medium Companies to Work for in America, HR Magazine, July 2008 2-40

Managing Diverse Schedules (con’t)

What types of flexible work programs have your experienced at work?

What were their pros and cons?

What challenges do organizations face when attempting to accommodate varying schedules?

What are the benefits?

2-41

Leaders in Diversity: Deloitte

Business case for retaining and promoting women: • Growing segment of labor market • Women have lots of choices • Clients expect composition of consultants to mirror their own Assessed cultural barriers for women Source: Women Leaders; Symposium, 22nd Annual Conference of the Society of Industrial and Organizational Psychologists; April, 2007, New York, NY 2-42

Leaders in Diversity: Deloitte

Actions taken to retain and promote women: Allow choice with regard to: • Pace of career progression • Workload • Location and schedule of work Allow for up to 5 year leave of absence but opportunities to remain connected (company-wide 2006) • Maintain professional certifications (e.g., CPA) • • Assigned a mentor and career coach Attend Deloitte functions • Work as independent contractor Source: Women Leaders; Symposium, 22nd Annual Conference of the Society of Industrial and Organizational Psychologists; April, 2007, New York, NY 2-43

Leaders in Diversity: Deloitte

Results: • • • • 21% women partner / principal / directors Deloitte leads Big 4 46% women employees Consistently recognized on Working Mother’s ‘100 Best Companies for Working Mother’s’ honor roll Over 400 Professional development, networking and mentoring activities Source: Women Leaders; Symposium, 22nd Annual Conference of the Society of Industrial and Organizational Psychologists; April, 2007, New York, NY 2-44

Video Cases

Starbucks Pike Place Fish Market 2-45

Management in the Movies – The Inside Man – “Bugged” In this scene, Det. Frazier is talking with Sergeant Collins (Victor Colicchio) about a previous experience.

What apparent biases does Sergeant Collins have?

How does Det. Frazier deal with Sergeant Collins apparent stereotypes?

How should an employee deal with another employee’s bias?

2-46

Diversity Challenges

Bailey’s Health Center, Falls Church • Repeatedly, patients would not return for their follow up visits or call and cancel • Most were immigrants from Central America • Why? Hospital in Michigan • Large % of Vietnamese women were dehydrated after giving birth?

• Why?

Source: Reshaping Bedside Manner in a Diverse World Washington Post , S. Levine, Feb. 6, 2006, 2-47

Strategic Value of Diversity

Gallup survey conducted in late 2005 found: 15% of US workers experienced discrimination in the workplace over the past year Positive perceptions of the company’s diversity efforts was related to: • Satisfaction with the company • Likelihood of staying with the company • Probability of recommending the company to others Source: Employee Discrimination in the Workplace, The Gallup Poll, 11/10/05 2-48

Office Closet Empties Out

Poll conducted in April 2006 found: 74% of gay and lesbian employees say they are completely out at work up from 47% in 2003 15% say they have told selected co-workers but not their bosses Of Fortune 500, 246 offer domestic-partnership benefits today up from 28 in 1996 Source: BusinessWeek, May 1, 2006; Jessi Hempel, The Office Closet Empties Out 2-49

Leaders in Diversity

Pepsi’s CEO & direct reports are each assigned different employee group (e.g., GLT, Asian, women of color) Responsible for: • Understanding the issues these employees face • Facilitating their growth and development Hold themselves

accountable

Source: Diversity Finds Its Place, R. Rodriquez, August 2006, HR Magazine 2-50

Leveling the Field

Coaching: providing perspective and assistance on career development • Typically not performed by manager • Scope extends current job 38.7% said minorities receive coaching at the same rate as their representation in the workforce 11.7 %said minorities receive coaching at lower rate than the typical worker Source: HR Magazine, July 2006, Minority Employees Skipped for Coaching, Kathy Gurchiek 2-51

Land Executives, Not Lawsuits

35.5% of all charges filed with EEOC cite race as basis of discrimination (2005) EEOC is focused on reducing “systemic discrimination” • Occurs when an organization’s policies, practice, and/or culture fail to address discriminatory actions 2-52 Source: HR Magazine, October 2006, Land Executives, Not Lawsuits, Jonathan A. Segal, Esq.

Younger Women at the Top

Women who make it into executive ranks get there faster than men 75% of Fortune 1,000 women executive officers are 50 or younger Percentage of male and female Fortune 1,000 executive officers in each age category

35 30 25 20 15 10 5 0 28-40 41-45 46-50 Females Males

2-53

Diversity Training

What is diversity training?

Why do companies invest in it?

What types of diversity training are most effective?

• Awareness or Skills/Behavioral?

2-54

Denny’s: A Turnaround

Background

1993 – Class action case against Denny’s for racial discrimination Ended in a settlement that included: • • Mandatory diversity training for all employees Random testing of restaurants for treatment of customers 2-55

Denny’s: A Turnaround

How did Denny’s respond?

Changed leadership (CEO), added Chief Diversity Officer Implemented skills-based diversity training Held managers accountable for diverse staff and fair treatment of customers 2-56

Denny’s: A Turnaround

What was the outcome?

Significant increase in minority-owned franchises Management team is 31% minority, up from 21% in 1993 Board is 33% minority Denny’s placed first for two years on Fortune’s best place to work for minorities 2-57

Diversity and Competitive Advantage

How does your organization leverage diversity for a competitive advantage?

My organization doesn't actively leverage diversity Increasing innovation through diverse employees Meeting needs of diverse customers Leadership development for all employees 0% 30% 34% 39% 40% 10% 20% 30%

% Respondents out of 310

40% 1-58 2-58

Business Case for Workplace Diversity Direct Link: Expanding customer base with diverse workforce • DuPont – a drug they produce was low in the Hispanic market • • Hispanic manager noticed the label was only in English; they had it translated and sales improved Significant increase in minority-owned franchises 2-59

Business Case for Workplace Diversity Indirect Link: Retaining Employees • • • Nortel lost revenue due to turnover Turnover cost - $55,000 average cost per employee “Attracting and keeping talent – a key aspect of workplace diversity – has a significant impact on the bottom line.” Taken from Workplace Diversity: Leveraging the Power of Difference for Competitive Advantage 2005 SHRM Research Quarterly 2-60

Conclusion

Questions for discussion 2-61