Chapter © 2008The McGraw-Hill Companies, Inc. All rights reserved. Managing Diversity: Releasing Every Employee’s Potential 2 McGraw-Hill/IrwinCopyright.

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Managing Diversity:

Releasing Every Employee’s

Potential

2

McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved.

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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. Describe the glass ceiling and the four top strategies used by women to break the glass ceiling

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

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Ch. 2 Learning Objectives (con’t)

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

6. Explain 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.

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Understanding DiversityDiversity: Host of individual differences that make us similar and different from each otherPlease stand up…..If the statement made doesn’t pertain to you have a seat!If a statement does describe you, stand up again!

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The Four Layers of Diversity

Personality

Functional Level/ Classification

Geographic Location

Age

WorkLocation Seniority

Division/Dept./Unit/

Group

WorkContent/

Field

UnionAffiliation

Mgmt.Status

MaritalStatus

ParentalStatus

Appearance

EducationalBackground

WorkExperience

Race

Income

PersonalHabits

Religion

RecreationalHabits

Ethnicity

PhysicalAbility

SexualOrientation

Source: L Gardenswartz and A Rowe, Diverse Teams at Work: Capitalizing on the Power of Diversity (New York: McGraw-Hill, 1994), p. 33

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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.PersonalityB.InternalC.ExternalD.Organizational

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Affirmative Action

Goal: Prevent discriminationNever required to hire unqualified people

Your OpinionHave affirmative action programs been good for society?

•A=Yes, B=No

Are affirmative action programs still necessary?

•A=Yes, B=No

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Managing Diversity

Enables all people to perform up to their maximum potential.How can managing diversity be a competitive advantage?

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Increased Workforce Diversity - Women

Glass Ceiling• Invisible barrier blocking women

and minorities from top management positions

Women CEO’s (as of 2/2007):•10 of Fortune 500 •23 of Fortune 1000

What helps break the ceiling?

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Increased Workforce Diversity - Race

Racial minorities are growing•2006 – 1,016

race-based charges of discrimination to EEOC

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Education and Personal Income

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Increased Workforce Diversity - Age

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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

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Aging Workforce: Challenges

Career Plateauing: when the probability of being promoted is very smallElder care – helping older workers care for aging parentsKeeping older workers engaged and current

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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

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A Process Model of Diversity

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Challenges to Managing Diversity

What barriers exist for organizations trying to manage diversity?

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Thomas’s Generic Action Options

Responses to handling diversity issues:Option 1: Include/ExcludeOption 2: DenyOption 3: AssimilateOption 4: SuppressOption 5: IsolateOption 6: TolerateOption 7: Build RelationshipsOption 8: Foster Mutual Adaptation

Which ones are most effective for managing diversity?

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Supplemental Slides

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Video Cases

StarbucksPike Place Fish Market

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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?

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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, S. Levine, Feb. 6, 2006, Washington Post

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Strategic Value of Diversity

Gallup survey conducted in late 2005 found:15% of US workers experienced discrimination in the workplace over the past yearPositive 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

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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 200315% say they have told selected co-workers but not their bossesOf 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

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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

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Leveling the FieldCoaching: providing perspective and assistance on career development•Typically not performed by manager•Scope extends current job38.7% said minorities receive coaching at the same rate as their representation in the workforce11.7 %said minorities receive coaching at lower rate than the typical workerSource: HR Magazine, July 2006, Minority Employees Skipped for Coaching, Kathy Gurchiek

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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

Source: HR Magazine, October 2006, Land Executives, Not Lawsuits, Jonathan A. Segal, Esq.

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Younger Women at the Top

Women who make it into executive ranks get there faster than men75% 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

0

5

10

15

20

25

30

35

28-40 41-45 46-50Females

Males

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Diversity Training

What is diversity training?Why do companies invest in it?What types of diversity training are most effective?•Awareness or Skills/Behavioral?

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Denny’s: A Turnaround

Background1993 – Class action case against Denny’s for racial discriminationEnded in a settlement that included:• Mandatory diversity training for all

employees• Random testing of restaurants for

treatment of customers

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Denny’s: A Turnaround

How did Denny’s respond?Changed leadership (CEO), added Chief Diversity OfficerImplemented skills-based diversity trainingHeld managers accountable for diverse staff and fair treatment of customers

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Denny’s: A Turnaround

What was the outcome?Significant increase in minority-owned franchisesManagement team is 31% minority, up from 21% in 1993Board is 33% minorityDenny’s placed first for two years on Fortune’s best place to work for minorities

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Diversity and Competitive Advantage

40%

39%

34%

30%

0% 10% 20% 30% 40%

% Respondents out of 310

Leadership development for allemployees

Meeting needs of diverse customers

Increasing innovation through diverseemployees

My organization doesn't activelyleverage diversity

How does your organization leverage diversity for a competitive advantage?

1-33

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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

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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

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Conclusion

Questions for discussion