Managing workplace diversity: performance of minority employees.
Rawat, Preeti S. ; Basergekar, Prema
Organizations will not reap benefits from diversity management till
there is a supportive environment which is inclusive in orientation
towards the minority workforce. The present study was carried out in
three organizations in India. The independent variable was a supportive
work environment. The dependent variable was performance management
score of diverse categories of employees. The term minority workforce
refers to women employees, employees belonging to religions other than
Hinduism and those preferring not to disclose their sexual orientation.
A comparison between those having care taking responsibilities at home
and those having no such responsibilities back home was undertaken. The
results showed that supportive work environment led to high performance
scores.
Introduction
Globalization is fast changing the demographic mix of workforce in
organizations across countries. Therefore the concept of diversity and
its management become imperative. Diversity management (DM) is planning
and implementing organizational systems and practices to manage people
so that the potential advantages of diversity are maximized while its
potential disadvantages are minimized (Cox, 1993). The term originated
in North America in the late 1980's and since then it has seeped
into countries across the world (Hays-Thomas, 2004; Kaiser & Prange,
2004; Nyambegera, 2002; Ozbilgin & Tatli, 2008; Palmer, 2003;
Pattnaik & Tripathy, 2014) DM started as an initiative to provide
equal employment opportunities and today it has translated into an
industry wide policy on diversity. It refers to a mixture of people with
different group identities within the same social system (Fluery, 1999).
Diversity includes factors such as race, gender, age, color, physical
disability, and ethnicity (Kundu & Turan, 1999).
Paradigms of Diversity
Organizations look at diversity from different paradigms, which in
turn shape their philosophy on diversity. The moral paradigm believes
that discrimination is wrong, illegal and immoral (for example
discrimination on grounds of race, caste and religion). The social need
paradigm believes that our solutions to diversity for a country or
region must be different and unique from the rest (for example the needs
of 'differently-abled' in an organization or how to bring the
economically and educationally backward population into the national
main stream). The competitive advantage paradigm believes that there is
a competitive rationale behind the belief in diversity and adopting
inclusion as a policy (1). For example, Mckinsey (2014) reported that
companies in the top quartile for gender or racial and ethnic diversity
are more likely to have financial returns above their national industry
medians. Companies in the bottom quartile in these dimensions are
statistically less likely to achieve above-average returns. Diversity
thus is a competitive differentiator. (2)
Types of Organization & Diversity Policies
Cox (1994; 2001) divides organizations in to three types: the
monolithic organization, the plural organization, and the multicultural
organization and presents a diversity management paradigm for each type.
They are as follows:
The monolithic organization is demographically and culturally
homogeneous. For example, most Chinese companies are monolithic from a
cultural and ethnic perspective. (Powell & Graves, 2003). A
monolithic organization in North America or Europe will have a majority
of white men and relatively few women and members of ethnic and racial
minorities (Cox, 1994; 2001).Similarly in India almost all organizations
will have primarily Indians as employees. Such organizations will have a
culture that will perpetuate the homogeneity of its workforce through
its hiring and promotion practices.
The plural organization: has a heterogeneous workforce, relative to
the monolithic organization, and typically makes efforts to conform to
laws and public policies that demand and expect workplace equality. It
will take active steps to prevent discrimination in the workplace such
as audits that assures equality of compensation systems and manager
trainings on equal opportunity issues and sexual harassment. Although
women and members of minority groups are represented in larger numbers,
they make up only a small percent of the management, particularly top
management, and are still expected to assimilate into the majority
culture. Examples of plural organizations include companies in which
members of minority groups constitute a sizable proportion of the
workforce but only a small percent of the managerial positions. Most
Indian organizations are attempting to become plural through policies of
reservation, second careers for women and work life balance.
The multicultural organization is characterized by a culture that
fosters and values cultural differences--truly and equally incorporates
all members of the organization via pluralism as an acculturation
process, rather than as an end resulting in assimilation. It is more an
ideal than an actual type because very rarely do companies achieve this
level of integration. However, Cox (1994; 2001) indicate that it is
important to understand this type and use it to create a vision for
effective diversity management.
Diversity in a Globalized Environment
Along with the above classifcations, in a globalizing economy
diversity can also be understood as intra national and cross national
(Lee, 1997; Park, 2008). Intra national diversity management refers to
managing a diverse workforce of citizens or immigrants within a single
national organizational context and crossnational diversity management,
refers to managing a workforce composed of citizens and immigrants in
different countrie. Each of these types of diversity management presents
different challenges and dilemmas, and each requires a different set of
policies and programs
Homogenous & Heterogenous organizations
Conventional human resource (HR) practices tend to produce and
perpetuate homogeneity in the workforce as a result of the A-S-A
(attraction-selection-attrition) cycle (Schneider, 1987; Schneider,
Smith & Paul, 2001). Typically, individuals are attracted to
organizations that appear to have members with values similar to their
own. In turn, organizations select new members who are similar to their
existing members because their hiring continues to make everyone feel
comfortable (Garcia, Posthuma, & Colella, 2008). Recruitment
practices often emphasize hiring people from sources that have
historically been reliable and selecting candidates whose
characteristics are similar to those employees who have been successful
in the past. As a result, employees who do not fit in well with the
dominant organizational culture eventually leave or are fired; creating
a selective attrition process that supports and maintains a workforce
that is homogeneous (Schneider, Smith & Paul, 2001). In the long
run, this trend is unhealthy for organizations in that it limits their
talent pool, their long-term growth and renewal, and their ability to
adapt to environmental changes and tap into new markets.
In recent decades, human resource managers have recognized the need
to adopt effective diversity management practices in order to overcome
barriers for diversity and reap the rewards of a diverse workforce.
Kossek and Lobel (1996) summarize the three prevailing HR approaches to
diversity management and offer an original approach of their own. The
authors later expanded on the model and made the connection between
human resource management practices, workforce diversity, and
individual, group, and organizational outcomes (Kossek, Lobel &
Brown, 2006). The four approaches are:
Diversity enlargement. This approach focuses on increasing the
representation of individuals of different ethnic and cultural
backgrounds in the organization. The goal is to change the
organizational culture by changing the demographic composition of the
workforce. The assumption is that the new employees will conform to
existing practices and that no additional intervention will be needed.
The mere presence of increasing numbers of employees from different
backgrounds will result in a culture change that will bring the desired
results. Often this approach is motivated by compliance to laws and
public expectations of political correctness rather than a deep
understanding of the business need for diversity (Kossek & Lobel,
1996).For example the reservation policy on caste lines in India.
Diversity sensitivity approach recognizes the potential
difficulties introduced by bringing together individuals from diverse
backgrounds and cultures in the workplace. It attempts to overcome these
difficulties through diversity training that is aimed at sensitizing
employees to stereotyping and discrimination while also promoting
communication collaboration. The assumption embedded in this approach is
that increased sensitivity to differences will improve performance.
Although this is sometimes the case, in other instances, particularly
when the training is not linked to corporate goals and initiatives and
not supported by its long-term policies, it can create more harm than
good. Emphasizing differences can backfire by reinforcing stereotypes
and highlighting intergroup differences rather than improving
communication through understanding and common interests (Kossek &
Lobel, 1996).
Cultural audit approach aims at identifying the obstacles that
limit the progress of employees from diverse backgrounds and that block
collaboration among groups in the organization. The audit is usually
performed by outside consultants who obtain data from surveys and focus
groups and then identify areas in which employees who are different from
the dominant group feel that they are blocked from performing to the
best of their ability. Although this is a customized approach that is
tailored to specific organizational cultures, the recommendations for
change are typically based on the notion that the source of the problem
is in the dominant cultural group (typically, in North America, white
male) and that the change must come from within that group (Kossek &
Lobel, 1996).An example of a cultural audit is company's global
employee satisfaction survey with diversity as one of the dimensions,
the results are used to assess commitment and performance in achieving a
diverse workforce (Ford Motor Company, 2002).
Strategy for achieving organizational outcome proposed by Kossek
and Lobel (1996) as a comprehensive framework for HR diversity
management focuses on diversity management as a means for achieving
organizational ends, not as an end in itself. Using this strategy,
managers have to identify the link between diversity management
objectives and desired individual and organizational outcomes.
Organizational strategic choices are viewed in the context of
environmental drivers such as the changing labor market composition, the
global economy, the shift to a service economy, and the legal and
governmental pressures. Analyzing environmental drivers can help the
organization determine the specific benefits it expects to gain from its
diversity management and how those are linked to its overall business
strategy. For example, if innovation is a business strategy for the
company, it is in its best interest to cultivate multicultural diverse
teams because creativity and responsiveness to new markets, primarily in
today's global economy, are more likely to be found in diverse work
teams.
In a nut shell, all these diversity management initiatives may be
viewed on a continuum, starting from equal employment opportunity (EEO)
legislation which means that it is against the law to discriminate; to
affirmative action programs which means that companies need to take
positive steps to ensure equal opportunities; and finally to diversity
management as proactive move aiming at promoting a diverse and
heterogeneous workforce. The emphasis of the latter is on the business
advantage that it can provide to organizations.
Policies & Practices
McKinsey (2014) has reported that companies in the top quartile for
gender or racial and ethnic diversity are more likely to have financial
returns above their national industry medians. Companies in the bottom
quartile in these dimensions are statistically less likely to achieve
above-average returns. Diversity is probably a competitive
differentiator that shifts market share toward more diverse companies
over time. (3) This clearly points towards the need for creating
policies and practices which support diversity. It is a win -win
situation for creating an inclusive culture and for maximizing profit.
Organizations which are insensitive to the needs of minority may have
employees who feel that they cannot be themselves at work. Therefore,
such employees may not engage fully in the team or in assigned work. For
example, an employee may fear that their sexual orientation or a hidden
disability if revealed will face reprisals. This type of
'closed' environment can significantly impact an
individual's involvement in the organization, potentially resulting
in low staff morale, increased absenteeism, decreased productivity and
retention difficulties. Open, effective communication, as well as clear
channels for feedback optimizes the opportunity for discussion of issues
related to inclusion and discrimination. (4) Similarly, employees with
physical disabilities should be supported by rearranging the office
layout room to accommodate wheelchairs, scooters, or other mobility
aids. Behaviors which demonstrate respect and support for a safe and
supportive working environment need to be incorporated in planning and
work practices. Policies and procedures should be supportive with
special focus on absence of workplace harassment, existence of workplace
values, standards of behavior, equal employment opportunity (EEO) and
diversity (5). Some other supportive policies are development of trust,
providing opportunities for staff to interact in settings outside of
work so that employees feel more comfortable and are creative, flexible
and look for new ways of doing things, recognizing and acknowledging
their special days and festivals.
Diversity Challenges in India
India is one of the beneficiaries of the globalization process.
(Budhwar, 2003). Since more and more multinational companies (MNCs) have
started their operations in India, they want to know the peculiarities
and idiosyncrasies of the Indian workforce and how it could be motivated
to contribute its best to the organizational goals. Currently, diversity
management in India is at the stage of providing equal opportunity. The
Indian organizations fall under plural organizations (Cox, 1994,2001)
and the approach to handle diversity issues fall under diversity
enlargement strategy (Kossek & Lobel, 1996). Here too, the gap
between the legal promise and actual implementation is very wide. The
Constitution safeguards the civil rights of the lower castes, scheduled
castes (SCs) and scheduled tribes (STs) (6) and also provides for
reservations of government jobs for them by way of quota. But a lot
needs to be accomplished. The women experience various forms of
unfavorable discrimination from society, employers and superiors. Along
with women workforce, there are other factors adding to the complexity
of diversity like the caste, tribes, religion and the challenges of the
'differently-abled.' The country has enactea some laws so as
to protect civil rights of the vulnerable sections of society, but there
is no law to proactively manage diversity at the workplace
However just as every cloud has a silver lining, so with the rise
in literacy levels the position of women in many spheres is becoming
better. For example, women are playing a significant role in the
expansion of the Indian software industry, Business Process Outsourcing
(BPO) industry and education. Multinational corporations have started
forming diversity committees to drive home the philosophy of diversity
management, and have set benchmarks towards achieving the stated
objectives (Budhwar, Saini & Bhatnagar, 2004). At the same time it
is also clear that organizations will not reap the benefit from
diversity management till there is supportive environment within the
organizations which is inclusive towards minority employees.
Who is a Minority?
According to the United Nations minorities' declaration (1992)
article one, minorities are defined based on national or ethnic,
cultural, religious and linguistic identity. (7) According to a
definition offered by Francesco Capotorti (1977), a minority is 'a
group numerically inferior to the rest of the population of a state, in
a non-dominant position, whose members--being nationals of the
state--possess ethnic, religious or linguistic characteristics differing
from those of the rest of the population and show, if only implicitly, a
sense of solidarity, directed towards preserving their culture,
traditions, religion or language (8).
In line with the above definition in the Indian context all people
belonging to religions other than Hinduism constitute religious
minority. In most instances a minority group will be a numerical
minority, but in others a numerical majority may also find itself in a
minority-like or non-dominant position like for example the Blacks
though were in majority in South Africa under the apartheid regime
experienced non dominant position (9). Taking the above logic women in
India also experience 'non-dominant' position in the workplace
and therefore are also termed as minority. The non-dominant aspect of
the definition is extended to also include persons with a particular
sexual orientation or identity (lesbian, gay, bisexual, transgender or
intersexual persons).
In the present study these three categories (women, non-Hindus and
people with sexual orientation other than heterosexual) constituted the
sample of minority under study.
Supportive Workplace Environment
The right not to be discriminated against is paramount in
protecting the rights of persons belonging to minorities in all regions
of the world. Minorities everywhere experience direct and indirect, de
jure and de facto discrimination in their daily lives. Therefore the
right not to be discriminated formed the basis of defining the
supportive workplace environment in this study (10). It focused on (a)
perception of fairness, (b) scope for growth and development, (c)
mentorship and support, (d) communition tone and gestures, (e)
experience of empowerment, (f) feedback mechanism.
It is argued that if the environment at workplace is perceived as
supportive to all then there will be no difference in the perception of
workplace environment by the majority and minority employees. On the
contrary, if the perception is negative, the minority will find the
workplace not supportive. Therefore the following hypotheses were
formed.
* Minority employees will perceive the workplace environment less
positive than the majority employees.
* H1: Employees who perceive workplace environment supportive will
have higher performance scores than those who do not.
* H3: Supportive work environment will lead to higher performance
appraisal scores
The study was carried out in three different organizations (a
biotechnology firm, an information technology firm and a knowledge
process outsourcing firm). Effort was also made to study supportive
environment between them. Of the three organizations biotechnology is
different from IT and KPO. Therefore, it was hypothesized that:
* H4: Perception of supportive work environment and performance in
biotechnology firm will be different from IT and KPO.
Research Design
A survey research design was used and responses were collected from
the three organizations (a biotechnology firm, an information technology
firm and a knowledge process outsourcing firm) in Maharashtra and
Tamilnadu in 2014.
The independent variable was supportive work environment. It was
defined as the initiatives taken by the organization to make the
workplace employee friendly and the right not to be discriminated
against. It was assessed by a self-designed seven item scale. The
responses were collected on a five point scale ranging from 1 being
strongly disagree to 5 being strongly agree.
The dependent variable was annual performance score captured in the
performance management system. The respondents were asked to report
their previous year's score on annual performance management. Since
each organization may measure performance on different scales, it was
decided to collect all the raw performance scores and convert them into
scores ranging from 1-5, where one meant lowest score and five meant
highest performance scores.
In the study the term 'minority workforce' referred to
those categories of working employees who are generally less in number
within organizations or who are in a non-dominant position in the
workplace. Thus, the categories chosen were (a) women (in case of
gender), (b) religious minority (all non-Hindus, that is Muslim,
Christians Sikh and Jains clubbed together as one category), and (c)
those who preferred not to reveal their sexual preferences (all others
called themselves heterosexual in orientation). For capturing sexual
preferences the respondents were given all the options (gay, lesbian,
bisexual, heterosexual,' others' and also the option of
'preferred not to say'). Almost all respondents opted for
'heterosexual' and only some opted for 'prefer not to
say' option perhaps because there is a stigma for revealing sexual
identity other than heterosexual. Therefore the statistical analysis was
carried out between 'heterosexual' and 'prefer not to
say' category.
The data collected was cross sectional in nature. A total of 121
valid samples were collected through the survey method. 57 respondents
were males and 64 were females.67 respondents were Hindus and 49 were
religious minority (non-Hindus). 109 respondents claimed they were
heterosexual and 12 respondents preferred not to say their sexual
orientation. 80 respondents had care taking responsibility at home
(wanted work life balance) while 41 did not have any caring
responsibility at home.
Table 1 shows the following results:
Gender
There is a significant difference (t=4.81 ***) in the perception of
supportive work environment among men (m=2.8822) and women
(m=3.25).There is a significant difference in the performance appraisal
scores (t=3.78) between men (m=2.25) and women (m=3.0). The perception
of supportive work environment led to higher average performance scores
among women than men. Women (in this study considered minority) found
the environment more supportive.
Religion
There is a significant difference (t=-1.93*) in the perception of
supportive work environment among Hindus (m=3.0171) and Non Hindus
(m=3.18). There is no significant difference in the performance
appraisal scores (t=0.43) among Hindus (m=2.69) and Non Hindus (m=2.60).
The Non Hindus (in this study considered minority) felt the supportive
work environment more.
Sexual Orientation
There is a significant difference in the perception of supportive
work environment (t= 1.97) among heterosexuals (m=3.10) and those who
preferred not to say their orientation (m=2.83) (in this study
considered minority). There is no significant difference in the
performance appraisal scores (t=1.25) among heterosexuals (m=1.15) and
those who preferred not to say their orientation (m= 1.14). However
those who preferred not to tell their sexual orientation found the
supportive work environment less conducive though its effect on the
performance was not significant.
Work Life Balance (Care Taking Responsibilities at Home)
There is a significant difference in the perception of supportive
work environment (t=4.55***) among those having care taking
responsibility at home (m=3.20) and those who did not (m=2.83). There is
a significant difference in the performance appraisal scores (t=2.63**)
between those who had care taking responsibilities at home (m=2.84) and
those who did not (m=2.27).Thus perception of supportive work
environment led to higher average performance scores among those having
care taking responsibility at home than those who did not.
The regression results show that 33% of the performance appraisal
scores can be explained by supportive work environment in the
organization. Under unstandardized beta coefficient, [beta] = 1.47,
standard error=0.19, Under standardized coefficients beta [beta] =0.58,
t value=7.67 *** The post hoc test (Scheffe test) in table 2 shows that
supportive work environment policies were significantly different
between Bio-tech ,KPO and IT firms (-.28 *) and the performance
appraisal scores were significantly different between BioTech and KPO
firms (-.89*). The regression results (Table 2) shows that 33% of the
performance appraisal scores can be explained by supportive work
environment in the organization.
Discussion
The purpose of this study was to find out if diversity in
demography of the organizations led to differences in the perception of
supportive work environment practices. We also wanted to study if this
difference in perception of supportive practices also influenced the
performance scores of the employees.
The first hypothesis stating that minority employees will perceive
the workplace environment less positively than the majority employees
was rejected (Table 1). The results showed that women (minority)
perceived the environment more supportive than men. Similarly those
having care taking responsibility at home also perceived the
organization policies more positively. Under the category of religion,
the non-Hindus (minority) perceived the policies more positively than
the Hindus. McKinsey (2014) has reported that companies in the top
quartile for gender or racial and ethnic diversity have performed much
better than those who do not have diversity policies. Lastly the
heterosexuals perceived the organization policies more supportive than
those who preferred not to reveal their orientation (minority). In India
there is a social stigma around having sexual preferences other than
heterosexual. Therefore it is not clear whether the category
'preferred not to say' comprised non-heterosexuals or a mix of
all.
The second hypothesis stating that employees who perceive workplace
environment supportive will have higher performance scores than those
who do not is proved only in the case of gender differences and work
life balance parameter. Table I also shows that in the categories of
religion and sexual orientation though there is a similar trend but it
is not statistically significant. One of the possible reasons for
results not coming out significant is the small sample size.
Third hypothesis which stated that supportive work environment will
lead to higher performance appraisal scores is also proved as shown in
the regression results (Table 2). The Scheffe test (Table 3) shows that
there are organization differences with reference to supportive work
environment. Though further research is required to find out in what way
the three organizations are different, it proves the fourth hypothesis
that perception of supportive work environment and performance in
biotechnology firm will be different from IT and KPO. This conclusion
has strong implications for policy makers and the human resource
department who need to design supportive practices unique to their
sector/organization. All these studies clearly point out the important
role played by diversity within the organization. Organizations should
realize that if these differences have to be leveraged upon then it
should invest in creating a supportive work environment for its
employees.
The limitation of this study is the small sample size. For getting
more conclusive findings, more data is required. The questionnaire can
also be refined to include more dimensions measuring supportive work
environment. The study was carried out in organizations where women are
in significant numbers. Further research is required in organizations
where either women are less or it is challenging for women to work, The
study also brought to our notice that tabooed information (sexual
preference in this case) is difficult to collect using the survey
format. Therefore qualitative method should be utilized to get more in
depth information on such sensitive issues. The study pointed out that
the small category of respondents who preferred not to disclose their
sexual orientation does not find the workplace supportive. Further
research needs to be carried out to study factors which can make the
workplace more inclusive for this category of employees. More work is
needed to find out why there was difference between organizations in the
perception of supportive work environment and performance outcome. More
work is required to study why minority performed better than the rest.
In the study only last one year's performance management score was
considered (as dependant variable). In order to get more stable findings
a time series data of last 3-5 years should be considered.
The study has good potential for future research in cross cultural
comparison of minority's perception of supportive work environment
and its impact on performance. It can also be used to create and improve
employee policies to make the environment more inclusive. The study also
supports the competitive advantage paradigm by enabling diversity to
contribute to business which can be the subject for future research.
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Preeti S. Rawat (Email:Preetirawat@somaiya.edu) is Professor &
Prema Basergekar (Email: prema@ somaiya.edu) is Associate Professor, K.
J. Somaiya Institute of Management Studies and Research, Mumbai
Table 1 t Test for Various Demographic Characteristics
N Supportive S.D.
Work
Environment
(Mean value)
Gender Male 57 2.88 0.41
Female 64 3.25 0.42
Worklife balance (caring Yes 80 3.20 0.41
responsibility at home) No 41 2.83 0.43
Religion Hindu 67 3.02 0.43
Non-Hindu 49 3.17 0.45
(minority)
Sesual Orientation Heteros 109 3.10 0.45
exual
Prefer not 12 2.83 0.36
to say
t test level of
Significance
Gender Male -4.81 ***
Female
Worklife balance (caring Yes 4.55 ***
responsibility at home) No
Religion Hindu
Non-Hindu -1.93 ?
(minority)
Sesual Orientation Heteros 1.97 *
exual
Prefer not
to say
Performance
Appraisal
Score
(mean value)
Gender Male 2.25
Female 3.00
Worklife balance (caring Yes 2.84
responsibility at home) No 2.27
Religion Hindu 2.69
Non-Hindu 2.59
(minority)
Sesual Orientation Heteros 2.69
exual
Prefer not 2.25
to say
S.D. t test level of
Signifi-
cance
Gender Male 1.06 -3.78 ***
Female 1.13
Worklife balance (caring Yes 1.08
responsibility at home) No 1.20 2.63 **
Religion Hindu 1.14 0.43 not
Non-Hindu 1.19 signif-
(minority) cant
Sesual Orientation Heteros 1.15 1.25 not
exual signifi-
Prefer not 1.14 cant
to say
*=p<0.05; **=p<0.01 : ***=p<0.001
N=121
Table 2 Regression Results
Predictor Variable Criterion Variable
Performance Apppraisal
Score (mean value)
Standard unstandardized Standardized
error beta ([beta]) beta ([beta])
value value
Supportive Work 0.19 1.47 0.58
Environment
(Mean value)
Predictor Variable Criterion Variable
Performance Apppraisal
Score (mean value)
t value [R.sup.2]
Supportive Work 7.67 *** 0.33 ***
Environment
(Mean value)
* = p < 0.05: ** = p < 0.01; *** = p < 0.001
N = 121
Table 3 ANOVA & Scheffe Test
N Mean S.D. F value
Supportive 121 3.07 0.45 4.18 ***
Work Environ-
ment
(Mean value)
Performance 121 2.65 1.15 7.50 ***
Apppraisal
Score
(mean value)
Scheffe Analysis
Mean Difference
BioTech-IT BioTech-KPO K.PO-IT
Supportive 0.28 * -0.13 -0.15
Work Environ-
ment
(Mean value)
Performance -0.07 0.81 * -.82 *
Apppraisal
Score
(mean value)
* = p < 0.05: ** = p < 0.01; *** = p < 0.001
N = 121
