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6 SCIENTIFIC EVIDENCE OF DIVERSITY MANAGEMENT
6.1 Negative impact due to diversity
6.1.1 Article 1
According to (1), in this article a study is conducted in a security company in RSA to evaluate the impact of diversity in the operational teams’ performance. The teams are composed of different races (coloureds 66%, blacks 24% & whites 11%), gender (men 75%, women 25%), and 6 different languages were used by the different team members. The methodology used was based on questionnaires (to evaluate effectiveness of the operational team) but also included issues related to language and conflict resolution. The results pointed that no impact of diversity was captured as major issue in the teams; nevertheless communication issues in one of the teams between Blacks & Coloureds were detected. In such circumstances were languages barriers exist, the role of the team leader is crucial to stimulate the interaction between the team members, so the effectiveness of teamwork is not affected due to alienated team members.
6.1.2 Article 2
An empirical study was conducted (2), to assess the impact on financial performance (ROE) and employee productivity in the financial service industry, regarding the managerial racial and gender diversity. The study included not only top management but also middle management, which plays a vital role in implementing and influencing decision making. The results showed no U relationship between gender diversity and company performance; however regarding racial diversity the U relationship was evident in productivity but not in ROE. This study demonstrates that teams highly homogeneous or highly heterogeneous in the study show higher productivity results than the teams with low to moderate diversity. The topic of diversity cannot be generalized to one dimension, it is complex and more research will be needed to validate conclusions.
6.1.3 Article 3
Equity I (3) programme started in 1971, the goal was to achieve 50/50% mix between black and white salaried staff by 1990. This programme was partially successful by achieving 46% of black. The issue with the Equity I was that black people were not appointed for technical fields, these are entry positions for future supervisory and management. Line managers were not held accountable for diversity targets, their focus was mainly on the business goals to achieve the bonuses, this had to change and diversity targets were placed on par with the other business goals. Black employees had to be identified and developed to take technical and other jobs, this meant development plans and career paths had to be developed and incorporated in the overall strategy.
The programme in 1990 again lost its momentum because managers felt it was affecting negative their bottom line, and they decided to focus on issues that would make the business units profitable.
6.2 Positive impact due to diversity
6.2.1 Article 1
In this article (4) IBM, takes workforce diversity, as a key pillar to be a successful company in the global market. This articles points the importance of developing a “partnership” between senior line management and diversity leadership, to have a workplace that reflects the market place. Leaders in IBM at all levels have to become diversity leaders, to motivate others, convince, enable change, so the workplace reflects the market, in doing so the teams will be stronger and perform better in the marketplace. At IBM diversity management focuses in mainly 3 streams: equal opportunity, affirmative action and work/life balance, this will ensure productive employees and again this will impact successful execution in the market. Examples of innovative actions to understand, cater and leverage the needs of the diversity in workforce and in the market place are mentioned, like:
- Global Work/Life Fund Strategy 2000 – 2006, this initiative created 74 child care center relationships around the globe.
- 1995, creation of 8 task forces to understand the different groups and the relevant motivation impacting in the workplace & in the market place when buying IBM products.
- Developing separate washing facilities for Muslim employees, etc
In conclusion IBM acknowledges the importance of diversity leadership in the workplace so performance in the marketplace can be leveraged, captured everyday to contribute to company success.
6.2.2 Article 2
SAB (5), this company embarked on equity employment plan since 1971, to have a salaried workforce representative of the market place. The target set, was to achieve 50/50 mix between black & white salaried employees by 1991, the percentage achieved was 46.
In 1998 when the Employment Equity Act came into, SAB equity initiatives were already similar. During this year the company launched Equity III, this aimed to push human resource diversity to create global competitive advantage. To achieve this, resources had to be availed to retain top black management talent, hiring and training. Senior managers had diversity on top of the list to achieve their bonuses.
By 1999 SAB, was positioned on the high end, in RSA, in terms of pay & benefits, the training targets were achieved ($17M & 34,000 employees) and the Beer South Africa training institute was awarded best global training practices. This focus in diversity management in the South African Division created a global competitive advantage for SAB’s expansion.
The same article refers to the success of Halifax the UK, ban when it embarked on bringing diversity into the workforce to reflect the Chinese community (35,000 people). This was done by bilingual posters, hiring that could speak Mandarin or Cantonese (the numbers of employees representing ethnic minorities has raised from 4 to 6.4%). The bank experienced a 30-40% increase in mortgage business from the Chinese community.
Regarding the opportunity to attract more disabled customers the bank has 250 employees that use sign language and 3.3 % are disabled.
6.2.3 Article 3
In this article (6) a study is conducted on 76 publicly trade firms, and relate the diversity friendly rankings (determined through a survey) with the performance measures: ROS (indicator of competitive advantage), ROA, ROI, ROE (3 indicators measuring return on value of stockholder investment). The statistical parameters show that the diversity friendly firms outperformed in key financial indicators, this is an indication that these firms are good for shareholders, minority employees and organizations. The study however does not explore the “why” for these high returns. The data only analyzes the racial diversity, other forms of diversity where not taken into account (gender, age nationality, etc).
The successful diversity practices that are picked from the articles are:
- Leadership at all ranks (4) (1) is fundamental to achieve, do not delegate, drive it through the entire organization. It is crucial to be aware of the diverse individuals working in the organization or a small team. Leaders have to enable all diverse employees to embrace the organization to deliver the business results.
- Understand the needs of the demographics in the workforce and market place understand the impact in the business and implement strategies to fulfil these needs (4), (3) & (5) and therefore minimize business risks
- Training (1), (5) (3) (4), fundamental in the diversity management portfolio, employees must be aware of the different groups, how to interact, how to understand the customer needs, etc.
- Entire organization must live the values around diversity management, especially regarding any type of discrimination (benefits, career development, compensation, rewards, recognition, etc); this will eliminate the creation of groups within the organization (5), (3).
Any oversight on the above practices can definitely put the success of any effective diversity management programme at risk
- DESERE KOKT.2003. The impact of cultural diversity on work team performance: A South-Africa perspective. Team Performance Management. Bradford: Vol.9, Iss.3/4; pg 78, 6pgs.
- MCMILLAN-CAPECHART, A; SIMERLY, R. L. 2008. Effects of managerial racial and gender diversity on organizational performance: An empirical study. International Journal of Management. 25, 3; pg 446, 7pgs.
- SIEHL, C. 2001. South African Breweries Group. Thunderbird International Business Review. 43, 4; pg 569, 12pgs.
- CHILDS J.T. JR. 2005. Managing workforce diversity at IBM: A global HR topic that has arrived. Human Resources Management. 44, 1; pg 73, 5pgs.
- ANONYMOUS. 2002. Diversity creates global competitive advantage for South African Breweries. Human Resource Management International Digest. 10, 5; pg 14, 4pgs.
- VON BERGEN, C. W; SOPER, B; PARNELL, J. A. 2005. Workforce diversity and organizational performance. Equal Opportunities International. 24, 3/4; pg1, 16pgs