Chapter 12 Managing Individuals and a Diverse Workforce MGMT7 © 2015 Cengage Learning

12-1 describe diversity and explain why it matters 12-2 understand the special challenges that the dimensions of surface-level diversity pose for managers 12-3 explain how the dimensions of deep-level diversity affect individual behavior and interactions in the workplace 12-4 explain the basic principles and practices that can be used to manage diversity The subject of this chapter is diversity, what it is, how it benefits companies, and how companies should manage diversity. We first define what diversity is, compare and contrast it to affirmative action, and discuss why it matters to companies. We next explore the challenges managers and companies face in dealing with differences in surface-level diversity, which includes factors like race, age, gender, and disabilities. We next discuss the impact of deep-level diversity, which includes factors like personality, attitudes, beliefs, and values. The chapter closes with a discussion of the various techniques that managers should use to manage and foster diversity in the workplace. © 2015 Cengage Learning

Diversity Is Not Affirmative Action Diversity exists in an organization when there are a variety of demographic, cultural, and personal differences among the people who work there and the customers who do business there. Affirmative action refers to purposeful steps taken by an organization to create employment opportunities for minorities and women One key difference between diversity and affirmative action is that affirmative action is more narrowly focused on demographics such as sex and race, while diversity has a broader focus that includes demographic, cultural, and personal differences. A second difference is that affirmative action is a policy for actively creating diversity, but diversity can exist even if organizations don’t take purposeful steps to create it. A third important difference is that affirmative action is required by law for private employers with 50 or more employees, while diversity is not. Fourth, affirmative action programs and diversity programs also have different purposes. The purpose of affirmative action programs is to compensate for past discrimination, which was widespread when legislation was introduced in the 1960s; to prevent ongoing discrimination; and to provide equal opportunities to all regardless of race, color, religion, sex, or national origin. 12-1 © 2015 Cengage Learning

Percent of the Projected Population by Race and Hispanic Origins for the United States: 2010 to 2050 Workplace diversity as we know it is changing. Exhibit 12.1 shows predictions from the U.S. Bureau of the Census of how the U.S. population will change over the next forty years. The percentage of white, non-Hispanic Americans in the general population is expected to decline from 64.7 percent in 2010 to 46.3 percent by 2050. Similarly, the percentage of black Americans will decrease (from 12.2 percent to 11.8 percent). By contrast, the percentage of Asian Americans will increase (from 4.5 percent to 7.6 percent). Meanwhile, the proportion of Native Americans will hold steady at 0.8 percent. The fastest-growing group by far, though, will be Hispanics, who are expected to increase from 16 percent of the total population in 2010 to 30.3 percent by 2050. Other significant changes have already occurred. For example, today women hold 46.5 percent of the jobs in the United States, up from 38.2 percent in 1970. Furthermore, white males, who composed 63.9 percent of the work force in 1950, hold just 38.2 percent of today’s jobs. 12-1 © 2015 Cengage Learning

Diversity Makes Good Business Sense Decreases turnover Decreases absenteeism Helps companies avoid expensive lawsuits Helps companies attract and retain talented workers Drives business growth Higher-quality problem solving Those who support the idea of diversity in organizations often ignore its business aspects altogether, claiming instead that diversity is simply the right thing to do. Yet diversity actually makes good business sense in several ways: cost savings, attracting and retaining talent, and driving business growth. 12-1 © 2015 Cengage Learning

Diversity and Differences Surface-level diversity Deep-level diversity Social integration Surface-level diversity consists of differences that are immediately observable, typically unchangeable, and easy to measure. In other words, independent observers can usually agree on dimensions of surface-level diversity, such as another person’s age, sex, race/ethnicity, or physical capabilities. Deep-level diversity consists of differences that are communicated through verbal and nonverbal behaviors and are recognized only through extended interaction with others. If managed properly, the shift from surface- to deep-level diversity can accomplish two things. First, coming to know and understand co-workers better can result in reduced prejudice and conflict. Second, it can lead to stronger social integration. Social integration is the degree to which group members are psychologically attracted to working with each other to accomplish a common objective, or, as one manager put it, “working together to get the job done.” 12-2 © 2015 Cengage Learning

Age Discrimination Treating people differently in hiring, firing, promotions, or compensation because of their age. Managers should: Recognize that age discrimination is much more pervasive then they think Make hiring and promotion decisions based on qualifications, not age Monitor the extent to which older employees receive training Ensure that younger and older workers interact with each other Age discrimination is treating people differently (e.g., in hiring and firing, promotion, and compensation decisions) because of their age. The victims of age discrimination are almost always older workers, and the discrimination is based on the assumption that “you can’t teach an old dog new tricks.” It’s commonly believed that older workers can’t learn how to use computers and technology, won’t adapt to change, are sick more often, and, in general, are much more expensive to employ than younger workers. 12-2 © 2015 Cengage Learning

When people are treated differently because of their sex. Sex Discrimination When people are treated differently because of their sex. Managers should: Mentoring Make sure that male-dominated social activities don’t unintentionally exclude women Designate a go-to person that women can talk to if they believe they are being held back Sex discrimination and racial/ethnic discrimination (discussed in the next section) are often associated with the so-called glass ceiling, the invisible barrier that prevents women and minorities from advancing to the top jobs in organizations. So, what can companies do to make sure that women have the same opportunities for development and advancement as men? One strategy is mentoring, or pairing promising female executives with senior executives from whom they can seek advice and support. 12-2 © 2015 Cengage Learning

Women at Fortune 500 and 1000 Companies Although progress is being made, sex discrimination continues to operate via the glass ceiling at higher levels in organizations, as shown in Exhibit 12.3. For instance, while the trends are going upward, women are the top earners in just 7.6 percent of companies in 2011. Likewise, only 14.4 percent of corporate officers (i.e., top management) were women, and the numbers are even lower for women of color. Indra K. Nooyi, PepsiCo’s CEO, Ursula Burns, Xerox’s CEO, are the only women of color heading Fortune 500 companies. Indeed, only seventeen of the 500 largest companies in the United States have women CEOs. Similarly, only 15.72 percent of the members of corporate boards of directors are women. 12-2 © 2015 Cengage Learning

Racial or Ethnic Discrimination When people are treated differently because of their race or ethnicity. Managers should: Start by looking at the numbers (hiring rates, promotion rates) Survey employees’ level of satisfaction Eliminate unclear selection and promotion criteria Train those who make hiring and personnel decisions Racial and ethnic discrimination occurs when people are treated differently because of their race or ethnicity. To what extent is racial and ethnic discrimination a factor in the workplace? Every year, the EEOC receives between 26,000 and 35,000 charges of race discrimination, which is more than any other type of charge of discrimination. 12-2 © 2015 Cengage Learning

Disability Discrimination When people are treated differently because of their disabilities. Managers should: Education Workplace accommodations Actively work to find jobs for qualified people with disabilities According to the Americans with Disabilities Act (http://www.ada.gov), a disability is a mental or physical impairment that substantially limits one or more major life activities. 12-2 © 2015 Cengage Learning

Deep-Level Diversity Disposition Personality 12-3 Deep-level diversity is reflected in differences that can be recognized only through extended interaction with others. Examples include differences in personality, attitudes, beliefs, and values. In short, recognizing deep-level diversity requires getting to know and understand co-workers better. And that matters because it can result in less prejudice, discrimination, and conflict in the workplace. These changes can then lead to better social integration, the degree to which organizational or group members are psychologically attracted to working with each other to accomplish a common objective. 12-3 © 2015 Cengage Learning

The Big Five Personality Dimensions Extraversion Emotional stability Agreeableness Conscientiousness Openness to experience Extraversion is the degree to which someone is active, assertive, gregarious, sociable, talkative, and energized by others. In contrast to extraverts, introverts are less active, prefer to be alone, and are shy, quiet, and reserved. For the best results in the workplace, introverts and extraverts should be correctly matched to their jobs. Emotional stability is the degree to which someone is not angry, depressed, anxious, emotional, insecure, or excitable. People who are emotionally stable respond well to stress. In other words, they can maintain a calm, problem-solving attitude in even the toughest situations (e.g., conflict, hostility, dangerous conditions, or extreme time pressures). By contrast, emotionally unstable people find it difficult to handle the most basic demands of their jobs under only moderately stressful situations and become distraught, tearful, self-doubting, and anxious. Emotional stability is particularly important for high-stress jobs such as police work, fire fighting, emergency medical treatment, piloting planes, or commanding rockets. Agreeableness is the degree to which someone is cooperative, polite, flexible, forgiving, good-natured, tolerant, and trusting. Basically, agreeable people are easy to work with and be around, whereas disagreeable people are distrusting and difficult to work with and be around. Conscientiousness is the degree to which someone is organized, hardworking, responsible, persevering, thorough, and achievement oriented. Openness to experience is the degree to which someone is curious, broad-minded, and open to new ideas, things, and experiences; is spontaneous; and has a high tolerance for ambiguity. People in marketing, advertising, research, and other creative fields need to be curious, open to new ideas, and spontaneous. By contrast, openness to experience is not particularly important to accountants, who need to consistently apply stringent rules and formulas to make sense out of complex financial information. 12-3 © 2015 Cengage Learning

Diversity Paradigms Discrimination and fairness paradigm Access and legitimacy paradigm Learning and effectiveness paradigm organizational plurality The discrimination and fairness paradigm, which is the most common method of approaching diversity, focuses on equal opportunity, fair treatment, recruitment of minorities, and strict compliance with the equal employment opportunity laws. Under this approach, success is usually measured by how well companies achieve recruitment, promotion, and retention goals for women, people of different racial/ethnic backgrounds, and other underrepresented groups. The access and legitimacy paradigm focuses on the acceptance and celebration of differences to ensure that the diversity within the company matches the diversity found among primary stakeholders such as customers, suppliers, and local communities. This is related to the business growth advantage of diversity discussed earlier in the chapter. The basic idea behind this approach is to create a demographically diverse work force in order to attract a broader customer base. Whereas the discrimination and fairness paradigm focuses on assimilation (having a demographically representative work force), and the access and legitimacy paradigm focuses on differentiation (having demographic differences inside the company match those of key customers and stakeholders), the learning and effectiveness paradigm focuses on integrating deep-level diversity differences, such as personality, attitudes, beliefs, and values, into the actual work of the organization. The learning and effectiveness paradigm is consistent with achieving organizational plurality. Organizational plurality is a work environment where (1) all members are empowered to contribute in a way that maximizes the benefits to the organization, customers, and themselves, and (2) the individuality of each member is respected by not segmenting or polarizing people on the basis of their membership in a particular group. 12-4 © 2015 Cengage Learning

The Learning and Effectiveness Paradigm Values common ground Makes a distinction between individual and group differences Less likely to lead to conflict, backlash, divisiveness Focuses on bringing different talents and perspectives together 12-4 © 2015 Cengage Learning

Diversity Principles 12-4 Carefully and faithfully follow and enforce federal and state laws regarding equal opportunity employment. Treat group differences as important but not special. Find common ground. Tailor opportunities to individuals, not groups. Solicit negative as well as positive feedback. Set high but realistic goals. 12-4 © 2015 Cengage Learning

Diversity Training and Practices Awareness training Skill-based diversity training Diversity audits Diversity pairing Minority experiences Organizations use diversity training and several common diversity practices to manage diversity. There are two basic types of diversity training programs. Awareness training is designed to raise employees’ awareness of diversity issues, such as the big 5 personality dimensions discussed in this chapter, and to get employees to challenge underlying assumptions or stereotypes they may have about others. By contrast, skills-based diversity training teaches employees the practical skills they need for managing a diverse work force, such as flexibility and adaptability, negotiation, problem solving, and conflict resolution. Diversity audits are formal assessments that measure employee and management attitudes, investigate the extent to which people are advantaged or disadvantaged with respect to hiring and promotions, and review companies’ diversity-related policies and procedures. In diversity pairing, people of different cultural backgrounds, sexes, or races/ethnicities are paired for mentoring. The hope is that stereotypical beliefs and attitudes will change as people get to know each other as individuals. Finally, because top managers are still overwhelmingly white and male, a number of companies believe that it is worthwhile to have top executives experience what it is like to be in the minority. This can be done by having top managers go to places or events where nearly everyone else is of a different sex or racial/ethnic background. 12-4 © 2015 Cengage Learning

Mitchell Gold + Bob Williams What are advantages and disadvantages of diversity at Mitchell Gold and Bob Williams? How does MG + BW’s approach to diversity reflect the learning and effectiveness paradigm? How might a commitment to diversity at MG+BW help managers with globalization? When Mitchell Gold and Bob Williams started their furniture company in 1989, they had a vision for how they wanted to run things. They would guarantee comfort, minimize costs, enact rigorous controls, and produce the styles they liked for their own homes. They had one other important goal: to foster a diverse workplace where employees could labor unburdened by stress, worry, or discrimination. The company has clearn nondiscrimination policies, extensive diversity training, and insures that all employees receive the same benefits, regardless of race, gender, or religion. As employees have come to recognize, Mitchell Gold + Bob Williams is a diversity trendsetter. The company’s founders envisioned a workplace where individuals felt safe and respected, and now, some 20 years later, the business is reaping rewards of diversity. With more than $100 million in annual sales, it’s clear that people-focused business strategies are paying off. © 2015 Cengage Learning