1. Managing the Diverse Workforce
CHAPTER 11
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2. Chapter Introduction Quote
“e pluribus unum” or "Out of many, one"

3. Learning Objectives
1 Describe how changes in the U.S. workforce make diversity a critical organizational and managerial issue. 2 Distinguish between affirmative action and managing diversity. 3 Explain how diversity, if well managed, can give organizations a competitive edge. 4 Identify challenges associated with managing a diverse workforce. 5 Define monolithic, pluralistic, and multicultural organizations. 6 List steps managers and their organizations can take to cultivate diversity.

4. Managing Diversity
Managing a culturally diverse workforce by recognizing the characteristics common to specific groups of employees while dealing with such employees as individuals
This chapter discusses why a proactive approach to developing and managing a diverse workforce has become not only a legal or moral obligation but a fundamental business requirement as well.
Managing diversity involves, first, such basic activities as recruiting, training, promoting, and using to full advantage people with different backgrounds and perspectives. It also means understanding and deeply valuing employee differences to build a more effective and effective organization.
Copyright Gary Gershoff/WireImage/Getty Images

5. Diversity: A Brief History (1 of 3)
Most immigrants to the United States from late s to early 1900s were from Italy, Poland, Ireland, and Russia.
It was considered poor business practice for white Protestant-dominated insurance companies to hire Irish, Italians, Catholics, or Jews.
It was not until the 1960s that the struggle for acceptance by various ethnic and religious groups had, on the whole, succeeded.
Managing diversity is not a new management issue. From the late 1800s to the early 1900s, most of the groups immigrating to the United States were from Italy, Poland, Ireland, and Russia. They struggled to gain acceptance in industries such as steel, coal, automobile manufacturing, insurance, and finance. In the 1800s, it was considered poor business practice for white Protestant-dominated insurance companies to hire Irish, Italians, Catholics, or Jews. As late as the 1940s, and in some cases later yet, colleges routinely discriminated against immigrants, Catholics, and Jews, and established strict quotas if admitting any at all. Discrimination severely diminished the employment prospects of many groups, and it wasn’t until the 1960s that the struggle for acceptance by successful white ethnic and religious groups made notable progress.

6. Diversity: A Brief History (2 of 3)
When the Women’s Rights Movement was launched in 1848, most occupations, colleges, and professional schools were off limits to women.
Until the Civil Rights Act of 1964, women:
Were excluded from certain jobs.
Needed a male cosigner for a bank loan.
Were not issued credit cards if they were married.
Women’s struggle for acceptance in the workplace was in some ways even more difficult. When the women’s rights movement was launched in Seneca Falls in 1848, most occupations were off-limits to women, and colleges and professional schools were totally closed to them. Women could not vote and lost all property rights once they were married.

7. Diversity: A Brief History (3 of 3)
Racial segregation remained for 100 years after the end of the Civil War. Blacks suffered voting right suppression and discrimination in education, employment, and housing. Brown v. Board of Education (1954) declared segregation unconstitutional, setting the stage for the Civil Rights Act of 1964.
The most difficult and wrenching struggle for equality involved America’s nonwhite minorities. Rigid racial segregation remained a fact of American life for 100 years after the end of the Civil War.
Today nearly half of the U.S. workforce consists of women, 17 percent of U.S. workers identify themselves as Hispanic or Latino, and 12 percent African American. Women own one-third of all businesses in the United States, employing about 20 percent of America’s workers.

8. Diversity Today Diversity Managing diversity
Differences that include religious affiliation, age, disability status, military experience, sexual orientation, economic class, educational level, lifestyle, gender, race, ethnicity, and nationality
Managing diversity
Not just tolerating or accommodating differences, but supporting, nurturing, and utilizing these differences to the organization’s advantage
Today diversity refers to far more than skin color and gender. It is a broad term used to refer to all kinds of differences, as summarized in Exhibit 11.1 (next slide). These differences include education, political belief, religion, and income in addition to gender, race, ethnicity, and nationality.
Managing diversity means being distinctly aware of characteristics common to a group of employees while also working with each employee as an individual. Managing diversity means not just tolerating or accommodating all sorts of differences, but supporting, nurturing, integrating, and using these differences to the organization’s advantage.

9. Exhibit 11.1 Components of a Diversified Workforce
Today diversity refers to far more than skin color and gender. It is a broad term used to refer to all kinds of differences, as summarized in Exhibit These differences include education, political belief, religion, and income in addition to gender, race, ethnicity, and nationality.

10. Exhibit 11.2 Examples of Diversity Programs in S&P 100 Companies
Although many companies initially instituted diversity programs to prevent discrimination, more now see these programs as a crucial way to expand their pool of talent and customer bases worldwide. These potential benefits are making diversity initiatives standard practice among industry-leading companies. A huge majority of large, mostly multinational companies have at least one diversity initiative. Exhibit 11.2 shows some additional data.
Jump to Appendix 1 for long description of image.
SOURCE: Based on data in DeGroot, Christine et al., “Examining the Cracks in the Ceiling: A Survey of Corporate Diversity Practices of the S&P 100,” Calvert Investments, March 2015 Supplement,

11. Gender Issues
Women make up about 47 percent of the workforce. Almost 60 percent of marriages are dual-earner marriages. One of every three married women in two-income households earns more than her husband does. The percentage of women in the labor force earning college degrees has nearly quadrupled over the past 45 years.
Although white, American-born males still constitutes the largest percentage of workers—about 80 percent of U.S. workers are white, and more than half of them are male—its share of the labor force is declining.
About one in three U.S. residents of the United States is a racial or ethnic minority—a unique milestone in the nation’s history. The largest and fastest-growing minority group is Hispanics, closely followed by Asian Americans.
The United States Census Bureau projects that by 2044 these onetime minority groups will collectively represent a majority of the U.S. population.
Several gender Issues are listed on the slide.

12. Glass Ceiling
An invisible barrier that makes it difficult for women and minorities to move beyond a certain level in the corporate hierarchy
As women and minorities move up the corporate ladder, they encounter a glass ceiling: an invisible barrier that makes it difficult for women and minorities to move beyond a certain level in the corporate hierarchy. At this writing, just 29 women are chief executives of S&P 500 companies—that’s 29 out of 500. Looking at all board members of those companies, about 20 percent are women.

13. Most Powerful Women Executives
Rank
Name
Company
Title 1
Mary Barra
General Motors
CEO 2
Indra Nooyi
PepsiCo
Chairman and CEO 3
Marillyn Hewson
Lockheed Martin
Chairman, CEO, and president 4
Ginni Rometty
IBM 5
Abigail Johnson
Fidelity Investments
CEO and president 6
Sheryl Sandberg
Facebook
COO 7
Meg Whitman
Hewlett Packard Enterprises 8
Phebe Novakovic
General Dynamics
CEO and Chairman 9
Irene Rosenfeld
Mondelez International 10
Safra Catz
Oracle
Co-CEO
 Exhibit 11.4 (recreated on this slide) lists 10 companies where women are thriving as a result of proactive leadership, mentoring programs, and hiring initiatives.
SOURCE: Adapted from “2016 Working Mother 100 Best Companies,” Working Mother.

14. Sexual Harassment
Sexual harassment Conduct of a sexual nature that has negative consequences for employment
Quid pro quo Submission to or rejection of sexual conduct is used as a basis for employment decisions Hostile environment Unwelcome sexual conduct unreasonably interfering with job performance or creating an intimidating or hostile, working environment
As women have gained more presence and power in the workforce, some are drawing attention to the serious problem of sexual harassment : unwelcome sexual conduct that is a term or condition of employment. Sexual harassment falls into two categories. The first, quid pro quo harassment, occurs when submission to or rejection of sexual conduct is used as a basis for employment decisions. 
The second type, hostile environment, occurs when unwelcome sexual conduct “has the purpose or effect of unreasonably interfering with job performance or creating an intimidating, hostile, or offensive working environment.”
Harassment by a hostile work environment is now more common than quid pro quo.

15. Basic Components of an Effective Sexual Harassment Policy
Develop a comprehensive organization-wide policy.
Hold training sessions with supervisors.
Establish a formal complaint procedure.
Act immediately when employees complain of sexual harassment.
Discipline the offenders at once.
Follow up on all cases.
One way managers can help their companies prevent harassment, or avoid punitive damages if an unfounded lawsuit is filed, is to make sure their organizations have an effective and comprehensive policy on harassment. Exhibit (abbreviated on this slide) shows the basic components of such a policy.
SOURCE: Snell, S.A., and Bohlander, G.W., Managing Human Resources, 16th ed. Boston, MA: Cengage Learning, 2012.

16. Minorities and Immigrants
Organizations that do not take full advantage of the skills and capabilities of minorities and immigrants are severely limiting their potential.
The number of businesses started by Asian American, African American, and Hispanic entrepreneurs is growing much faster than the overall growth in new companies.
Population and workplace demographics indicate that organizations that do not take full advantage of the skills and capabilities of minorities and immigrants are severely limiting their potential talent pools and their ability to understand and capture diverse markets. As minority shares of the population grow, so does its purchasing power.

17. Some Top Executives of Color
Name
Company
Title
Ajay Banga
MasterCard
President and CEO
Denice Torres
Johnson & Johnson Medical Devices
Chief Strategy and Business Transformation Officer
David P. Bozeman
Caterpillar 
Senior vice president, Caterpillar Enterprise System Group
Jin Sook and Do Won Chang
Forever 21
Cofounders and owners
Kenneth Chenault
American Express
Chairman and CEO
Gisel Ruiz
Sam's Club
Executive vice president of operations
John Thompson
Microsoft
Chairman
Marvin Ellison
JCPenney
Kenneth Frazier
Merck
CEO and chairman
Exhibit 11.6 (recreated on this slide) gives signs of progress in the top ranks.  Even so, evidence shows some troubling racial disparities in employment and earnings. Unemployment rates are higher for black and Hispanic workers than for whites—twice as high in the case of black men. Earnings of black and Hispanic workers consistently trail those of white and Asian workers, and African Americans and Hispanic Americans are underrepresented in management and professional occupations.
SOURCES: Company website, "Gisel Ruiz: Executive Vice President of Operations, Sam's Club," "Diversity Leadership: Kenneth Frazier, Merck & Co.," DiversityInc., Kezar, C., "J.C. Penney CEO among retail leaders meeting with Trump over import tax," Biz Journals, February 15, 2017, Garcia, A., "MasterCard CEO: Every woman in our company makes the same as a man," Money CNN, April 9, 2016, Microsoft Chairman Feels Need for Speed," Fortune, June 3, 2016, "Kenneth Chenault: Why I Came to American Express," Bloomberg, November 9, 2016,

18. Mentally and Physically Disabled People
This group is the largest unemployed minority in the United States. And the share of the population with a disability is growing. Assistive technologies make it easier for companies to comply with the Americans with Disabilities Act.
The largest unemployed minority population in the United States is people with disabilities. It includes people of all ethnic backgrounds, cultures, and ages.
The share of the population with a disability is growing as the average worker gets older and heavier.

19. The Age of the Workforce
The median age of workers is rising.
The Bureau of Labor Statistics projects that entry-level workers will be in short supply in the future.
70% of workers between 45 and 74 intend to work in retirement.
A strong majority of employers view their older workers as valuable resources for training, mentoring, and sharing knowledge.
Approximately 10,000 Boomers (those born between 1946 and 1964) are retiring each day in the United States. Industries most at risk of losing this talent include health care (hospitals and nursing facilities), transportation, social assistance, and mining and construction  At the same time, the Bureau of Labor Statistics projects that entry-level workers will be in short supply.

20. A Note on Affirmative Action
Affirmative action and diversity management are complementary, not identical.
Affirmative action programs are required for certain organizations like government agencies and federal contractors/sub-contractors.
For many organizations, the original impetus to diversify their workforces was social responsibility and legal necessity. Companies introduced affirmative action—special efforts to recruit and hire qualified members of groups that were discriminated against in the past. The intent was not to prefer these group members to the exclusion of others but to correct for the long history of discriminatory practices and exclusion. Viewed from this perspective, amending these wrongs is moral and ethical as well as a legal necessity.

21. Competitive Advantage through Diversity and Inclusion
Attracting, Motivating, and Retaining Employees Understanding Differentiated Markets Creative Problem Solving Organizational Flexibility
Diversity can provide an organizational strength, especially if managers know how to leverage it.
Some potential advantages of diversity and inclusion are listed on this slide.

22. Challenges of Diversity and Inclusion
Unexamined Assumptions Lower Cohesiveness Communication Problems Mistrust and Tension Stereotyping
Managers of the diverse organization need to identify and overcome difficulties including unexamined assumptions, lower cohesiveness, miscommunications , mistrust and tension, and stereotyping.

23. Beyond Affirmative Action: Key Practices to Leverage Employee Differences
Objective
Key Individual Practices
Key Organizational Practices
Seeing
Adopt a stance that relevant differences are ubiquitous.
Attend to points of conflict.
Observe silence.
Attend to intergroup tension.
Reduce the climate of secrecy.
Understanding
Build skill in acquiring data.
Listen.
Ask questions.
Learn and share your own story.
Include people who are different in your inner circle or network.
Acquire information via survey and other data gathering.
Create and institutionalize inclusive structures.
Valuing
Lower the levels of unnecessary carefulness when dealing with differences.
Be willing to persist in the midst of conflict and its accompanying discomfort.
Incorporate data into your worldview.
Reward
Leveraging difference starts with recognizing that we all bring something different, contributing different strengths, values, and ways of thinking and problem solving. To capitalize on these differences, Exhibit 11.7, (recreated on this slide) offers suggestions applicable to the whole spectrum of organizational activities such as innovating, learning, working as a team, and interacting with customers.

24. Multicultural Organizations
Monolithic organization
An organization that has a low degree of structural integration—employing few women, minorities, or other groups that differ from the majority—and thus has a highly homogeneous employee population
Pluralistic organization
An organization that has a relatively diverse employee population and makes an effort to involve employees from different gender, racial, or cultural backgrounds
Some organizations are monolithic , having very little diversity inclusiveness. The pluralistic organization comes up short by failing to adequately address the cultural aspects of integration. In contrast, in multicultural organizations diversity not only exists but is valued.

25. Diversity Assumptions and Implications for Management (1 of 2)
Common / Misleading Assumptions
Description
More Appropriate Assumptions
Homogeneity
Melting pot myth: We are all the same.
Heterogeneity
Image of cultural pluralism: We are not all the same; groups within society differ across cultures.
Similarity
Similarity myth: “They” are all just like me.
Similarity and difference
They are not just like me: Many people differ from me culturally. Most people exhibit both cultural similarities and differences when compared with me
To capitalize on the benefits and minimize the costs of a diverse workforce, one of the first things managers need to do is examine prevailing assumptions about people and cultures. Exhibit 11.9 shows some assumptions that might exist.
SOURCE: Adler, Nancy J., “Diversity Assumptions and Their Implications for Management,” Handbook of Organization, 1996.

26. Diversity Assumptions and Implications for Management (2 of 2)
Common / Misleading
Assumptions
Description
More Appropriate Assumptions
Parochialism
Only-one-way myth: Our way is the only way. We do not recognize any other way of living or working.
Equifinality
Our way is not the only way: There are many culturally distinct ways of reaching the same goal, of working, and of living one’s life.
Ethnocentrism
One-best-way myth: Our way is the best way. All other approaches are inferior versions of our way.
Culture contingency
Our way is one possible way: There are many and equally good ways to reach the same goal. The best way depends on the culture of the people involved
To capitalize on the benefits and minimize the costs of a diverse workforce, one of the first things managers need to do is examine prevailing assumptions about people and cultures. Exhibit 11.9 shows some assumptions that might exist. Based on these assumptions, we can classify organizations as one of three types and describe their implications for managers.
This slide shows the final two rows of the column and the exhibit is continued from the previous slide.
SOURCE: Adler, Nancy J., “Diversity Assumptions and Their Implications for Management,” Handbook of Organization, 1996.

27. Social Enterprise Managing Diversity at Change.org
Change.org’s mission is to “empower people everywhere to create the change they want to see.” Dulski and other leaders have realigned the company’s internal culture and employee composition to match those of its customers.
Change.org’s mission is to “empower people everywhere to create the change they want to see.” The company is currently helping 150 million global users and 100,000 organizations launch tens of thousands of online petitions per day. In addition to bringing about thousands of success stories in which positive change occurred, the company is broadening its mission and revising its revenue model. It recently began a shift toward crowdsourcing that will let U.S. users not only sign a petition but donate to the cause it represents; Change.org will collect a 5% fee from all donations.
Discussion questions are on the following slide.

28. Social Enterprise Questions
What internal and external forces drove Jen Dulski and other managers at Change.org to reexamine their commitment to diversity?
Why was it important for the company to hire more female and international employees?
What internal and external forces drove Jen Dulski and other managers at Change.org to reexamine their commitment to diversity?
First, the organization’s internal culture should reflect the market it is meant to serve. For example, there used to be only one female employee in the engineering department. When you are serving 150 million users and launch tens of thousands online petitions a day, you should mimic this surely diverse environment. There are also international perspectives that should be taken into consideration. Overall, Dulski has listed effective steps to both embrace employee diversity and take international perspectives into consideration.
Why was it important for the company to hire more female and international employees?
As mentioned in question 1, Change.org’s employees should better reflect it targets market, which includes a good number of female and international customers. This way the workforce can better understand the needs of its customers and work to satisfy them. If the company’s employees do not identify with the customers they serve, the level of service may drop and creativity may also suffer.

29. How Organizations Can Cultivate a Diverse Workforce
Secure top management’s leadership and commitment.
Assess the organization’s progress toward goals.
Attract employees.
Train employees in diversity.
Retain employees.
The slide discusses steps to cultivate diversity.
Steps three through five are discussed on subsequent slides.

30. Attracting Employees
Recruitment Accommodating Work and Family Needs Alternative Work Arrangements
Companies can attract a diverse, qualified workforce by using effective recruiting practices, accommodating employees’ work and family needs, and offering alternative work arrangements.
The following slide discusses training.

31. Guidelines for Diversity Training
Position training in your broad diversity strategy. Do a thorough needs analysis. Distinguish between education and training. Use a participative design process. Test the training thoroughly before rollout. Incorporate diversity programs into the core training curriculum.
Training Employees
Traditionally, most management training was based on the unstated assumption that managing means managing a homogeneous, often white-male, full-time workforce. But diversity creates an additional layer of complexity. Diversity training programs attempt to identify and reduce hidden biases and develop the skills needed to manage a diversified workforce effectively.
This slide abbreviates Exhibit 11.10
SOURCE: Training: The Human Side of Business, 1993.

32. Retaining Employees
Support Groups Mentoring Career Development and Promotions Systems Accommodation Accountability
As replacing qualified and experienced workers becomes more difficult and costly, retaining good workers becomes vitally important. Most executives know that a "lack of attention to diversity and inclusion contributes to employee turnover." Strategies such as the ones listed can improve employee retention.

33. Management in Action Apple’s Driver toward Diversity
Silicon Valley still employs fewer women and minorities than any other private- sector industry. The gap is particularly wide at the management and executive level.
An 2016 Equal Employment Opportunity Commission (EEOC) report concluded that Silicon Valley still employs fewer women and minorities than any other private-sector industry. The gap is particularly wide at the management and executive level.
Apple stands by its efforts to promote inculsion. It has demonstrated its support of diversity by becoming a corporate advocate of the LGBTQ community and of the country’s immigration population, and its many internal diversity initiatives, such as the Diversity Network Associations for employees, increased support for employees with disabilities, pay equity for women, and improved recruitment and hiring practices, appear to be slowly yielding results. However, for now, the company remains 68% male and 56% white.
Copyright Gary Gershoff/WireImage/Getty Images

34. Management in Action Questions Apple’s Driver toward Diversity
Suppose you were charged with increasing the diversity of Apple’s workforce by reducing turnover among the company’s existing female and minority employees. What specific recommendations would you make?
What factors do you think might be slowing the company’s progress toward a more diverse workforce? What can Apple do to overcome these?
Suppose you were charged with increasing the diversity of Apple’s workforce by reducing turnover among the company’s existing female and minority employees. What specific recommendations would you make?
Students may focus on more promoting more opportunities for advancement, mentoring programs and improving work/family balance.
What factors do you think might be slowing the company’s progress toward a more diverse workforce? What can Apple do to overcome these?
Students may suggest that Apple do a better job cultivating future employees and recruiting from more diverse sources. Training to overcome bias in hiring officials and management may also be suggested.

35. In Review
1 Describe how changes in the U.S. workforce make diversity a critical organizational and managerial issue. 2 Distinguish between affirmative action and managing diversity. 3 Explain how diversity, if well managed, can give organizations a competitive edge. 4 Identify challenges associated with managing a diverse workforce. 5 Define monolithic, pluralistic, and multicultural organizations. 6 List steps managers and their organizations can take to cultivate diversity.