Human Resources Management 13th Edition - Chapter 10 PDF

Human Resources Management Chapter 10 309 with years of experience in developing high-­caliber ammu- are relevant for predicting whether they are likely to leave nition suddenly departs, there may be no one else on the the company. Turnover rates are high...

Human Resources Management Chapter 10 309 with years of experience in developing high-­caliber ammu- are relevant for predicting whether they are likely to leave nition suddenly departs, there may be no one else on the the company. Turnover rates are higher among unmarried team with that person’s knowledge and skill set. employees and recently hired employees (who tend to be Another unusual quality of Invincibility’s HR planning is younger). Thus the company plans greater recruiting efforts the variety of factors that the planners consider when they in departments where it has higher levels of young and run their regression analyses. For example, the company has unmarried employees. It also may consider stepping up its run regressions to determine whether turnover is related to efforts to mentor and train employees in these departments. changes in employee benefits and even the month of the However, it does not make employment decisions such as year. If the analysis shows that a factor has been significant hiring and promotion based on these factors. in the past, the planners take it into account in their fore- casts. In one situation, the planners found that retirements D IS C US S IO N Q UESTIO N S in a department rose after the company announced that it 1. Besides the factors identified, what other factors would be phasing out health insurance benefits for retirees. should Invincibility Systems take into account in its HR More experienced workers left before the phase-out took planning? effect. When the company prepared to phase out similar benefits in another division, the planners knew they would 2. What legal concerns does the data analysis at need to step up recruiting efforts there in preparation for an Invincibility raise? How should the company address uptick in retirements. those issues? Some of the data Invincibility uses for planning are 3. Besides its use for HR planning and recruiting, how unsuitable for other kinds of HR decisions. For example, the might Invincibility’s data analysis be applied to improv- company has found that employees’ ages and marital status ing the company’s training programs? Design elements: Lightbulb icon that indicates innovation: ©McGraw-Hill Education; Money icon that indicates cost: ©McGraw-Hill Education; Recycle icon that indicate sustainability: ©McGraw-Hill Education; Human head with headset that indicate service: ©McGraw- Hill Education; Letter Q icon that indicates quality: ©McGraw-Hill Education; Sand dial that indicates speed: ©McGraw-Hill Education CHAPTER 11 Managing the Diverse Workforce E pluribus unum ©Sollina Images LLC/Blend Images RF L E AR N I NG OBJEC T IVES CH A P T ER OUT LIN E After studying Chapter 11, you will be Diversity: A Brief History able to: Diversity Today The Changing Workforce LO 1 Describe how changes in the U.S. workforce The Age of the Workforce make diversity a critical organizational and managerial issue. Managing Diversity and Affirmative Action Advantage through Diversity and Inclusion LO 2 Distinguish between affirmative action and Challenges of Diversity and Inclusion managing diversity. Multicultural Organizations LO 3 Explain how diversity, if well managed, can How to Cultivate a Diverse Workforce give organizations a competitive edge. Top Management’s Leadership and Commitment LO 4 Identify challenges associated with Organizational Assessment managing a diverse workforce. Attracting Employees Training Employees LO 5 Define monolithic, pluralistic, and Retaining Employees multicultural organizations. LO 6 List actions managers and their organizations can take to cultivate diversity. 310  M A N AGE R’ S BR IE F Management in Action D I V ERS I T Y A N D I N C LU S I O N AT APPLE Silicon Valley has a problem. For all their progress in cre- ating successful new products that forever change the PR OG R E SS R E PORT way we live and work, tech companies lag far behind many other industries in creating even a minimally diverse workforce. Blacks and Latinos, who together make up about 30 percent of the U.S. population, account for only about 5 percent of employees in the technology industry, while women, fully half the population, are only 24 percent of the tech workforce. When it comes to the executive suite, those num- bers drop even lower. At Cisco, for instance, women make up about half the administrative staff but hold only about 20 percent of the highest managerial posi- ON WAR D tions. Dell’s numbers are about the same. ©Gary Gershoff/WireImage/Getty Images While some, including Facebook, have blamed a dearth of minority applicants for the lack of diversity, others disagree strongly. “It’s not even remotely a of sexual harassment complaints at companies like pipeline issue,” says Andrea Hoffman of Culture Shift Uber has drawn attention away from underlying indus- Labs, a sourcing company that helps managers meet try problems, like entrenched hiring practices that favor diversity goals. “For anybody to tell me the talent isn’t white men. Many believe the tech industry, which a few out there, I know emphatically that’s not true.” As proof, years ago began releasing data about the diversity of her company recently accepted a waiting list of 200 its workforce, has succeeded only in raising aware- people for a sold-out event it hosted to attract minori- ness without taking sufficiently active steps to really ties looking for jobs in technology and finance. solve the problem. An African American engineer with two master’s Apple is among the tech companies trying to increase degrees and an outstanding management track record the diversity of its workforce, aiming to make itself “a agrees with Hoffman. After being turned down for a job reflection of the world around us.” The company has at Facebook, he told Inc. magazine, “To say there is not undertaken a conscious effort to increase the number enough talent out there is like a slap in the face. There are of women and “underrepresented minorities” among its plenty of diverse people in my network alone who have new hires in several ways over the last few years, and the aptitude and the competitive edge and innovative the numbers are ticking slowly upward. CEO Tim Cook mentality necessary to be successful at a tech company.” takes the definition of diversity farther than most. “One of Other causes for the disproportionately high num- the reasons Apple products work really great,” he says, bers of white males in tech jobs include unconscious “is that the people working on them are not only engi- racial and gender bias and companies’ tendency to neers and computer scientists, but artists and musicians. consider only applicants with specific majors. Some It’s this intersection of the liberal arts and humanities with employees also believe the extensive media coverage technology that makes products that are magical.”1 Tim Cook’s outlook on diversity may seem surprisingly broad, but that might be just what Silicon Valley needs. As you read this chapter, think about how bringing together a diverse group and leading it toward a common purpose can be challenging but also a source of opportunity 311 312 Part Three Organizing: Building a Dynamic Organization Until recently, white American-born males dominated the U.S. workforce, and businesses diverse workforce catered to their needs. Chapter 10 discussed equal opportunity and fair treatment in the One in which there are both workplace. In this chapter, we discuss why a proactive approach to developing and manag- similarities and differences ing a diverse workforce has become not only a legal or moral obligation but a fundamental among employees in terms business requirement as well. of age, cultural background, Managers need to be highly aware of, and sensitive to, group and cultural differences physical abilities and to succeed in the modern economy. In the United States, the number of racial and ethnic disabilities, race, religion, minorities is increasing at a far faster rate than the growth in the white, nonminority popula- sex, and sexual orientation. tion. Women make up a larger share of the workforce than in decades past, and businesses are increasingly global. Workers, customers, and markets are already highly diverse, and are managing diversity becoming even more so every day. Managing a culturally We have discussed how vital creativity and innovation have become for success. These diverse workforce require different perspectives and talented people from all walks of life. Few societies have by recognizing the access to the range of talents available in the United States, with its immigrant tradition and characteristics common racially and ethnically diverse population. to specific groups of Yet getting people from widely divergent backgrounds to work together effectively is not employees while dealing with employees as easy. For this reason, managing diversity is both a big challenge and big opportunity. individuals and supporting, Managing diversity involves, first, such basic activities as recruiting, training, promoting, nurturing, and utilizing and engaging fully people with different backgrounds and perspectives. This means more their differences to the than just hiring women and minorities and making sure they are treated fairly and encour- organization’s advantage; aged to succeed. It also means understanding and deeply valuing employee differences in see also diversity. ways that build a more effective and profitable organization. Diversity: A Brief History 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. Many considered them outsiders because most did not speak English and had differ- ent customs and work styles. 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 Many of the rights all of us take for insurance companies to hire Irish, Italians, Catholics, or Jews. As late as the 1940s, and in granted today—equal opportunity, some cases later yet, colleges routinely discriminated against immigrants, Catholics, blacks, fair treatment in housing, the and Jews, and established strict quotas if admitting any at all. Discrimination severely dimin- illegality of religious, racial, and sex discrimination—received their ished the employment prospects of many groups, and it wasn’t until the 1960s that the strug- greatest impetus from the civil gle for acceptance by successful white ethnic and religious groups made notable progress. rights movement. Women’s struggle for acceptance in the workplace was in some ways even more difficult. ©Francis Miller/The LIFE Picture When the women’s rights movement was launched in Seneca Falls in 1848, most occu- Collection/Getty Images pations were off-limits to women, and colleges and profes- sional schools were totally closed to them. Women could not vote and lost all property rights once they were married. In the first part of the 20th century, a widespread, per- sistent assumption held that certain jobs were done only by men, and other jobs only by women. When women began entering professional schools, they were subject to severe quotas. As recently as the 1970s, classified ad sections in newspapers listed different jobs by sex, with sections headed “Help Wanted—Males” and “Help Wanted—Females.” Women who wanted a bank loan needed a male cosigner, and married women could not get credit cards in their own name.2 Only when the Civil Rights Act of 1964 and other legis- lation arrived was this kind of sex discrimination gradually  Managing the Diverse Workforce Chapter 11 313 eliminated. Women still are underrepresented at the most senior levels of corporate life, and major disparities still exist in other areas such as pay. But now increasing numbers of women occupy most jobs once considered the exclusive province of men, including front- line military units as well as the executive suite. 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. Black voting rights, particularly in the South, often were viciously sup- pressed, and racial discrimination in education, employment. Years of difficult, courageous protest and struggle gradually began to eat away at both legal and social barriers to equality. Organizations such as the NAACP, formed by a group of blacks and whites, began to use America’s court system and the Constitution to bring equality to African Americans and other people of color. The unanimous Brown v. Board of Education Supreme Court decision in 1954 declared segregation unconstitutional, setting the stage for other legislation including the Civil Rights Act of 1964. Consequences of America’s bitter racial legacy are still with us; the struggle for equality is far from complete. But many of the rights most of us take for granted today—equal oppor- tunity, fair treatment in housing, the illegality of religious, racial, and sex discrimination— received their greatest impetus from the civil rights movement. The traditional American image of diversity Today nearly half of the U.S. workforce consists of women, 17 percent of U.S. workers identify them- has been one of assimilation. selves 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.3 The traditional American image of diversity has been one of assimilation. The United assimilation States has long been praised as the world’s melting pot, a country in which ethnic and racial The absorption into the differences blended ideally into an American purée. In real life, many see not a melting pot cultural tradition of a but a mixing bowl. Progress, setbacks, and periods of strain appear, fade, and reappear; population or group. progress comes not naturally but only with concerted and sustained effort. Diversity Today Diversity refers to far more than skin color and gender. It is a broad term used to refer to all LO 1 kinds of differences, as summarized in Exhibit 11.1. These differences include education, political belief, religion, and income in addition to gender, race, ethnicity, and nationality.4 diversity Members of a demographic group or people who have been through similar important experiences share some common values, attitudes, and perspectives. At the same time, A broad term used to refer much diversity exists within each category. Every group is made up of individuals, each to all kinds of differences. These differences include unique in personality, education, and opinions. There may be more differences among, say, education, political belief, three Asian Americans from Thailand, Hong Kong, and Korea than among a white, an religion, and income in African American, and an Asian American all born in Chicago. And not all white males addition to gender, race, behave alike, nor do people from the same hometown share the same personal or profes- ethnicity, and nationality sional goals and values. Therefore managing diversity requires awareness of aspects 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, nurtur- ing, integrating, and using these differences to the organization’s advantage. Knowing that U.S. companies must learn to manage a diverse workforce better than their competitors, Ernst & Young has a program called “EY Unplugged” that connects ethnically diverse new hires from all around the U.S. with executive mentors.5 Although many companies initially instituted diversity programs to prevent discrimina- tion, 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 314 Part Three Organizing: Building a Dynamic Organization EXHIBIT 11.1 Gender Components of a Diversified Workforce Income Race Education Ethnicity Sexual Nationality Orientation Disability Religion practice among industry-leading companies. A huge majority of large multinational compa- nies have at least one diversity initiative. Exhibit 11.2 shows some additional data. The Changing Workforce Although white, American-born males still constitute the largest percentage of workers— about 80 percent of U.S. workers are white, and more than half of them are male—their share of the labor force is declining. The number of white male workers will continue grow- ing, but the numbers of Asian American, African American, and Hispanic American work- ers will grow faster.6 This parallels trends in the overall U.S. population. About one in three U.S. residents is a racial or ethnic minority. The largest and ­fastest-growing minority group is Hispanics, closely followed by Asian Americans. In several EXHIBIT 11.2 Examples of Diversity At least 1 diversity initiative Programs in S&P 100 Companies Diversity training for managers/leaders Mentoring programs Overall corporate commitment* One woman or minority among the five highest-paid executives 0% 20% 40% 60% 80% 100% *Refers to corporate structures that govern inclusion strategies across all operations, including board oversight of diversity programs, an established diversity council, CEO and/or chair involvement in inclusion initiatives, and compensation plans tied to diversity objectives. 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, http://www.calvert.com.  Managing the Diverse Workforce Chapter 11 315 states—California, Hawaii, New Mexico, and Texas—and the District of Columbia, these minority groups plus Native Americans and Pacific Islanders combine to make a popula- tion that is “majority minority.”7 The United States Census Bureau projects that by 2044 these one-time minority groups will collectively represent a majority of the U.S. population.8 Gender Issues Social changes during the 1960s and 1970s, coupled with financial necessity, greatly increased the number of women entering the workforce. Consider: Women make up about 47 percent of the workforce. Approximately 53 percent of marriages are dual-earner marriages. Nearly 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.9 For anyone holding dual responsibilities, balancing work and family presents an enor- mous challenge. Although men’s roles in our society have been changing, women still adopt glass ceiling the bulk of family responsibilities, including household responsibilities, child care, and care An invisible barrier that of elderly parents. Yet some companies still expect their employees, particularly at the man- makes it difficult for women agerial level or in certain professions, to put in long hours and sacrifice their personal lives and minorities to move for the sake of their work. Not only can these expectations put many women at a career beyond a certain hierarchical disadvantage, but they also cause companies to lose valuable talent. level. Companies that offer their employees the oppor- tunity to balance work and family are better able The average full-time working woman earns to recruit and retain women and sometimes men. These companies offer family-friendly benefits such about 83 percent as much as men in the as onsite child care, in-home care for elderly family same job. members, increased maternity leave, job sharing, and flexible work schedules, and they permit more work from home. The nearby “Multiple Generations at Work” box discusses such work arrangements. The average full-time working woman earns about 83 percent as much as men in the same job. A long-standing, persistent gap exists between male and female workers’ earnings, even after adjusting for age, marital status, geographic region, college major and GPA, type and selectivity of undergraduate school, type of occupation, economic sector, number of hours worked, and months between graduation and starting work. Importantly, differences in performance evaluations do not explain the pay differences.10 While career interruptions to care for family reduce women’s long-term earnings,11 another possible explanation for the wage gap is that women are not negotiating pay as effectively as men. This hurdle is complicated by evidence that some negotiation tactics that work for men can backfire when women use them, but women benefit by doing more research into pay scales and expressing their pay requirements in a pleasant tone, backed up with evidence of their worth.12 Another concern is the low representation of women in top jobs. 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 hierarchical level. At this writing, just 29 women are chief executives of S&P 500 companies—that’s 29 out of 500. Among all board members of those companies, about 20 percent are women.13 Still, Irene Rosenfeld has broken through the glass ceiling one positive trend is that women’s leadership is beginning to be seen at as CEO of Mondelez International, overseeing the companies in a broader range of industries. Exhibit 11.3 lists top women company with revenues of over $30 billion. executives and their companies. ©Bloomberg/Bloomberg/Getty Images 316 Part Three Organizing: Building a Dynamic Organization Multiple Generations at Work Flexibility and Work–Life Balance In addition to offering family-­friendly benefits, many 2. Review your company’s existing policies about flexible companies provide flexible working arrangements to work arrangements. This information can help you recruit and retain Millennial employees. A recent survey shape your negotiation strategy. indicates that these early career employees value work 3. Research whether your organization has the technol- flexibility and work–life balance more than compensation ogy to support virtual workers. For example, does it growth or skill development. have shared file folders and documents, videoconfer- Additional factors driving the trend toward flexible encing software, cloud-based computing, and instant work arrangements include technology and Millennial messaging? employees’ affinity for using it. Mobile technology, cloud 4. Make a compelling case for why adding flexibility to computing services, and high-speed Internet enable your work is good for business and productivity. It employees to collaborate in teams and with clients from could be that you have a long commute each day and non-office locations. As the first generation to come of that you could better spend your time working on age as “digital natives,” Millennials are comfortable work- projects. ing in this virtual, flexible environment. The traditional 5. Be prepared for pushback. Your manager may Monday–Friday, 9–5 p.m. work schedule can be per- resist granting a flexible schedule for fear that you ceived as too restrictive for this generation that is used to will use the time outside the office for nonwork integrating work and leisure during “off hours.” activities. A counterpoint may be that you’ll likely Here are some tips for making your job more flexible:14 put in longer hours (and be more productive) and that your online work and e-communication time 1. Identify which type of flexible work arrangement you stamps will provide consistent evidence of time desire. Is it telecommuting, job sharing, flexible work worked. hours... ? To help break through the glass ceiling, Accenture sponsors monthly networking events and offers flexible schedules and part-time arrangements. Employers sometimes match employees with mentors to help them navigate the corporate environment. Whatever the sexual harassment source of career obstacles, empowerment programs can help. Exhibit 11.4 lists eight com- Unwelcome sexual conduct panies where women are thriving as a result of proactive leadership, mentoring programs, that is a term or condition of and hiring initiatives. employment. As women have gained more presence and power in the workforce, more are drawing attention publicly to the serious problem of sexual harassment: unwelcome sexual conduct EXHIBIT 11.3 Rank Name Company Title Top Ten Most Powerful Women Executives 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 Chairman, CEO, and president 5 Abigail Johnson Fidelity Investments CEO and president 6 Sheryl Sandberg Facebook COO 7 Meg Whitman Hewlett Packard Enterprises CEO and president 8 Phebe Novakovic General Dynamics CEO and Chairman 9 Irene Rosenfeld Mondelez International Chairman and CEO 10 Safra Catz Oracle Co-CEO SOURCE: “The Most Powerful Women in Business,” Fortune, 2016. http://www.fortune.com.  Managing the Diverse Workforce Chapter 11 317 AT Kearney Johnson & Johnson EXHIBIT 11.4 Deloitte McKinsey & Company Top Companies for Women EY (Ernst & Young) PWC IBM Prudential SOURCE: Adapted from “2016 Working Mother 100 Best Companies,” Working Mother, www.workingmother.com. 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 intimi- dating, hostile, or offensive working environment.” Behaviors that can cause a hostile work environment include persistent or pervasive displays of pornography, lewd or suggestive remarks, or demeaning taunts or jokes. Both categories of harassment violate Title VII of the Civil Rights Act of 1964. Regardless of the sex of the harasser and the victim—in a recent year, more than 15 per- cent of complaints filed with the federal government came from males—if an employee files a complaint of sexual harassment with the Equal Employment Opportunity Commission (EEOC), the commission may investigate. If it finds evidence for the complaint, it may request mediation, seek a settlement, or file a lawsuit. Companies fear these lawsuits, with stiff potential fines and negative publicity that can damage the company’s reputation and ability to recruit the best employees. Harassment via a hostile work environment is now more common than quid pro quo harassment. The former may involve more subjective standards, but managers must main- tain an appropriate work environment by ensuring everyone knows what conduct is and is not appropriate and that misconduct has serious consequences. Even when managers do not themselves engage in harassment, they and their employers can be held liable if a lawsuit is filed and they have failed to prevent harassment or to take appropriate action after receiv- ing legitimate complaints. Also important to know is that the “hostile work environment” standard applies to same-sex harassment as well as to non-gender-related cases, such as a pattern of racial or ethnic slurs. Teenage employees are particularly vulnerable because they are inexperienced, hold lower-status jobs, and often feel hesitant or embarrassed to speak up. A teenager who spoke up recently about being sexually harassed by a manager of a Houston-based Chipotle Mexican was awarded $7.7 million.15 The federal EEOC has made this concern a prior- ity and launched a teen-focused page called “Youth A strong commitment to valuing diversity leads at Work” on its website (http://www.youth.eeoc.gov). The National Restaurant Association and National to fewer problems with sexual harassment. Retail Federation also have stepped up efforts to pro- tect teens from harassment.16 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 11.5 shows the basic compo- nents of such a policy. Companies such as Kaiser Permanente, AT&T, and MasterCard know that a strong commitment to valuing diversity leads to fewer problems with sexual harassment.17 Gender issues do not apply only to women. In some ways, the changing status of women has given men the opportunity to redefine their roles, expectations, and lifestyles. Some men are deciding that there is more to life than corporate success and choosing to scale back work hours to spend more time with their families. Men as well as women want to achieve a balance between career and family. 318 Part Three Organizing: Building a Dynamic Organization EXHIBIT 11.5 1. Develop a comprehensive organizationwide policy on sexual harassment and Components of Effective present it to all current and new employees. Stress that sexual harassment will not Sexual Harassment be tolerated under any circumstances. Emphasize how strongly top management Policies believes in the policy. 2. Hold training sessions with supervisors to explain Title VII requirements, their role in providing an environment free of sexual harassment, and investigative procedures. 3. Establish a formal complaint procedure in which employees can discuss problems without fear of retaliation. Spell out how charges will be investigated and resolved. 4. Investigate immediately when employees complain of sexual harassment. Convey clearly that investigations will be conducted objectively and with appreciation for the sensitivity of the issue. 5. When an investigation supports the charges, discipline the offender at once. For serious offenses, discipline should include penalties up to and including discharge. Discipline should be applied consistently across similar cases and among managers and hourly employees alike. 6. Follow up on all cases to ensure a satisfactory resolution of the problem. SOURCE: Snell, S. A., and Bohlander, G. W., Managing Human Resources, 16th ed. Boston, MA: Cengage Learning, 2012. Employees who are lesbian, gay, bisexual, or transgender (LGBT) are affected by the same issues. They want to avoid discrimination and harassment too, of course, to obtain benefits for a same-sex spouse or domestic partner, or to feel free not to be secretive about this aspect of who they are. Treatment of LGBT employees is an area of ongoing change, both in societal attitudes and in the law. For example, a few years ago, couples in a same-sex relationship would be categorized legally as single, but now some states have laws allowing them to marry or register as domestic partners and to adopt children together. Over 90 percent of Fortune 500 companies have policies protecting employees on the basis of sexual orientation, and former president Obama signed an executive order prohibit- ing federal contractors from discriminating against LGBT workers.18 In situations where laws, policies, and social norms are in a state of flux, employers must be especially attentive to what is required and how employees, customers, and other stakeholders are affected by company policies and practices. Minorities and Immigrants Organizations that do not take full advantage of the skills and capabilities of minorities and immigrants are severely limiting their potential tal- ent pools and their ability to understand and capture diverse markets. As minority shares of the population grow, so do these groups’ purchasing power. And if you sell to businesses, you probably deal with minority-owned companies because the number of businesses started by Asian American, African American, and Hispanic entrepreneurs is growing much faster than the overall growth in new companies. Immigrants founded more than half of the com- panies that started in California’s high-tech Silicon Valley; in a recent year, half of patent applications in the United States identified an immigrant as the inventor or a co-inventor.19 In many urban areas with large Asian, Hispanic, or African American populations, banks have deliberately increased the diversity of their managers and tellers to reflect the popula- tion mix in the community and attract additional business. If they did not, customers would notice and switch to other banks where they would feel more welcome and comfortable. Such diversity—and effective collaboration among diverse employees—creates better cus- tomer service that helps banks compete successfully. For example, tellers approached by new immigrants who do not yet speak English immediately call on their bilingual colleagues for help. The bilingual colleagues also are better able to assist bank customers with special problems such as income transfers from abroad. Exhibit 11.6 gives signs of progress in the top ranks. Even so, evidence shows some trou- bling racial disparities in employment and earnings. Unemployment rates are higher for black  Managing the Diverse Workforce Chapter 11 319 EXHIBIT 11.6 Some Top Executives of Color Name Company Title Ajay Banga MasterCard President and CEO Denice Torres Johnson & Johnson Medical Chief strategy and business Devices 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 Chair and CEO Gisel Ruiz Sam’s Club Executive vice president of operations John Thompson Microsoft Chair Marvin Ellison JCPenney President and CEO Kenneth Frazier Merck CEO and chair Oprah Winfrey Harpo Chair and CEO SOURCES: Company website, “Gisel Ruiz: Executive Vice President of Operations, Sam’s Club,” www.walmart.com; “Diversity Leadership: Kenneth Frazier, Merck & Co.,” DiversityInc., www.diversityinc.com; Kezar, C., “J.C. Penney CEO among Retail Leaders Meeting with Trump over Import Tax,” Biz Journals, February 15, 2017, www.bizjournals.com; Garcia, A., “MasterCard CEO: Every Woman in Our Company Makes the Same as a Man,” CNNMoney, April 9, 2016, www.moneycnn.com; “Microsoft Chairman Feels Need for Speed,” Fortune, June 3, 2016, www.fortune.com; “Kenneth Chenault: Why I Came to American Express,” Bloomberg, November 9, 2016, www.bloomberg.com. and Hispanic workers than for whites—twice as high in the case of black men. Earnings of Ernst & Young has been named black and Hispanic workers consistently trail those of white and Asian workers, and African as one of the best companies for valuing diversity, based on how Americans and Hispanic Americans are underrepresented in management and professional it ranked in four key areas—CEO occupations.20 This underrepresentation perpetuates the problem because it leaves aspiring commitment, human capital, young minorities with fewer role models or mentors that are so important to people’s careers. corporate and organizational communications, and supplier Discrimination accounts for at least some of the disparities in employment and earn- diversity. ings. In one recent study—and there are other such findings—fictitious résumés were used ©Lars Niki RF to respond to help-wanted ads in Boston and Chicago newspapers. Résumés with white-sounding names were 50 percent more likely to get a callback for an interview than the same résumés with African American names. Despite equivalence in credentials, the often unconscious assumptions about differ- ent racial groups are very difficult to overcome.21 Virtually every large organization has policies and programs dedicated to increasing minority representation, including compensation systems that reward managers for increasing diversity. Major companies such as FedEx, Xerox, Shell, PNC Financial, and Sun Microsystems have corporate diver- sity officers who help managers to attract, retain, and promote minority and women executives. Many organizations support minority internships and MBA programs. Microsoft sponsors summer internship programs for minor- ity undergraduate students pursuing computer science or software engineer- ing degrees. Lockheed Martin partners with the American Management Association’s Operation Enterprise on two-week paid summer internship programs for high school and college students. Ideally these internships turn into full-time employment. Mental and Physical Disabilities 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.22 According to U.S. government statistics, about 17 percent of people with 320 Part Three Organizing: Building a Dynamic Organization disabilities are employed compared to 65 percent of people without.23 One-third are employed on a part-time basis.24 People with a disability are more likely to have jobs if they have higher education levels, and more likely than workers without disabilities to have a part-time job because they can’t find full-time work.25 The Americans with Disabilities Act Amendments Act (ADAAA) defines a disability as a physical or mental impairment that substantially limits one or more major life activities. Examples of such physical or mental impairments include those resulting from orthopedic, visual, speech, and hearing impairments; cerebral palsy; epilepsy; multiple sclerosis; HIV infections; cancer; heart disease; diabetes; mental retardation; psychological illness; particu- lar learning disabilities; drug addiction; and alcoholism.26 New assistive technologies are making it easier for companies to comply with the ADA and for those with disabilities to be productive on the job. In many cases, state govern- ments pay for special equipment or other accommodations. Accommodations can result in unanticipated fringe benefits, too. The National Industries for the Blind (NIB), a Wisconsin company that markets products under the Skilcraft brand name, is a case in point. Seventy- five percent of NIB employees are visually impaired. Because the company’s warehouse pickers have trouble reading instructions on paper, NIB installed a voice technology sys- tem that conveys instructions to workers through headsets. An added benefit is that the technology has raised the productivity of the entire operation. Accuracy has improved, and ­workers—both blind and sighted—are able to pick and ship orders faster using the headsets. For most businesses, people with disabilities represent an unexplored but productive labor market. Employers frequently find that employees with disabilities are more depend- able than other employees, miss fewer days of work, and exhibit lower turnover. Companies receive tax credits for hiring workers with disabilities. And such practices send important signals to other employees and outside stakeholders of a strong desire for an inclusive organization. Education Levels When the United States was an industrial economy, many jobs required physical strength, stamina, and skill in a trade, rather than college degrees. In today’s service and technology economy, more positions require a college education and even a graduate or professional degree, and prospective employees have responded by apply- ing to college in record numbers. One result is rising shares of African American, Hispanic, and female graduates. People with degrees in science and technology are The share of workers with a bachelor’s degree in especially high demand. Employers often expand their search for scientists and computer professionals has more than doubled since 1970. overseas, but visa requirements limit that supply. On the other side of the spectrum, in the current labor pool almost 25 percent of foreign-born workers have not completed high school, compared with just 5 percent of native-born workers.27 The Age of the Workforce Approximately 10,000 Boomers (those born between 1946 and 1964) are retiring each day in the United States.28 Industries most at risk of losing this talent include health care (hos- pitals and nursing facilities), transportation, social assistance, and mining and construc- tion.29 At the same time, the Bureau of Labor Statistics projects that entry-level workers will be in short supply. On the plus side, almost 70 percent of workers between the ages of 45 and 74 say that they intend to work in retirement. Retirees often return to the workforce at the behest of their employers, who don’t want to lose the knowledge accumulated by longtime employees, their willingness to work nontraditional shifts, and their reliable work habits, which have a positive effect on the entire work group. To prevent an exodus of talent, employers need strategies to help retain, attract, and motivate skilled and knowledgeable older workers.30 Phased retirement plans allow older employees to work fewer hours per week. Other strategies include workplace adaptations to  Managing the Diverse Workforce Chapter 11 321 help older workers cope with physical problems such as poor vision, hearing, and mobility. This is quite different from previous practice when companies gave older workers incentives to leave in order to reduce overhead and perhaps hire less expensive replacements. Now, a strong majority of employers view their older workers as valuable resources for training, mentoring, and sharing knowledge.31 At the same time, companies need to compete hard for the smaller pool of young tal- ent, who know the job market and expect the working conditions they value. Bruce Tulgan, founder of Rainmaker Thinking, which specializes in researching generational differences, says that today’s young workers tend to be “high-maintenance” but also “high-performing,” having learned information technologies so thoroughly.32 affirmative action Therefore top employers scramble to design work arrangements that are stimulating, Special efforts to recruit involve teamwork, keep work hours reasonable, and provide plenty of positive feedback. and hire qualified members Employers also are updating their recruiting tactics to reach young workers where they of groups that have been are—through social media. Most recruiters post job opportunities on Facebook, Instagram, discriminated against in the LinkedIn, and Twitter.33 past. Managing Diversity and Affirmative Action For many organizations, the original impetus to diversify their workforces was a combination LO 2 of 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. Nevertheless, the legislated approach created fragmented efforts that have not fully achieved the integrative goals of diversity. Employment discrimination persists; even after decades of government legislation, equal employment oppor- tunity (EEO) and affirmative action laws have not adequately improved the upward mobility of women and minorities. To move beyond correcting past wrongs and create truly inclu- sive organizations requires a change in organization culture to one in which diversity contributes directly to the attain- ment of organization goals. Affirmative action and managing diversity are not the Managing diversity involves same thing. Managing diversity means moving beyond legislated mandates to embrace a pro- making changes to remove active business philosophy that values differences positively. All employees are different, add- obstacles that keep people from reaching their full potential. ing in many ways to the richness of talents and perspectives that organizations can draw upon. ©Rawpixel.com/Shutterstock.com RF Thus managing diversity is not just about getting more minorities and women into the organization. Managing diversity requires manag- ers to recognize and value the uniqueness of each employee and to see the variety of differences as a Affirmative action and managing diversity are potential source of competitive advantage. It is about not the same thing. coming together to benefit the whole, leading many companies to refer now not just to diversity but also inclusion as their objectives. Advantage through Diversity and Inclusion Diversity in an organization’s upper ranks relates to superior financial performance, as LO 3 shown by a number of studies. Investors’ preferences for organizations with a policy of inclusion may play a stronger role than does superior diversity management. Whether and 322 Part Three Organizing: Building a Dynamic Organization how women on boards of directors relate to firm financial performance is complex and difficult to discern, but the findings sometimes are positive.34 One recent study shows that female board members can help to deter securities fraud.35 Diversity can provide an organi- zational strength, especially if managers know how to leverage it.36 Attracting, Motivating, and Retaining Employees Companies with a reputa- tion for providing opportunities for diverse employees will have an advantage in the labor market, and will be sought out by the most qualified employees. When employees believe their differences are not merely tolerated but valued, they may become more loyal, produc- tive, and committed. Understanding Differentiated Markets Companies such as Ford, General Mills, IBM, Target, and Kroger are committed to diversity because as the workforce changes, so does their customer base. Just as diverse groups prefer to work for employers that value diversity, they may prefer to patronize such organizations. A diverse workforce can provide a company with greater knowledge of the preferences and consuming habits of a diversified marketplace. This knowledge helps in designing prod- ucts and developing marketing campaigns to meet consumers’ needs. In addition, for at least some goods and services, a multicultural sales force can help sell to diverse groups. A diverse workforce also can give a company an edge in a global economy by helping to under- stand other customs, cultures, and market needs. Creative Problem Solving Work team diversity promotes creativity and innovation because people from different backgrounds bring different perspectives. Diverse groups have a broader base of experience from which to approach a problem; when effectively man- aged, they invent more options and create more solutions than homogeneous groups do. In addition, diverse groups are freer to deviate from traditional approaches and practices. Diversity also can help minimize groupthink (recall Chapter 3).37 Many law firms routinely have diverse legal teams working together on cases. Complex Bottom Line cases often require fresh “out of the box” ideas, and a group of lawyers from the same back- A diverse workforce can lead ground who all think alike may not be as innovative as a more diverse team. In jury trials, to greater responsiveness. the impression that a legal team makes on a jury can help or badly hurt the client, and a Why might a customer who visibly diverse legal team is likely to impress a diverse jury. wants something new get a faster response from a Organizational Flexibility Managing diversity well requires a corporate culture that company that tolerates tolerates many styles and approaches. Less restrictive policies and less standardized operat- different styles? ing methods enable greater flexibility and thus quicker response to environmental changes. Procter & Gamble values diversity as key to fulfilling its strategy: “Everyone valued, every- one included, everyone performing at their peak.”38 Challenges of Diversity and Inclusion Every year, thousands of lawsuits are filed over issues of discrimination and unfair treat- LO 4 ment, some involving the largest and most respected firms.39 Recently settled governmental EEOC lawsuits include Walgreens for firing a longtime diabetic employee for eating a bag of chips during a diabetes-related episode; Qualcomm paying $19.5 million to settle claims that it did not provide equal pay and job opportunities to its female employees; and DSW for unfairly firing employees over 40 years old in a workforce reduction effort.40 Even when there is no overt discrimination in hiring, pay, and firing, managing diversity can be challenging. Minorities and women often find themselves in an environment that does not give them the opportunity to do their best work. And managers with all the good- will in the world find it harder than they expected to get people from different backgrounds to work together for a common goal.41 Managers of the diverse organization need to identify and overcome difficulties includ- ing unexamined assumptions, lower cohesiveness, miscommunications, mistrust and ten- sion, and stereotyping.  Managing the Diverse Workforce Chapter 11 323 Unexamined Assumptions For most of us, seeing the world from someone else’s perspective is difficult because our own assumptions and viewpoints seem so normal and familiar. For example, heterosexuals may not even think about whether to put a photo of their loved ones on their desks; it is a routine, even automatic decision, repeated in a million workplaces across the country. But for many gay employees in some environments, display- ing (or even considering) such photos can cause considerable anxiety. Other unexamined assumptions involve the roles of women and men. For example, many people assume that women will shoulder the burden of caring for children, even if it conflicts with the demands of work. In a recent experiment, employers were less likely to invite the fictional candidate for an interview when the résumé implied the candidate was a ­parent—but only if the name was female.42 Because the résumés were otherwise identical, the results suggest that people make assumptions about mothers that do not apply to fathers or to childless women. In organizations that are oblivious to such assumptions and do not actively help people feel welcome and valued, managers will find it more difficult to develop an enthusiastically shared sense of purpose. Lower Cohesiveness Diversity can create a lack of cohesiveness. Cohesiveness refers to how tightly knit the group is and the degree to which group members perceive things and behave in similar or mutually agreed-upon ways. Because of differences, diverse groups typi- cally are less cohesive than homogeneous groups. Mistrust, miscommunication, stress, and attitudinal differences reduce cohesiveness, which in turn can diminish productivity. This may be one explanation for the results of a study that showed greater turnover among store employees who feel they are greatly outnumbered by co-workers from other racial or ethnic groups.43 In a diverse group, managers should take the lead in building cohe- siveness by establishing common goals and values. Group cohesiveness will be discussed in greater detail in Chapter 14. Communication Problems Communication difficulties include misunderstand- ings, inaccuracies, inefficiencies, and slowness. Speed is lost when not all group mem- bers are fluent in the same language or when additional time is required to explain things. Sometimes diversity decreases communication, as when white male managers feel less com- fortable ­giving feedback to women or minorities for fear of how criticism may be received. If managers don’t deliver helpful feedback, employees will not know how to improve their performance. Diversity also can lead to errors and misunderstandings. Group members may assume they interpret things similarly when in fact they do not, or they may disagree because of their different frames of reference.44 For example, if managers do not actively encourage and accept the expression of different points of view, some employees may be afraid to speak up at meetings, leaving the manager with a false impression that consensus has been reached. We discuss communication in depth in Chapter 15. Mistrust and Tension People prefer to associate with others who are like themselves. This is a normal, understandable tendency. Feeling excluded from joining colleagues at business lunches or after-hour gatherings is isolating and frustrating, and can lead to mis- understandings, mistrust, and ineffective work relationships. Tensions may develop between people of different ages; what one generation might see as a tasteless tattoo is for others a creative example of body art. Such disagreements can cause stress, tension, and resentment, making it more difficult to agree on work issues. Stereotyping We learn to see the world in a certain way based on our backgrounds and experiences. Our interests, values, and cultures act as filters and distort, block, and select what we see and hear. We see and hear what we expect to see and hear. Group members often inappropriately stereotype colleagues rather than accurately perceiving their contribu- tions, capabilities, aspirations, and motivations. 324 Part Three Organizing: Building a Dynamic Organization Such stereotypes usually are negative or condescending. Women may be stereotyped as not dedicated to their careers, and older workers as incapable and unwilling to learn new skills. But even so-called positive stereotypes can be burdensome. The common stereotype that Asian Americans are good at math may leave unrecognized other positive attributes. Many people dislike being stereotyped at all, even positively, preferring to be understood and treated as individuals. Stereotypes may lead organizations to miss the opportunity to hire qualified candi- dates,45 and can cost the organization dearly by stifling employees’ motivation so that they don’t contribute fully. Managers want their employees to perform to their full ability, but stereotypes that dampen individual employees’ ambition and performance detract from the organization’s success. Managers unaware of stereotyping—by themselves or others—may not recognize its effects on how people are treated. Employees stereotyped negatively will be given work assignments that are less important than those given to co-workers. Those assignments will underuse people’s skills, frustrate them, perhaps reduce their commitment, and cause higher turnover.46 Leveraging Differences For all these reasons, and more, managing diversity is not easy. Managers are not immune to the biases, stereotypes, inexperience, and tensions that make communication, teamwork, and leadership in a diverse workforce challenging. But they do need to confront these issues and develop the necessary strategies and skills if they and their organizations are to succeed in our multicultural environment. One constructive way to begin is with what Professor Martin Davidson calls “leverag- ing difference.” This approach sees diversity not as a problem to be tolerated or solved but as a resource the organization can capitalize on, even though doing so can be difficult. Leveraging difference starts with recognizing that we all bring something different, contrib- uting different strengths, values, and ways of thinking and problem solving. To capitalize on these differences, Exhibit 11.7 offers suggestions applicable to the whole spectrum of organizational activities such as innovating, learning, working as a team, and interacting with customers.47 EXHIBIT 11.7 Leveraging Employee Differences Key Individual Practices Key Organizational Practices Seeing Adopt a stance that relevant differences are Attend to intergroup tension. ubiquitous. Reduce the climate of secrecy. Attend to points of conflict. Observe silence. Understanding Build skill in acquiring data. Acquire information via survey and other data – Listen. gathering. Create and institutionalize inclusive structures. – Ask questions. – Learn and share your own story. Include people who are different in your inner circle or network. Valuing Lower the levels of unnecessary carefulness Reward and hold employees accountable for when dealing with differences. engaging in difference-related activities. Be willing to persist in the midst of conflict and Recruit and develop people who add diversity its accompanying discomfort. to the organization. Incorporate data into your worldview. SOURCE: Davidson, M. N., The End of Diversity as We Know It: Why Diversity Efforts Fail and How Leveraging Difference Can Succeed. San Francisco: Berrett- Kohler Press, 2011.  MANAGER’S BRIEF Management in Action APPLE’S DRIVE TOWARD DIVERSITY With the number of women and minorities lagging in the The company has improved some of the diversity sta- PROGRESS REPORT tech industry’s workforce, many companies are thinking tistics it releases in its annual diversity and inclusion report, and talking about ways to remedy the situation. People even if only by a small amount. Change, while slow, is tak- within and outside the industry are concerned that results ing place. have been slow in coming; Facebook’s global director of Apple says it takes a “holistic view” of diversity, “a view diversity recently drew widespread criticism for saying that includes the varied perspectives of our employees as progress on diversity would take years because there are well as app developers, suppliers, and anyone who aspires not enough qualified minority applicants coming through to a future in tech. Because we know new ideas come from the nation’s school system—a statement many deny. diverse ways of seeing things.” The company’s efforts to be Apple, on the other hand, has moved out in front of more diverse extend to pay equity as well as racial, ethnic, many other tech companies, increasing and broadening and gender diversity. According to the company’s website, its recruitment process (including at college campuses), “We’ve achieved pay equity in the United States for similar ONWARD fostering an inclusive workplace climate, cultivating a roles and performance. Women earn one dollar for every pool of diverse leaders, addressing current employees’ dollar male employees earn. And underrepresented minori- unconscious biases, supporting veterans and people with ties earn one dollar for every dollar white employees earn.” disabilities, and advocating for the rights of the LGBTQ That’s a remarkable achievement in a nation where women in community. Its Diversity Network Associations are “groups general still do not earn what men earn for the same work.48 where employees can make connections that create trust Do you agree that the achievement of diversity in the and a feeling of belonging,” whether they want to iden- tech workforce will take a long time? Why or why not? tify as and associate with fellow Christians, Jews, Muslims, What challenges to achieving diversity has Apple over- women, Asian Americans, African Americans, agnostics, or come? Which could it work harder to resolve? others. Multicultural Organizations To capitalize on the benefits and minimize the costs of a diverse workforce, one of the first LO 5 things managers need to do is examine prevailing assumptions about people and cultures. Exhibit 11.8 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. Some organizations are monolithic, having very little diversity or inclusiveness. For monolithic organization example, a firm might favor hiring alumni of the same school. In monolithic organizations, An organization that has groups other than the norm (if represented) work primarily in low-status jobs. Minority a low degree of structural group members must adopt the norms of the majority to survive. This fact, coupled with integration—employing small numbers, keeps conflicts among groups low. Discrimination and prejudice can pre- few women, minorities, or vail, integration between groups is almost nonexistent, and minority group members do not other groups that differ identify strongly with the company. from the majority—and thus Most large U.S. companies made the transition from monolithic to pluralistic organizations has a highly homogeneous in the 1960s and 1970s because of changing demographics and societal forces such as the civil employee population. rights and women’s movements. Pluralistic organizations have a more diverse employee popu- lation and use an affirmative action approach to managing diversity: They actively try to hire pluralistic organization and train a diverse workforce and to avoid discrimination. They integrate groups more fully An organization that has a than do monolithic organizations, but like monolithic organizations they often have minority relatively diverse employee group members clustered at certain levels or in particular functions within the organization. population and makes an Because of training programs and greater cultural integration, the pluralistic organization effort to involve employees shows less prejudice and some acceptance of minority group members into the informal net- from different gender, racial, work. Improved employment opportunities help group members identify more strongly with or cultural backgrounds. 325 326 Part Three Organizing: Building a Dynamic Organization EXHIBIT 11.8 Diversity Assumptions and Implications Common and Misleading Assumptions More Appropriate Assumptions Homogeneity Melting pot myth: We are all the Heterogeneity Image of cultural pluralism: We are not all same. the same; groups within society differ across cultures. Similarity Similarity myth: “They” are all just Similarity and They are not just like me: Many people differ like me. difference from me culturally. Most people exhibit both cultural similarities and differences when compared with me. Parochialism Only-one-way myth: Our way is the Equifinality Our way is not the only way: There are many only way. We do not recognize any culturally distinct ways of reaching the same other way of living or working. goal, of working, and of living one’s life. Ethnocentrism One-best-way myth: Our way is the Culture Our way is one possible way: There are best way. All other approaches are contingency many and equally good ways to reach the inferior versions of our way. same goal. The best way depends on the culture of the people involved. SOURCE: Adler, Nancy J., “Diversity Assumptions and Their Implications for Management,” Handbook of Organization, 1996. the organization. Sometimes some majority group members’ resentments toward women and minorities create more conflict than exists in the monolithic organization. The pluralistic organization does not adequately address the cultural aspects of integra- multicultural tion. In contrast, multicultural organizations both are diverse and value differences. These organization organizations fully integrate gender, racial, and minority group members, both formally and An organization that values informally. Rather, managers value and leverage the varieties of experiences and knowledge cultural diversity and seeks employees bring to help the company achieve agreed-upon strategies and goals.49 to utilize and encourage it. The truly multicultural organization is marked by an absence of prejudice and discrimina- tion and by low levels of intergroup conflict. It forges a synergistic environment in which all members contribute to their maximum potential, and fully realizes diversity advantages.50 How to Cultivate a Diverse Workforce LO 6 Plans for becoming multicultural and making the most of a diverse workforce should include (1) securing top management’s leadership and commitment, (2) assessing the organiza- tion’s progress toward goals, (3) attracting employees, (4) training employees in diversity, and (5) retaining employees. Top Management’s Leadership and Commitment If top management is not visibly committed to diversity programs, others in the organiza- tion will not take the effort seriously. One way to communicate this commitment to all employees—as well as to the external environment—is to incorporate diversity values into the corporate mission statement and into strategic plans and objectives. Managerial compensa- tion can be linked directly to accomplishing diversity goals. Adequate funding must be allo- cated to the diversity effort to ensure its success. Also, top management can set an example by participating personally in diversity programs and making participation mandatory for all managers. The “Social Enterprise” box discusses how Change.org manages diversity. As mentioned earlier, some organizations have corporate offices or committees to coor- dinate the companywide diversity effort. Among many examples, the City of Boston has a chief diversity officer, and Avon has a director of multicultural planning and design. Other companies prefer to incorporate diversity management into the function of director of affir- mative action or EEO.  Managing the Diverse Workforce Chapter 11 327 Social Enterprise Managing Diversity at Change.org When Jen Dulski took over as chief operating officer of the online petition platform Change.org, there was only one female employee in the engineering department. For an organization that serves diverse stakeholders in 196 countries, this lack of diversity did not align with the organization’s mission. Change.org’s mission is to “empower people every- where to create the change they want to see.” The company helps 150 million global users and 100,000 organizations launch tens of thousands of online peti- tions per day. While contributing to so many success sto- ries, the company is broadening its mission and revising its revenue model. It recently began a shift toward crowd- sourcing that lets U.S. users sign a petition plus donate to ©The Washington Post/Getty Images the cause it represents; Change.org collects a 5 percent fee from all donations. 3. Create the right culture. Encourage open communica- Dulski and other leaders have realigned the company’s tion between managers and employees and provide internal culture and employee composition to match rewards that employees value. those of its customers. The leaders are “embracing open- Have these initiatives helped increase diversity at ness,” which means working toward gender equality while Change.org? The company’s engineering team is 27 per- also embracing employees with different perspectives— cent female and over half of its employees are women. international workers, older employees, and individuals Women hold 40 percent and non-­Americans occupy 43 with different career experiences. percent of the leadership positions.51 Dulski suggests the following steps to embrace Questions employee diversity and inclusiveness: 1. Make everyone part of the mission. Make diversity a What internal and external forces drove Jen Dulski part of your firm’s core values and celebrate those and other managers at Change.org to reexamine their employees who embody those values. commitment to diversity? 2. Improve the hiring process. Cast a wider recruitment Why, specifically, was it so important for the company net to find qualified, diverse applicants. to hire more female and international employees? The work of managing diversity cannot be done by top management or diversity direc- Michael Jordan, Basketball Hall tors alone. Many rely on minority advisory groups or task forces to monitor organizational of Fame inductee, is one of the high-profile minority team owners policies, practices, and attitudes; assess their impact on the diverse groups within the orga- in the NBA. nization; and provide feedback and suggestions. ©Streeter Lecka/Getty Images At Equitable Life Assurance Society, employee groups meet regularly with the CEO to discuss diversity issues and make recommendations. At Honeywell, employees with disabilities formed a council to discuss their needs. They proposed, and the company accepted, an accessibility pro- gram that went beyond federal regulations to accommodate disabilities. As you can see, progressive companies are moving from asking managers what they think minority employees need and toward asking the employees themselves what they need. Organizational Assessment The next step in managing diversity is to establish an ongoing assessment of the organization’s workforce, cul- ture, policies, and practices in areas such as recruitment, 328 Part Three Organizing: Building a Dynamic Organization promotions, benefits, and compensation. Managers evaluate whether they are attracting their share of diverse candidates from the labor pool and whether the current workforce composition is meeting customer needs. The objective is to identify areas with problems or opportunities and to make recommendations. Etsy, the social commerce website for hand- crafted and vintage items, determined that 80 percent of its customers were women but only about 3 percent of its engineers were women. Marc Hedlund, former senior vice president of engineering, determined—easily, with the data—that Etsy needed to bring in more female engineers and develop their customer skills.52 Women and Asian Americans can be at a disadvantage when an organization values aggressiveness. Such a culture might exclude—from hiring, or full inclusion—those who do not exhibit high levels of aggressiveness. Managers could then decide that the organization’s “values” need to change so that other personal styles are equally acceptable. Managers can change their own behaviors to reflect such a change; for example, by ask- ing everyone in meetings for their thoughts instead of letting more assertive participants dominate. Corporate norms should be identified and evaluated regarding their real value and their impact on people. Attracting Employees Companies can attract a diverse, qualified workforce by using effective recruiting prac- tices, accommodating employees’ work and family needs, and offering alternative work arrangements. Recruiting Developing a reputation for hiring and promoting all types of people can be a strong recruiting tool. Xerox gives prospective employees an article that rates the company as one of the best places for African Americans to work. Hewlett-Packard ensures that its female candidates are familiar with its high rating by Working Woman magazine. Some employers work hard to attract female applicants, ensure that their talents are used to full advantage, and to keep (avoid losing) their most capable employees. With over 80 percent of its customers female, Etsy’s solution was to position itself as a company that values women. It offered female engineers $5,000 scholarships to a pro- gramming course, bringing a flood of Etsy-appreciating women to learn the skills Etsy needs. Etsy also shifted its focus from hiring senior engineers to hiring junior engineers and training them to lead. The focus on diversity not only increased the share of female engineers at Etsy, but also has attracted male engineers who value the company’s culture and work well in teams. In less than two years, the number of women in engineering positions grew from 4 to 20.53 Many minority group members, people with disabilities, and those who are economically disadvantaged are physically isolated from job opportuni- ties. Companies can bring information about job opportunities to the source of labor, or they can transport the labor to the jobs. Polycast Technology in Stamford, Connecticut, contracts with a private van company to transport workers from the Bronx in New York City to jobs in Stamford. Days Inn recruits homeless workers in Atlanta and houses them in a motel within walking distance of their jobs. Burger King has done a lot to recruit and hire immigrants in its fast-food restaurants. Accommodating Work and Family Needs Many job seekers put family needs first. Corporate work and family policies have a big impact on recruiting success and failure. SAS, the business analytics software company in North Carolina, keeps turnover to less than 3 percent by providing free “work–life" counseling, helping employees effectively manage the stresses of everyday life. Employees burn stress by working out in a large gym, tak- ing yoga classes, swimming laps in a heated pool, and taking advantage of ©KARL DEBLAKER/AP Images deeply discounted child care.54  Managing the Diverse Workforce Chapter 11 329 Employers offering onsite child care report lower turnover and absenteeism and higher morale. Many companies assist with care for elderly dependents, care for sick family mem- bers, parental leaves of absence, and benefits tailored to individual family needs. Some com- panies accommodate dual-career couples by limiting relocation requirements or providing job search assistance to relocated spouses. Alternative Work Arrangements Many employers offer flexible work schedules and arrangements. General Electric Aviation invites its engineers to develop and submit a plan to reduce onsite work hours and work offsite. Approval of the flexible work plan depends on each engineer’s job duties and the company’s ability to accommodate the request.55 Other creative work arrangements include compressed workweeks (e.g., four 10-hour days) and job sharing, in which two part-time workers share one full-time job. Training Employees Traditionally, most management training was based on the unstated assumption of a homo- geneous, often white-male, full-time workforce. But diversity creates an additional layer of complexity.56 Diversity training programs attempt to identify and reduce hidden biases and develop the skills needed to manage effectively in a diversified workforce. Most U.S. organizations sponsor some sort of diversity training, typically having two components: awareness building and skill building. Awareness Building Diversity training must increase awareness of the meaning and importance of valuing diversity.57 The aim is to sensitize employees to the assumptions they make about others and the way those assumptions affect their behaviors, decisions, and judgments. For example, a male employee who has never reported to a female manager may feel awkward the first time he is required to do so. Awareness building can reveal this con- cern in advance and help people address it. To build awareness, trainers teach people about myths, stereotypes, and cultural differ- ences as well as the organizational barriers that inhibit the full contributions of all employ- ees. They offer a better understanding of corporate culture, requirements for success, and important behaviors that affect opportunities for advancement. In most companies, the rules for success are ambiguous, unwritten, and perhaps incon- sistent with written policy. A common problem for women, minorities, immigrants, and young employees is th