The Project

The Role of HR

Human Resource Strategies to Manage Workforce Diversity: Examining the ‘Business Case’
Authors
E. E. Kossek, S. A. Lobel, & J. Brown
Publication
Handbook of Workplace Diversity (2006)

In this book chapter, the authors discuss the human resource management (HRM) perspective on workplace diversity. They look at how HRM practices can influence workforce diversity, how diversity influences outcomes, and how HRM practices directly influence outcomes.

With regards to how HR practices can influence workforce diversity, the authors show (by reviewing a number of previous studies) that emphasising employee development and promotion increases the representation of women in the workforce. HRM structures that explicitly address how different demographic groups are represented in HRM decision making, are linked to a greater representation of women and minorities in management positions. This was also true when formalised HRM practices were in place. Moreover, one study showed a ‘cascading’ effect of board level representation. Where boards had more than one female or minority member, they were more likely to subsequently hire women or minority employees.

However, other research points in a different direction. For example, some studies found that diversity training and formalised HRM structures were not associated with diversity in management, or the workforce. Additionally, increased workforce diversity was sometimes found to be reported negatively by employees, as well as having lower salaries or increased turnover. Other research pointed to evidence of organisations promoting diversity when recruiting employees, but failing to create an appropriate atmosphere for a diverse workforce, and subsequently failing to retain a diverse workforce. However, overall, the authors here suggest that the research generally shows that diversity is positive when formalised HR practices are in place.    

Next, this chapter assesses how diversity affects individuals, groups and organisations. They begin by briefly outlining how individuals can negatively perceive diversity efforts – for example by believing that overt prejudice against women and minorities is unacceptable and that organisations must adopt the same perspective. This therefore implies that discrimination is outdated, but may result in people viewing women and minorities to be using tactics to gain an unfair advantage. They term this ‘modern racism’, and argue that this is characterised by fear and discomfort rather than overt hate, resulting in a reduced likelihood of commitment to organisational diversity by majority group members.

When individuals are more positive towards diversity, they are often in more diverse work groups. Additionally, a ‘critical mass’ of minority members is said to exist, where minority members can act as a buffer against negative stereotypes. Other researchers suggest that both too much or too little diversity can also have negative effects on group functioning. In general, the better the match between workforce diversity and management diversity, the more likely it is that there will be improvements in performance outcomes and individual characteristics such as organisational commitment and engagement.

Diversity effects on groups suggest that higher diversity is associated with better brainstorming and cooperation, but also with lower social cohesion and greater turnover. Other studies show no effect on group performance, and the evidence here is mixed. Importantly, other academics note that over time, as people get to know one another the negative effects of diversity often subside.

For organisations, there is evidence to suggest that increases in the workforce increases the customer base and related products. Also, evidence shows that the more women there are as managers, the better the performance of the organisation, in some instances 35% more return on equity and return to shareholders than other firms. However, other studies have found limited or no evidence for improvements based on an ethnically diverse workforce. This is not necessarily the end of the story though, and it is likely that the strategy followed will affect the diversity – performance relationship. Where organisational strategy is directed towards growth, research has shown that diversity can improve performance.

The final part of this chapter focuses on how HR practices can influence outcomes directly. Diversity training is useful, and can positively influence attitudes, values and perspectives, although the effects of diversity training are mixed. Systematically conducting training needs assessments may improve the effects of training. Mentoring is another way in which HRM can help individuals and improve diversity efforts and outcomes. Senior members mentoring junior women or minority employees can be beneficial. Informal mentoring is particularly helpful, and may provide support otherwise unsuccessful formalised HR structures. Also beneficial is to facilitate intergroup contact and increase information and empathy with ‘out-groups’. Training initiatives which focus on social interaction as well as tasks are more likely to succeed. When looking at the task, focusing on improving current goals and outcomes are more likely to have longer effects than training that aims to change ‘moral perspectives’ or to promote diversity because ‘it is the right thing to do’.

For groups, training with an external facilitator can lead to short term improvements, particularly given that work-group diversity can result in increased conflict – at least in the short term. HR interventions can also include identity-based networking which can reduce isolation and increase social networks. These networking groups can reduce turnover intentions amongst minority members, relative to those members who were not in groups. Organisations can promote networking groups for minorities, but must also be careful as these can have unintended consequences by being perceived to be unfair or a threat by majority members who do not see themselves as contributing to a problem.

For organisations, diversity strategies can be successful when they address organisational culture which nurtures teamwork, participation and cohesiveness. The diversity strategy should also integrate with business objectives and mirror what a ‘successful multicultural organisation’ looks like. Top management behaviours should support diversity efforts throughout the organisation, and be seen to do so by the workforce. Programmes which are not supported by senior management involvement are doomed to fail. Conversely, programmes which are supported by a ‘critical mass’ of senior executives enjoy more success. Additionally, organisational measurement is important to understand diversity properly. This should be carefully implemented at an early stage to accurately assess culture, perceptions, workforce identity, power distribution, communication, networks, and HR policies, amongst a range of other indicators. Additionally, long term change requires consistent commitment from leadership alongside resources. Some research shows that firms which have innovation strategies are able to improve productivity through diversity practices, but the authors of this chapter warn that organisations which do not follow the recommendations are likely to fail, and this may explain the mixed messages often found from diversity research.

In their conclusions, they highlight the need for integrated, inclusive strategies and programmes to enable the positive aspects of diversity efforts. This includes the integration with other HR practices and strategies, for example, diversity practices can be implemented alongside a high-commitment employer strategy for work/life policies. It is important that HR practitioners assess the diversity need, based on accurate organisational measurement, and adopt programmes and strategies which serve those needs, rather than merely pay ‘lip service’ to diversity.

Practical Takeaways

  • HRM structures that explicitly address how different demographic groups are represented in HRM decision making, are linked to a greater representation of women and minorities in management positions.
  • Diversity is positive when formalised HR practices are in place 
  • ‘Modern racism’, characterised by fear and discomfort rather than overt hate, poses a challenge to HR, resulting in a reduced likelihood of commitment to organisational diversity by majority group members.
  • When managed effectively diversity can lead to positive outcomes. 
  • The effects of diversity training is mixed. Systematically conducting training needs assessments may improve the effects of training. Training initiatives which focus on social interaction as well as tasks are more likely to succeed. When looking at the task, focusing on improving current goals and outcomes are more likely to have longer effects than training that aims to change ‘moral perspectives’ or to promote diversity because ‘it is the right thing to do’.
  • Mentoring, in particular when reciprocal or informal, can help individuals and improve diversity efforts and outcomes, and may provide support otherwise unsuccessful formalised HR structures. 
  • Identity-based networking can reduce isolation and increase social networks but organisations must also be careful as these can have unintended consequences by being perceived to be unfair or a threat by majority members.
  • Diversity strategies can be successful when they address organisational culture which nurtures teamwork, participation and cohesiveness. The diversity strategy should also integrate with business objectives and mirror what a ‘successful multicultural organisation’ looks like. 
  • Programmes which are supported by a ‘critical mass’ of senior executives enjoy more success. Additionally, long term change requires consistent commitment from leadership alongside resources.
  • Organisational measurement is important to understand diversity properly as well as programmes and strategies which serve those needs, rather than merely pay ‘lip service’ to diversity.
  • Integrated, inclusive strategies and programmes are key to enable the positive aspects of diversity efforts.

References

Kossek, E. E., Lobel, S. A., & Brown, J. (2006). Human resource strategies to manage workforce diversity.
Handbook of workplace diversity, 53-74. [Open Access]

Further Reading

Armstrong, C., Flood, P. C., Guthrie, J. P., Liu, W., MacCurtain, S., & Mkamwa, T. (2010). The impact of diversity and equality management on firm performance: Beyond high performance work systems.
 Human Resource Management, 49(6), 977-998.

Kulik, C. T. (2014). Working below and above the line: The research–practice gap in diversity management.
Human Resource Management Journal, 24(2), 129-144.

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