Submitted To:
Ms Sarah Yaqoob
Submitted By:
Ramsha Nasir
Moshin Masood
M.Murad Saqib
Submission date
24/5/2013
Assignment No:
Final Report
Class:
BBA 24, 5TH Semester
Subject:
Business Research Methods
Topic :
Exploring the Determinants of Diversity Climate
1
PURPOSE
The study contains an organization level investigation which highlights diversity climate among
workforce of organization.
ABSTRACT
Workforce diversity has become an important issue in Pakistan. This study examined the extent
to which human resource management practices were being used by organizations in Pakistan to
manage workforce diversity. The study also assessed the perceived challenges and benefits of
diversity in the workforce.
INTRODUCTION
Diversity may be defined as the presence of differences among members of a social unit
(Jackson et al., 1995). Diversity is an increasingly important factor in organizational life as
organizations worldwide become more diverse in terms of the gender, race, ethnicity, age,
national origin and other personal characteristics of their members (Shaw and Barrett-Power,
1998). Today, the workforce comprises people who are different and share different attitudes,
needs, desires, values and work behaviors (Deluca and McDowell, 1992; Morrison, 1992; Rosen
and Lovelace, 1991).
In today's society, cultural diversity is at the highest point it has ever been. As companies are
becoming more diverse, it is becoming more important for them to understand and manage that
diversity. People of different backgrounds, races, ages, sex, and/or religions create a diverse
workforce. There is an importance of having a diverse workforce in order to provide better
performance overall. With a diverse workforce, there arises a need for new management
strategies, which require organization leaders and managers to know the differences among their
employees and to know how to handle situations involving these differences. As Dr. Sondra
Tiedemann, a leading expert in workplace diversity, stated, ``whether you are a business
owner, executive, salesperson or customer- service professional, your success will increasingly
depend on your ability to function in a culturally diverse marketplace'' (Thiederman, 2000).
The growth in diversity is continually on the rise. Today, one in four people in this country
belong to a minority or are foreign-born (U.S. Census Bureau, 2001).
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ANTECEDENTS TO DIVERSITY CLIMATE
Workforce diversity has become an important issue in Pakistan. This study examined the extent
to which human resource management practices were being used by organizations in Pakistan to
manage workforce diversity.
The organizations seek several benefits from their multicultural Workforce. The term “diversity”
was not widely used until the mid 1980s. In a review of the management literature, Edelman,
Fuller, and Mara-Drita (2001) show the rise of diversity rhetoric started in 1987 and peaked in
the early 1990s. A multitude of factors have been included in the definition of diversity, and
definitions can be extremely broad, such as, “any attribute that another person may use to detect
individual differences” (Williams & O’Reilly, 1998, p.81). Broad inclusive definitions of
diversity have been shown to have a positive influence on perceptions of diversity programs
(Rynes& Rosen, 1995; Robinson & Dechant, 1997). However, the utility of overly broad
definitions is questionable, as it makes diversity difficult to measure and study effectively. On
the other hand, more narrow definitions can undermine the intent of diversity initiatives, as
excluded groups become alienated. A balance will be attempted by breaking down diversity into
more useful categories while incorporating a broad overall inclusive definition of diversity.
Although individuals can differ across a wide variety of categories, researchers have made a
distinction between visible and non-visible characteristics (Milliken & Martins, 1996). Visible
categories include, but are not limited to, age, ethnicity, gender, and race. Less visible categories
include, but are also not limited to, physical abilities, educational background, sexual orientation,
geographic location, income, marital status, parental status, and religious beliefs. Beyond this
dichotomy, diversity has been divided into surface-level and deep-level categories in order to
describe the functional difference that diversity presents (Phillips & Loyd, 2006). Surface-level
diversity refers to demographic characteristics, such as race and gender, while deep-level
diversity explains functional differences, such as work experience. The current research will
consider diversity broadly as any relevant categories that can affect workplace interactions. This
definition allows for a comprehensive review of factors that influence diverse interpersonal
interactions at work. Some researchers have suggested that every dimension of diversity,
regardless of how it is defined, has the potential to facilitate or inhibit group performance
(Earley& Mosakowski, 2000). From a pragmatic standpoint, development of a diversity related
measure that limits the definition of diversity could easily overlook important dimensions that
affect workplace interactions. Diversity may also be defined as the presence of differences
among members of a social unit (Jackson et al., 1995). Diversity is an increasingly important
factor in organisational life as organisations worldwide become more diverse in terms of the
gender, race, ethnicity, age, national origin and other personal characteristics of their members
(Shaw and Barrett-Power, 1998). Today, the workforce comprises people who are different and
share different attitudes, needs, desires, values and work behaviours (Deluca and McDowell,
1992; Morrison, 1992; Rosen and Lovelace, 1991). Diversity presents unique challenges for
management as it is linked to both positive and negative organizational performance outcomes
(Mannix& Neale, 2005). Diversity, by itself, may not be sufficient to achieve competitive
advantage. Effective diversity management becomes an important issue for organizing diverse
teams present unique challenges for management, as they are linked to both positive and
3
negative performance outcomes. As effective management of a diverse workforce is a necessity
for many organizations, there exists a need for better assessment of diversity related skill sets.
The organizational climate literature provides insight and a theoretical framework for
understanding how collective perceptions of diversity climate might emerge. Within the
organizational climate literature, an important distinction is made between the individual and
organizational psychological climate (James 1982). Individual psychological climate refers to
individual level inferences regarding what is important, valued, and rewarded through exposure
to the organizational environment. These perceptions are based on both formal and informal
features of the organization including policies, practices, and organizational routines (Schneider
et al. 1996). When situational characteristics are experienced and interpreted consistently across
employee populations, uniform and shared inferences regarding organizational values and
priorities are possible (Schneider1990; Schneider and Reichers 1983). Therefore, organizational
climate is defined as collective perceptions among employees regarding the practices,
procedures, and kinds of behaviors that are supported and rewarded in their work environments
(Schneider 1990). Climate perceptions are believed to provide an important intermediate
measure linking organizational programs with employee attitudes and behaviors and, ultimately,
firm performance outcomes (Bowen and Ostroff 2004; Ferris et al. 1999).Also consistent with
this reasoning, signaling theory suggests that employees rely on organizational cues and signals
in the interpretation of an organization’s commitment and goals (Spence 1973).
Signaling theory suggests that salient organizational features serve as signals to both applicants
and current employees. For example, applicants have been found to interpret an organization’s
corporate social performance as signals regarding the organization’s values and norms (Greening
and Turban 2000) and working conditions (Turban and Greening 1997).Among current
employees, Saks and McCarthy (2006) found support for signaling theory logic in demonstrating
that organizational policies and procedures facilitate perceptions consistent with a general
valuing of diversity. Common in these findings is the notion that features of the organization are
important in shaping employee perceptions of the organization. The development of shared
perceptions, or climate, is more likely in circumstances where the environment provides salient
unambiguous signals regarding organizational priorities—often defined as a ‘‘strong’’ situation
(Bowenand Ostroff 2004). Strong situational characteristics dominate otherwise idiosyncratic
perceptions of the environment and serve as the primary determinant of affective and behavioral
responses (Mischel and Mischel 1976; Ross and Nisbett 1991). Applied to perceptions of a
diversity climate, we are concerned with those situational characteristics, or signals, likely to
manifest in uniform perceptions regarding the organization’s support for diversity.In the
following discussion, several organizational characteristics are discussed which are likely to be
important in the creation of strong situational characteristics and the development of collective
perceptions of support for organizational diversity. These organizational signals include the
establishment of formal programs designed to support diversity, the racial/ethnic composition of
management, and managerial values related to employee management. Relationships between
these organizational characteristics and a diversity climate are hypothesized.
4
DIVERSITY CLIMATE:
Diversity climate is defined as organizational member’s attitudes and perceptions towards people
from cultural groups other then owner. It’s a climate which refers ways of operations, behavior
and actions which are expected and rewarded in an organization. (Sehneiger and renpsch1998).
Diversity, defined as the degree of intra-organizational representation of people with different
group affiliations of sculptural significance (Cox 1994), is purported to expand the plurality of
perspectives and experiences within an organization and can serve as a strategic resource to the
organization in securing a competitive advantage (Richard 2000)
“It is very helpful to suggest that diversity is not so much an end in itself as it is a condition of
our society and the condition of the World in which we live.”
(Frank Wong Vice President for Academic Affairs University of Redlan Diversity
Management)
The 1990s saw the development of a new trend in the form of workforce diversity mainly
because of the liberalization and globalization of markets (Jain and Verma, 1996). At the same
time the liberalization of economies and struc- tural adjustment policies brought about by the
Brentwood institutions opened the doors to free market economies. Organizational efforts and
investments in the intentional management of diversity continue to grow (Carrell et al.2006;
Frankel 2009). Therefore, diversity initiatives typically involve employee recruitment and
promotion strategies targeting underrepresented groups and mechanisms to both tap the latent
perspectives with in organizations and, ultimately, bring them to bear on organizational policy
decisions (Richard and Kirby 1997; Coxand Blake 1991).
One consequence of the implementation of diversity initiatives should be changes in employee
perceptions regarding the importance of diversity within the organization (Cox and Blake 1991;
Gelfand et al. 2005).For this reason, efforts to understand the consequent diversity climate, or
‘‘aggregate perceptions about the organization’s diversity-related formal structure characteristic
sand informal values’’ (Gonzalez and DeNisi 2009,p. 24), is an important line of research.
Indeed, diversity climate provides important information regarding the efficacy of organizational
diversity programs by providing direct insight into the actual employee experience with the
organization. As Schneider et al. note (2003, p. 126), ‘‘… it is one thing to know what the VP of
HR says happens …and it may be another to hear how employees experience practices.’’ For this
reason, it can be argued that these employee perceptions are a more telling indicator of the
organization’s actual support for diversity (Kossek andZonia 1993; Rynes and Rosen 1995).Past
research concerning diversity climate supports these assertions by demonstrating its association
with a wide array of important organizational outcomes, including the heterogeneity of an
organization (Kossek and Zonia1993), turnover intentions (McKay et al. 2007), organizational
commitment, job satisfaction, career commitment, career satisfaction, and satisfaction with
managers (Hickes-Clarke and Iles 2000).
5
Diversity climate has also been shown to mitigate the adverse effects of diversity such as
increased relationship conflict, decreased productivity, and intent to quit, and lower
organizational commitment (Gonzalez and DeNisi 2009). Further, employee perceptions of the
organization’s support for diversity, a construct that is conceptually similar to diversity climate
perception, were positively associated with organizational commitment and decreased
absenteeism across racioethnic groups, including non-minority employees (Avery et al.
2007).Finally, of particular importance to the present study, when considered at the organization
level, diversity climate was found to moderate the relationship between diversity and firm
productivity and return on profit (Gonzalez and DeNisi2009). This research suggests that
diversity climate is an organizationally important intermediate outcome worthy of empirical
attention, leading to calls for research directed to understanding its causes (Gonzalez and DeNisi
2009).Further, the development of a diversity climate is an important consideration for
organizations wishing to capitalize on the positive effects of diversity. For example, a primary
goal of diversity programs is to recruit, promote, and retain a diverse workforce. Logically, an
organization’s ability to recruit and retain a diverse workforce is linked directly to its ability to
develop a reputation for valuing diversity. As organizations compete for talented and qualified
employees, diversity management programs may become a deciding factor for many recruits. By
enhancing perceptions that the organization supports diversity, organizations will be more able to
attract and retain minority employees than their less committed competitors (Cox 1994).
6
DIAGRAM FIG: 1
Managerial relational values
H 4+
Diversity program
H 1+
Diversity climate
H 2+
Managerial Expertise
H 3+
Heterogeneity of
Management Team
7
FORMALLY ESTABLISHED DIVERSITY PROGRAMS:
One obvious antecedent to the development of higher aggregate level diversity climate is the
establishment of diversity programs. HR practices, including diversity initiatives, can be salient
features of the organization and, as such, important in shaping employee perceptions of the
climate. HR practices are argued to operate as symbolic signals to employees in the
communication of organizational priorities and values (Guzzo and Noonan 1994; Rousseau
1995; Tsui et al. 1997).
This includes inferences regarding their role in the organization, the nature of the relationship
with the organization, and behaviors important to organizational functioning (Bowen and Ostroff
2004; Rousseau 1989, 1995). In this way, an organization’s investment in diversity-related
initiatives should have the effect of sending a visible and salient signal to employees that the
organization is committed to achieving and leveraging diversity (Avery et al. 2007).
Perceptions resulting from the implementation of diversity practices should be consistent with
the meaning and intent of these practices. For example, diversity programs such as targeted
efforts at recruiting and promoting adverse workforce are signals that an organization values
diversity. Following this logic, as shown in Fig. 1, the use of diversity-related programs should
be positively associated with employee perceptions of diversity climate. (Jeanquart-Baron 1996).
Diversity management programmes include efforts to celebrate, value, and support the differences among
an organization’s employees. In general, diversity management programmers fall into two categories:
changing organizational systems and employee development. Strategies focusing on changing
organizational systems include: • offering flexible work arrangements (for example, flextime, flexiplace,
job sharing, etc.);
In contrast, employee development strategies include two types of training: awareness-based
diversity training and skill-based diversity training. Awareness-based diversity training is
designed to raise people’s awareness of diversity issues in the workplace and to get them to
recognize the underlying cultural assumptions they make about people. It is primarily a cognitive
approach. On the other hand, skills-based diversity training is designed to develop skills needed
to interact effectively with others (for example, intercultural communication and facilitation
skills such as handling cross-cultural conflict). We believe that the traditional diversity training
programmers outlined above fall short in three ways. First, the training is often viewed as an
inoculation rather than an on-going treatment of habitual ways of thinking and feeling. Second,
while the diversity training acknowledges the need for both cognitive (awareness) and behavioral
learning (skill building), many of these training programmes often minimize or overlook the
linkage between our thoughts and behaviors. Third, the goal of much of this training is to
encourage the dominant cultures (that is, males, whites, able-bodied, etc.) to accept and value
people who do not “look or think like them”[8]. Often overlooked is the role and responsibility
of both majority and minority group members in the process of managing diversity. If managing
diversity means “enabling every member of your work force to perform to his or her
potential”[9, p. 112], then all employees must work independently and collectively towards this
end. Consequently, the primary purpose of this paper is to propose a method in which the
counter-productive, cross-cultural behaviors and attitudes that hamper employee effectiveness
can be self-monitored and managed over time by all employees. The desired outcome is to assist
employees in self-managing their feelings (for example, isolation, stress) and thinking (for
example, intolerance, frustration, prejudice). Specifically, the proposed method involves self8
management of one’s mental processes and is a practical application of recent cognitive-based
leadership research (that is, thought self-leadership).
At the programmatic level, one simple and concrete way to inform others that a career counselor
or vocational psychologist is supportive of the struggles of culturally diverse persons who are
seeking career counseling is by creating a supportive atmosphere in the office. There is much
power in these often quite subtle signs. It can be as simple as having a selection of culturallyappropriate books on your bookshelf integrated with all of your other professional literature. This
will help some clients realize that you are prepared to work with individuals from diverse
cultures. Placing such professional and popular literature in the office waiting room will send a
very overt signal that the counselor is culturally-affirming. Popular magazines and newspapers
focused on various cultural communities send obvious signals to all clients and may even help
majority-culture clients gain more information about their culturally diverse co-workers
(Bowman, 1995; Chung & Harmon, 1994; Fouad, 1993; Leong & Gim-Chung, 1995; Rivera
et al., 2007).
HYPOTHESIS 1:
The existence of diversity programs will be positively associated with the diversity climate
among others.
9
MANAGERIAL EXPERTISE AND DIVERSITY CLIMATE
In this section, we review applications of Diversity programs in expertise management. Although
research in expertise management largely aligns with that in document management, review on
diversity climate effect on management and information retrieval, in an attempt to identify to
expertise management in diversity climate.
Managerial expertise is an important asset in diversity climate .Capturing such expertise is
critical for companies to maintain their competitive advantages. Expertise management, as a
broad concept that covers various aspects of this knowledge capitalization process, has spawned
research efforts in many fields including Knowledge Management, Computer Supported
Collaborative Work (CSCW), etc. Many similar concepts such as expertise
capitalization/leveraging, skill mining, competence management, intellectual capital
management, expertise network, knowledge sharing system and the like are widely discussed in
these research communities. (Schneider and Reichers 1983; Schneider1990; Schneider et al.
1996), (Bowenand Ostroff 2004; Ross and Nisbett 1991).
Several studies have demonstrated that members from under-represented groups are sensitive to
diversity-related dimensions of their organization’s climate. Thomas and Wise (1999) and Mor
Barak et al. (1998) found that racial/ethnic minority group members were more sensitive to the
organizational diversity climate than were Caucasian men. Chrobot-Mason (2003) found that
minority participants perceived a dimension of the diversity climate, that of diversity promises
(including the consideration of minority perspectives) to be distinct from general organizational
promises..Other scholars have adopted a broader perspective by exploring the more general
relationship between psychological contract breaches and employees’ turnover intentions (Lo
and Aryee, 2003; Robinson and Morrison, 2000; Tekleab et al., 2005). For example, Lemire and
Rouillard (2005), Suazo (2009), and Turnley and Feldman (2000) reported that psychological
contract violations were associated with employee outcomes, including organizational
commitment and turnover.
Organizational agents who convey impressions about the importance of diversity in the
company’s mission statements may lead applicants of color to have certain expectations about
the sophistication of diversity strategies and organizational climate. If these expectations are
unmet, the incongruence may lead to perceptions of a psychological contract violation. These
violations may traverse several dimensions of injustice, including disrespectful behavior by
organizational agents (Bies and Moag, 1986) and unfair procedures (Rousseau, 1989). Perceived
violations can lead to negative employee emotional reactions, attitudes and behaviors. the
employing organization and higher levels of turnover (Robinson and Rousseau, 1994; Turnley
and Feldman, 1999). We turn now to each of these dimensions of organizational justice.Bies and
Moag (1986) described interactional justice as perceptions of fairness, such as demonstration of
10
respect and dignity toward the subordinate by the employee’s supervisor. Several studies suggest
that interactional justice moderates diversity. Climate perceptions and employee outcomes:
Roberson and Stevens (2006) analyzed accounts of diversity incidents described by employees in
a large organization. They examined incidents involving treatment by management, work
relationships, respect between groups and diversity climates. They found that treatment by
management, in effect interactional justice, was a dominant theme in the incident descriptions. In
their review of the justice literature, Turnley and Feldman (1999) proposed that individuals’
response to unfavorable organizational actions will be less severe when the aggrieved individuals
perceive interactional justice. Kickul (2001) found that negative affect was high following a
contract breach when interactional injustice was high. Similarly, Kickul et al. (2001) found that
anti-citizenship behavior was higher after a breach when both interactional and procedural justice
were low. Kickul et al. (2002) found that interactional injustice interacted with intrinsic contract
breach to predict lower citizenship and job satisfaction and higher turnover intentions. In a study
of knowledge workers, Thompson and Heron (2005) found that following a perceived contract
breach, high levels of interactional and procedural justice combined to increase worker
commitment to their organizations. In a study that examined the influence of behavioral integrity
(the alignment between what a manager says and what s/he does in treatment of subordinates),
Simons et al. (2007) reported that Black employees were more sensitive to managerial behavioral
integrity than were members of any other racial group. Based on these findings, we hypothesize
that interactional justice and perceptions of a fair diversity climate would interact to affect work
outcomes (herein organizational commitment and turnover intentions), for employees of color.
HYPOTHESIS 2:
Managerial expertise will moderate the relationship between the diversity program and diversity
climate.
11
DIVERSITY AMONG MANAGERS (HETEROGENEITY AMONG THE
MANAGEMENT TEAM)
The race and gender in the supervisor–employee relationship have proven important in shaping
both affective and behavioral outcomes among the employees (Avery et al. 2007). For example,
employees with dissimilar managers, along ethnic and gender lines, perceive less support and
more discrimination than employees with demographically similar managers (Jeanquart- Barone
1996). This suggests that the racioethnic composition of the managerial team serves as an
important and salient organizational signal regarding support for diversity. Extending this logic
to the organizational level, actual diversity among management teams may operate as a salient
and visible signal of the organization’s support for diversity.
In the same way dissimilarity between the supervisor and employee results in negative outcomes
in the dyadic relationship, overall heterogeneity of managerial team would seem important in the
development of collective perceptions of a climate for diversity. As McKay and Avery (2006)
state, ‘‘a potentially vivid signal of a firm’s diversity climate is to actually see or meet a number
of minority employees…’’ When employees examine their organizational environments and
draw conclusions regarding the overall support for diversity, a more diverse management team
offers salient, unambiguous evidence of this support. (Arthur 1994; Baron and Kreps 1999;
Delery and Doty 1996; Guthrie 2001; Pfeffer 1998; Walton 1985) and ‘‘relational’’ (Sun et al.
2007), (O’Reilly and Pfeffer 2000). (Argyris 1964; Likert 1961, 1967; McGregor 1960, 1967)
The concern of diversity management is quite new. Therefore, few studies have been
executed to assess workplace diversity or to investigate discrimination. Kasımog˘lu and Halıcı
(2000) developed a scale relating to discrimination for human resource management in the
Turkish Higher Education Institutions. The results indicated that political opinions, religious
beliefs, local community, gender, and age differences are influential on discrimination.
Managing diversity means establishing a heterogeneous workforce to perform to its potential in
an equitable work environment where no member or group of members has an advantage or a
disadvantage (Torres and Bruxelles, 1992). Managing diversity includes a process of creating
and maintaining an environment that naturally allows all individuals to reach their full potential
in pursuit of organizational objectives (Jenner, 1994; Thomas, 1994). Diversity management
emphasizes building specific skills, creating policies and drafting practices that get the best from
every employee. It assumes a coherent environment in organizations and aims for effectiveness,
productivity and ultimately competitive advantage. Through effective integration of diversity,.
management principles in the key human resource functions of recruitment and selection,
training and development, performance appraisal and remuneration, an organization can
effectively manage workforce diversity.
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Diversity practices in recruitment
Successful organizations can benefit from workforce diversity by creating an organizational
environment which attracts people from diverse labor markets. Managing diversity promotes
competitive edge by recruiting the best people for the job, regardless of ethnicity, age, gender or
other individual characteristics (Cornelius, 1999). Since organizations often resort to internal
promotions to fill vacancies, recruiting a diverse workforce at critical entry points to the
organization also ensures that a diverse pool of talent is available for promotion. To achieve
these objectives, recruitment and selection processes must be based on organizational and jobrelevant criteria and managers who run these processes should be skilled in assessing the criteria
(Kandola and Fullerton, 1994). Unfortunately, most of the research has indicated that steps and
criteria followed by organizations to select and test candidates are inadequate or inappropriate
for a number of applicants including minorities (Loveman and Gabarro, 1991; Morrison, 1992;
Rosen and Lovelace, 1991; Schreiber et al., 1993).
Many organisations in Australia conduct blanket literacy and language testingin recruitment.
These tests bear no relationship to the specific job requirements. In addition, interviewers have
little or no understanding of techniques suitablefor interviewing applicants from different ethnic
backgrounds (Caudron, 1990;Morrison, 1992).Effective management of diversity recognises that
people from different backgrounds, cultures and experiences can bring new ideas to the
workplace. Several ``best practices'' have been recommended to improve management
ofworkforce diversity in the area of recruitment and selection. These include thedevelopment of
a job description and selection process that cover job relevant duties, qualifications, and
experience and complies with anti-discrimination legislation. Other practices include attracting
applicants by including advertisements in ethnic language press in addition to daily newspapers,
presence of diverse managers on selection committees and implementing techniques that allow
diverse people to answer questions to the best of their ability and potential (Morrison, 1992;
Schreiber et al., 1993). Interviews constitute an important part of the selection process. However,
researchers have found that interviewers have little or no understanding of special interviewing
techniques that can be used when dealing with applicants from different ethnic backgrounds
(Caudron, 1990; Morrison, 1992).
Diversity practices in training and development
The goal of training and development programs of all organisations should be to maintain or
improve the performance of individuals and, in so doing, that of the organisation (Anthony et al.,
1999). Effective management of workforce diversity involves not just recruiting diverse
employees but also retaining them. One way of increasing retention rates is by providing
adequate training and development opportunities to employees.. Diverse employees often feel
13
neglected and do not perceive any career paths. Employee development programs can address
this problem, by preparing employees for future promotions. Best practices recommended in the
area of training include: identifying specific training needs which are linked to the organisation's
goals and objectives; assessing individual worker's training needs (both traditional and non
traditional) to enable participation within a training program; developing individual annual
training plans which cover knowledge, operational and interpersonal skills, facilitating
individuals' entry into job/technical skills training; evaluating literacy, language and numeracy to
assess ability to undertake job/technical training; linking training to award restructuring,
enterprise agreements, process improvement and pay scales; and identifying present skills of
staff through an audit process which assesses language, literacy, numeracy and skill competency
levels (Adler, 1986; Grace, 1994; Morrison, 1992; Schreiber et al., 1993). In Australia, where 23
per cent of the populations are from non-English speaking backgrounds, literacy training
assumes significant importance. Training programs for diverse employees can help to eliminate
group differences in career outcomes and generate respect for individual differences in attitudes,
values and behavior.
HYPOTHESIS 3:
Heterogeneity of management team is positively associated with diversity climate.
14
MANAGERIAL RELATIONAL VALUES
Final contextual factors we consider in development of a diversity climate are the values and
attitudes of the managers responsible for establishing and implementing diversity initiatives.
(Tsui et al. 1995, 1997).(Arthur 1994; Baron and Kreps 1999; Delery and Doty 1996; Guthrie
2001;Pfeffer 1998; Walton 1985, Sun et al.2007) It means that if accompany have diversified
management team i.e. people from different sects and background they will eliminate all types of
discriminations faced by their sects and backgrounds and it will help to create training programs
for employees and staff which will enhance diversity climate.(42 J Bus Psychol (2010) 25:39–
53), (Abrahamson and Fairchild 1999).
Though most often anecdotally derived, the adoption of a relational employment mode is
suggested to begin with a fundamental valuing of and investment in employees by organizational
leaders (O’Reilly and Pfeffer 2000). While this line of reasoning has a rich theoretic history (e.g.
Argyris 1964; Likert 1961, 1967; McGregor 1960, 1967), few studies isolate and measure these
basic beliefs of organizational leaders. However, when considered in relationship to diversity
initiatives, the degree to which organizational leadership believes in the strategic importance of
employees, referred to here as relational values, is a natural complement to both the adoption and
implementation of diversity practices. However, these relational values cannot be experienced
directly until they are enacted in the form of managerial practices and programs. (42 J Bus
Psychol (2010) 25:39–53)
Diversity practices in performance appraisal
Effective performance management can make a major contribution towards the achievement of
business objectives while maximizing the contribution of employees (Cornelius, 1999). A good
performance appraisal system can help to enhance employee performance by evaluating how
employees are doing on the job and giving them the chance to correct their mistakes and acquire
new skills (Stewart, 1986). A performance appraisal system should be objective not subjective,
relevant to the job and the company, and fair to all employees and offer no special treatment
(Schuler et al., 1992). However, workplace diversity scholars point to the glass ceiling that is a
barrier to promotion into management (Powell and Butterfield, 1994). Multicultural employees
are often perceived as not having the ``right skills'' to move into management positions. Thus, the
glass ceiling creates artificial barriers based on attitudinal or organizational bias that prevent
qualified individuals from advancing upward in their organization (US Department of Labour,
1991).Several steps can be taken to improve the effectiveness of performance appraisal practices
in the area of diversity. Minorities can be regularly included on panels that evaluate, select, and
promote managers. The problem of assessing candidates who are ``different'' can be reduced, if
some of the decision makers are non-traditional managers. Migrant representation on such panels
can help to create objective criteria and fair performance appraisal practices. Multicultural
employees must have equal opportunities and adequate preparation to take on demanding
assignments in the future (Loden and Rosener, 1991; Morrison, 1992; Schreiber et al., 1993).
15
Performance appraisal techniques should focus on appraising the individual's performance, not
personality. Fulkerson and Schuler (1992) argue that the appraisal process should be as culturally
neutral as possible.
Organizations can include effective management of workforce diversity as one of the criteria on
which all managers will be assessed. For example, actions taken by the manager to hire and
promote minorities and women can be used as performance criteria (Morrison, 1992; Sessa,
1992). Performance appraisal systems will improve employee performance only when these
systems are seen as fair and unbiased.
Diversity and remuneration
Remuneration systems seek to improve employee performance by rewarding those who have
made a contribution to the organisation's performance. Good remuneration systems ensure that
there is a direct relationship between effort and reward. Thus, a performance-based pay system is
viewed as being effective when the process of providing measurable rewards is appropriately
linked to the individual or group performance. This is achieved within an agreed framework of
planned goals, objectives and standards (Armstrong and Murlis, 1994). An effective pay system
is the backbone of all policies concerning the acquisition and utilisation of human resources. The
key outcome of an effective performance-based pay system is to improve an organisation's
overall performance. According to Lowery et al. (1996), the otherm key aim of a pay system is to
retain the most valuable employees by distributing the rewards in such a way that these
employees are left with a feeling of satisfaction. An effective performance-based pay system
should sustain high levels of performance from the organisation's human resources, lead to
employee satisfaction and increase organisational commitment. Thus, performance-based pay
systems can help to reduce wage disparities for migrant employees, since there is a direct
relationship between pay and performance. Another method of reducing inequalities in income
for multicultural employees is by giving good performers challenging assignments (Rosen and
Lovelace, 1991; Schreiber et al., 1993). Such assignments prepare these employees for
promotion to more senior positions in the organization (Loveman and Gerber, 1991; Schreiber et
al., 1993; Kogod, 1992). Unfortunately, research indicates that the main problems that affect
culturally diverse employees are inequality in income and bonuses, job recognition, promotions
and assignment of responsibilities (Jackson et al., 1992; Grace, 1994). In addition, many
traditional managers still prefer to give non-traditional employees responsibilities on a ``trial''
period before they become permanent (Morrison, 1992). This creates mistrust, lowers morale,
and demotivates the non-traditional workforce. Cabezas and Kawaguchi (1988) found that an
income gap exists between white managers and minority groups for the same amount of work
and qualifications. This gap was attributed to barriers which created some discrepancies in
recognition. Prejudice, for instance, contributes to an unwillingness to pay higher salaries, grant
benefits, or give minorities freedom to do their jobs without constant monitoring. Studies by
Goldin (1990) and Gerhart and Rynes (1991) revealed that there is still reluctance to give nontraditional managers the ,same authority and rewards that go to their white male counterparts.
16
Differences in rewards for similar performance result in loss of motivation and lower job
satisfaction.
HYPOTHESIS 4:
Managerial relational values will be positively associated with extensions of diversity programs.
17
METHODOLOGY
The research paper demonstrates to discover the factors that influence customer satisfaction. The
research use following research methodology.
POPULATION
Telenor Employees were taken as population for this research study. Survey was conducted from
Top, Middle and Lower Management of Telenor.
QUESTIONEIR
For data collection a structured questionnaire was used as an instrument. Series of close ended
questions were composed in order to get appropriate information from respondents.
Questionnaire was divided into two parts, first was based on Demographical background. Second
part based on dependent Variable (Diversity Climate) and Independent Variables (Diversity
Programs, Heterogeneity Management Team & Management Relations Values) and Moderating
Variable. (Managerial Expertise).
Five point Likert Scale was designed to measure the variables and the purpose was to indicate
those variables that can be the reason to compel customers toward any other service provider
18
Section 1: (Please tick the appropriate checkbox below)
Age
Gender






20 or below
21-25
26-30
31-35
36-40
41 or above


Highest level of education
Monthly earning











Male
Female
SSC
HSSC
Bachelors
MBA/Ms/M.Phi/MBBS
PHD
Years with this
organization
Below 10,000
11,000-20,000
21,000-30,000
31,000-40,000
41.000-50,000
Above 50,000




Nature of job



Less than a Year
1-5 Years
6-10 Years
10 or above
inside the organization
outside the organization
others
Section 2 (Please circle the appropriate checkbox below)
Diversity Programs
1.
2.
3.
4.
Targeting and growing employee
diversity is an important
consideration in our recruitment and
selection efforts.
We have a formal diversity policy
and program in place for this
department.
We take deliberate steps to grow the
diversity of our work force by
targeting and recruiting minority
candidates.
We have processes in place to
incorporate the perspectives of
employees of all backgrounds and
experiences in decisions in this
department.
Strongly Agree
Agree
1
2
Neither
Disagree or
Agree
3
1
2
1
1
Disagree
Strongly disagree
4
5
3
4
5
2
3
4
5
2
3
4
5
19
Diversity Climate
5.
6.
7.
8.
I feel that I have been treated
differently here because of my race,
sex, religion, or age
Different opinions, ideas, and
perspectives are valued
Dept. chairs here make promotion
and tenure decisions fairly,
regardless of such factors as the
faculty member’s race,sex or social
background
I believe this firm strives to have a
very diverse workforce
Managerial Expertise
9.
Does your organization have a formal
succession planning process?
10. Proportion of Mgmt. Positions held
by Women/Minorities? Disable
Persons
11. Do you recognize and use the
knowledge and expertise of staff that
have insight into the audience you are
targeting by involving these staff in
the design/review process?
12. My Management is flexible and
understands the important of
balancing my work and personal life.
Strongly Agree
Agree
1
2
1
2
1
1
Strongly Agree
Neither
Disagreed or
Agree
3
Disagree
Strongly Disagree
4
5
3
4
5
2
3
4
5
2
3
4
5
Agree
1
2
1
2
1
1
20
Neither
Disagreed or
Agree
3
Disagree
Strongly Disagree
4
5
3
4
5
2
3
4
5
2
3
4
5
Heterogeneity among the management
team
13. I am considerate of coworker’s group
differences when I work with them.
14. Do you have diversity and equality of
opportunity practices and policies in
your company
15. Devalued your work and efforts.
16. Made false negative statements or
circulated negative rumors about
you.
17. Paid little attention to your
statements or showed little interest in
your opinion.
18. Addressed you in unprofessional
terms.
19. I am treated with respect by
colleagues.
Managerial Relational Values
20. In my opinion, our employees’
capabilities are our main source of
competitive advantage’
21. Employees will work harder if I
show that I care about them
personally
22. My primary responsibility is to create
an environment that maximizes
employee productivity and
contribution level.
23. As long as employees continue to do
a good job, they can expect to stay
here as long as they want.
24. One of my core responsibilities as a
leader is to prepare others for future
promotion.
25. I believe that it is management’s
obligation to provide all employees
with long-term career opportunities.
Strongly Agree
Agree
1
2
1
2
1
1
Neither
Disagree or
Agree
3
Disagree
Strongly Disagree
4
5
3
4
5
2
2
3
3
4
4
5
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
Strongly Agree
Agree
1
2
1
2
1
Neither
Disagree or
Agree
3
Disagree
Strongly Disagree
4
5
3
4
5
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
21
PROCEDURE
Questionnaire was distributed among 300 people. From the target sample 300 questionnaires
were received Study used 50 questionnaires for final analysis and conducted descriptive statistics
and correlation and regression analysis.
DEMOGRAPHIC PROFILE
Table below shows the demographical analysis of 50 respondents.
GENDER
Frequency
Valid
Percent
Valid Percent
Cumulative
Percent
MALE
35
48.6
70.0
70.0
2.00
15
20.8
30.0
100.0
Total
50
69.4
100.0
AGE
Frequency
Valid
20 OR BELOW
Percent
Valid Percent
Cumulative
Percent
7
9.7
14.0
14.0
21-25
38
52.8
76.0
90.0
31-35
5
6.9
10.0
100.0
Total
50
69.4
100.0
22
NATURE OF JOB
Frequency
Valid
Percent
Valid Percent
Cumulative
Percent
INSIDE THE
ORGANIZATION
23
31.9
46.0
46.0
OUTSIDE THE
ORGANIZATION
3
4.2
6.0
52.0
others
24
33.3
48.0
100.0
Total
50
69.4
100.0
EARNING
Frequency
Valid
Percent
Valid Percent
Cumulative
Percent
BELOW 10,000
34
47.2
68.0
68.0
11,000-20,000
1
1.4
2.0
70.0
21,OOO-30,000
6
8.3
12.0
82.0
31,000-40,000
8
11.1
16.0
98.0
6.00
1
1.4
2.0
100.0
Total
50
69.4
100.0
23
EDUCATION
Frequency
Valid
SSC
Percent
Valid Percent
Cumulative
Percent
1
1.4
2.0
2.0
HSSC
15
20.8
30.0
32.0
BACHELORS
32
44.4
64.0
96.0
2
2.8
4.0
100.0
50
69.4
100.0
MASTERS
Total
RESULTS AND ANALYSIS
For the analysis part of this research SPSS 18 were used. The following results has attained after
inserting the linear regression
24
Correlations
Table 1
DIVERSITY
CLIMATE
MANAGERIAL
EXPERTIZE
HETROGENIT
YOFMANAGE
MENTTEAM
MANAGERIA
LRELATIONA
LVALUES
.580(**)
.522(**)
.460(**)
.364(**)
.000
.000
.001
.009
50
50
50
50
50
.580(**)
1
.611(**)
.674(**)
.455(**)
.000
.000
.001
DIVERSITY
PROGRAM
DIVERSITYPROGRAM
Pearson Correlation
1
Sig. (2-tailed)
N
DIVERSITYCLIMATE
Pearson Correlation
Sig. (2-tailed)
.000
N
MANAGERIALEXPERTIZE
Pearson Correlation
50
50
50
50
50
.522(**)
.611(**)
1
.691(**)
.422(**)
.000
.000
.000
.002
50
50
50
50
50
.460(**)
.674(**)
.691(**)
1
.429(**)
.001
.000
.000
50
50
50
50
50
.364(**)
.455(**)
.422(**)
.429(**)
1
.009
.001
.002
.002
50
50
50
50
Sig. (2-tailed)
N
HETROGENITYOFMANA
GEMENTTEAM
Pearson Correlation
Sig. (2-tailed)
N
MANAGERIALRELATION
ALVALUES
Pearson Correlation
Sig. (2-tailed)
N
.002
** Correlation is significant at the 0.01 level (2-tailed).
The influence of the diversity program on the diversity climate the r is .580 this indicates a
moderate positive linear relationship.
The influence of heterogeneity of management team on the diversity climate is 0.674 this
indicates a moderate positive linear relationship.
The influence of Managerial relational values on the diversity program are 0.364 this also
indicates a moderate positive linear relationship.
Positive coefficients tell us there is a direct relationship: when one variable increases, the other
increases. So the coefficient for the relationship between Diversity Program and Diversity
Climate is .580, and it is positive. This tells us that, just as we predicted, as Diversity program
increases, Diversity Climate increases. Which means that the relationship is “perfect” (a
coefficient of 1).
25
50
Regression
After setting linear regressions, the following results were acquired.
In the table adjusted R-square is showing that the dependent variable (Diversity Climate) is
52.30 % influenced by independent variables (Managerial Relational Values, Diversity Programs
& Heterogeneity among Management). Since R Square is far from one so it indicates that these
variables have less but positive impact on Diversity Climate of the organization.
Table: 1
Model Summary
Model
R
1
a.
.750(a)
R Square
.562
Adjusted R
Square
Std. Error of
the Estimate
.533
.51468
Predictors: (Constant), MANAGERIALRELATIONALVALUES, DIVERSITYPROGRAM,
HETROGENITYOFMANAGEMENTTEAM
ANOVA
The below table of ANOVA explained that overall model was significant. Since the sig. value is
less than 0.05 so it indicates that the model is statistically significant. It is clear that all the
independent variables, that is, Managerial Relational Values, Diversity Programs &
Heterogeneity among Management).are connected to the dependent variable, that is, Diveristy
Climate.
Table: 2
Sum of
Squares
Model
1
a.
b.
df
Mean Square
Regression
15.626
3
5.209
Residual
12.185
46
.265
Total
27.811
49
F
Sig.
19.664
.000(a)
Predictors: (Constant), MANAGERIALRELATIONALVALUES, DIVERSITYPROGRAM,
HETROGENITYOFMANAGEMENTTEAM
Dependent Variable: DIVERSITYCLIMATE
26
Coefficients (a)
Unstandardized
Coefficients
Model
1
B
Std. Error
(Constant)
.322
.318
DIVERSITYPROGRAM
.362
.130
HETROGENITYOFMA
NAGEMENTTEAM
.467
MANAGERIALRELATI
ONALVALUES
.201
Standardized
Coefficients
t
Sig.
Beta
B
Std. Error
2.012
.041
.313
2.787
.008
.115
.470
4.058
.000
.159
.140
2.263
.002
A Dependent Variable: DIVERSITYCLIMATE
Results of Pearson Correlation are shown in given table. The table indicates the relationship
between the overall Diversity Programs, Heterogeneity Management Team & Management
Relations Values. The results indicate that the overall Diversity Programs has a significant
relationship with the Heterogeneity Management Team & Management Relations Values.
(r=0.467, p<0.00). This particular finding confirms the hypothesis
H3 the influence of heterogeneity of management team on the diversity climate indicates a
moderate positive linear relationship.
H4 the influence of Managerial relational values on the diversity program this also indicates a
moderate positive linear relationship.
27
RELIABILITY OF THE SCALE
The table below shows the reliability of the data collected from respondents. The following table
show that the data collected from mentioned sample is reliable and respondents answered
accurately because the variables are exceeding from 70% or are near to 70% which is the
standard of acceptance for reliability.
The below table calculations suggest that the responses given by respondents of the study are
reliable.
Reliability of the variables
S.No
1
2
3
4
Variable
Diversity Climate
Diversity Programs
Heterogeneity Management Team
Management Relations Values
28
Cranach’s Alpha
.607
..609
.798
.714
Moderating Variable
Descriptive Statistics
Mean
Std. Deviation
N
DIVERSITYCLIMATE
2.5050
.75338
50
MANAGERIALRELATI
ONALVALUES
1.9100
.52187
50
HETROGENITYOFMA
NAGEMENTTEAM
2.3686
.75873
50
DIVERSITYPROGRAM
1.9150
.65194
50
Correlations
Pearson Correlation
Sig. (1-tailed)
N
DIVERSITY
CLIMATE
MANAGERIA
LRELATIONA
LVALUES
HETROGENIT
YOFMANAGE
MENTTEAM
DIVERSITYCLIMATE
1.000
.455
.674
.580
MANAGERIALRELATI
ONALVALUES
.455
1.000
.429
.364
HETROGENITYOFMA
NAGEMENTTEAM
.674
.429
1.000
.460
DIVERSITYPROGRAM
.580
.364
.460
1.000
.
.000
.000
.000
MANAGERIALRELATI
ONALVALUES
.000
.
.001
.005
HETROGENITYOFMA
NAGEMENTTEAM
.000
.001
.
.000
DIVERSITYPROGRAM
.000
.005
.000
.
DIVERSITYCLIMATE
50
50
50
50
MANAGERIALRELATI
ONALVALUES
50
50
50
50
HETROGENITYOFMA
NAGEMENTTEAM
50
50
50
50
DIVERSITYPROGRAM
50
50
50
50
DIVERSITYCLIMATE
29
DIVERSITY
PROGRAM
Model Summary
R
R Square
Adjusted R
Square
R
Square
Chang
e
F Change
df1
Model
1
Std. Error of
the Estimate
df2
Change Statistics
Sig. F Change
R Square
Change
F Change
.750(a)
.562
.533
.51468
.562
19.664
3
A. Predictors: (Constant), DIVERSITYPROGRAM, MANAGERIALRELATIONALVALUES,
HETROGENITYOFMANAGEMENTTEAM
ANOVA (b)
Sum of
Squares
Model
1
A.
B.
df
Mean Square
Regression
15.626
3
5.209
Residual
12.185
46
.265
Total
27.811
49
F
Sig.
19.664
.000(a)
Predictors: (Constant), DIVERSITYPROGRAM, MANAGERIALRELATIONALVALUES,
HETROGENITYOFMANAGEMENTTEAM
B Dependent Variable: DIVERSITYCLIMATE
30
df1
df2
46
.000
31
Collinearity Diagnostics (a)
Eigenvalue
Condition
Index
(Constant)
MANAGERIA
LRELATIONA
LVALUES
Variance Proportions
HETROGENIT
YOFMANAGE
MENTTEAM
DIVERSITY
PROGRAM
(Constant)
MANAGERIA
LRELATIONA
LVALUES
Model
Dimension
1
1
3.857
1.000
.00
.00
.00
.00
2
.060
8.019
.12
.18
.00
.85
3
.049
8.875
.12
.06
.99
.14
4
.035
10.567
.76
.76
.01
.01
a Dependent Variable: DIVERSITYCLIMATE
CONCLUSION
The main aim of this research was to find the Workforce Diversity in the organizations from the
above results, following findings and conclusion is drawn. It is concluded that Diversity Climate
is the key factor contributing towards Workforce Diversity in the organization. Keeping the
findings of this research it is very obvious that the organizations should always continue to
emphasize on Diversity Programs, Heterogeneity Management Team and Management Relations
Values in organizations
32
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