Chapter
2
McGraw-Hill/Irwin
Managing
Diversity:
Releasing Every
Employee’s
Potential
Copyright © 2008
by The McGraw-Hill Companies, Inc. All rights reserved.
© 2008The
Ch. 2 Learning Objectives
1. Define diversity and review the four layers of
diversity.
2. Explain the difference between affirmative action
and managing diversity.
3. Describe the glass ceiling and the four top strategies
used by women to break the glass ceiling
4. Review the demographic trends pertaining to racial
groups, educational mismatches, and an aging
workforce.
2-2
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Ch. 2 Learning Objectives (con’t)
5. Highlight the managerial implications of increasing
diversity in the workforce.
6. Explain the positive and negative effects of diversity
by using social categorization theory and
information/decision-making theory.
7. Identify the barriers and challenges to managing
diversity.
8. Discuss the organizational practices used to
effectively manage diversity as identified by R.
Roosevelt Thomas, Jr.
2-3
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Understanding Diversity
Diversity: Host of individual differences that
make us similar and different from each other
Please stand up…..
If the statement made doesn’t pertain to you
have a seat!
If a statement does describe you, stand up
again!
2-4
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
The Four Layers of Diversity
Functional Level/
Classification
Geographic Location
Mgmt.
Status
Marital
Status
Parental
Status
Age
Income
Work
Content/
Field
Personal
Habits
Race
Personality
Appearance
Union
Affiliation
Sexual
Orientation
Ethnicity
Work
Experience
Work
Location
Physical
Ability
Recreational
Habits
Religion
Educational
Background
Division/
Dept./
Unit/
Group
Source: L Gardenswartz
and A Rowe, Diverse
Teams
at Work: Capitalizing on
the Power of Diversity
(New
York: McGraw-Hill,
1994), p. 33
Seniority
2-5
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Test Your Knowledge
Sam is a 55 year-old, male Sales
Manager for XYZ corporation. He likes
to drive fast cars and is Native
American. Which layer of diversity has
not been mentioned about Sam?
A.Personality
B. Internal
C. External
D.Organizational
2-6
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Affirmative Action
Goal: Prevent
discrimination
Never required to
hire unqualified
people
Your Opinion
Have affirmative action
programs been good
for society?
• A=Yes, B=No
Are affirmative action
programs still
necessary?
• A=Yes, B=No
2-7
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Managing Diversity
Enables all people
to perform up to
their maximum
potential.
How can managing
diversity be a
competitive
advantage?
2-8
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Increased Workforce Diversity - Women
Glass Ceiling
• Invisible barrier blocking women and
minorities from top management
positions
Women CEO’s (as of 2/2007):
• 10 of Fortune 500
• 23 of Fortune 1000
What helps break the ceiling?
2-9
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Increased Workforce Diversity - Race
Racial minorities
are growing
• 2006 – 1,016
race-based
charges of
discrimination
to EEOC
2-10
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Education and Personal Income
2-11
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Increased Workforce Diversity - Age
2-12
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Your Experience
For school group projects, it has been
easier to work with groups we could
choose rather than one’s the professor
chose.
• 1= Strongly Disagree
• 2 = Disagree
• 3 = Neutral
• 4 = Agree
• 5 = Strongly Agree
2-13
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Aging Workforce: Challenges
Career Plateauing: when the
probability of being promoted is very
small
Elder care – helping older workers care
for aging parents
Keeping older workers engaged and
current
2-14
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Pros and Cons of Diversity
Social categorization theory
• Similarity leads to liking and attraction
Information/Decision-Making Theory
• Diversity leads to better task-relevant
processes and decision-making
2-15
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
A Process Model of Diversity
2-16
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Challenges to Managing Diversity
What barriers exist for organizations
trying to manage diversity?
2-17
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Thomas’s Generic Action Options
Responses to handling diversity issues:
Option 1: Include/Exclude
Option 2: Deny
Which ones are
Option 3: Assimilate
most effective for
Option 4: Suppress
managing diversity?
Option 5: Isolate
Option 6: Tolerate
Option 7: Build Relationships
Option 8: Foster Mutual Adaptation
2-18
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Chapter
2
Supplemental
Slides
2-19
© 2008The McGraw-Hill Companies, Inc. All rights reserved.
Video Cases
Starbucks
Pike Place Fish Market
2-20
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Management in the Movies –
The Inside Man – “Bugged”
In this scene, Det. Frazier is talking with Sergeant
Collins (Victor Colicchio) about a previous experience.
What apparent biases does Sergeant Collins have?
How does Det. Frazier deal with Sergeant Collins
apparent stereotypes?
How should an employee deal with another
employee’s bias?
2-21
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Diversity Challenges
Bailey’s Health Center, Falls Church
• Repeatedly, patients would not return for their followup visits or call and cancel
• Most were immigrants from Central America
• Why?
Hospital in Michigan
• Large % of Vietnamese women were dehydrated after
giving birth?
• Why?
Source: Reshaping Bedside Manner in a Diverse World, S. Levine, Feb. 6, 2006,
Washington Post
2-22
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Strategic Value of Diversity
Gallup survey conducted in late 2005 found:
15% of US workers experienced discrimination in the
workplace over the past year
Positive perceptions of the company’s diversity efforts
was related to:
• Satisfaction with the company
• Likelihood of staying with the company
• Probability of recommending the company to others
Source: Employee Discrimination in the Workplace, The Gallup Poll, 11/10/05
2-23
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Office Closet Empties Out
Poll conducted in April 2006 found:
74% of gay and lesbian employees say they are
completely out at work up from 47% in 2003
15% say they have told selected co-workers but not
their bosses
Of Fortune 500, 246 offer domestic-partnership
benefits today up from 28 in 1996
Source: BusinessWeek, May 1, 2006; Jessi Hempel, The Office Closet Empties Out
2-24
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Leaders in Diversity
Pepsi’s CEO & direct reports
are each assigned different
employee group (e.g., GLT,
Asian, women of color)
Responsible for:
• Understanding the issues
these employees face
• Facilitating their growth
and development
Hold themselves
accountable
Source: Diversity Finds Its Place, R. Rodriquez, August 2006, HR Magazine
2-25
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Leveling the Field
Coaching: providing perspective and
assistance on career development
• Typically not performed by manager
• Scope extends current job
38.7% said minorities receive coaching
at the same rate as their representation
in the workforce
11.7 %said minorities receive coaching
at lower rate than the typical worker
2-26
Source: HR Magazine, July 2006, Minority Employees Skipped for Coaching, Kathy Gurchiek
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Land Executives, Not Lawsuits
35.5% of all charges filed with EEOC
cite race as basis of discrimination
(2005)
EEOC is focused on reducing “systemic
discrimination”
• Occurs when an organization’s
policies, practice, and/or culture fail to
address discriminatory actions
2-27
Source: HR Magazine, October 2006, Land Executives, Not Lawsuits, Jonathan A. Segal, Esq.
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Younger Women at the Top
Women who make it
into executive ranks get
there faster than men
75% of Fortune 1,000
women executive
officers are 50 or
younger
Percentage of male and
female Fortune 1,000
executive officers in
each age category
35
30
25
20
15
10
5
0
28-40
41-45
46-50
Females
Males
2-28
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Diversity Training
What is diversity training?
Why do companies invest in it?
What types of diversity training are
most effective?
• Awareness or Skills/Behavioral?
2-29
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Denny’s: A Turnaround
Background
1993 – Class action case against Denny’s for
racial discrimination
Ended in a settlement that included:
• Mandatory diversity training for all employees
• Random testing of restaurants for treatment of
customers
2-30
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Denny’s: A Turnaround
How did Denny’s respond?
Changed leadership (CEO), added Chief
Diversity Officer
Implemented skills-based diversity
training
Held managers accountable for diverse
staff and fair treatment of customers
2-31
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Denny’s: A Turnaround
What was the outcome?
Significant increase in minority-owned
franchises
Management team is 31% minority, up from
21% in 1993
Board is 33% minority
Denny’s placed first for two years on
Fortune’s best place to work for minorities
2-32
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Diversity and Competitive Advantage
How does your organization leverage diversity
for a competitive advantage?
My organization doesn't actively
leverage diversity
Increasing innovation through diverse
employees
30%
34%
39%
Meeting needs of diverse customers
Leadership development for all
employees
0%
40%
10%
20%
30%
40%
% Respondents out of 310
2-33
1-33
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Business Case for Workplace Diversity
Direct Link: Expanding customer base with
diverse workforce
• DuPont – a drug they produce was low in the
Hispanic market
• Hispanic manager noticed the label was only
in English; they had it translated and sales
improved
• Significant increase in minority-owned
franchises
2-34
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Business Case for Workplace Diversity
Indirect Link: Retaining Employees
• Nortel lost revenue due to turnover
• Turnover cost - $55,000 average cost per
employee
• “Attracting and keeping talent – a key aspect
of workplace diversity – has a significant
impact on the bottom line.”
Taken from Workplace Diversity: Leveraging the Power of Difference for Competitive Advantage
2005 SHRM Research Quarterly
2-35
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Conclusion
Questions for discussion
2-36
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.