Workforce Diversity and Its Impact on Organizational Behavior

Introduction to Workforce Diversity

In many organizations there has been a marked increase in workforce diversity compared to earlier periods. This shift has been driven by demographic factors such as immigration and economic factors including globalization (Christian et al., 2006). In many economies, the minority workforce is expected to grow substantially in the coming years. This anticipated shift has generated considerable interest in programs aimed at managing workforce diversity. The process of adopting such programs has been affected by various challenges, particularly those related to changes in organizational behavior. In order to manage workforce diversity effectively, it is vital that the distinction between functional and non-functional diversity is clearly identified. Functional diversity makes a positive contribution to organizational behavior and effectiveness, while non-functional diversity deters organizational performance. This is why understanding the impact of diversity on organizational behavior is so important.

Before discussing the impact of workforce diversity further, it is important to define the term. Hornby (2005) defines the workforce as the "totality of the people working in an organization." This means that whenever workforce diversity is discussed, both the similarities and differences among individuals must be taken into consideration. Workforce diversity encompasses all individuals who are part of the organization. Although it is often assumed that workforce diversity refers only to the demographic characteristics of individuals, this is not accurate — all differences and similarities that exist among the workforce, and which make each person unique, must be taken into account (Kreitner and Kinichi, 2004; Thomas, 2006). Those tasked with managing workforce diversity must therefore address both the similarities and differences of individuals simultaneously, examining, determining, and establishing such features with the aim of integrating them.

Theoretical Perspectives on Diversity

There are a number of theories attempting to explain workforce diversity, and these theories have given rise to various — and sometimes contradictory — hypotheses regarding the impact of diversity on group process and performance. Social categorization and similarity-attraction theory predict negative effects, including reduced inter-group communication, lower satisfaction and commitment, and increased labor turnover. However, from the perspective of information and decision-making, there is a hypothesis of positive effects of diversity. The primary reason is that diverse work teams are expected to process information differently, since team members naturally bring differing perspectives and opinions. As a result, greater creativity and improved performance are anticipated outcomes.

There are cases where diversity in work-team composition provokes conflict, and several findings have attempted to explain this phenomenon. It has been proposed that the identification of individual group members with distinct groups may disrupt group dynamics (Pelled et al., 1999). Self-categorization theory has employed a similar line of argument to show that "out-group" members tend to evoke more aversion, suspicion, and competition than "in-group" members (Hogg et al., 1993). Biases directed at out-group members appear to arise automatically; the perception of a salient characteristic almost inevitably generates a corresponding categorization (Fiske & Neuberg, 1990). Furthermore, if out-group members originate from cultures or sub-cultures that are unfamiliar to in-group members, linguistic or paralinguistic differences may breed miscommunication and misunderstanding (Hambrick et al., 1998). Even less pronounced differences associated with attitudes, perceptions, and expectations can create subtle but formidable barriers to communication and understanding in diverse groups. When these factors are combined, diverse groups can become a breeding ground for misunderstanding and discord.

Generally, the assumption that all dimensions of diversity can have both positive and negative impacts has been supported empirically (Jackson et al., 2003). Social categorization theory emphasizes that similarities and dissimilarities can lead to categorizations, which in turn results in favoritism toward one's own group at the expense of out-groups. At the intra-group level, this approach is typically known as relational demography. Consequently, problematic sub-group formation — the "us" versus "them" dynamic — can develop wherever such categorizations exist in a workforce.

Conclusion and Recommendations

In some instances, positive or negative outcomes are associated with diversity; however, in most cases diversity has no measurable effects at all (Webber & Donahue, 2001; Jackson et al., 2003). Studies have shown that company executives may not experience a direct positive relationship between workforce diversity and organizational effectiveness. Instead, the impact of diversity is likely to be shaped by the strategies pursued by an organization and by how its leaders and participants respond to and manage diversity. It is therefore essential that collaborative research efforts be undertaken to identify the contextual variables that can direct workforce diversity toward positive outcomes in organizational behavior. This matters because the phenomenon of workforce diversity is complex, yet it is a crucial element of any organization. Londen (2006) concludes that organizations need to practice workforce diversity with genuine sincerity in order to avoid the significant failures that can arise when diversity is poorly managed.

References

Christian, J., et al. 2006. Workplace diversity and group relations: An overview. Group Processes & Intergroup Relations, 9(4), 459–466.

Fiske, S.T.; Neuberg, S.L. 1990. A continuum of impression formation, from category-based to individuating processes: Influences of information and motivation on attention and interpretation. In M.P. Zanna (Ed.), Advances in Experimental Social Psychology, Vol. 23, pp. 1–74.

Hambrick, D.C.; Mason, P.A. 1984. Upper echelons: The organization as a reflection of its top managers. Academy of Management Review, Vol. 9, pp. 193–206.

Hogg, M.A.; Cooper-Shaw, L.; Holzworth, D.W. 1993. Studies of group prototypicality and depersonalized attraction in small interactive groups. Personality and Social Psychology Bulletin, Vol. 19, pp. 452–465.

Hornby, A.S. 2005. Oxford Advanced Learner's Dictionary. Oxford: Oxford University Press.

Jackson, S.E.; Joshi, A.; Erhardt, N.L. 2003. Recent research on team and organizational diversity: SWOT analysis and implications. Journal of Management, Vol. 29, pp. 801–830.

Kanter, R.M. 2006. Confidence: How winning and losing streaks begin and end. New York: Crown Random House.

Kreitner, R., and Kinichi, A. 2004. Organizational Behaviour. Boston: McGraw-Hill.

Londen, M. 2006. Implementing Diversity. Chicago: Irwin.

Pelled, L.H.; Eisenhardt, K.M.; Xin, K.R. 1999. Exploring the black box: An analysis of work group diversity, conflict, and performance. Administrative Science Quarterly, Vol. 44, pp. 1–28.

Pollar, O.; Gonzales, R. 1994. Dynamics of diversity. Research in Organizational Behavior, 20.

Thomas, R.R. 2006. Redefining Diversity. New York: AMACOM.

Turner, J. 1987. Rediscovering the Social Group: A Social Categorization Theory. Oxford, UK: Blackwell.