Workplace Diversity Management: Literature Review & Business Case

Introduction

"The benefits of diversity cannot be achieved with isolated interventions. To the contrary, a complete organizational culture change is required in order to promote appreciation of individual differences… diversity is a multifaceted reality…" (Martin-Alcazar, et al., 2012)

The need for diversity in the workplace has been well established in the literature, but the need for managers and executives to build a culture based on diversity is still on the drawing boards for many organizations. Learning the how, why, and when of diversity in the workplace is the next big step for companies — in particular those competing in the global marketplace. According to the literature reviewed in this paper, diversity in the workplace must be more than numbers and demographics. It is a moral imperative, and it should also be an intelligent, insightful, and practical business policy.

An International Perspective on HR Management and Diversity

Diversity is not a new concept in the workforce, but it has been receiving a great deal of attention due to the growing immigrant population in the United States and due to an awakening among human resource professionals regarding the need for fairness and justice in places of employment. This paper delves into and critiques the existing literature on the basic question of whether or not managers and employees truly understand the importance of diversity in the workplace.

An article in the peer-reviewed International Journal of Human Resource Management is an appropriate first scholarly source to present because it reviews the major issues associated with diversity management and posits that inequality in the workplace is still rampant — helping to answer the question of whether managers and employees fully grasp the value of diversity. The piece also covers the objectives of diversity management and reports — unfortunately — that "…inequality and discrimination still widely exist." The authors suggest that this persists because HRM has focused "…mainly on compliance with equal employment opportunity (EEO) and affirmative action (AA) legislation" (Shen, et al., 2009, 235). As a result, less attention has been paid to "valuing, developing and making use of diversity" (Shen, 235).

Published in 2009, the article's authors assert that at the time there was "very limited literature" examining precisely how diversity is handled through human resource management (Shen, 235). The authors review the existing literature on diversity and present a "conceptual framework" which they believe will benefit other organizations' HRM components. In their review, Shen and colleagues assert that a "large number" of corporations are not willing to hire ethnic minorities or females — especially for openings in high-level positions (236). Some of those same companies go through the motions of diversity training, but those activities do not create opportunities within top management structures or meaningfully diversify the overall workforce (Shen, 236).

On the other hand, research shows there is "wide recognition" of the value added by workplace diversity; empirical research provides evidence that companies that have implemented effective "…diversity management stand to benefit through bottom line returns" (Shen, 236). An alert reader would naturally wonder why, if embracing diversity is actually profitable, more companies do not engage in diversity programs.

Shen also references McLeod, Lobel, and Cox (1996) in presenting several benefits of diversity inclusion. These include the following positives associated with genuine workforce diversity: (a) brainstorming sessions are more productive and solution-oriented; (b) there is a greater sense of cooperative behavior; (c) organizational efficiency is raised to a higher level; (d) the chances for profitability are greater; and (e) organizational success is more assured because diversity can "…enable access to a changing marketplace by mirroring increasingly diverse markets" (Shen, 236).

That said, simply hiring workers from diverse ethnicities and nationalities will not necessarily produce these results, Shen warns. That is where competent diversity management comes into play, which "…hinges on strategic thinking and people-centered policies" (Shen, 236). In the article's conclusion, Shen insists that companies should not embrace diversity merely for legal compliance reasons; rather, diversity management should be a priority for HRM practices in "all organizations" because it is the right thing to do and because it improves companies in many respects — including the bottom line.

The Bottom Line's Linkage to Diversity Management

An article in Forbes argues that diversity is indeed the "key to growth" in today's global marketplace (Llopis, 2011). Diversity is not about numbers and demographics, Llopis declares; it is about "how an organization treats its people authentically down to the roots of its business model" (1).

Because many corporate leaders are still paying "lip service to diversity" — without truly living it — they are missing out on growth and, moreover, are apt to "tarnish their brand" (Llopis, 1). Diversity is not just about data and numbers; it is about "responding" to the needs of workers and consumers in a "holistic way" (2). And it is not just about responding to the "…changing face of America" — it is about responding to the "…mindset of the global marketplace" (Llopis, 2).

The dearth of "cultural intelligence" in society and in business is having a damaging effect on the American economy, according to Kathy Hannan, managing partner in the "Diversity & Corporate Responsibility" component of KPMG LLP (Llopis, 3). Hannan points out how her company, KPMG, integrated the concept of diversity with corporate responsibility: "Today, KPMG views its sustainability strategy across four areas: Ethics, Citizenship, Environmental and Diversity (talent sustainability)" (Llopis, 4). In no instance can a "homogeneous talent pool be innovative," Hannan insists; "Diversity is essential."