Impact Of Effective Diversity Management On Organizational Performance – CERA

Diversity Management and Implementation Strategies

Discuss about the impact of effective diversity management on organizational performance and make recommendations to the Civil Engineering and Research Associates (CERA).

The objective of this report is to emphasize the impact of effective diversity management on organizational performance and make recommendations to the Civil Engineering and Research Associates (CERA). CERA is a civil construction consultancy company in Sydney that was started in 2007. The organization target medium to large infrastructural projects in Sydney. CERA is aimed at becoming a leader in the new innovative field of smart construction solutions.

In order to accomplish its mission, CERA has engaged professional consultants who are equipped with the necessary skills to undertake any construction project, have the right attitude to work and focused on meeting the needs of the clients even beyond their expectations. Additionally, the staff of consultants provides comprehensive services to ensure total delivery. To sustain such quality of team, CERA attracts, rewards excellence and retains the best of engineering employees that the market provides in addition to routine training offered by the human resource department to equip their staff with the emerging techniques to innovative construction solutions.

This report is structured in such a way that the first section is a discussion on the necessity of diversity in the organization and its contribution towards improved customer service and overall organizational performance. The second part will consider the implementation strategies of managing diversity in an entity using HR functions. Then the report will give recommendations to Mark French, the CEO of CERA on how to achieve the organization’s mission through the implementation of diversity management.

Introduction

Workplace diversity is defined by Briscoe, Tarique, & Schuler (2012) as the variety of differences between the employees and the organization. Diversity is inclusive of individual perception and how employees perceive each other. Workplace diversity can constitute a race, gender, ethnic classes, belief, sexual orientation, age, among other distinctive variations that exist between people.

Each organization adopts diversity at their place of work in their perspective to become more innovative and flexible to change (Chen & Huang, 2009). The changing trends of the workplace have led to more emphasis on improving workplace diversity and a significant concern for the management. Because the management of a diverse workforce is still a challenge to the managers, they are inclined to learn techniques required in a multicultural setting.

The advantages of a diverse workforce cannot be overemphasized. It is the practice of the leading firms to recruit competent staff from a diverse pool as this will lead to getting more qualified candidates at a faster rate and low recruiting costs (Shen et al., 2009). At least there is a diverse workforce in each organization because of globalization, a situation that calls for effective management skills of a diverse workforce. This is because the management tries to balance between creating a conducive work environment for the employees and meeting the organizational objectives.

The workforce at CERA comprises of employees of varying skills combination with different responsibilities working towards a common corporate objective of becoming a leader in the new field of smart construction solutions. With a total of 45 qualified employees, the management should apply diversity management to ensure that the employees work in a supportive environment, the customers that deal directly with these staff are satisfied with the service, and the organization achieves its objective of leading the innovative and providing customized quality customer service.  Some of the primary benefits of managing a diverse workforce are outlined below.

Necessity of Diversity

Necessity of Diversity

Diverse Teams Perform Better

 Research has shown that cognitively diverse groups find solutions to issues much faster than those that are not diverse (Kearney et al., 2009; Shin et al., 2012). The studies observed that a high level of cognitive diversity led to improved learning and performance in situations that were new, unpredictable and complicated. Also, when the staff is confident that their company is committed and promotes diversity, it develops a feeling of inclusion in them and the innovative ability increases as well (Shin et al., 2012).

The reason for the better performance of diverse teams is that first, they comprise of individuals with varying experiences and exposure, and also they feel that all of them are strangers and no preferences concerning the employee to approach for help. Thus they can share knowledge widely and work toward a common goal of solving the issue at hand. The employees also feel part of the team and that their contributions are of value thus developing a feeling of uniqueness and belonging. Diversity also increases organizational performance due to the individual performance of the diverse teams. Organizations with different workforce can satisfy the demands of the customers, more so minority customers because a diverse workforce can identify with their daily encounters (Shin et al., 2012).

Employee Satisfaction and Growth 

A diverse workplace offers an opportunity for individual growth of the staff (Choi & Rainey, 2010). The exposure of the employees to new cultures, ideas and views, they intellectually reach out and develop a more precise insight of their stand in the international and local job market. The more time they spend with co-workers with diverse cultures, the more they will break down the subconscious hindrances of chauvinism and ethnicity, thus influencing workers to become more experienced. Additionally, the more the staff knows, the more they would like to know, and through working in different circumstances, the employees will learn different styles of working in different cultures (Choi & Rainey, 2010).

Employee Retention and Turnover

Effective management of a diverse workforce will lead to employee satisfaction. The satisfaction is as a result of the feeling by the employee that the company is determined by treating each separately because of their uniqueness (Herring, 2009). Employees tend to stay longer in a specific organization because of the sense of satisfaction even if competitor companies provide better perks (Yap et al., 2010).

A satisfied workforce will own the organizational objectives and work with minimal supervision towards attaining them. This will reduce employee turnover and increase retention at the same time. Most organizations would like to retain their skilled employees for as long as possible because the costs of recruiting and training a new candidate are high and it’s not certain that they may get a more qualified candidate for a given position. Thus, workforce diversity instills a sense of belonging and exceptionality to the employees, and hence their commitment to the company grows (Yap et al., 2010).

Greater innovation and creativity

According to Østergaard et al. (2011) employees from diverse backgrounds and experiences will approach issues from different viewpoints, thus evoking alternative responses and techniques when deliberating a problem. If properly managed, the strengths and improved comprehension of each person can be joined to improve output. The combination of different staff promotes creativity and innovation because brainstorming over an issue generates ideas that can be supported and fashioned differently by other team members leading to creativity (Shin et al., 2012).

Diverse Teams Perform Better

Introduction 

The human resource management (HRM) is a combination of characteristic functions, activities, and processes that are geared towards attracting, directing and sustaining an organization’s workforce (Kazlauskait? & Bu?i?nien?, 2008). Studies have shown the relationship between specific human resource management practices and diversity management. Shen et al. (2009) studied various human resource diversity management practices and found out that they are formulated to be applied in a diverse workforce and are not biased and value the contribution of minority staff. These practices will ensure that there is cohesiveness among the diverse team in the organization since the HRDM practices are aimed at dealing with all employees in a fair and equitable manner (Shen et al., 2009). There are multiples of HR practices that can be implemented for diversity management, but the most common ones include recruitment and selection, performance management, training and development and compensation (Briscoe, Tarique, & Schuler, 2012).

Recruitment and Selection

Recruitment and selection are two important practices in the sector of human resource management, and should thus be factored into the human resource plan. Furthermore, human personnel is the central corporate resources that should be adequately managed. Shen et al. (2009) observe that an organization needs to ensure that recruitment and selection practices are unbiased and free from discrimination in order to capitalize on diversity. Thus, the right approach to diversity will enable the company to select the best candidate for the position. According to Cooke & Saini (2010) distinct and clearly outlined labor force diversity creates a workplace environment that attracts job candidates from different labor markets. Furthermore, there is harmony in a culture that fosters workforce diversity (Choi & Rainey, 2010).

Training and Development

Workforce training and development process comprises of strategies, tools, and procedures formulated to improve the ability and capability of the staff (Chen & Huang, 2009). Noor et al. (2013) assert that better management training and development practices can lead to the success of the business. Also, the scholars opine that these practices can be used to overcome corporate issues such as turnover among others. According to Noor et al. (2013), such practices also affect the attitudes and performance of employees which translates to overall customer satisfaction and organizational performance.

Training programs are useful in diverse workforces because it can be used to address team differences issues and assist in promoting respect for personal differences with regard to attitudes, ethics, and conduct. Effective management of a diverse workforce is fulfilled when after recruitment process, the employees are retained through the provision of sufficient training and development (Noor et al., 2013). Bezrukova et al. (2012) found out that training on diverse awareness improves integration amongst minority employees and other staff.

Performance Appraisal 

Effective performance appraisal in diversity management practices should be impartial, just and without discrimination to all the staff (Briscoe, Tarique, & Schuler, 2012). The appraisal committee should include multicultural representatives so that the appraisal process can be much more appreciated and to aid in the establishment of fair performance process of appraisal (Munjuri & Maina, 2012).

Employee Satisfaction and Growth

Shen et al. (2009) recommend the inclusion of minority employees in the process of performance appraisal to minimize any perceived discrimination amongst the staff. Failure to implement appropriate human resource diversity management practices during the process of evaluation will cause employee dissatisfaction which will further affect their productivity and organizational performance. Thus, employee performance can be enhanced through just and balanced performance appraisal process Shen et al. (2009).

Compensation 

From the perspective of an organization, compensation also termed as remuneration, pay or reward structures used to encourage the workforce (Goel, 2012).  Compensation is a significant element of HRM that stresses planning, organizing, and regulating various payment systems for rewarding the staff for the work done or service delivered (Goel, 2012). Studies have shown that equality in payment may result in sufficient diversity management and corporate performance (Armstrong et al., 2010; Nielsen & Nielsen, 2013).

Additionally, remuneration diversity management requires the implementation of principle equal pay and performance-based pay systems. Factors such as personal differences should be factored in when formulating the structure of compensation. Good compensation practices can attract and retain the best pool of candidates which are generally relied upon by an organization to improve customer satisfaction and organization performance; Nielsen & Nielsen, 2013).

Occupational Development Practices

Occupational development is the corporate techniques used to help the staff to attain their career objectives (Briscoe, Tarique, & Schuler, 2012). These include the formulation and implementation of corporate processes which allows career planning and management to be done in a manner that meets the needs of the organization and employee preferences (Foong-ming, 2008).

Yap et al. (2010), observes that an organization can overcome negative stereotypes of minority discrimination at the workplace by identifying talents and providing career development opportunities to the qualified minority groups. Such an initiative will make the organization to be perceived as a fair, friendly and developing workplace and will attract employees from different labor market thus enabling the firm to have a mixture of expertise thus promoting creativity.

Conclusion

The objective of this report was to ascertain the impacts of effective diversity management on organizational performance. The report demonstrates that globalization has played a significant role in the existence of diversity workforce in almost every organization. This has necessitated the need for the management to learn diversity management skills so as to know how to strike a balance between meeting both organizational objectives and employee’s needs. This is because to the existing and overwhelming evidence of the importance of a diverse workforce. A diverse workforce performs much better which translates to improved organizational performance.

Cognitive diverse groups tend to find solutions to issues much faster, and their integration improves learning and performance due to the sharing of knowledge and ideas. A diverse workforce also provides opportunities for exposure to new cultures and ways of doing things which promotes growth and employee satisfaction thus minimizing turnover and increasing retention. A diverse workforce constitutes different individuals with varying experiences and exposure. Such a combination of staff fosters creativity and innovation when brainstorming over issues and sharing ideas.

Employee Retention and Turnover

The report also found out that diversity management strategies can efficiently be implemented using specific HRDM practices namely recruitment and selection, training and development, performance appraisal, compensation and occupational development practices. It is common for discrimination to exist among employees in a diverse workforce. Therefore, the human resource management practices on diversity management should aim at overcoming diversity issues at every stage right from recruitment and selection, to training and development up to compensation. The practical implementation of such HRDM strategies will ensure that the employees are motivated, become creative and innovative and their productivity will increase as well as that of the organization.

The objective of establishing CERA by Mark was to offer a brand new and unique product from the existing players in the construction industry and to meet the varying customer needs.  To accomplish this objective, it is vital that CERA adopts a diverse workforce. The construction and building industry require that work is done according to the needs of the clients. The company is based in Sydney which is one of the largest cities in Australia with a diverse population, thus to meet the needs of such customers, it is essential that CERA adopts diverse employees who will also deal with the customers directly.

A diverse workforce will enable CERA to personalize their services in a way that meets the demands of the varying clients. It will also foster creativity and innovation which is very important in the construction sector. The diverse workforce will also perform much better because they will be sharing ideas and approach problems from different perspectives based on their backgrounds, thus improving their efficiency and the general performance of the organization.

The organization can effectively use the human resource management to acquire and maintain a diverse workforce through its various functions such as selection and recruitment, training and development, performance appraisal among others. It is not only essential to establish a diverse workforce, but it should also be maintained. This is possible through the above-mentioned HRDM strategies because they generally create a feeling of self-worth in the employees which will be reflected in their work

References

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.

Bezrukova, K., Jehn, K. A., & Spell, C. S. (2012). Reviewing diversity training: Where we

have been and where we should go. Academy of Management Learning & Education, 11(2), 207-227.

Briscoe, D., Tarique, I., & Schuler, R. (2012). International human resource management:

Policies and practices for multinational enterprises. Routledge.

Chen, C. J., & Huang, J. W. (2009). Strategic human resource practices and innovation

performance—The mediating role of knowledge management capacity. Journal of business research, 62(1), 104-114.

Choi, S., & Rainey, H. G. (2010). Managing diversity in US federal agencies: Effects of

diversity and diversity management on employee perceptions of organizational performance. Public Administration Review, 70(1), 109-121.

Cooke, F. L., & Saini, D. S. (2010). Diversity management in India: A study of organizations

in different ownership forms and industrial sectors. Human Resource Management, 49(3), 477-500.

Fey, C. F., & Furu, P. (2008). Top management incentive compensation and knowledge

sharing in multinational corporations. Strategic Management Journal, 29(12), 1301-1323.

Foong-ming, T. (2008). Linking Career development practices to turnover intention: The

mediator of perceived organizational support. Journal of Business and Public Affairs, 2(1), 1-16.

Goel, D. (2012). Performance appraisal and compensation management: A modern

approach. PHI Learning Pvt. Ltd..

Herring, C. (2009). Does diversity pay?: Race, gender, and the business case for

diversity. American Sociological Review, 74(2), 208-224.

Kazlauskait?, R., & Bu?i?nien?, I. (2008). The role of human resources and their

management in the establishment of sustainable competitive advantage. Engineering economics, 5(60), 78-84.

Kearney, E., Gebert, D., & Voelpel, S. C. (2009). When and how diversity benefits teams:

The importance of team members’ need for cognition. Academy of Management journal, 52(3), 581-598.

Munjuri, M. G., & Maina, R. M. (2012). Workforce Diversity Management and Employee

Performance in the banking sector in Kenya. DBA Africa Management Review, 3(1), 1-21.

Nielsen, B. B., & Nielsen, S. (2013). Top management team nationality diversity and firm

performance: A multilevel study. Strategic Management Journal, 34(3), 373-382.

Noor, A. N. M., Khalid, S. A., & Rashid, N. R. N. A. (2013). Human Resource Diversity

Management Practices and Organizational Citizenship Behavior: A Conceptual Model. International Journal of Academic Research ?n Business And Social Sciences, 3(8), 301.

Østergaard, C. R., Timmermans, B., & Kristinsson, K. (2011). Does a different view create

something new? The effect of employee diversity on innovation. Research Policy, 40(3), 500-509.

Shen, J., Chanda, A., D’netto, B., & Monga, M. (2009). Managing diversity through human

resource management: An international perspective and conceptual framework. The International Journal of Human Resource Management, 20(2), 235-251.

Shin, S. J., Kim, T. Y., Lee, J. Y., & Bian, L. (2012). Cognitive team diversity and individual

team member creativity: A cross-level interaction. Academy of Management Journal, 55(1), 197-212.

Yap, M., Holmes, M. R., Hannan, C. A., & Cukier, W. (2010). The relationship between

diversity training, organizational commitment, and career satisfaction. Journal of European industrial training, 34(6), 519-53