Diversity vs. Pluralism: Not Just Hiring but Engaging with Minority Employees

Research Paper for an Upper Level Human Resources Course.

---

Introduction

As over one-fifth of Canada’s population is made up of visible minorities, diversity is becoming an increasingly significant topic of discussion in the workplace (Statistics Canada, 2017). Diversity is the number of employees who have differences in inherent (race, gender, and age) attributes, often referred to as minorities, (Dixon-Fyle et al., 2018) from the majority of a workforce (predominantly white male workers in the Western context). It is important that companies, especially human resource professionals, understand what diversity is and the importance of creating a welcoming organizational culture for current employees and potential candidates.

Companies successfully implementing diversity strategies are shown to have higher profitability and value creation, but as legal regulations are limited to only the hiring of diverse candidates (Assadi, personal communication, October 31, 2018) many companies do not reap these benefits due to the later mismanagement of a minority workforce. When companies only focus on the selection and hiring of diverse candidates, diverse employees suffer as companies cultures are often unsuitable or even toxic for them. This is why a shift to Pluralism is inevitable. The Harvard University Initiative, the Pluralism Project, defines the Pluralism mindset as “energetic engagement with diversity”, arguing that diversity alone without management leads to conflict. Companies that transition to pluralism have seen improvements in their productivity, financial health, team morale and feeling of inclusion. Diversity is more than hiring minorities, organizations need to shift to Pluralism and create a culture that allows different groups to thrive and preserve their identities.

Diversity & Current Mismanagement

Diversity in a Modern Context

A diverse workforce can help create higher social value and improve profitability (Dixon-Fyle et al., 2018), but as firms rush to hire a diverse workforce some minority workers are being left behind. While women are gaining representation, ethnic minorities are still underrepresented in the workforce, especially Black and Latinx employees (Riveria, 2012). For example, while Black and Latinx employees make up 25.5% of the professional workforce, they only represent 12.7% of those employed in such position in the US (Ng & Wyrick, 2011). Even at Google, Black and Latinx workers only make up 2.5% and 3.6% (respectively) of Google’s workforce (Brown, 2018). While many firms cite the reason for the poor numbers is the small pool of suitable applicants (Riveria, 2012), one can look at the attrition or voluntary turnover rates of minority employees to see if this truly is the reason.

Racial minorities have a statistically higher voluntary turnover (Hofhuis, 2014). Voluntary turnover is when an employee leaves a company on their own accord. Looking at Google’s diversity attrition numbers, Black and Latinx workers have higher attrition rates than their white counterparts (Brown, 2018). The fact remains that if racial bias is still ingrained within company culture and processes, minority employees will continue to leave (Marcus, 2015). As diversity management is entirely voluntary for corporations (Ng & Wyrick, 2011), human resource managers must take the initiative to implement diversity outside of just hiring, otherwise, they can face business and legal ramifications.

Consequences of Mismanaged Diversity

Miscommunication, increased conflict, and lower social cohesion are often cited as the negative sides of diversity (Guerci & Riccò, 2013) but in reality, they are the symptoms of poorly managed diversity initiatives. When diversity is limited to the hiring process, decision making becomes more difficult for firms as cultural clashes and negative workplace dynamics between majority and minority groups arise (Amaram, 2011). Even when a decision is made, minorities often feel targeted or left out because the resolution is usually in favour of the majority group (Amaram, 2011). As a result, minority groups often experience barriers to advancement in the workplace as well as unfair treatment from supervisors, which ultimately could lead to legal ramifications for a firm.

A study conducted on 151 different workgroups identified that poor diversity management is correlated with a reduction in overall performance and results in unfavourable effects on organizations productivity, absenteeism, and employee turnover (Amaram, 2011). One study shows that the turnover rate for Black workers is 40% higher than the White population (Aghazadeh, 2004). Women experience two times greater turnover rate and a 58% larger absentee rate in the professional sector compared to men (Aghazadeh, 2004). For example, Qichen Zhang, a former-Google employee, felt isolated and that there were no opportunities for advancement as she was one of the few women of color working for the technology giant. Male colleagues made unwanted jokes claiming that Zhang was only hired because of her ethnicity. Ultimately, the culture at Google was discouraging, resulting in her resignation (Levin, 2018). Experiences like Zhang’s are part of the reason why absenteeism and employee turnover is high among minorities. They negatively affect organizational culture which in turn can cost a company over 3 million dollars annually (Aghazadeh, 2004).

In addition, lack of diversity management can lead to legal ramifications that could potentially cost firms millions of dollars. Companies often misjudge the issues and expenses that are linked to poor diversity management, resulting in financial suffering for some large companies (Guerci & Riccò, 2014). For example, Home Depot settled a lawsuit in February at a cost of “$925,000 for a disability discrimination suit brought by deaf workers”. Another example is from 2006 when “C.H. Robinson paid $15 million for a gender discrimination class action” claiming that the company created a hostile work environment for women. Similarly, Coca-Cola settled a lawsuit from black employees in 2000 by paying $192.5 million (Guerci & Riccò, 2014). Therefore, by mismanaging diversity, companies are put in unfortunate situations that are detrimental to the financial health and longevity of the business. Hence, companies should focus more on diversity management in order to maximize the potential of diverse talents, the following section will further examine the companies that have successfully implemented Pluralism.

Transition to Pluralism & Benefits

Pluralism Ideology & Diversity Management

Instead of looking at just the diversity of their workforce, a company should approach diversity through a Pluralism mindset. This encourages firms to listen to their minority employees and make public commitments to creating environments, leadership, and work teams that have a culture of open, respectful dialogue (Eck, 2006). While diversity is an acknowledgment there are differences, Pluralism looks to how firms can interact and manage those difference in a beneficial manner for everyone.

Pluralism ideology helps firms build successful diversity management plans, as it creates a foundation for human resource managers to approach diversity in a meaningful way. Diversity management consists of achieving better results by ensuring that employee’s needs are met (Guerci & Riccò, 2014), while Pluralism encourages managers to commit to listening and receiving feedback from minorities in order to create effective plans. Pluralism is the ideology while diversity management represents the execution of initiatives, policies, and protocols.

Benefits & Outcomes

Successfully managing diversity can bring many benefits including more committed, satisfied, and better-performing employees, which potentially leads to a better financial performance for the whole organization (Dixon-Fyle et al. 2018, 2018). As well, companies that are committed to managing diversity are 27% more likely to have higher value creation for their workforce (Dixon-Fyle et al. 2018). With a Pluralism approach, minority employees are more inclined to share their thoughts and feelings as they know their employer is committed to listening to their feedback (Dixon-Fyle et al. 2018). When given the right tools to thrive, such as flexible work schedules, work reviews free of racial/gender bias, and a company commitment to diversity, minorities are able to express their identities, thus increasing employee satisfaction and performance (Janssens & Zanoni, 2013).

Openly supporting minority rights can help boost a company’s social standing significantly. For example, Salesforce made a public commitment to end the gender pay-gap and revised its payroll to raise the wage for about six percent of its under-paid female employees, spending about three million dollars to do so (Dixon-Fyle et al. 2018). The company also publicly supports same-sex marriage and has earned 100% on the Corporate Equality Index, an index that rates companies treatment of LGBTQ+ individuals. All of their efforts have placed them fourth on Fortune’s Best Places to Work (Dixon-Fyle et al. 2018).

A meaningful commitment to Pluralism also has a direct effect on a firm's innovative abilities and its profits (Page, 2014). When diverse teams are properly managed, heterogeneous groups are better at solving problems and coming up with innovative solutions as each person pulls ideas from different knowledge bases and experiences (Goldman & Vogt, 2016). Firms that innovate often are the first to see financial gains, so it may be partly the reason why companies with gender-diverse executive teams are 21% more likely to outperform on profitability, while racially diverse teams are 33% (Dixon-Fyle et al., 2018). Studies have continued to provide evidence that diversity is beneficial in many aspects of business, allowing for better problem solving and prediction abilities (Page, 2014).

Application and Implementation of Pluralism

Employers must be committed to improving employees’ job satisfaction in order to engage in pluralism. Job satisfaction is directly correlated with retention rate, and the effort in hiring diverse talents would go to waste if the companies are unable to retain these diverse individuals. This section will further argue on how delivering through Inclusion and Diversity (I&D) and avoiding social identity management will help improve the work environment. It can help employers provide safer spaces for minorities of all kinds to thrive and achieve their potential in an open and welcoming atmosphere.

Businesses can start delivering their decisions through I&D by setting a public goal of gender balance and diversity in the workplace. Gender balance and diversity is more than simply hiring an equal number of workers from different minorities, it is more important to ensure there is an equal representation across the hierarchy. For example, at Sodexo, a multinational hospitality agency, their internal research shows that greater representation of women in their management team correlated with superior performance on certain aspects of the job (Dixon-Fyle et al. 2018, 2018). With currently half of their board members and 32% of their executive staff being women, Sodexo has seen their value creation for their employees raise 13% above its industry average (Dixon-Fyle et al., 2018). This provides evidence that it is important for companies to recognize the benefits of promoting or hiring female senior executives to boost the value creation within the company. Sodexo can also be considered a successful example of a company actively engaging in the practice of Pluralism by setting a strong foundation for more I&D development.

Upon developing a solid foundation for I&D, companies should then integrate and communicate I&D into their growth strategies and prioritize different companywide initiatives. They should establish the portfolio for implementing the exact initiatives and communicate this across all levels of the company (Dixon-Fyle et al., 2018). However, the company should be prepared for any disruptions that may occur during the implementation and be willing to listen to the voices of the employees involved. The following paragraphs will illustrate how to deal with one particular problem that may affect minorities in the workplace.

Social identity management is when individuals employ various strategies to conceal or suppress their identity to protect themselves from discrimination. Employees actively engaging in social identity management experience greater job dissatisfaction, thus resulting in a higher turnover (Madera, King, & Hebl, 2012). This can also sabotage the development of I&D strategies. Hence, it is crucial for human resources to not only hire diverse talents but to actively engage in the reduction of social identity management in the workplace to help exploit the true potential of diversity. In a recent study, the authors surveyed a sample size of 211 individuals from different ethnic groups and different social backgrounds, and the results of the studies proved that self-conducted social identity management by the employees can be toxic to the diverse workforce (Madera, King, Hebl, 2012).

Preventing employees from actively engaging in social identity management will help avoid unnecessary stress and eventually lead to increased organizational commitment and better performance (Madera, King, Hebl, 2012). One way is to create a safe space where employees are free to express their social identity, including sexuality, gender, and ethnic backgrounds. However, it is common for employees to discriminate without realizing the damage it can do. Thus, employers should contribute a significant amount of effort in providing training and support to help promote awareness about discrimination and unconscious bias in order to avoid microaggressions. Employers should also be conscious to not alienate or signal out those within the majority group, as it may lead to negative experience for all employees. Instead they should focus on respectful education and sharing of ideas, with encouragement and incentives for everyone to participate.

Efforts in delivering through I&D are considered a significant part of Pluralism, as they are the actionable steps to achieving a more satisfied minority workforce. Creating a healthy environment for diverse employees needs to start at the top and work its way down through actionable, well intentioned initiatives. When fully implemented, it can help create a welcoming space for employees of different social groups and lead to higher job satisfaction and organizational commitment, which eventually translates to more profits and better performance in the long run.

Conclusion

Mismanaged diversity has been an ongoing issue in organizations for many years resulting in employee turnover, absenteeism and legal ramifications. As more firms and businesses strive to achieve a diverse workforce, pluralism must become a vital concept in retaining top talent. It encourages employees to preserve their individual identities and gain an appreciation for each other’s differences. The Pluralism ideology will also help avoid conflict and legal issues that arise from the mismanagement of diversity as well as lead companies to having improved productivity, financial health and creativity. While many companies are starting to see the benefit of diversity, there is still a long way for human resources to go until there is a truly equitable workforce. With the help of a Pluralistic mindset and the voices of diverse leaders such as Candice Morgan (Pinterest), Tariq Meyers (Lyft), and Maxine Williams (Facebook) a place where work is a safe space for minorities may be close in the future.

References

Aghazadeh, S. (2004). Managing workforce diversity as an essential resource for improving

organizational performance. International Journal of Productivity and Performance Management, 53(6), 521-531.

Amaram, D. (2011). Cultural Diversity: Implications For Workplace Management. Journal of

Diversity Management (JDM), 2(4).

Brown, D. (2018). Google Diversity Annual Report 2018. Google. Retrieved From:

https://diversity.google/annual-report/

Goldman, A., & Vogt, P. (2016). #52 Raising the Bar [Podcast]. Reply All. Retrieved from

https://www.gimletmedia.com/reply-all/52-raising-the-bar

Hunt, V., Prince, S., Dixon-Fyle, S., & Yee, L. (2018). Delivering Through Diversity. Mckinsey

& Company.

Hofhuis, J., Van Der Zee, K., & Otten, S. (2014). Comparing antecedents of voluntary job

turnover among majority and minority employees. Equality, Diversity and Inclusion: An International Journal, 33(8), 735-749.

Levin, S. (2018). Women say they quit Google because of racial discrimination: 'I was invisible'.

The Guardian. Retrieved From:https://www.theguardian.com/technology/2017/aug/18/

women-google-memo-racism-sexism-discrimination-quit [Accessed 4 Nov. 2018].

Madera, J. M., King, E. B., & Hebl, M. R. (2012). Bringing social identity to work: The

influence of manifestation and suppression on perceived discrimination, job satisfaction, and turnover intentions. Cultural Diversity and Ethnic Minority Psychology, 18(2), 165-170. doi:10.1037/a0027724

Marcus, B. (Aug 12, 2015). The Lack of Diversity In Tech Is A Cultural Issue. Forbes. Retrieved

Nov. 4, 2018 from:https://www.forbes.com/sites/bonniemarcus/2015/08/12/the-lack-of-

diversity-in-tech-is-a-cultural-issue/#3ee6b59a79a2

Ng, E., & Wyrick, C. (2011). Motivational bases for managing diversity: A model of leadership

commitment. Human Resour­­­­­ce Management Review, 21(4), 368-376.

Page, S. (2014). Where diversity comes from and why it matters? European Journal Of Social

Psychology, 44(4), 267-279. doi: 10.1002/ejsp.2016

Riccò, R., & Guerci, M. (2014). Diversity challenge: An integrated process to bridge the

‘implementation gap’. Business Horizons, 57(2), 235-245.

Rivera, L., & Huffman, M. (2012). Diversity within Reach: Recruitment versus Hiring in Elite

Firms. The ANNALS of the American Academy of Political and Social Science, 639(1), 71-90.

Statistics Canada. (2017) Visible Minority (15), Generation Status (4), Age (12) and Sex (3) for

the Population in Private Households of Canada, Provinces and Territories, Census Metropolitan Areas and Census Agglomerations, 2016 Census - 25% Sample Data. 2016 Census.

Schmidt, A. (2016, May 26). Groupthink. Retrieved November 4, 2018, from

https://www.britannica.com/science/groupthink#accordion-article-history

Shaban, A. (2016). Managing and Leading a Diverse Workforce: One of the Main Challenges in

Management. Procedia - Social and Behavioral Sciences, 230, 76-84.