Diversity Management

Diversity Management: all activities in an organisation aimed at dealing with, and making optimal use of, the diversity in its labour force.

What is Diversity Management?

Diversity Management is about creating a supportive climate for all employees to participate and contribute, with a high degree of efficiency and innovation, in order to achieve corporate objectives, improve organisational effectiveness and increase corporate profit. Managing Diversity focuses on opportunities: how can we get the best out of all employees, maximise organisational profit and at the same time maximise personal profit. Profit here does not only mean money; it can also be a good reputation for the organisation, or maximum work satisfaction for the employee. Examples of diversity management can be found in the case-study part of this site.

What Makes Diversity Management Different from a Target Group Approach?

By focussing on opportunities Diversity Management separates itself from policies for target groups (e.g. women, older workers). Target group policies are about helping disadvantaged groups to enter the organisation, get promoted etc. Diversity Management on the other hand starts from the advantages of having a diverse workforce. It keeps asking the question: how can this organisation function optimally, what people with what skills, abilities etc. do I need for that, and how can I make sure that they function optimally. In order to optimise the performance of workers, their diverse personal wishes and needs of workers have to be taken into account. Group needs are not specific enough: though more women than men make use of childcare facilities, not every woman has a need for them while several men do.

Why Diversity Management?

As we noted earlier, people differ on many aspects. The goal is to make optimal use of these differences. Research has shown that diversity in the workforce can be very profitable, but that does not happen all by itself. The differences need to be managed. Simply said: the performance of diverse teams is often more extreme than that of more homogeneous teams. When managed well they function better, when not managed well, they perform worse.

Over the last decade, much research was carried out on the effects of diversity and diversity management. From this we learn that when managed well, diversity results in:

Improved performance/productivity (Agocs and Burr, 1996; Richard, 2000)
Increased creativity/flexibility (Cox and Blake, 1991; Robinson and Dechant, 1997)
Higher quality of problem-solving (Cox and Blake, 1991; Hubbard, 1999)
Improved understanding/penetration of markets (Cox and Blake, 1991; Robinson and Dechant, 1997).
Increased staff morale and job satisfaction (Agocs and Burr, 1996)
Improvements in staff retention, less absenteeism (Agocs and Burr, 1996; Robinson and Dechant, 1997)
Less law suits (Robinson and Dechant, 1997)

Similar results were identified by the Society for Human Resource Management. They state that diversity initiatives are important to businesses since they can:

Improve the quality of the organisations workforce and can be a catalyst for a better return on investment in human capital.
Capitalize on new markets since customer bases are becoming more diverse.
Attract the best and the brightest employees to a company.
Increase creativity.
Increase flexibility, ensuring survival.

Source: http://www.shrm.org/diversity/businesscase.asp