the impact of workforce diversity on organizational effectiveness

THE IMPACT OF WORKFORCE DIVERSITY ONORGANIZATIONAL EFFECTIVENESS

INTRODUCTION

• the quality or state of having many different forms, types, ideas

OR

• the state of having people who are of different races or who have different cultures in a group or organization

• Globalization web increase demographic diversity in the workforce

• Increased competition demand from workgroups to generate innovations, flexibility, and quick

decision making for sustained business success

• Demographic changes and laws aimed at promoting fairness in recruitment practices are urging

diversity within work teams

INTRODUCTION

• Diversity as multi-ethnic (previous studies)

• work place (workforce) diversity is found to have a contrasting dual implication on

organizational effectiveness.

• Milliken and Martins (1996) opines that

'diversity appears to be a double-edged sword, increasing the opportunity for

creativity as well as the likelihood that group members will be dissatisfied and fail to

identify with the group’

INTRODUCTION

One side

• Greater innovation

• improved strategic decision making

and

• organizational performance

Other side

• increase conflict

• reduce social cohesion

and

• increase employee turnover

business organizations are contending with the challenges of effectively managing a diverse workforce

RESEARCH HYPOTHESES

(1) Workgroups that are demographically diverse are likely to be less effective in

workgroup contexts that emphasize competition oriented cultures than in contexts that

do not emphasize competition-oriented cultures.

(2) Workgroups that are demographically diverse are likely to be more effective in

workgroup contexts that pursue growth oriented business strategies than in contexts

that do not pursue growth-oriented business strategies.

LITERATURE REVIEW

• Workplace diversity is a complex, controversial, and political phenomena

(Janssens & Steyaert, 2003)

Perspective about Diversity

Narrow Perspective

Broad perspective

Nkomo,1995

NARROW PERSPECTIVE

• Diversity should be restricted to specific cultural categories such as race and gender

• Diversity based on race, gender and ethnicity differ from the diversity based on

organizational function, abilities or cognitive orientation

So,

• Narrow concept is deficient as cultural diversity dimension interacts with other

dimension of diversity

BROAD PERSPECTIVE

• Encompasses all the possible ways people can differ

Race, gender, age and other

demographic categories

Values, abilities, organizational

function, tenure, personality

CLUSTER CLASSIFICATIONMcGath, Berdahl & Arrow (1995)

workplace diversity

demographic characteristic

values,views and attitudes

task-related knowledge, skills and capacities

Status in the organization

personal, cognitive and

attitudinal styles

social categorization (turner)

• categorization of people based on salient attributes like gender, ethnicity or age

• result in stereotyping on the basis of these differences

similarity/attraction theory• Asserts that similarity

on salient and non-salient attributes like race or values increases interpersonal attraction and attachment

information and decision-making theory• examines the impact of

distribution of information and expertise on work-teams

Theories about diversity

CONFLICTS BY DIVERSITY

• Disrupt group dynamics

• Out-group members evoke more disliking, distrust, and competition than in group members

• the perception of a salient quality (e.g., race) more or less inevitably triggers a corresponding categorization

• Biases seem to unfold automatically

• Linguistic or paralinguistic differences may foster miscommunication and misunderstanding

• Problematic formation of sub-group (“us” versus “them”)

DIVERSE TEAM VS. HOMOGENOUS TEAMS

• Relative to homogeneous groups,

members of diverse work-groups

display less attachment to each other

• Show less commitment to their

respective organizations

• Communicate less with one another,

miss work more often

• Experience more conflict

• And take more time to reach decisions

• Dissimilar belief structures

i.e., priorities, assumptions

about future events, and

understandings of alternatives

based on previous training and

Experiences

• divergent preferences and

interpretations of tasks

THE CONTROVERSY Whether or not there is a positive connection

BetweenWORKPLACE DIVERSITY AND ORGANIZATIONAL

PERFORMANCE Still persists

METHODOLOGY

• Gleaned both from primary and secondary data sources

• Random sample of work teams within the bank’s 62 branch network in Lagos Island

and Mainland, using questionnaires

• Sample size surveyed is 120 work-teams

• Response rate to the survey was 40%

Dependent

variable

Performance Measure

independent variabl

e

Cultural Diversity

FINDINGS

• Gender is negatively related to both employee productivity and performance bonus, but is significantly related to employee productivity

• Age is positively related to employee productivity, and it is significantly positive in its correlation to performance bonus

• Ethnicity is insignificantly negative in its relationship to both employee productivity and performance bonus

• Tenure is insignificantly positive in its correlation to employee productivity, and is not related to Bonus

• In terms of the moderating effects of workgroup contexts (competition oriented workgroup culture, and growth-oriented strategy) of diversity factors, the research results indicate that context effect is insignificant.

RECOMMENDATION&

CONCLUSION

• Diversity sometimes is associated with effectiveness, other times with negative

outcomes, and often it has no effects at all.

• Company executives are not likely to see a direct positive relationship between

workforce heterogeneity and organizational effectiveness.

• The effects are likely to be determined by the strategies a firm pursues and by how

organization leaders and participants respond to and manage diversity

The impact of workforce heterogeneity on organizational effectiveness when moderated by workgroup contexts is minimal

Thank you!