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Chapter

11
Managing the Diverse Workforce

McGraw-Hill/Irwin
Management, 7/e Copyright © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
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Learning Objectives
 After Studying Chapter 11, You will know
 How changes in the U.S. workforce make diversity
a critical organizational and managerial issue.
 The distinction between affirmative action and
managing diversity.
 How managers can gain a competitive edge by
managing diversity effectively.
 What challenges a manager is likely to encounter
with a diverse workforce.
 How managers and their organizations can take
steps to cultivate diversity
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Diversity: A Brief history

 Few societies have access to the range of talents
available in the US, with its immigrant tradition
and racially and ethnically diverse population
 Managing diversity is one of America’s biggest
challenges – and opportunities
 Managing diversity is a term used to describe the
process of managing a culturally diverse workforce
by recognizing the characteristics common to
specific groups of employees while dealing with
such employees as individuals and supporting,
nurturing, and utilizing their differences to the
organization’s advantage
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Diversity: A Brief history

 The traditional
American image of
diversity has been one
of assimilation
 Employees often
abandoned most of
their ethnic and
cultural distinctions
at work to keep their
jobs and get ahead
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Diversity Today
 Diversity refers to far more than skin color
and gender
 Differences include religious affiliation, age,
disability status, military experience, sexual
orientation, economic class, educational level
and lifestyle
 This is in addition to gender, race, ethnicity,
and nationality
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Diversity Today
 Managing diversity may seem a contradiction
within itself because it requires
 Being acutely aware of characteristics common
to a group of employees while
 Managing these employees as individuals
 Managing diversity means that management
does not just tolerate or accommodate
differences they also support, nurture, and
utilize these differences to the organization’s
advantage
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The Size of the Workforce

 Historically the United States has
experienced a surplus of workers
 Lower birthrates in the US, as well as other
developed countries, are resulting in a
smaller labor force
 Projections for 2015-2025 period suggest that
there will be an even greater slowdown in the
pace of labor force growth due to the retiring
of the baby-boom generation
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The Workers of the Future

 White American-born males dominated the US
workforce until recently
 Currently this group constitutes 38% of the
workforce
 It accounts for only 15% of the net growth
 The Census Bureau predicts that between
2000 and 2020 the number of African-
American, Hispanics, Asians, and Native
Americans will grow by 42 million while the
number of Caucasians will grow by only 10
million
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Gender Issues
 47% of the workforce is
women
 99 of 100 women will
work for pay at some
point
 The participation rate of
women in the workforce
continues to rise while
men’s declines
 60% of all marriages are
dual-earner marriages
 One of every five married
women earns more then
her husband
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Gender Issues
 The average full-time working woman earns
only about 77% s much as men in the same
job
 As women, and minorities, move up the
corporate ladder they may encounter a glass
ceiling
 The glass ceiling is an invisible barrier that
makes it difficult for women and minorities to
move beyond a certain level
 One persistent concern for both men and
women is the problem of sexual harassment
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Minorities and Immigrants

 Minorities and immigrants hold approximately one of every
four jobs in the
 United States
 Asian and Hispanic workforces are growing the fastest in the
Unite States, followed by the African-American workforce
 Three in ten college enrollees are people of color
 By 2020, most of California’s entry-level workers will be
Hispanic
 English has become the second language for much of the
population in California, Texas, and Florida
 Foreign-born workers make up 14 percent of the U.S. civilian
labor force
 The younger Americans are, the more likely they are to be
persons of color
 One in 40 people in the United States identifies himself or
herself as multiracial, and the number could soar to 1 in 5
by 2050
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Mentally and Physically Disabled

 The largest unemployed
minority population in the US
is people with disabilities
 During the last decade the
number of Americans with
disabilities increased 25 %
 Mentally and Physically
disabled people represent an
unexplored but fruitful labor
market for most businesses
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The Age of the Workforce

 One and three workers is over age 45 and by
2006 the median age of America’s workforce
will be 40.6
 In the early 1960’s the median age was 30
 Industries such as nursing and manufacturing
are already facing a tremendous loss of
expertise as a result of downsizing and a
rapidly aging workforce
 The Bureau of Labor Statistics projects that
entry-level workers will be in short supply
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The Age of the Workforce

 68% of workers between the ages of 50 and 70 plan
to work in retirement or never retire
 Employers will need strategies to help retain and
attract the talent older workers have to offer
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Managing Diversity versus Affirmative

Action
 To correct the past exclusion of women and
minorities, companies introduced affirmative
action
 Affirmative Action is a special effort to recruit
and hire qualified members of groups that
have been discriminated against in the past
 Legal remedies to end discrimination have
had a powerful impact in transforming our
society and organizations in positive ways
 However the legislative approach tends to
result in fragmented efforts that have not
achieved fully the integrative goals of diversity
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Managing Diversity versus Affirmative

Action
 Affirmative action and diversity are
complementary, not the same
 Managing diversity means moving beyond
legislated mandates to embrace a proactive
business philosophy that sees differences as a
positive value
 Managing diversity means people are treated
as individuals equally but not necessarily the
same
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Competitive Advantage through Diversity

 Diversity can be a powerful tool for building
competitive advantage by
 Attracting and retaining motivated employees
in a competitive labor market
 Gaining better perspectives on differentiated
markets
 Promoting creativity and innovation in
problem solving
 Enhancing organizational flexibility through
varied styles and approaches
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Challenges of a Diverse Workforce

 To become effective managers of diverse

organizations challenges must be identified
and overcome
 Unexamined Assumptions
 Lower Cohesiveness
 Communication Problems
 Mistrust and tensions
 Stereotyping
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Multicultural Organizations
 To capitalize on the benefits and minimize the
costs of a diverse workforce, management needs
to examine their organization’s prevailing
assumptions about people and cultures
 Based on the assumptions organizations can be
classified as
 Monolithic is an organization with a low degree of
structural integration
 Pluralistic organizations are more diverse and take
steps to involve persons from different
backgrounds
 Multicultural organizations
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Top Management Leadership and

Commitment
 Obtaining top management leadership and
commitment is critical for diversity programs to
succeed
 Ways to communicate this commitment include
 Incorporating the organization’s attitudes toward
diversity into the mission statement and strategic
plans
 Allocating funding to diversity efforts
 Setting the example for organizational members by
participating in diversity programs value cultural
diversity and seek to utilize and encourage it
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Organizational Assessment
 The objective of organizational assessment is
to identify problem areas and make
recommendations where changes are needed
 Management should establish an ongoing
assessment of the organization’s workforce,
culture, policies, and practices
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Attracting Employees

 Recruitment – companies with reputations for hiring

and promoting all types of people have a
competitive advantage
 Accommodating work and family needs
 Alternative work arrangements
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Training Employees
 Traditionally most management training has
been based on the unstated assumption that
managing means managing a homogeneous,
often white male, full-time workforce
 Diversity training programs attempt to
identify and reduce hidden biases and develop
the skills need to manage a diversified
workforce
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Training Employees
 Diversity training has two components
 Awareness building is designed to increase the
awareness of the meaning and importance of
valuing diversity
 Skill building is designed to allow all
employees and managers to develop the skills
they need to deal effectively with one another
and with customers in a diverse environment
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Retaining Employees
 Replacing qualified experienced workers is
difficult and costly
 Aetna estimates its annual turnover expense at
more then $100 million
 A number of policies and strategies can be used to
retain good workers
 Support groups
 Mentoring
 Career Development and Promotions
 Systems Accommodation
 Accountability
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Looking Ahead
 Chapter 12 Leadership
 What it means to be a leader.
 What people want and organizations from leaders.
 How a good vision helps you be a better leader.
 How to understand and use power.
 The personal traits and skills of effective leaders.
 The behaviors that will make you a better leader.
 What it means to be a charismatic and
transformational leader.
 The many types of opportunities to be a leader in
an organization.
 How to further your own leadership development.