Topic 4 (responding to

primary stakeholders)

Part 3B
Managing a
Diverse Workforce
McGraw-Hill/Irwin Copyright © 2014 by The McGraw-Hill Companies, Inc. All rights reserved.
 T4 P3B: Key Learning Objectives
 Knowing in what ways the workforce of the United States is
diverse, and evaluating how it might change in the future
 Understanding where women and persons of color work, how
much they are paid, and the roles they play as managers and
business owners
 Identifying the role government plays in securing equal
employment opportunity for historically disadvantaged groups,
and debating whether or not affirmative action is an effective
strategy for promoting equal opportunity
 Assessing the ways diversity confers a competitive advantage
 Formulating how companies can best manage workforce
diversity, making the workplace welcoming, fair, and
accommodating to all employees
 Understanding what policies and practices are most effective in
helping today’s employees manage the complex, multiple
demands of work and family obligations

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The Changing Face of the Workforce
 Diversity – Refers to variation in the important human
characteristics that distinguish people from one
another
 Primary dimensions: age, ethnicity, gender, mental or
physical abilities, race, sexual orientation
 Secondary dimensions: such characteristics as
communication style, family status and first language

 Workforce diversity: diversity among employees of a

business or organization
 Represents both a challenge and an opportunity for
businesses

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The Changing Face of the Workforce
 Today, the U.S. workforce is as diverse as it ever has
been, and it is becoming even more so. Consider the
following workforce diversity trends:
 More women are working than ever before
 Immigration has profoundly reshaped the workplace (with
massive undocumented immigrant workers – noncitizens
working without the legally required documents or permits)
 Ethnic and racial diversity is increasing
 The workforce will continue to get older
 Millennials (people who born after 1980s) are entering the
workforce

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Gender and Race in the Workplace
 Following World War II, the proportion of women
working outside the home has risen dramatically
 Most dramatic increases have been married women, mothers
of young children, and middle-class women
 Increase in professional, technical and service jobs produced
“demand-side” pull for women into the labor force (more
women’s jobs)

 Labor force rates for minorities have always been high

 Change is that wider range of jobs are available to minorities
as discrimination barriers have fallen (minorities in US like
Hispanics and Asians)

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 Proportion of Women and
Men in the Labor Force
Figure 17.1
1950-2010

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The Gender and Racial Pay Gap
 Pay gap – Women and persons of color on average
receive lower pay than white men do
 Gap has narrowed over the past 3 decades

 Still, in 2010 black men still earned only slightly more than
three‑quarters of white men’s pay; black women earned
about 70 percent, and white women 81 percent

 From Figure 17.2, Asian-American able to have higher pay

growth rate, mainly due to education, almost half of Asian-
Americans hold a bachelor degree or above, more schooling
than any other ethnic group

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 The Gender and Race Pay
Figure 17.2 Gap 1990-2010

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The Gender Pay Gap
 Reasons for pay gap
 Some believe is evidence of sexual discrimination
 Some believe is women’s choices in pursuing lower paying
jobs or slower advancement
 Others believe occupational segregation is occurring
• Inequitable concentration of a group in certain job categories
• Example, Hispanics working in lower-paid occupations
 Women have made great strides in entering professional
occupations, however “pink collar ghetto” still exists
• Examples include preschool teachers and secretaries

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Women and Persons of Color in
Management (Current Trends)
 Women have broken into management ranks
 Tends to be, however, in occupations where women are
numerous like education and health care
 Grouped by industry, women tend to be concentrated in service
industries, in finance, insurance, real estate and retail businesses

 Only a very few women or persons of color have

achieved highest positions in corporate America
 Although women and minorities are as competent as white men
in managing people and organizations, they rarely attain the
highest positions in corporations

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The Glass Ceiling
 Invisible barrier that exists in reaching these higher levels
has been named the glass ceiling
 Reasons for the glass ceiling:
 Glass walls – fewer opportunities to move into positions that lead
to the top; many women and minorities start in staff rather than
line positions (Examples, Marketing, Sales, Production)
 Recruiters fill positions by word of mouth and is still “old boys
network” (Women voluntarily choose to step off from top spots
and let men occupy the position)
 Company lack of commitment to diversity
 Too little accountability at the top management level for equal
employment opportunity

 Recent advances show some cracking of the ceiling

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 Extent of Diversity in Selected
Figure 17.3
Management Occupations

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Women and Minority Business
Ownership
 Some women and minorities have chosen to avoid the
glass ceiling by opening up their own businesses

 2010, 40% of over 10 million U.S. businesses were

owned or controlled by women
 Although most female-headed firms are small, collectively they
employed over 13 million people in the United States and
generate $1.9 trillion in sales

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Women and Minority Business
Ownership
 According to the Small Business Administration, there
were around 5.8 million minority-owned businesses in
the United States in 2007

 Hispanic-owned businesses were the most numerous,

followed by African-American and Asian-owned businesses

 Immigrants were responsible for a good share of the

entrepreneurial spirit in the minority community; immigrants
are nearly 30 percent more likely to start a business than are
non-immigrants

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Equal Employment Opportunity
 Government involvement in securing equal employment for
all began in the 1960s on a large scale
 Is defined as discrimination based on race, color, religion,
sex, national origin, physical or mental disability, or age is
prohibited in all employment practices
 In U.S. is prohibited in all employment practices (The enforcement of
The Equal Employment Opportunity rules apply to most businesses)
 Government contractors must have written affirmative action plans
detailing how they are working positively to overcome past and
present effects of discrimination in their workforce (However,
affirmative action plans must be temporary and flexible, designed to
correct past discrimination and cannot result in reverse
discrimination against whites or men)
 Women and men must receive equal pay for performing equal work,
and employers may not discriminate on the basis of pregnancy

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 Major Federal Laws and
Executive Orders Prohibiting
Figure 17.4
Job Discrimination

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Affirmative Action
 One way to promote equal opportunity and remedy past
discrimination is through Affirmative Action
 Affirmative action plan should specify goals, actions and
timetables for promoting greater on-the-job equality
 Examples of company adopting this plan are General
Electric, AT & T and IBM
 Reverse discrimination may occurs when one group is
unintentionally discriminated against in an effort to help
another group (example, if a more qualified White man has
been passed over a job as a police officer in favor of a less
qualified Hispanic man to remedy past discrimination in a
police department, this might be unfair to the White
candidate)
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Affirmative Action
 Since mid-1960s, government contractors been required to
have affirmative action plans
 Purpose to reduce job discrimination by encouraging companies to
take positive steps to overcome past discriminatory employment
practices

 Affirmative action became increasingly controversial in the

1990s and 2000s
 Some states passed laws banning it in public hiring
 Opponents cite possibility of reverse discrimination

 Some women and persons of color called for less emphasis

on affirmative action, preferring to achieve personal
success without preferential treatment (rather to depend on
themselves)
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 Sexual Harassment
 Occurs at work when:
 Any employee, woman or man, experiences repeated, unwanted
sexual attention or
 When on‑the‑job conditions are hostile or threatening in a sexual
way
 It includes both physical conduct—for example, suggestive
touching—as well as verbal harassment, such as sexual
innuendoes, jokes, or propositions
 It can also occur if a company’s work climate is blatantly and
offensively sexual or intimidating to employees
 Is illegal and U.S. Equal Employment Opportunity Commission is
empowered to sue on behalf of victims
 E.U. recognized sexual harassment as a form of gender
discrimination in 2002, required its member states to bring their
laws into compliance by 2005
 Malaysia, Penal Code (Section 509), Industrial Relations Act 1967
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Racial Harassment
 Is also illegal, under Title VII of the Civil Rights Act

 Under EEOC guidelines, ethnic slurs, derogatory

comments, or other verbal or physical harassment
based on race are against the law, if they create an
intimidating, hostile, or offensive working environment
or interfere with an individual's work performance

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Preventing Sexual and Racial
Harassment
 In 1998, the Supreme Court ruled that companies
could deflect lawsuits by taking two steps:
 Develop a zero-tolerance policy on harassment and
communicate it clearly to employees

 Establish a complaint procedure—including ways to report

incidents without retaliation—and act quickly to resolve any
problems

 In addition, stated that companies that took such steps

would be protected from suits by employees who claimed
harassment but had failed to use the complaint procedure

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 Diversity Policies and Practices
 Well run companies go beyond required legal actions to develop
these policies to welcome employees of all backgrounds
 Actions taken by companies to manage diversity effectively:
 They articulate a clear diversity mission, set quantitative objectives,
and hold managers accountable
 They spread a wide net in recruitment, to find the most diverse
possible pool of qualified candidates (seek from internally or
externally)
 They identify promising women and persons of color, and provide
them with mentors and other kinds of support
 They set up diversity councils to monitor the company’s goals and
progress toward them (Diversity council is a group of managers and
employees responsible for developing and implementing specific
action plans to meet an organization’s diversity goals)

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Strategic Advantages of Managing
Diversity Effectively
 Companies that promote equal employment opportunity generally do
better at attracting and retaining workers from all backgrounds (having
widely diverse workforce boosts innovation; diverse and inclusive
workforce is crucial to encourage different perspectives and ideas that
drive innovation)
 Businesses with employees from varied backgrounds can often more
effectively serve customers who are themselves diverse (changes in
taste and preference)
 The global marketplace demands a workforce with language skills,
cultural sensitivity, and awareness of national and other differences
across markets
 Companies with effective diversity programs can avoid costly lawsuits
and damage to their corporate reputations from charges of
discrimination or cultural insensitivity
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Balancing Work and Life
 Changing demographics, including increasing
number of dual income families, have led people to
adopt wide range of strategies for combining full and
part-time work with the care of children, elderly
relatives, and other dependents
 Helping “make it work” for employees trying to
balance the complex, multiple demands of work and
family life has became a major business challenge
(how to strike a balance)

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Child Care and Elder Care
 Types of programs companies are offering:
 Child Care
 Elder Care
 Parental and family leave (to take care wife and children –
parental; to take care elders – family)
 Work flexibility
 Benefits to non-traditional families (homosexual partners)

 Some employees have been reluctant to take advantage

of work flexibility options, for fear of being labeled
“mommy track” or “daddy track” (low in productivity)
 A shift in corporate cultures is needed to truly become a “family
friendly” company where men and women are fully supported in
their efforts to balance work and family responsibilities

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Exhibit 17.C Domestic Partner Benefits
 Many corporations in the United States have begun to
acknowledge differences in employee sexual orientation and
gender identity. Gay, lesbian, bisexual, and transgender (LGBT)
employees have become a vocal minority, winning important
victories in the workplace.
 A 2012 report by the Human Rights Campaign Foundation found
that 86 percent of the Fortune 500 companies included sexual
orientation in their non-discrimination policy, and 60 percent
provided health benefits to domestic partners and same-sex
spouses
 Lotus Development was the first major employer to offer spousal
benefits to same sex partners; it was followed by many others,
including AT&T, Chase Manhattan, Microsoft, United Airlines, and
the Big Three automakers.
 Other steps companies have taken to support their homosexual
employees have included management training on sexual
diversity issues, visible gay and lesbian advertising, and
transgender-inclusive health coverage
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