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Managing Diversity in HRM

Dr Robert Perrett

Lecture 7 9th November 2009

Lecture Structure
1. 2. 3. 4.

What is Equal Opportunities?

What discrimination legislation exists?

What is Managing Diversity? Reasons for shift to MD Demographic and business case Opposition to Managing Diversity Gender discrimination in the UK

5. 6.

What is Equal Opportunities?


It is about protecting groups of staff (e.g. gender, race, disability, sexual orientation, religion or belief) It is about legal compliance



It is the preserve of HR sections

It involves collating statistics It has some negative connotations



Examples of discrimination legislation

Sex Discrimination Act 1975 Race Relations Act 1976, R R [Amendment] Act 2000

Disability Discrimination Act 1995

Sexual Orientation Regulations 2003 Religion or Belief Regulations 2003

Bullying in the workplace

Human Rights in the Workplace Age discrimination legislation 2006


EMPLOYMENT LAW The Health and Safety at Work Act 1974

The Employment Rights Act 1996

CRIMINAL LAW Criminal Justice Act and Public Order Act 1994

Protection From Harassment Act 1997

All equality legislation prohibits discrimination:

Direct discrimination Indirect discrimination Harassment Victimisation

Compensation awards are unlimited and can be made against companies and individuals

- Legislation can apply before, during and after employment

Legal protection from discrimination

Sex Marital status Pregnancy Gender reassignment Race Colour Nationality Ethnic origin Age

Disability Religion and political opinion (in NI only) Religion(UK) Trade union membership and non-membership Carrying out a role as a recognised trade union representative

What is Managing Diversity?


It is about everyone


It is about recognising, valuing and harnessing the differences that exist in ourselves and our customers
It is about promoting processes, practices, decision making and behaviours that oppose inequality, prejudice and unethical behaviour Not just about numbers and protection form the law it gives real benefits to the organisation proactive



Managing diversity - definition

...the basic concept of managing diversity accepts that the workforce consists of a diverse population of people. The diversity consists of visible and nonvisible differences that will include factors such as sex, age, background, race, disability, personality and work style. It is founded on the premise that harnessing these differences will create a productive environment in which everybody feels valued, where their talents are being fully utilised and in which organisational goals are met.

EOR No 86 July/August 1999


SOCIAL CATEGORY Gender Race Disability Religion or belief Sexual orientation Age Marital status Caring responsibilities Working pattern Criminal record Culture Nationality Colour Language Accent Weight Height Appearance Social class Health

Equal Opportunities vs. Managing Diversity

Externally initiated Legally driven Quantitative focus Problem focused Reactive Race, gender, disability

Internally initiated Business-needs driven Qualitative focus Opportunity focused Proactive All differences

Different Approaches in UK and USA

UK Legislation founded upon equal treatment for race and sex. Codes of Practice Issued in 1984 promoting good employment practice Focus on fairness and equity at point of selection. Positive action in training and advertising to offer a more diverse pool of talent from which to select. Selection decisions based on sex, race or disability illegal. Focus on the individual and legislation. Eg Individuals have to apply to Industrial tribunals or Civil Court.. Equality of treatment. US Legislation for Civil Rights initially for Racial Equality Federal contract compliance-statistical returns and targets for workforce profiles. Focus on parity in representation of women and minority groups in recruitment. Positive selection of women and people from minority groups when candidates of equal calibre, if targets not fulfilled, when race or sex taken into account.. Legislation allows group action for litigation (eg class action). Equality of outcomes.

Source: Adapted from Ford (1996) Partnership is the Secret to Success People Management, February 8 February, p34-36.

A shift away from Equal Opportunities

There has been an increasing disillusionment. 30 year history and is not seen as achieving the desired outcomes. Employers have resisted Equal Opportunities legislation precisely because it has been IMPOSED UPON THEM.

Equal opportunities is seen as a negative attempt to address issues of INEQUALITY.

Diversity policy on the other hand is more POSITIVE to their recognition and celebration of the characteristics of diverse groups.


Demographic changes and the case for Managing Diversity

A wider pool of recruits is required labour shortage

16% of organisations have hard to fill vacancies

By 2010 only 20% of the workforce will be white, able bodied men under 45 Women now make up nearly half the workforce and numbers are increasing More ethnic minority workers will be entering the labour market (50% of London workers are BME)

Demographic changes and the case for managing diversity

Encompassing many of these themes Patricia Hewitt addressed the annual CBI conference in 2005 and stated:

In less than ten years time, only one in three of the British workforce will be a white man under the age of 45. We will have more women workers now almost half of the workforce and set to rise further. We will have more older workers, more workers from different ethnic and faith groups. More people working part of the week or part of the year. I know that this growing diversity of our workforce can make life tough for managers [But] its an opportunity to create organisations that are more successful and business that is more profitable [and] equipped to meet the challenges of a global economy.

So what is the BUSINESS CASE of managing diversity?

The business case for managing diversity

1. 2. 3. 4.

Protection from equal value cases Responsive to market pressure and skill shortages Fairness, equity and consistence - Becoming an employer of choice Positive company image, used as a selling point to customers, clients and investors


Often organisations impose external standards on their suppliers, using their purchasing power to force change i.e. body shop
Can lead to a better understanding of the customer. Flexible workforce

6. 7.


The business case for managing diversity

1. 2. 3. 4. 5.

Workforce representation of the local community Attract ethnic investors New business ideas from a diverse workforce Fully utlilise skills and harnessing the talents and of the population Reducing recruitment and training costs can be attained through accommodation of workers request for flexible working Better decision making, improved teamwork, greater creativity, better customer service skills and improved quality of output Building effective global relationships




Opposition to Managing Diversity

1. 2. 3. 4. 5. 6. 7. 8.

To what extent do they actually impact on the bottom line EO and diversity policies expensive and hard to quantify benefits Under-resourced and criticised as limiting management decisions White males can feel vilified Male masculinity and womens work and pay What happens when demographic trends alter the other Could the business case actually encourage discrimination Managing diversity has little or no benefit at lower levels


Direct and Indirect discrimination 1975 Sex Discrimination Act

A person discriminates against a woman if

On the ground of her sex he treats her less favourably than he treats or would treat a man (Direct), or He applies to her a requirement or condition which he applies or would apply equally to a man but (Indirect) (i) which is such that the proportion of women who can comply with it is considerably smaller than the proportion of men who can comply with it, and (ii) which he cannot show to be justifiable irrespective of the sex of the person to whom it is applied, and (iii) which is to her detriment because she cannot comply with it.



The development of societal norms


Historically: a womans place is in the home. The man as the breadwinner. Self perpetuating, now women expected to take menial, lower paid work. Women may even expect to be paid less!



Massive shift of women into employment. Growth of womens rights movements change in the climate of discrimination.
The gap between mens pay and womens pay has shrunk considerably but here is still along way to go.



The gender pay gap and extent of inequality - WWC2006


Considerable growth but vertical and horizontal segregation Female salaries low particularly full time UK 1 of largest gender pay gaps in Europe

2. 3.

5. 6.

Examples of good practice not universal

Gender pay gap 18% Women must decide between domestic or labour market career lack of childcare


Why do employers discriminate?


Human capital theory Women are less skilled, they have a lack of Human Capital because of discrimination Crowding theory
Patriarchal and family wage theory Social system ruled by men generally according to their seniority. Labour market segregation theory




The development UK legislation on gender discrimination

1. 2.

Article 119 1957 Treaty of Rome 1970 Equal Pay Act came into force in 1975

Problems with the 1970 legislation Criticised for:

Similar work Too narrowly defined Legislation did not make job evaluation compulsory


The European Court ruled that the UK had failed to properly implement the directive in 1982 and so the 1983 Equal Pay [Amendment] Act was introduced and came into effect in 1984.

The Equal Pay [Amendment] Regulations 1983


Women were entitled to the same pay as men where work is of equal value, no longer subject to being in the same kind of employment This can be done without requiring a job evaluation by the employer Case claims can be made across employers within an umbrella organisation




The Kingsmill Report Recommendations (2001)

1.Set up Inquiry to advise on implementation of Operating and Financial Review (OFR) in Company Reports. 2.Public sector organisations must include OFR in Annual Reports. 3. Private sector employers encouraged to conduct employment and pay reviews (EPR) 4.All public bodies must conduct EPRs. 5.Govt monitor progress with view to introduce EPR as legal requirement. 6.Public sector contractors must also conform by setting up EPRs. 7.Govt. set up Centre of Excellence researching on career and labour market prospects of women. 8.Identifiable element of Board Executive appraisal and remuneration to stated diversity objectives and pay equality. 9.Investors in People standards to include womens employment and issues 10.Consider introduction of employee right to if he/she receives remuneration equal to a named colleague.


The Kingsmill Report on Pay Equality ( 2001) cont

11. Govt. introduce tax credits for training individuals to move to higher paid jobs. 12.Govt. fund tax credits to fund training of women who would be unemployed or on low pay. 13.Convene group of experts (Task Force) to to investigate labour market causes of organisation of pay differential between part and full time pay. 14.Govt. monitor tax, national insurance and rules of pensions and review implications in trms of gender and pay differences.


Managing Diversity in HRM

Dr Robert Perrett

Lecture 7 9th November 2009