Chapter © 2008The McGraw-Hill Companies, Inc. All rights reserved. Managing Diversity: Releasing Every Employee’s Potential 2 McGraw-Hill/IrwinCopyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved.

© 2008 The McGraw-Hill Companies, Inc. All rights reserved. 2-2 Ch. 2 Learning Objectives 1.Define diversity and review the four layers of diversity. 2.Explain the difference between affirmative action and managing diversity. 3.Describe the glass ceiling and the four top strategies used by women to break the glass ceiling 4.Review the demographic trends pertaining to racial groups, educational mismatches, and an aging workforce.

© 2008 The McGraw-Hill Companies, Inc. All rights reserved. 2-3 Ch. 2 Learning Objectives (con’t) 5.Highlight the managerial implications of increasing diversity in the workforce. 6.Explain the positive and negative effects of diversity by using social categorization theory and information/decision-making theory. 7.Identify the barriers and challenges to managing diversity. 8.Discuss the organizational practices used to effectively manage diversity as identified by R. Roosevelt Thomas, Jr.

© 2008 The McGraw-Hill Companies, Inc. All rights reserved. 2-4 Understanding Diversity Diversity: Host of individual differences that make us similar and different from each other Please stand up….. If the statement made doesn’t pertain to you have a seat! If a statement does describe you, stand up again!

© 2008 The McGraw-Hill Companies, Inc. All rights reserved. 2-5 The Four Layers of Diversity Personality Functional Level/ Classification Geographic Location Age Work Location Seniority Division/ Dept./ Unit/ Group Work Content/ Field Union Affiliation Mgmt. Status Marital Status Parental Status Appearance Educational Background Work Experience Race Income Personal Habits Religion Recreational Habits Ethnicity Physical Ability Sexual Orientation Source: L Gardenswartz and A Rowe, Diverse Teams at Work: Capitalizing on the Power of Diversity (New York: McGraw-Hill, 1994), p. 33

© 2008 The McGraw-Hill Companies, Inc. All rights reserved. 2-6 Test Your Knowledge Sam is a 55 year-old, male Sales Manager for XYZ corporation. He likes to drive fast cars and is Native American. Which layer of diversity has not been mentioned about Sam? A.Personality B.Internal C.External D.Organizational

© 2008 The McGraw-Hill Companies, Inc. All rights reserved. 2-7 Affirmative Action Goal: Prevent discrimination Never required to hire unqualified people Your Opinion Have affirmative action programs been good for society? A=Yes, B=No Are affirmative action programs still necessary? A=Yes, B=No

© 2008 The McGraw-Hill Companies, Inc. All rights reserved. 2-8 Managing Diversity Enables all people to perform up to their maximum potential. How can managing diversity be a competitive advantage?

© 2008 The McGraw-Hill Companies, Inc. All rights reserved. 2-9 Increased Workforce Diversity - Women Glass Ceiling Invisible barrier blocking women and minorities from top management positions Women CEO’s (as of 2/2007): 10 of Fortune of Fortune 1000 What helps break the ceiling?

© 2008 The McGraw-Hill Companies, Inc. All rights reserved Increased Workforce Diversity - Race Racial minorities are growing 2006 – 1,016 race-based charges of discrimination to EEOC

© 2008 The McGraw-Hill Companies, Inc. All rights reserved Education and Personal Income

© 2008 The McGraw-Hill Companies, Inc. All rights reserved Increased Workforce Diversity - Age

© 2008 The McGraw-Hill Companies, Inc. All rights reserved Your Experience For school group projects, it has been easier to work with groups we could choose rather than one’s the professor chose. 1= Strongly Disagree 2 = Disagree 3 = Neutral 4 = Agree 5 = Strongly Agree

© 2008 The McGraw-Hill Companies, Inc. All rights reserved Aging Workforce: Challenges Career Plateauing: when the probability of being promoted is very small Elder care – helping older workers care for aging parents Keeping older workers engaged and current

© 2008 The McGraw-Hill Companies, Inc. All rights reserved Pros and Cons of Diversity Social categorization theory Similarity leads to liking and attraction Information/Decision-Making Theory Diversity leads to better task-relevant processes and decision-making

© 2008 The McGraw-Hill Companies, Inc. All rights reserved A Process Model of Diversity

© 2008 The McGraw-Hill Companies, Inc. All rights reserved Challenges to Managing Diversity What barriers exist for organizations trying to manage diversity?

© 2008 The McGraw-Hill Companies, Inc. All rights reserved Thomas’s Generic Action Options Responses to handling diversity issues: Option 1: Include/Exclude Option 2: Deny Option 3: Assimilate Option 4: Suppress Option 5: Isolate Option 6: Tolerate Option 7: Build Relationships Option 8: Foster Mutual Adaptation Which ones are most effective for managing diversity?

Chapter © 2008The McGraw-Hill Companies, Inc. All rights reserved. Supplemental Slides

© 2008 The McGraw-Hill Companies, Inc. All rights reserved Video Cases Starbucks Pike Place Fish Market

© 2008 The McGraw-Hill Companies, Inc. All rights reserved Management in the Movies – The Inside Man – “Bugged” In this scene, Det. Frazier is talking with Sergeant Collins (Victor Colicchio) about a previous experience. What apparent biases does Sergeant Collins have? How does Det. Frazier deal with Sergeant Collins apparent stereotypes? How should an employee deal with another employee’s bias?

© 2008 The McGraw-Hill Companies, Inc. All rights reserved Diversity Challenges Bailey’s Health Center, Falls Church Repeatedly, patients would not return for their follow- up visits or call and cancel Most were immigrants from Central America Why? Hospital in Michigan Large % of Vietnamese women were dehydrated after giving birth? Why? Source: Reshaping Bedside Manner in a Diverse World, S. Levine, Feb. 6, 2006, Washington Post

© 2008 The McGraw-Hill Companies, Inc. All rights reserved Strategic Value of Diversity Gallup survey conducted in late 2005 found: 15% of US workers experienced discrimination in the workplace over the past year Positive perceptions of the company’s diversity efforts was related to: Satisfaction with the company Likelihood of staying with the company Probability of recommending the company to others Source: Employee Discrimination in the Workplace, The Gallup Poll, 11/10/05

© 2008 The McGraw-Hill Companies, Inc. All rights reserved Office Closet Empties Out Poll conducted in April 2006 found: 74% of gay and lesbian employees say they are completely out at work up from 47% in % say they have told selected co-workers but not their bosses Of Fortune 500, 246 offer domestic-partnership benefits today up from 28 in 1996 Source: BusinessWeek, May 1, 2006; Jessi Hempel, The Office Closet Empties Out

© 2008 The McGraw-Hill Companies, Inc. All rights reserved Leaders in Diversity Pepsi’s CEO & direct reports are each assigned different employee group (e.g., GLT, Asian, women of color) Responsible for: Understanding the issues these employees face Facilitating their growth and development Hold themselves accountable Source: Diversity Finds Its Place, R. Rodriquez, August 2006, HR Magazine

© 2008 The McGraw-Hill Companies, Inc. All rights reserved Leveling the Field Coaching: providing perspective and assistance on career development Typically not performed by manager Scope extends current job 38.7% said minorities receive coaching at the same rate as their representation in the workforce 11.7 %said minorities receive coaching at lower rate than the typical worker Source: HR Magazine, July 2006, Minority Employees Skipped for Coaching, Kathy Gurchiek

© 2008 The McGraw-Hill Companies, Inc. All rights reserved Land Executives, Not Lawsuits 35.5% of all charges filed with EEOC cite race as basis of discrimination (2005) EEOC is focused on reducing “systemic discrimination” Occurs when an organization’s policies, practice, and/or culture fail to address discriminatory actions Source: HR Magazine, October 2006, Land Executives, Not Lawsuits, Jonathan A. Segal, Esq.

© 2008 The McGraw-Hill Companies, Inc. All rights reserved Younger Women at the Top Women who make it into executive ranks get there faster than men 75% of Fortune 1,000 women executive officers are 50 or younger Percentage of male and female Fortune 1,000 executive officers in each age category

© 2008 The McGraw-Hill Companies, Inc. All rights reserved Diversity Training What is diversity training? Why do companies invest in it? What types of diversity training are most effective? Awareness or Skills/Behavioral?

© 2008 The McGraw-Hill Companies, Inc. All rights reserved Denny’s: A Turnaround Background 1993 – Class action case against Denny’s for racial discrimination Ended in a settlement that included: Mandatory diversity training for all employees Random testing of restaurants for treatment of customers

© 2008 The McGraw-Hill Companies, Inc. All rights reserved Denny’s: A Turnaround How did Denny’s respond? Changed leadership (CEO), added Chief Diversity Officer Implemented skills-based diversity training Held managers accountable for diverse staff and fair treatment of customers

© 2008 The McGraw-Hill Companies, Inc. All rights reserved Denny’s: A Turnaround What was the outcome? Significant increase in minority-owned franchises Management team is 31% minority, up from 21% in 1993 Board is 33% minority Denny’s placed first for two years on Fortune’s best place to work for minorities

© 2008 The McGraw-Hill Companies, Inc. All rights reserved Diversity and Competitive Advantage 1-33

© 2008 The McGraw-Hill Companies, Inc. All rights reserved Business Case for Workplace Diversity Direct Link: Expanding customer base with diverse workforce DuPont – a drug they produce was low in the Hispanic market Hispanic manager noticed the label was only in English; they had it translated and sales improved Significant increase in minority-owned franchises

© 2008 The McGraw-Hill Companies, Inc. All rights reserved Business Case for Workplace Diversity Indirect Link: Retaining Employees Nortel lost revenue due to turnover Turnover cost - $55,000 average cost per employee “Attracting and keeping talent – a key aspect of workplace diversity – has a significant impact on the bottom line.” Taken from Workplace Diversity: Leveraging the Power of Difference for Competitive Advantage 2005 SHRM Research Quarterly

© 2008 The McGraw-Hill Companies, Inc. All rights reserved Conclusion Questions for discussion