HRM Project Report
Diversity Management In India Bechmarking with International Standards
Group – 06 | Section C | PGPM 2016-18
Submitted By: B. Anand: 16P135 Chandni Jain: 16P136 Karan Singh: 16P145 Shashank Singh: 16P166 Shreyas Vaidya: 16P168
CONTENTS
Introduction o
What is Diversity
o
Diversity Perspectives
o
Advantages of Diversity Linkages to Success
o
Negative outcomes of working with Diversity
o
Benchmarking Diversity Initiatives o
Study of International Market with DiversirtyInc Top 50 List
o
Study Of Indian Market Scenario
Gender Diversity
Disability Diversity
LGBT Inclusion
Cultural & Ethnic Diversity
Conclusion
INTRODUCTION
Definition of Diversity:
As may be expected there are various definitions of diversity.
Some of the common definitions include : “The mixture of attributes within a workforce that in significant ways affect how people think, feel, and behave at work, and their acceptance, work performance, satisfaction, or progress in the organizat ion”. Diversity has also been described as “the varied perspectives and approaches to work members of dif ferent identity groups bring”.
While demographic diversity may be a visible lead indicator, diversity of thought is seen as the end game. Having a diverse workforce is increasingly being recognized as instrumental in improving the firm’s performance, and also an imperative that organizations can no longer choose to ignore. It is well recognized today that diversity adds both tangible and intangible value, even if it requires working through the issues and costs that sometimes accompany it. What we see today is the discourse increasingly shifting to one of inclusion, over and beyond that of diversity. Workforce diversity acknowledges the reality that people differ in many ways, visible or invisible, mainly age, gender, marital status, social status, disability, sexual orientation, religion, personality, ethnicity and culture. However, the predominant diversity issues in each country are different. While gender inequality is the oldest and most common diversity issue worldwide, religion and ethnicity separate people in India and Middle East and household status differentiates off-farm migrants from urbanites in China. Chinese rural migrants are routinely looked down on by urbanites and mistreated at the workplace and in society. Multiculturalism has always been the most important dimension of diversity in Western countries, including the EU nations, Australia and New Zealand, where there are a large number of international migrants with diverse cultural backgrounds. Racial equality appears to be the predominant issue in both USA and South Africa where there has been a long history of systematic discrimination against blacks and other ethnic minorities. Although researchers have examined several aspects of diversity, no comprehensive model exists. A diverse workforce comprises a multitude of beliefs, understandings, values, ways of viewing the world, and unique information. Rapid internationalization and globalization has enhanced the significance of workforce diversity. A cross-cultural and multicultural workforce is a common thread not only in organizations in western economies but also in corporations globally. As a result, diversity has increasingly becom e a “hot-button” issue in political, legal, corporate and educational arenas. However, the attitudes towards a diverse workforce in these corporations and from researchers have been very mixed. The organizational attitudes range from intolerance to tolerance and even appreciation of diversity
The term diversity is often used to describe:
The composition of work groups
Demographic differences
Emphasis on diversity focuses on the composition of work groups around factors that generally distinguishes one individual from the other, mostly in terms of observable demographic characteristics such as gender, race, ethnicity, or age, or in term of non-observable attributes such as education or socio-economic status. Diversity Perspectives
Initially, the business case for diversity was built on the assumption that women and minorities would outnumber the traditional white male worker, and since this was a foreseeable future, businesses were left with no choice but to learn to manage a diverse workforce productively. Organizations in the United States are legally bound to support diversity, owing in part to the US Civil Rights Act of 1964, affirmative action and equal employment opportunity. Since the initial focus in the 1980s on women and people of color, the meaning of diversity has expanded to include other forms of demographics such as religious practices and sexual orientation. Diversity and inclusion in the current context encompass other invisible forms of differences among people that include factors such as educational background, functional specialties, working styles, thinking styles and even personality traits. Some argue that when diversity efforts focus more on visual identities such as race, gender, age or disability, without addressing hidden identities emergent from differences in values, beliefs, attitudes, cultures or needs, it may actually hinder development of inclusive cultures by overemphasizing differences rather than commonalties. Different diversity perspectives have been proposed. According to the typologies proposed, they can vary from a negative view of diversity marked by resistance (diversity as a threat) to more positive approaches such as
Discrimination and fairness perspective (differences problematized): Involves focus on justice and the fair treatment of all members, as a moral imperative.
Access and legitimacy perspective (where differences are thought to create opportunities such as access to new markets or consumers): Based on the recognition that the organization’s markets and constituencies are culturally diverse and therefore matching the organization’s own workforce is a way of gaining access and legitimacy to
those markets.
Learning and integration perspective (seen as offering opportunities and providing sustained benefits in the long run): Premised on the belief that the skills, experiences
and insights of diverse employees is a potentially valuable resource for learning and change, and is valued in the workgroup for attainment of its goals. While there are very tangible reasons for promoting diversity and inclusion, and often a business case has to be made to make the argument more compelling, it is also, simply put, the right thing to do. As observed, there are multiple reasons for investing in diversity, not the least of which is because it is ethically and morally the right thing to do. Advantages of Diversity
Diversity can provide many potential advantages to organizations. On one level it helps organizations to reach out to diverse customer groups and markets, and on another level by allowing for a variety of perspectives, it promotes innovativeness and superior work outcomes and performance.
In one study of Fortune 500 companies, it was found that the top 25% of the firms in terms of women in senior management, actually yielded returns to their stockholders that were more than 30% higher than those of their peers. Based on empirical evidence it is argued that diversity does in fact pay.
A survey in the United States found racial diversity to be associated with increased sales revenue, more number of customers, greater market share, and greater relative profits. Gender diversity was associated with increased sales revenue and customers, and greater relative profit.
The findings that more women as board members translates to higher financial returns, was based on a study commissioned by the Times of India group to examine the relationship between companies with women on their boards and profitability. Using the top Indian 100 companies as listed on the Bombay Stock Exchange, the study reports a positive impact of women representation in top leadership and as board members, on ROE.
In a report by Deloitte it is argued that diversity and inclusion lead to improved business outcomes and diversity means more than „just having a sprinkle of women and a dab of
color.
Diversity management alone is insufficient to improve performance. Inclusive workplaces characterized by supportive leadership and empowered employees is required to translate the gains. Diversity management strategies or approaches have also been criticized for not addressing the exclusion of people from different identity groups and their limited access and participation in the organization.
A Deloitte report observes that if just 10% more employees feel included, the company will increase work attendance by almost one day per year per employee. The report also
found that when employees think their organization is committed to and supportive of diversity and they feel included, they report better business performance in terms of their ability to innovate, responsiveness to changing customer needs and team collaboration.
A catalyst report found that in India, employee perceptions of inclusion accounted for 43% of team citizenship behavior. Organizations need to rebalance their focus on inclusion rather than prioritizing only diversity, to fully unleash the potential of diversity.
Linkages to Success
A Forbes report found that diversity was a key driver of innovation and critical for success of organizations on a global scale. The results indicate that diversity is crucial for encouraging different perspectives and ideas that foster innovation.
There is also evidence to show that diversity can be directly linked to financial performance. A recent study examined the relationship between gender diversity and financial performance at the business-unit level, using more than 800 business units across two organizations from different industries. The study found that employee engagement and gender diversity independently predict financial performance at the business-unit level. Employee engagement served as a moderator of the diversity performance relationship. The basis for such findings is the notion that men and women bring different viewpoints, diverse market insights and broader repertoire of skills for problem solving and innovation.
Diverse organizations are thought to offer opportunity for greater crea tivity, innovation, financial performance, organizational adaptability, better problem solving and information processing, employee retention and enhanced profit and corporate image.
The link between heterogeneity and desirable work outcomes has been shown to be even more important when the work involves tacit knowledge such as those of knowledge workers, given that possessing of knowledge is not the privilege of any one group/race/individual.
Negative Outcomes of Working with Diversity
In certain cases diversity training could have some unintended consequences. As some rue, backlash may occur in diversity training because of an overemphasis on differences and it could strengthen stereotypes about minority group members. Research has also linked diversity to negative outcomes such as personnel issues, costs due to harassment and discrimination, lower commitment, inhibited decision making and turnover. Demographic diversity has also been frequently associated with a few negative group outcomes such as higher levels of conflict.
Some scholars point to the inadvertent creation of distinct categories for the sake of diversity management. Intersections of multiple identities at work in organizations may be ignored.
Another study shows how typecast “diverse” employees have been placed in positions
of lower power and status than those enjoyed by others in the organization. In other words, diversity has a flip side too and diversity management runs the threat of becoming a means for creating and perpetuating distinctions rather than seeking assimilation and integration.
Studies have reported that female and racial ethnic-minority employees in the United States are more supportive of organizational diversity initiatives than their White male counterparts. This leads to greater polarization in the work groups.
BENCHMARKING DIVERSITY INITIATIVES
Bechmarking Diversity Initiatives in India against International Standards for the following categories:
Gender Diversity
Race/Ethinicity
LGBT
Diasbled
Study of International Market Scenario in Terms of Diversity Management: DiversityInc is an American company focused on issues of diversity and inclusion in the
workplace. Founded in 1997 in New Jersey as an online publication, the company started the DiversityInc Top 50 Companies for Diversity list in 2001, and in 2002 began a bi-monthly print magazine. Circulation of DiversityInc was 194,000 as of March 2016. DiversityInc's annual list of the top 50 companies for diversity has been covered in media outlets such as NPR, CNBC, Business Insider , and Entrepreneur , the latter of which reported that "the organization's
research
shows
that
more
diverse
companies
are
more
profitable." The DiversityInc Foundation , a non-profit organization, was founded in 2006 and has distributed around $1.5 million to fund scholarships since its inception . Since 2001, DiversityInc has published an annual list of the top 50 companies for diversity. Though the survey covers a range of industries, it is limited to companies with headquarters in the United States with more than 1,000 employees. Companies submit data in the areas of recruiting, talent development, senior leadership, accountability and supplier diversity.
Indian Market Scenario With Respect to Diversity Management: Gender Diversity Gender diversity policies have evolved over the years, even as Indian companies have spread their wings to foreign shores, and younger and younger generations of people - with divergent views and approaches to work - have joined the workforce. Today, therefore, no company needs a specific trigger to conceptualize a new policy - they are being designed constantly, on the run. Most companies agree that the need to have a diverse workforce stems from the fact that their customer base itself is diverse. Fallout of this realization: companies have been innovating in terms of their HR policies to help them retain women employees. For example, most companies look to go much beyond the statutory maternity leave of 12 weeks (about three months) as per the Maternity Benefit Act, 1962. Godrej Industries offers six months of maternity leave with another six months of flexi time; PwC India also offers six months of maternity leave; Tata Sons offers seven months of paid maternity leave and 15 days of paid paternity leave. The question is: are Indian companies' interventions working? Going by the fact that these companies have a fair share of women in their workforce, the answer appears to be yes - TCS has 35 per cent; Tata Group, 24 per cent; Godrej, 30 per cent; EY, 41 per cent; PwC, 33 per cent; IBM, 30 per cent. And the numbers are rising. Anand informs that TCS's share of women has gone up from 30 per cent to 35 per cent in about five years.
Disability Diversity: In its Code of Practice on Managing Disability in the Workplace , the ILO defines a disabled person as “an individual whose prospects of securing, returning to, retaining and advancing in suitable employment are substantially reduced as a result of a duly recognized physical, sensory, intellectual or mental impairment”. Many companies realize that people with disabilities are productive, reliable employees who bring benefits to the workplace. A diverse workforce, inclusive of people with disabilities, is seen by many as important. Some companies also engage in developing products and services for people with disabilities, their families and friends. And, as companies engage with communities in which they work, many pay specific attention to disabled persons. Based on an emerging body of information, the business case outlines the benefits of a diverse workforce, inclusive of disabled persons. Basically, it states that: People with disabilities make good, dependable employees. Many cases document comparable productivity, lower accident rates and higher job retention rates between employees with disabilities and a company’s general workforce. People with disabilities represent an untapped source of skills and talent, including technical skills if they have access to training, and transferable problem‐solving skills developed in daily life. People who develop disabilities while working often have valuable skills and experiences learned on the job, in addition to their formal skills qualifications. Disabled people, their families and friends are often an overlooked market segment. Especially in developed countries, many have significant disposable income. Hiring people with disabilities can contribute to the overall diversity, creativity and workplace morale and enhance a company’s image among its staff, in the community and among customers.
International Standards: Legislation:
Govt of many countries, including the US have drafted policies and plans for affirmative action on inclusion of PWDs in the business environment.
Hiring Quotas are there for inclusion of PWDs in private and public sector companies.
It is mandatory to ensure that PWDs are able to seek equal job opportunities through the same routes as other job seekers. Financial Assistance:
Governments have also started financial incentives including tax benefits, funding for employment related accommodations or workplace modifications.
Social assistance by governments across countries help to ease those with disabilities into employment, providing a safety net should they not succeed.
Funding or microfinancing is another way to assist them.
Supported employment, training and mentoring and peer learning are other areas in which the PWDs are supported by giving them special space and attention.
In India , as per the census2011 data, of the 26.8 Mn PWDs recorded, 15.7 Mn were in the age group of 15-59, the official age for participation in workforce. Among these roughly one third (5.8 million) were employed as main workers, of which less than 20% were women. In 2014, a survey was conducted to study the HR practices and policies of various Indian firms related to the inclusion of PWDs: The companies surveyed were like Wipro, ITC hotels, Brista, Lemon tree Hotels, DS group etc. Reports of Few Companies which have been surveyed: ITC:
90 PWDs hired
Disability Supported: orthopedic Impairment, hearing Impairment, visual impairment, cerebral palsy
Responsibilities
assigned:
Secretarial
role,
desk
based
work
on
computers,
housekeeping, sales and reservation Lemon Tree Hotels:
275 PWDs hired
Speech and hearing impaired, orthopedically handicapped
Responsibilities assigned: Housekeeping supervisory roles, food and beverage services, kitchen stewarding
Barista
Disability Supported: Hearing Impairment
Responsibilities assigned: front end role for receiving orders from customers, serving food, making beverages etc.
Reasons for inclusion:
Sensitization to people with diverse abilities
Lower rate of attrition
Encouragement of innovative thinking and out of box approach
Good performance, dedication and sincerity of PWDs
Providing equal opportunities for growth and development
There are challenges to link the disabled to labor markets: The main stakeholders in this field are the government, companies, NGOs and the disabled community. There are challenges at different levels. For example, in the world of work, persons with disabilities tend to experience high unemployment and underemployment and segregated from the mainstream labor market. This affects their self-confidence. Rural disabled are cut off from markets, have no knowledge of English and computers which is important for employability. Government's reservation policy of 3% reservation in government and public sector jobs does not translate to a reality because the disabled cannot pass the online recruitment tests and the method of job identification is faulty. As a result, no public sector organization has persons with disability more than 1-1.5% of their workforce. While multinational companies are focusing on building an inclusive workforce, most Indian companies' knowledge of disability is negligible. This results in skepticism of whether disabled can be a productive workforce, or whether high expenditure has to be made in work place adaptation for the disabled.
LGBT Inclusion: Workplace Diversity & Inclusion has now been widely recognized as a business driver. However, one segment of the employee base that is still largely neglected and their presence unrecognized at least in the Indian workplace – is that of LGBT employees. The Supreme Court ruling on Section 377 has also hurt the pace of progress on this issue. Section 377 of Indian Penal Code does not criminalize LGBT identity and hence initiatives that promote inclusion of LGBT employees – such as constituting Employee Resource Groups- do not pose any legal risk for the companies, however risk-averse organizations have taken a safer route by not taking any steps in this regard. On the other hand, some multinationals- especially those based in the US and Europe are bringing LGBT-friendly policies into their Indian offices as well. MINGLE (Mission for Indian Gay & Lesbian Empowerment) is first of its kind LGBT think-tank and advocacy group consisting of academicians, students and professionals from fields as diverse as the Arts and Sciences, Journalism, Law, Medicine, Management and Engineering. Its vision is a truly liberal and pluralistic India where all citizens enjoy their fundamental right to lead a secure and dignified life irrespective of their sexual orientation and gender identity.
Over the last five years, MINGLE has partnered with Community based organizations, Corporates and Universities across India, acting as a catalyst for positive change to happen for LGBT Indians and their families and friends. The Second Indian LGBT Workplace Climate Survey was conducted with the aim of assessing the workplace environment vis-à-vis LGBT employees in corporate India. This survey focused on three sectors of the economy- Information Technology, Banking & Finance and FMCG & Manufacturing.
Survey Results
Human resource/ Diversity & Inclusion Policies
Workplace Environment
With better awareness on LGBT issues, and more openness in the workplace, we are seeing a wider representation of LGBT employees though the numbers for lesbian & transgender employees is low, which also reflects the gender diversity gap in the workforce. Undoubtedly as more organizations see the value of LGBT inclusion at workplace, they will work towards creating an inclusive workplace. It is also clear that there remains much work to be done to create a truly inclusive work environment for LGBT employees in India.
Cultural Diversity: In the U.S. and UK, workforce diversity may include gender, race, ethnicity, religion, age, disability, immigration status, social class, political association, marital status, parental status, sexual orientation, and ex-offenders, among other categories. Society accepts many of these differences, protecting them by law and acknowledging them in company policy. Some characteristics, however, may not be acceptable socially or legally in Asian countries such as China and India (Cooke, 2010). India is a democracy in which “inclusiveness” is the major politico-economic discourse at present. In furtherance of this thinking, the talk of empowerment of socially disadvantaged groups is emerging as a powerful weapon for political parties to connect with their constituencies. India has a markedly different societal context for diversity from Western countries and is one of the most diverse nations in the world (Sowell, 2002). The country must address a range of diversity issues, including age, education, religion, caste, socially disadvantaged (e.g., scheduled castes, scheduled tribes, and other depressed classes), gender, language, regional background, ethnicity, economic well-being, and lifestyle (e.g., vegetarian vs. non-vegetarian). Even though the inevitable economic interdependency, shifting demographics and in the case of some countries, legal frameworks encourage the rising cultural diversity; the same is hardly observed at present in businesses, even in the ones as large as the Fortune 500.
Frederick Herzberg demonstrated that people value interesting work and challenges the most as motivations to work and cultural diversity at workplace helps the cause. Diverse individuals, when made to work together, are bound to have their differences in opinions and in all probability, conflicts. The challenge lies in putting aside these differences and working in harmony to achieve the organizational goals along with accomplishing the individual objectives of growth. Not to forget the incentive of an experience enriched with peer learning, the primary reason why the finest universities worldwide prefer to have diverse candidates in their class.
Following figures show the cultural diversity included by Harvard Business School in its class of 2016:
A diverse firm would most likely outperform a firm that has little or no diversity. As per Anne McMohan’s research on the interrelationship between diversity at workplace and firm’s performance, social and psychological characteristics such as openness to experience, agreeableness, feelings and cognition etc. have considerable implications on the organizational performance. McKinsey & Company’s study of 366 corporations also confirms the statistical connection between gender diversity, ethnic diversity and financial performance; signifying that companies promoting diverse leadership are more successful.
Managing diversity is at the core of organizing and cultural diversity is only a point of departure for present day global organizations. How these corporations attract, manage and retain demographically diverse personnel along with their existing workforce will determine their market position, relative to their competitors worldwide. Becoming culturally embedded in the host community can also be used to cultivate viable competitive advantages through improved cost-structure, relevant marketing and valuable talent-acquisition.
Conclusion: Diversity is leveraged through inclusion, which requires employees to feel valued and included by an organization. It calls for simultaneously recognizing differences and overcoming them, by valuing differences in and across people in organizations. Central to the discourse on diversity is the principle of fairness and justice. Individuals have a need to belong, to be appreciated, to be treated fairly, and to be acknowledged from whatever source or basis they derive their identity from. Arguably, when organizations invest in diversity, they stand to gain, in both apparent and economic ways but also in other subtle forms of stronger allegiance, greater well-being and respect that they command in the process. Creating an inclusive culture has to focus beyond diversity based recruitment and diversity training and include holistic ways to leverage on diversity. It involves rephrasing the conversation from demographic diversity to thought diversity and finally to inclusion, and addressing biases, both conscious and unconscious that may hinder acceptance and integration. When employees feel included, in a true sense, beyond mere lip service, they are able to bring the whole of themselves to the organization, expressing and giving voice in an unhindered way that enables effective problem solving, creativity, innovation and enhanced performance in multiple ways. Most conceptualizations of inclusion allude to the notion of belongingness and uniqueness. It is worth exploring what meaning and interpretation, diversity and inclusion hold in an Indian context of work, where multiple identities jostle with each other for space. What particular identities are relevant and inform the discussion on inclusion? With the myriad identities that abound in India, do workers here have a different notion of diversity and inclusion? Does feeling included mean a negation of differing identities or is it their recognition? Is assimilation the key or integration? Do individuals in India seek identity blind strategies for diversity management or does it require a whole new approach that has hitherto been unexplored. What role do individual differences play in perceptions of inclusion and how do leader behaviors influence inclusion in a culturally sensitive manner? What specific leader behaviors are required to foster inclusion in an Indian context? These are just some of the questions that bear further exploration.
