Running head: Workforce Diversity XYZ Bank

WORKFORCE DIVERSITY XYZ BANK

(Individual Assignment)

By

Mr. S. A. Samarakoon

(2010/MBA/WE/69)

Semester I – First half

January, 2011

Course: MBA 531 - Organizational Behaviour

Lecturer: Mr. Trevor Mendis

Postgraduate and Mid-Career Development Unit

Faculty of Management and Finance

University of Colombo
Workforce Diversity XYZ Bank 2

Abstract

Workforce Diversity has been increasing in the recent past due to changing demographics.
Organization has to use this into an opportunity rather than looking it as a barrier. Objective of
this report is to understand the importance of diversity in modern organization, convert
diversity challenges into opportunities and to find out the ways in which diversity could be
managed so that it will be beneficial to XYZ Bank. Several theories are mentioned as a
guideline to convert XYZ Bank into a true multicultural organization. A model and number of
methods at individual level and organizational level are mentioned in managing the diversity.
These methods will be useful for XYZ Bank to analyze the current status and come up with an
approach suitable to the bank.
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Table of Contents
Abstract..........................................................................................................................................2
Table of Contents..........................................................................................................................3
1.0 Introduction.............................................................................................................................4
2.0 Definition of the Diversity.......................................................................................................4
3.0 Emergence of Diversity...........................................................................................................5
4.0 Developing a Multicultural Organization................................................................................7
5.0 Approaches to Managing Diversity.......................................................................................13
5.1 Individual approaches to managing diversity....................................................................14
5.2 Organizational approaches to managing diversity............................................................15
6.0 Conclusion & Recommendation............................................................................................17
Methodologies discussed in this paper can be used as a prototype to make a detailed plan in
transforming our organization as a true multicultural organization............................................17
7.0 Reference...............................................................................................................................18
8.0 Bibliography..........................................................................................................................19
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1.0 Introduction

Modern workforce consists of a diverse population of people

consisting of visible and non-visible differences including factors such as
sex, age, background, race, disability, personality and work style.
Organizations which can harness these differences will create a productive
environment in which everyone feels valued, where all talents are fully
utilized and through which organizational goals are met. If the diversity is
not managed properly, it can affect the productivity of the organization
adversely. So Workforce diversity must be faced and converted into
opportunities and to gain a competitive advantage over the others.

2.0 Definition of the Diversity

The concept of diversity encompasses acceptance and respect. It

means understanding that each individual is unique, and recognizing our
individual differences. These can be along the dimensions of race,
ethnicity, gender, sexual orientation, socio-economic status, age, physical
abilities, religious beliefs, political beliefs, or other ideologies. It is the
exploration of these differences in a safe, positive, and nurturing
environment. It is about understanding each other and moving beyond
simple tolerance to embracing and celebrating the rich dimensions of
diversity contained within each individual.
(http://gladstone.uoregon.edu/~asuomca/diversityinit/definition.html)

Diversity in the workplace is the presence of individual characteristics

that make people different from one another. These different characteristics
can be with respect to race, ethnicity, gender, sexual orientation (lesbian,
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gay, bisexual and transgender), socio-economic status, age, physical

abilities, religious beliefs, political beliefs etc

Primary dimensions of diversity includes age, gender, physical ability, race, sexual
orientation, and ethnicity and secondary dimensions commonly include education, marital
status, parental status, work background, income, geographic location and religion beliefs.

3.0 Emergence of Diversity

As we enter 21st century workforce diversity becomes an essential business concern.

Advance in technology and advent of global economy bring the people closer than ever thus
western, Asian , Spanish etc people has to work very closely. Also the changing workforce
demographics (age, gender, ethnicity and education), legislation and law suits, competitive
pressure and the recognition and desire for diverse view point has led to a increase in diversity
in today’s organization ( Luthans , 2008) . We have become a borderless world with global
citizens, global competitors, global customers, global suppliers and global distributors. ( David,
2009) Hence the diversity of the workforce is a given fact for the current organizations.

In the changing external environment (technological change, political change,

economical change, socio cultural change, demographical change, new laws etc) companies
have to find new strategies to sustain and survive in the market with a reasonable profit. In
achieving growth and profitability market penetration, product development, market
development and diversification are essential. Workforce play an important role in achieving
the above. Today’s workforce is dramatically different from the past it is not dominated by one
group (eg : white males) but vast array of different backgrounds and experiences. So
organizations cannot afford to restrict its ability to attract the best employees available. Also
when cities in developing countries becomes mature, finding skilled and creative workers
becomes difficult especially when combined with technological advances. At the same time,
diverse skills, aptitudes and experience, along with different types of available training and
education are becoming crucial contributors to the growth and competitiveness of
organizations. So the diversification of the workforce mean better competitiveness and growth
in the current industry.
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USA Today calculates a diversity index ( based on population and ethnic probabilities )
that shows now almost 1 out of 2 people randomly selected in the United States are racially or
ethnically different, up from 1 out of 3 in 1980. In addition U.S. Department of Labour
estimates that the vast majority of new workers entering the workforce will be women or
minorities ( as cited in Luthans, 2008, p. 36) . These studies explain the composition of today’s
workforce is much different from the past.

Another reason for increase in diversity is that many companies are under legislative
mandate to comply with non-discriminative practices in their activities. Violating these laws
may end up in paying fines and not being awarded government contracts.

Following laws are some of the example legislations in USA and Sri Lanka

1. Age Discrimination Act of 1978 - USA. This law at first increased the mandate
retirement age from 65 to 70 and then was later amended to eliminate an upper age limit
altogether.
2. Pregnancy Discrimination Act of 1978 - USA. This law gives full equal opportunity
protection for pregnant employees.
3. 1978 Sri Lanka constitution Article 12 – It has mentioned that “No Citizen shall be
discriminated against on the grounds of race, religion, language, caste, sex, political
opinion, place of birth or any such grounds”
( http://www.priu.gov.lk/Cons/1978Constitution/Chapter_03_Amd.htm)

These laws, along with law suits and the threat of lawsuits have put teeth into diversity.
People that have found themselves excluded from organization and managerial positions can
bring and have brought lawsuits in an effort to overcome discriminatory barriers and ensure
themselves equal opportunity in employment. For example successful lawsuits with resulting
multimillion dollar penalties have in recent past year been brought against such well-known
firms as Mitsubishi, Boeeing, Denny’s Safeway, American Express and numerous others.
( Luthans, 2008)
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In global economy buying power is represented by all types of people (ethnicities, ages,
races, genders etc). To ensure that their products are attracted by diverse customer base, smart
companies hire all those type of people for their insights and knowledge. For example If a bank
wants to set up branches in North and East in Sri Lanka, it can take the advantage of employees
who know and understand best about the people in that area .

Firms also take the advantage of diversity to communicate among their vendors,
partners and customers. Having diversified workforce will be very much effective in
communicating with the external world.

IBM as an example had programs for diversity even in 1930s . In 1935 IBM hired its
first professional women, 25 college seniors recruited for Systems Service. In 1952 IBM
actively recruited Black employees at Howard University, Tennessee State University and
West Virginia State College. By 1965, the number of Black colleges and universities in the
IBM Recruitment Program grows to 30. Once a company establishes its name as a truly
multicultural and diversified organization, talented workers among diversified groups of people
would love to be a part of that organization.

It is very much clear that organizations that diversify their workforces will have a
distinct competitive advantage over those that don’t. Companies that have a reputation in
having a truly diverse workforce will also have a distinct advantage of attracting more talented
and capable workforce over the others.

4.0 Developing a Multicultural Organization

Multicultural organization can be described as where employees of varied backgrounds,

cultures, ethnicities, and experiences can contribute freely, and achieve their individual
potentials for their own and their organization's benefit (
http://www.businessdictionary.com/definition/multicultural-organization.html )

Jackson, LaFesto, Schultz and Kelly (1992) has described a multicultural organization as one
that
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1. Reflects the contributions and interests of diverse cultural and social groups in its
mission, operations, and product or service
2. Acts on commitment to eradicate social oppression in all forms within the organization
3. Includes the members of diverse cultural and social groups as full participants,
especially in decisions that shape the organization
4. Follows through on broader external social responsibilities, including support of other
institutional efforts to eliminate all forms of social oppression.
(as cited in Luthans, 2008, p.39)

Developing a multicultural organization cannot be done overnight. It will have to be

done in a phased approach. Initially the top level management support is required and they need
to create a policy which includes the support and activities that the company is going to take
towards being a multicultural organization.

Following are the steps which can be used in planning to develop a multicultural organization
First an assessment has to be done about the current dynamics of the organization.
• Develop deep understanding of the dynamics of the organization
• Identify the vision statement and goals for an inclusive multicultural organization
• Map out and asses the current organization dynamics
• Identify the best practices used by other like organization

Then Gaps and priorities need to be identified

• Identify the gaps between the vision/goals and the current reality
• Prioritize issues and dynamics to be addressed

Next a strategic plan has to be developed

• Identify clear outcomes of each priority
• Establish time frame for implementation and completion
• Identify required resources and : personnel, financial etc
• Identify responsible parties
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Then the implementation should be carried out on the created plan. Evaluation of the progress
is also important and plan can be revised as needed.
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In the past Organization used to take a “melting pot” approach to differences assuming
different cultures and nationalities would somehow automatically become one culture. The
main idea of melting pot is that all of the people in a society would blend together to form one
basic cultural norm based on the dominant culture. But people from different cultures cannot
set aside their cultural values and preferences at home and come to work. The challenge for the
organization is therefore to make themselves more accommodating to diverse groups of people
by addressing different life styles, family needs and work style etc. Even though in the past
organization used to have diverse groups at workplaces they haven’t paid much attentions to
this issue.

Jackson and Hardiman (1981) have developed a model that describes three levels and
six stages in the multicultural development process. The stages are sequential. Experiencing the
learnings and limitations of each stage contributes to the ability of the organization to move to
the next stage. An organization may demonstrate indicators of one, some, or all of the stages in
its separate divisions or departments.

Level One
Stage One: The Exclusionary Organization
The Exclusionary Organization is devoted to maintaining dominance of one group over
other groups based on race, gender, culture, or other social identity characteristics. Familiar
manifestations of such organizations are exclusionary membership policies and hiring
practices.

Stage Two: The Club

The Club describes the organization that stops short of explicitly advocating anything
like White male supremacy, but does seek to establish and maintain the privilege of those who
have traditionally held social power. This is done by developing and maintaining missions,
policies, norms, and procedures seen as “correct” from their perspective. The Club allows a
limited number of members from oppressed groups such as women and racial minorities,
provided that they have the “right” perspective and credentials.
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Level Two
Stage Three: The Compliance Organization
The Complicate Organization is committed to removing some of the discrimination
inherent in the “club” by providing access to women and minorities. However, it seeks to
accomplish this objective without disturbing the structure, mission and culture of the
organization. The organization is careful not to create “too many waves” or to offend or
challenge its employees’ or customers’ racist, sexist, or anti-Semitic attitudes or behaviors.

The Compliance Organization usually attempts to change its organizational racial and
gender profile by actively recruiting and hiring more racial minorities and women at the bottom
of the organization. On occasion, they will hire or promote “token” racial minorities or women
into management positions, usually staff positions. When the exception is made to place a
woman, racial minority, or member of any other oppressed social group in a line position, it is
important that this person be a “team player” and that s/he be a “qualified” applicant. A
“qualified team player” does not openly challenge the organization’s mission and practices, and
is usually 150% competent to do the job.

Stage Four: The Affirmative Action Organization

The Affirmative Action Organization is also committed to eliminating the
discriminatory practices and inherent “rigidness” of The Club by actively recruiting and
promoting women, racial minorities, and members of other social groups typically denied
access to our organizations. Moreover, the affirmative action organization takes an active role
in supporting the growth and development of these new employees and initiating programs that
increase their chances of success and mobility. All employees are encouraged to think and
behave in a non-oppressive manner, and the organization may conduct racism and sexism
awareness programs toward this end.

This organization’s view of diversity also includes the disabled, Latinos, Asians/Asian
American-Pacific Islanders, Native Americans, the elderly, and other socially oppressed
groups.
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Although the affirmative action organization is committed to increasing access for members of
diverse groups and increasing the chances that they will succeed by removing those hostile
attitudes and behaviors, all members of this organization are still required to conform to the
norms and practices derived from the dominant group’s world view.

Level Three
Stage Five: The Redefining Organization
The Redefining Organization is a system in transition. This organization is not satisfied
with being just “anti-racist” or “anti-sexist.” It is committed to examining all of its activities for
their impact on all members’ ability to participate in and contribute to the growth and success
of the organization.

The Redefining Organization begins to question the limitations of the cultural

perspective as it is manifest in its mission, structure, management, technology, psycho-social
dynamics, and product or service. It seeks to explore the significance and potential benefits of a
diverse multicultural workforce. This organization actively engages in visioning, planning, and
problem-solving activities directed toward the realization of a multicultural organization.

The Redefining Organization is committed to developing and implementing policies

and practices that distribute power among all of the diverse groups in the organization. The
redefining organization searches for alternative modes of organizing that guarantee the
inclusion, participation, and empowerment of all its members.

Stage Six: The Multicultural Organization

The Multicultural Organization reflects the contributions and interests of diverse
cultural and social groups in its mission, operations, and product or service; it acts on a
commitment to eradicate social oppression in all forms within the organization; the
multicultural organization includes the members of diverse cultural and social groups as full
participants, especially in decisions that shape the organization; and it follows through on
broader external social responsibilities, including support of efforts to eliminate all forms of
social oppression and to educate others in multicultural perspectives.
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This model can be used in achieving closer to the stage six where an organization is
considered to be truly multicultural.

5.0 Approaches to Managing Diversity

Managing diversity should be one of the key focus area of Human Resource
Management. Some large organization has set up even a separate diversity department.
Managing diversity is an ongoing process through which the organization should be able to
unleash various talents and capabilities from the diverse population.

Chang (1996) came up with following Organizational diversity success model (Figure
1) as a workable plan that any organization can use to capitalize on the diversity. It is a
straightforward easy to understand and it will help organizations to realize the benefit that well
managed diversity provides.
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Figure 1 The Organizational Diversity Success Model

5.1 Individual approaches to managing diversity

A manager can have two approaches to mange diversity. First one is to learn from the
diverse workforce he may come across. Manager should interact with his workforce one on one
if possible irrespective of the gender, race experience etc and learn how best he understand
their requirements and views. Also he should get the valuable feedback on the way he manages
diversity. Second approach is the empathy where the manager need to think from the worker’s
perspective and try to understand the issues that the worker faces in relation to diversity.
(Luthans, 2008)
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5.2 Organizational approaches to managing diversity

Organization approaches to managing diversity includes variety of techniques. Some of

the most common are described below.

When recruiting people, the organization should maintain the integrity of its
commitment to diversity. Interviews should be carefully constructed so that skills required for
the job is tested. Job description should be developed for each position after analyzing each
position of the organization and interviews and tests should be based on the job description
rather than the age, gender, ethic background of the applicants.

Diversity training programs are also required in managing diversity in the organization.
These training programs should be started with a basic awareness programs and followed by a
detailed program which should be linked to the business outcomes. Employees should be made
to understand how diversity ties into organization’s overall vision and goals.

When new employees are recruited they should be given a mentor to work with them
for a one year period. There are a numeric specific benefits that mentors can provide to those
they assist, including the following
• Identify the skills, interests, and aspiration the person has
• Provide instruction in specific skills and knowledge critical to successful job
performance
• Help in understanding the unwritten rules of the organization and how to avoid saying
or doing the wrong things
• Answer questions and provide important insights
• Offer emotional support
• Serve as a role model
• Create an environment in which mistakes can be made without losing self-confidence
(Luthans, 2008)
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Typical employees in the 1960s worked from Monday to Friday and did their work for
eight or nine-hour chunks of time. But in the typical family today since both mother and father
are working, both have to balance their work and family life. So Most companies have now
come up various flextime programs as a solution for this. Flextime work schedule may include
shifting the working hours, reduced working hours etc.

There are also work/family programs provided by organization to decrease the family
conflict and job dissatisfaction. A majority of college and university students say that attaining
a balance between personal life and work is a primary career goal. So the organizations that
don’t help their work/life balance will find it increasingly hard to attract and retain the most
capable and motivated employees. (Robbins, 2004).
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6.0 Conclusion & Recommendation

Since diversity plays a central role in today’s environment, we must face it and should
try to reach towards being a truly multicultural organization. Application of the principles of
multicultural organizations and multi-cultural management helps to release the creative
energies of all employees (executives and non executives). This helps on the achievement of
the objectives of our organization in a multicultural environment where all the people will work
as one team. Once we become a true multicultural organization, we would automatically get
the following benefits
• Communication among employees as well as external world
• maximum utilization of human resources
• dynamic, flexible and adaptive organization
• ability to find various talents among workers
• improving customer relationship

Methodologies discussed in this paper can be used as a prototype

to make a detailed plan in transforming our organization as a
true multicultural organization.
Workforce Diversity XYZ Bank 18

7.0 Reference

Definition of Diversity. (n.d.). Retrieved January 19, 2011, from

http://gladstone.uoregon.edu/~asuomca/diversityinit/definition.html

Luthans F. (2008). Organizational Behavior. Singapore: Mcgraw-Hill.

David F. R. (2009). Strategic Management Concepts and Cases. New Delhi: PHI Learning
Private Limited.

The official Web Site of Government of Sri Lanka. The Constitution of Sri Lanka. Retrieved
January 19, 2011 from
http://www.priu.gov.lk/Cons/1978Constitution/Chapter_03_Amd.htm

Webfinance Incorporation’s Business Directory (2010). Multicultural organization definition.

Retrieved January 20, 2011 from
http://www.businessdictionary.com/definition/multicultural-organization.html

Jackson B. W. & Holvino E. (1988). Developing Multicultural Organizations. Retrieved

January 2011from http://www.chaosmanagement.com/images/stories/pdfs/Developing
%20Multicultural%20Organizations%201996%20Re-write.doc.

Chang R. Y. (1996) Capitalizing On Workplace Diversity: A Practical Guide to

Organizational Success Through Diversity. California: Richard Chang Associates.

Robbins S. P. (2004). Essentials of Organizational Behavior. Delhi: Pearson Education

(Singapore) Pte. Ltd.
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8.0 Bibliography

Lambert J. & Myers S. (1994). 50 Activities for Diversity Training. Amherst: HRD Press.

Mulholland G., Ozbilgin M. & Worman D. (2006). Managing Diversity: Words into Action.
London: CIPD Enterprise.