HRM for MBA Students

1. HRM for MBA Students Lecture 9 Managing diversity

2. Learning outcomes • An appreciation of the idea of diversity in human resource management • Familiarity with the concept of equal opportunities • An understanding of the basis of each of the moral, legal and business cases for managing diversity • Awareness of the limitations of legislation in the field

3. Diversity Diversity consists of visible and non-visible factors, which include personal characteristics such as sex, race, age, background, culture, disability, personality and work-style. Harnessing these differences will create a productive environment in which everybody feels valued, their talents are fully utilised and organisational goals are met. The CIPD (2007)

4. Equality • In the UK the legal framework countering discrimination in employment has followed the approach of seeking to provide equality of opportunity rather than equality of outcomes • One of the aims of managing diversity is to foster a culture which assists in achieving true equality of outcome

5. Discrimination • Literally means distinguishing between people and thus treating some people differently from others • It is not always unlawful – for example, people are paid different wages depending on their status and skills • However, there are certain reasons for which an employer cannot by law discriminate against an employee • If an employer treats an employee less favourably than another for an unlawful reason, the employee can take action against the employer • If an employer treats an employee unfairly for any reason other than unlawful discrimination, it is just bad management

6. Direct and indirect discrimination • Direct discrimination • when an employer treats an employee less favourably because of, for example, their gender or race • Indirect discrimination • when a condition that disadvantages one group of people more than another is applied to a job. For example, saying that applicants for a job must be clean-shaven puts members of some religious groups at a disadvantage

7. Harassment and victimisation • Harassment • offensive or intimidating behaviour (sexist language or racial abuse, for example) which aims to humiliate, undermine or injure its target • Victimisation • treating somebody less favourably than others because they have tried to bring a complaint of discrimination

8. The moral case for diversity • Managers have a moral obligation to treat all employees fairly and equally as fellow human beings • Managers are in a position of some power over their staff and they should not abuse it by showing favouritism or prejudice • No organisation would wish to acquire a reputation for being immoral or unethical towards its own employees

9. The legal case • Most countries have legal obligations not to discriminate on the grounds of gender, race or religion • Other criteria are also often specified – eg • disability • marital status • age • sexual orientation

10. The business case • Discrimination means that the optimum use of the organisation’s human resources has been impaired • If a firm gets a reputation for discrimination, it will seriously affect the morale of its own employees and of potential recruits • It will also hurt its standing with customers and other stakeholders, including investors

11. The limitations of legislation • Although legislation is essential in achieving equality at work, it has been found to be not sufficient and its limitations have become increasingly evident • For example, in late 2006 – more than 30 years after legislation was passed outlawing pay discrimination in the UK – there was still a ‘gender gap’ between the pay of the sexes, men being paid on average some 13% more than women The UK Government’s Women and Equality Unit

12. Managing diversity • It is recommended that employers follow a three-stage process to provide equality of opportunity • Formulating an explicit equal opportunities policy • Implementing the policy • Monitoring the policy to ensure its effectiveness in practice

13. The WERS survey (2004) • 73% of UK workplaces (98% of public sector workplaces) had a written, formal equal opportunities policy or a policy on managing diversity • But 72% of workplaces neither negotiated, consulted, nor informed employee representatives over equal opportunities. • Only 26% of UK workplaces reviewed selection and other procedures to identify indirect discrimination • Most (63%) UK workplaces did no reviewing or monitoring

14. The wrong option Employers who sit on the sidelines regarding diversity will quickly become less attractive to existing and prospective employees. The CIPD

15. Key issues in diversity • Legal compliance with discrimination legislation is obligatory and will be a key responsibility of the HRM function, which will take a corporate lead on the issue • But day-to-day compliance demands that line managers and supervisors are aware of company polices and procedures and must be trained accordingly • The need for compliance makes for a certain amount of unavoidable bureaucracy in monitoring • An analytical job evaluation scheme is probably a necessary evil for most larger organisations to ensure that equal pay is earned for equal work • Compliance is necessary but is not enough: in the ‘war for talent’ potential key employees will shun companies they believe will discriminate against them in any way