Business Case Of Diversity Management

The role of the Human Resource Manager is evolving with the change in competitive market environment and the realization that Human Resource Management must play a more strategic role in the success of an organization. Organizations that do not put their emphasis on attracting and retaining talents may find themselves in dire consequences, as their competitors may be outplaying them in the strategic employment of their human resources.

With the increase in competition, locally or globally, organizations must become more adaptable, resilient, agile, and customer-focused to succeed. And within this change in environment, the HR professional has to evolve to become a strategic partner, an employee sponsor or advocate, and a change mentor within the organization. In order to succeed, HR must be a business driven function with a thorough understanding of the organization’s big picture and be able to influence key decisions and policies. In general, the focus of today’s HR Manager is on strategic personnel retention and talents development. HR professionals will be coaches, counsellors, mentors, and succession planners to help motivate organization’s members and their loyalty. The HR manager will also promote and fight for values, ethics, beliefs, and spirituality within their organizations, especially in the diversity management.

This assignment will highlight critically on what are best practices of diversity management are in the contemporary Organizations. Can HRM meet the challenges of diversity management, how to motivate employees through gain-sharing and executive information system through proper planning, organizing, leading and controlling their human resources?

Diversity Management


Diversity management developed as a concept in the late 1980s in North America and concept gained popularity as a new management approach in the United Kingdom and also continued with the same because of persistent social and economic climate. Now days it is requisite for any successful workplace strategy due competitive pressures on organisation to sustain and improve economic performance and the changing expectations and aspirations of society. The increasing pressure is forcing attention on the requirement to address contextual realities, which have been ignored for the years. The diversity management implications of this are an employee composed of white, heterosexual, able-bodied males is now out of date as it does not reflect the correct mixture of current labour market.

When people think of diversity, they think of first ethnicity and race, and then gender; however, diversity is much broader than that. Dimensions of diversity include, but are not limited to: age, ethnicity, ancestry, gender, physical abilities/qualities, race, sexual orientation, educational background, geographic location, income, marital status, military experience, religious beliefs, parental status, and work experience. It’s important to understand how these dimensions affect performance, motivation, success, and interactions with others. Institutional structures and practices that have presented barriers to some dimensions of diversity should be examined, challenged, and removed.

“The Basic concept of managing diversity accepts that the workforce consists of a diverse population of people. The diversity consists of visible and non-visible differences which will include factors such as sex, age, background, race, disability, personality, 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.” (kandola and fullerton 1998)

Business Case of Diversity Management

Key facts about employment and people with disabilities

• 65% of people with a learning disability would like a job.

• 48% of people with disabilities are in employment.

• 6.8% of adults with learning disabilities known to Social Services are in any kind of paid employment.

• As many as 2.5 million disabled men and women are without work in Britain.

• Research conducted by the Department of work and Pensions concluded that it would not be possible to support oneself on earnings alone if a person is working less than 16 hours per week.

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• 3.4% of people with a serious mental health need are in paid employment.

• Nearly one in five people of working age (7 million, or 18.6%) in Great Britain has a disability.

Discovering the ‘hidden workforce’

It is clear from the fact that a large number of people with disabilities are unemployed however would like to work.

Defining disability

“A physical, sensory or mental impairment which has a substantial and long-term (more than 12 months) effect on normal day to day activities” (anonymous. (2011). The Business Case for Diversity Management. Available: Last accessed)

The business case for employing a person with a disability and engaging with a supported employment agency

The average cost of recruitment across the UK is estimated to be £5-7k per vacancy. His figure includes (advertising the vacancy, preparing and processing applications, screening candidates, interviewing candidates and training process. If at the first attempt to recruit, the wrong candidate is selected for the job then the cost may increase substantially.

The legal case

Since the introduction and implementation of the Disability Discrimination Act in 1995 and following amendments over the years organizations have a legal duty to comply with the law and not discriminate against people with disabilities. If a person has stated a disability the organization would be required to consider making an appropriate alteration to ensure that they are able to receive quality services, products and fair treatment in employment.

The moral case

Organizations more aware of their reputation in the communities they share and serve. Boards of directors should be involved with developing a corporate vision and producing statements that present an image to the public of being a caring organization and caring employer.

Best Practices for Managing Organizational Diversity

Best practises are the practises which are appropriate under the circumstances especially as considered acceptable and regulated in business (Patricia A. Kreitz. (2008). Best Practices for Managing Organizational Diversity. Available: Last accessed 02nd Dec 2011. ). Techniques or methodologies that through experience and research have reliably led to desired or optimum results. Best practices in the field of diversity management are often derived from systematic and careful reflection of hard work and practical experience.

Top leadership commitment – a vision of diversity demonstrated and communicated throughout an organization by top-level management.

Diversity as part of an organization’s strategic plan – a diversity strategy and plan that are developed and aligned with the organization’s strategic plan.

Diversity linked to performance – the understanding that a more diverse and inclusive work environment can yield greater productivity and help improve individual and organizational performance.

Measurement – a set of quantitative and qualitative measures of the impact of various aspects of an overall diversity program.

Accountability – the means to ensure that leaders are responsible for diversity by linking their performance assessment and compensation to the progress of diversity initiatives.

Succession planning – an ongoing, strategic process for identifying a diverse talent pool and developing them into an organization’s potential future leaders.

Recruitment – the process of attracting a supply of qualified, diverse applicants for employment.

Employee involvement – employee’s contributions in driving diversity throughout an organization.

Diversity training – organizational efforts to inform and educate management and staff about diversity’s benefits to the organization.

Case Study 1- Sainsbury’s Supermarkets

Sainsbury’s supermarket is one of Britain’s largest food retailers, with an annual turnover of approximately £11.5 billion. The company trades from Aberdeen to Truro, employing in excess of 127000 people. Sainsbury’s has a long-standing commitment to achieving equal employment opportunities. It is an active member of Opportunity 2000, the Employers’ Forum on Disability and the National Mentoring Scheme for Ethnic Minority students, by whom it was awarded the ‘Employer of the Year’ in 1996. Women employees outnumber men by two to one in the company. People from ethnic minorities represent 8.5 per cent of the total workforce. Women managers account for approximately 40 per cent of managers and ethnic minorities for 4.2 per cent. The company is reviewing how it monitors employees with disabilities it the light of the Disability Discrimination Act. A number of equality measures have been introduced by the company over the last decade including a career break scheme, paternity leave and part-time working at managerial level.

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Until now Sainsbury’s approach to promoting equality was based on similar formulae to those adopted by a number of other large UK companies. Firstly the company ensured compliance with legislation followed by positive action initiatives targeted at women and people with disabilities. Sainsbury has also modified its equality and diversity policy and introduced a fair treatment policy. The two pillars on which positive long term relationship between the company and its employee are built. The company is also developing an approach to disability which takes account of the increasing public interest in ensuring accessibility for customers with disabilities. The result of the same is treated as companies reputation as a provider of high standards of service to customer with disabilities. (Anonymous. (1999). Institute of personnel and development. Managing Diversity. 1 (1), 46.)

Case Study 2- Ernst & Young

Ernst & Young continues to be a diversity-management leader in talent development and the innovative use of its people to connect with clients globally and domestically. Under the leadership of chairman and CEO James Turley and Americas Managing Partner Steve Howe, the firm has put its diversity-management efforts in the capable hands of America’s inclusiveness officer Billie Williamson, a true business leader. (Anonymous. (2011). THE 2011 DIVERSITYINC TOP 50 LIST. Available: Last accessed 03rd Dec 2011.)

The firm aligns its executive’s goals with each executive developing a personal scorecard that has inclusiveness as one of two global transformational priorities. The Americas level Balanced scorecard applies to each partner, principal and executive. The compensation is also affected by the ethnicity and gender inclusive snapshots, which track more than 20 metrics on the progress of women, latinos, Asians and American Indians. Metrics include headcount, retention, promotions, partner pipeline, recruiting, flexible work arrangements, and participation in high potential development programs, survey scores and client assignments. Ernst and young has extraordinary benefits, including generous domestic partners, such as weekend travel expenses for partners for out of town multiweek assignments and six weeks of paid parental leave for primary care providers including men and adoptive parents. The company continues its strong talent development with best and varied mentoring programs, including Nextgen, career watch, Tax excellence program, Diversity mentoring program and cultural and cultural connections. Mentoring offering are available across the entire company. And also include cultural awareness training for participants which few are doing till now.

Ernst and Young have extremely firm employee resource. With fifty percent of its employees are participating in them and thirty percent in more than one single group. The groups are always in search of identify and nurture talent and are involved in the on boarding process of new employees. Employee resource group success is measured in different ways e.g. promotion, retention, engagement and contribution to the business. Each group has an executive sponsor who is responsible for showing the groups contribution to the business. In conclusion Ernst and Young continue to demonstrate consistent progress in building diversity into its global business goals.

Critical Discussion

There are evidence that workforce diversity improves organisational effectiveness through increased organisational and individual creativity and innovation, and also improves decision making and problem solving by problem solving by providing work teams with different and diverse perspectives. Diversity Management is one of the important strategic organizational goals which interact with all other aspects of the business e.g. Leadership, Management practices, human resources, product development, marketing and sales, financial projections, and community and global communications.

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Just having diversity does not by itself guarantee that the business will be successful or also it does not guarantee qualitative social and creative improvement. Research has proved that by mare changing the structure of the workforce will not lead to business success. On the other hand in some instances workforce diversity may even undermine business performance. The negative results of managing diversity can be low morale, ambiguity, conflict and tension, communication problems, confusion. The diversity might create discomfort for few members of workforce and result in lower organisational attachment and integration. Still there is possibility that even if diversity leads to better performance the cost of co-ordinating diverse workforces can block the advantages. There is also difficulty of merging different styles, values and attitudes which we can find in teams with diverse members. If it is not managed effectively then diversity can create internal processes that can cause delay in the decision making and keep members from concentrating on the task. The teams which are made up of individuals from different thought may find it difficult to develop a shared purpose and an efficient group process.

The employees who are working together they will maintain their diverse culture, distinct identities and separate lifestyles. Managers must learn to with their diverse pool of behaviours. Organisations can secure lead in the marketplace when they have effective Human Resource Management practises and diversity initiatives that accepts differences, create preferred places to work, values equality. The gender and sexuality are central to all workplace power relations and that the boss and secretary relationship provides the most vivid example of this. In case disabled people managers often justify decision not to employ them on the grounds that the necessary workplace adjustments would increase their operating expenses though equality and diversity initiatives often have a cost associated with them.

Case study

Diversity training often triggers workplace conflict and lawsuits, by compelling employees to talk about contentious racial or sexual issues, with resulting acrimony, and remarks that are misinterpreted or perceived as racially or sexually biased. For example, in Stender v. Lucky Stores (1992), statements made by managers during sensitivity training were held by a court to be admissible as evidence of discriminatory intent within the organization. That prevented the employer from getting a lawsuit dismissed.


The role of the Human Resource manager must parallel the needs of the changing organization. Successful organizations are becoming more resilient, adaptable, quick to change policies, and customer centric. Within this environment, the HR professional must learn how to manage effectively through planning, organizing, leading and controlling the human resource and be knowledgeable of emerging trends in training and employee development. Organizations can be strengthened by leveraging differences that mirror the diversity of its employees. Surveys have proved a positive impact on high performance where senior management teams include a diversity of ages, ethnicity, and gender. A diverse workforce also can improve organizational productivity and creativity. Managing a diverse workforce can be a challenge. When people from different backgrounds come together in the workplace, there is potential for great accomplishment, but also for great conflict. This paper has attempted to highlight the diversity efforts of those organizations that are leaders in diversity management. Organizations will consider adopting some of the practices of those organizations that have been acknowledged as leaders in the diversity management area.

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