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managing diversity in the workplace

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managing diversity in the workplace
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  Executive Summary  As the international working population is becoming increasingly varied, the need to manage diversity within the workforce is occurring more and more frequently, attracting the attention of organisations. The study focused on Managing Diversity as a new approach associated with recognising, valuing and exploiting all the visible and non-visible differences in individuals to gain a variety of business-related benefits. Adopting a comparative case study approach, this research has explored how managing diversity is understood and implemented by companies, with particular attention to HSBC Bank. It will also provide some recommendations which companies can consider in order to value and exploit more effectively the diversities characterizing the workforce, proposing a proactive approach toward workforce diversity also as a tool to discourage discriminatory practices.  Introduction. During the past 50 years, the world’s d emographic has changed. Globalisation and other factors such as immigration, ageing population and a shrinking workforce have quickly transformed the entire working population. As a result, organisations and Human Resources Managers have realized the need to reorganize their workforce in order to make profit. Therefore, it is crucial for companies to map a specific strategy, known as "Managing Diversity"(MD) to emphasize the positive effects a varied workforce can bring to firms. In this context, more than a mere response to a need, the idea of Managing Diversity is a new approach aiming at helping organisations to gain competitive advantages through human capital. Consequently, exploiting and valuing the diverse workforce has become mandatory to gain a variety of business-related benefits. This study explores the meaning of diversity and will refer to any type of visible and non-visible differences between individuals, with particular focus on how organisations interpret managing diversity. Three methods will be under consideration: Affirmative Action (AA), Equal Employment Opportunity (EEO) and Managing Diversity, so as to understand how companies have changed and strategically integrated managing diversity into their structure in order to survive and expand. The extent to which the practices analyzed could be applicable in HSBC Bank, to improve their overall performance and productivity, is used as example. However, many recent studies have raised major issues that require attention to evaluate the concept of managing diversity. On one hand the analysis of HRM's procedures adopted to manage properly a varied workforce is essential. On the other hand, it is necessary to determine the positive (resource/opportunity) and negative (cost/problem) aspects of this new approach. The aim of this research, therefore, is to assess how the concept of Managing Diversity is perceived in organisations. In order to accomplish this task, a broad approach is used to gain a general view of the subject and therefore to make recommendations on the possible implementations.  Managing diversity background. The need for diversity management as a business practice is becoming more and more crucial as the demographics of society are changing dramatically in the entire world, widening diversity in businesses and organisations (Cox & Blake, 1991). In the late '80s, factors such as globalisation, feminization of the market, workforce ageing, international concern towards discrimination and studies regarding the connection between HRM and organisational performance (Guest, 1997; Becker and Gerhart, 1996), have increased the need for a new plan to help firms to gain competitive advantages through human capital. The response has been found in a new strategic approach known as "Managing Diversity" or "valuing diversity" (Agocs& Burr, 1996). The central idea of MD is to enhance the effectiveness and productivity of organisations, through promoting, valuing and utilising diversities between individuals. Of the many who have examined the meaning of "diversity", none has yet produced a definite answer since everybody perceptions differ on the meaning of what diversity is (Cox & Beale, 1997. p.1).  A starting point could be the definition by Kandola and Fullerton (1998, cited in Kandola, 2006; p.5) who state that: "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 and 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 & Fullerton, 1998). Diversity, as a result, identifies any significant difference that distinguishes between individuals. Generally, researchers categorise the broad range of diversity into three variables: primary variable (for example culture, race, country of srcin, age, gender, religion, disability), secondary variables (psychological factors: cognition, behaviour, personality, attitudes, prior experience, education, position and linguistic ability) and mediating variables such as nature of attitude (stereotype, ethnocentrism, prejudice), interaction strategies (avoidance, reactive, proactive) and organisational factors (Mamman, 1996).  As illustrated, the definition of diversity expands to encompass all differences, especially due to the rapid internationalisation and globalisation which has enhanced the workforce diversity empowerment. This view is supported by Smith et al. (2004) who point out that a diversity workforce is now not only something that companies should   have, but something that companies have. Thomas (2004) describes a work force as a bridge between organisations and the market place. Furthermore, there is some agreement in literature that there are business benefits to be gained from adopting a managing diversity approach. In other words, an organisation can achieve  certain advantages by treating people as unique individuals, rather than the same. By adopting this definition, the appeal of managing diversity approach has also been enlightened as a result of factors relating to the nature of a wider business environment. In particular, the worldwide industries have highlighted the need for organisations to be able to manage diversity effectively, since many companies now employ a heterogeneous workforce with a variety of different countries and backgrounds (Cartwright & Cooper, 2000). The major goal of every business is: survive, develop, enlarge and make profit. To respond successfully and efficiently, organisations need to take the maximum advantage from what diversity can offer (Kreitz, 2007). Thus, managers and Human Resources departments play a central role in the process of redesign management and leadership which should constitute a strategic element of the business plan (Popescu and Rusko, 2012). Therefore, a first stage is to achieve a common understanding of what managing diversity is through policies, procedures and cultural changing (Kandola, 2006). In order to define managing diversity, the emergence of this concept and how it compares to other approaches, such as Equal Employment Opportunities and  Affirmative Action, will be firstly analysed. Difference between equal opportunity, affirmative action and managing diversity. In a global marketplace where organisations have to deal with diversity among clients as well as their employees an urgent reaction is required. To respond to this phenomenon human resource managers have opted for three major approaches: Affirmative Action (AA), Equal Employment Opportunity (EEO) and Managing Diversity (MD). To better comprehend the concept of Affirmative Action a brief historical excursus is necessary. AA emerged in North America with the Civil Right Act (1964) as a response to correct past discrimination against minority, by hiring and promoting members of minority groups, women and disable people (Walker, 1982). This initiative is frequently referred to as “hiring by numbers” avoiding direct discrimination. In spite of that, this action is neither addressed to integrate and change the internal organisational culture, nor to create an environment where individuals feel respected and appreciated. Unlike Managing Diversity, Affirmative Action mostly focuses on recruitment procedures ensuring that those who make selection decisions remain colour and gender blind; whereas, the anti-discrimination legislations should require a selection process based on colour and gender. However, AA has been frequently criticized because it is claimed that less qualified minorities are given preference in employment decisions (Agocs and Burr, 1996).  Equal Employment Opportunity, instead, is an extension of Affirmative Action. Essentially, the major role of EEO is concerned with the “social justice” (McDougall, 1996). As such, the need to ensure that organisations give the same access to work and the same opportunities to everybody (McDougall, 1996) removing any past discrimination and inequality against defined groups (Agocs and Burr, 1996). According to this approach, all employees should be treated in the same way. Equal Employment Opportunity also asserts that the talents and skills of individuals are equally distributed between people, no matter which group they belong to. Managing diversity, on the contrary, is based on a broad prospective, considering every type of differences (all-inclusive). The main difference within EEO and MD perhaps lay on how they deal with employees diversities. Managing diversity has been considered to acknowledge any sort of diversities, observing that organisations should treat people individually and differently (Shen, Chanda, D'Netto & Monga, 2009). The Ford Motor Company (2013), for example, states: "diversity include not only race, ethnicity, age and gender but also many things that make people unique: backgrounds, opinions, experiences, perspectives and life situations". One of the main reasons for adopting managing diversity can be attributed to the will of organisations to achieve competitiveness and effectiveness. Diversity management, therefore, is illustrated as a process due to the understanding of differences between individuals (Popescu and Rusko, 2012). As a result, Human resource management attempts to change the organisational culture aiming to create multicultural environment (Kramar, 1998). As such, HR department should not focus upon recruitment and selection only, but on specific strategic programs bound to promote inclusion rather than convert different groups into a dominant "way to think"(Kramar, 1998). Organisations need to create and implement procedures and systems suitable to their own circumstances (Thomas, 1991). The role of HR in managing diversity: procedures, issues and objectives. On the 27th of November 2000 European legislation on employment was introduced to condemn discrimination based on racial or ethnic srcin, age, disability, sexual orientation religion or belief in employment (European Commission, 2007). As a result, a great number of companies became aware of the importance of building a diverse workforce and the added economic value it can represent. Organisational change towards more welcoming and inclusive work environments would require changing policies, procedures and practices within the company as well as relationships between diverse groups of employees (Shen et al., 2009). Whilst there is no single method to focus on managing diversity approach, organisations need to adopt a system that is most
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