Chapter 17

Managing a
Diverse Workforce

McGraw-Hill/Irwin Copyright 2014 by The McGraw-Hill Companies, Inc. All rights reserved.
 Ch. 17 Key Learning Objectives
Knowing in what ways the workforce of the United States is
diverse, and evaluating how it might change in the future
Understanding where women and persons of color work,
how much they are paid, and the roles they play as
managers and business owners
Identifying the role government plays in securing equal
employment opportunity for historically disadvantaged
groups, and debating whether or not affirmative action is an
effective strategy for promoting equal opportunity
Assessing the ways diversity confers a competitive
advantage
Formulating how companies can best manage workforce
diversity, making the workplace welcoming, fair, and
accommodating to all employees
Understanding what policies and practices are most effective
in helping todays employees manage the complex, multiple
demands of work and family obligations
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The Changing Face of the Workforce
Diversity Refers to variation in the important human
characteristics that distinguish people from one
another
Primary dimensions: age, ethnicity, gender, mental or
physical abilities, race, sexual orientation
Secondary dimensions: such characteristics as
communication style, family status and first language

Workforce diversity: diversity among employees of a

business or organization
Represents both a challenge and an opportunity for
businesses

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The Changing Face of the Workforce
Today, the U.S. workforce is as diverse as it ever has
been, and it is becoming even more so. Consider the
following workforce diversity trends:
More women are working than ever before
Immigration has profoundly reshaped the workplace
Ethnic and racial diversity is increasing
The workforce will continue to get older
Millennials are entering the workforce

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Gender and Race in the Workplace
Following World War II, the proportion of women
working outside the home has risen dramatically
Most dramatic increases have been married women, mothers
of young children, and middle-class women
Increase in professional, technical and service jobs produced
demand-side pull for women into the labor force

Labor force rates for minorities have always been high

Change is that wider range of jobs are available to minorities
as discrimination barriers have fallen

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 Proportion of Women and
Men in the Labor Force
Figure 17.1
1950-2010

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The Gender and Racial Pay Gap
Pay gap Women and persons of color on average
receive lower pay than white men do
Gap has narrowed over the past 3 decades
Still, in 2010 black men still earned only slightly more than
three-quarters of white mens pay; black women earned
about 70 percent, and white women 81 percent
Rahmah Ismail and Idris Jajri (2012). Gender Wage
Differentials and Discrimination in Malaysian Labour Market,
World Applied Sciences Journal 19 (5): 719-728.
76.3% of gender wage gap was unexplained.

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 The Gender and Race Pay
Figure 17.2 Gap 1990-2010

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The Gender Pay Gap
Reasons for pay gap
Some believe is evidence of sexual discrimination
Some believe is womens choices in pursuing lower paying
jobs or slower advancement
Others believe occupational segregation is occurring
Inequitable concentration of a group in certain job categories
Women have made great strides in entering professional
occupations, however pink collar ghetto still exists
Examples include preschool teachers and secretaries

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Women and Persons of Color in Management
Women have broken into management ranks
Tends to be, however, in occupations where women are numerous
like education and health care
Only a very few women or persons of color have achieved
highest positions in corporate America
Although women and minorities are as competent as white men in
managing people and organizations, they rarely attain the highest
positions in corporations
Based on a 2013 survey by Talent Corp, only 8 percent of
board members of all listed companies in Malaysia were women
and this is a long way off the government's target of 30 percent
by 2016. (https://www.malaysiakini.com/letters/291333) and
only 26% of women are involved in top management positions
(Grant Thornton International Business Report, 2013)
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Labour Force Survey Report, Malaysia, 2014
https://www.statistics.gov.my/dosm/index.php?r=column/ctheme&menu_id=U3VPMldoYUxzVzFaYmNkWXZteGduZz09&b
ul_id=NHUxTlk1czVzMGYwS29mOEc5NUtOQT09

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The Glass Ceiling
Invisible barrier that exists in reaching these higher levels
has been named the glass ceiling

Reasons for the glass ceiling:

Glass walls fewer opportunities to move into positions that lead
to the top; many women and minorities start in staff rather than
line positions
Recruiters fill positions by word of mouth and is still old boys
network (an informal system of support and friendship through
which men use their positions of influence to help others who
went to the same school or college as they did or who share a
similar social background).

Recent advances show some cracking of the ceiling

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 Extent of Diversity in Selected
Figure 17.3 Management Occupations

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Women and Minority Business Ownership

Some women and minorities have chosen to avoid the

glass ceiling by opening up their own businesses
2010, 40% of over 10 million U.S. businesses were
owned or controlled by women
Although most female-headed firms are small, collectively they
employed over 13 million people in the United States and
generate $1.9 trillion in sales

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Women and Minority Business Ownership
According to the Small Business Administration, there were
around 5.8 million minority-owned businesses in the United
States in 2007.
Hispanic-owned businesses were the most numerous,
followed by African-American and Asian-owned businesses.
Immigrants were responsible for a good share of the
entrepreneurial spirit in the minority community; immigrants
are nearly 30 percent more likely to start a business than are
non-immigrants.
In Malaysia, about 19.7% of total SMEs are women-
controlled. By definition, this refers to enterprises with a
woman having equity of 51% and above, or she being the
CEO with equity ownership of at least 10%. Women-owned
SMEs are mainly concentrated in the services sector
(91.7%) followed by the manufacturing sector (6.9%).
Women are less involved in the construction, agriculture
and mining & quarrying sectors.(SME Corps 2015)
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Equal Employment Opportunity
Government involvement in securing equal
employment for all began in the 1960s on a large
scale
Is defined as discrimination based on race, color,
religion, sex, national origin, physical or mental
disability, or age
In U.S. is prohibited in all employment practices
Government contractors must have written affirmative action
plans detailing how they are working positively to overcome
past and present effects of discrimination in their workforce
Women and men must receive equal pay for performing
equal work, and employers may not discriminate on the
basis of pregnancy

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 Major Federal Laws and
Executive Orders Prohibiting
Figure 17.4
Job Discrimination

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Affirmative Action
Since mid-1960s, government contractors been
required to have affirmative action plans
Purpose to reduce job discrimination by encouraging
companies to take positive steps to overcome past
discriminatory employment practices

Affirmative action became increasingly controversial

in the 1990s and 2000s
Some states passed laws banning it in public hiring
Opponents cite possibility of reverse discrimination

Some women and persons of color called for less

emphasis on affirmative action, preferring to achieve
personal success without preferential treatment

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Affirmative Action in Malaysia
Affirmative action policies vary substantially across
countries in terms of the beneficiary groups usually
groups which are economically and socially
disadvantages and politically subordinate.
Unique feature of Malaysian Affirmative Action is the
preferential treatment for the Malays and other
indigenous groups was written in Malaysian Constitution
under Article 153.
This is due to a systems of ethnic preivileges established
by British colonial rule, hence requires the King of
Malaysia to safeguard the special position of the
Bumiputeras.
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Sexual Harassment
Occurs at work when:
Any employee, woman or man, experiences repeated,
unwanted sexual attention or
When on-the-job conditions are hostile or threatening in a
sexual way
It includes both physical conductfor example, suggestive
touchingas well as verbal harassment, such as sexual
innuendoes, jokes, or propositions
It can also occur if a companys work climate is blatantly and
offensively sexual or intimidating to employees
Is illegal and U.S. EEOC is empowered to sue on behalf of
victims
E.U. recognized sexual harassment as a form of gender
discrimination in 2002, required its member states to bring
their laws into compliance by 2005

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Racial Harassment
Is also illegal, under Title VII of the Civil Rights Act

Under EEOC guidelines, ethnic slurs, derogatory

comments, or other verbal or physical harassment
based on race are against the law, if they create an
intimidating, hostile, or offensive working environment
or interfere with an individual's work performance

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Preventing Sexual and Racial
Harassment
In 1998, the Supreme Court ruled that companies
could deflect lawsuits by taking two steps:
Develop a zero-tolerance policy on harassment and
communicate it clearly to employees

Establish a complaint procedureincluding ways to report

incidents without retaliationand act quickly to resolve any
problems

In addition, stated that companies that took such steps

would be protected from suits by employees who claimed
harassment but had failed to use the complaint procedure

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 UKM eFACT System

2014 The McGraw-Hill Companies, Inc. All rights reserved. 17 - 23

Diversity Policies and Practices
Well run companies go beyond required legal
actions to welcome employees of all backgrounds
Actions taken by companies to manage diversity
effectively:
They articulate a clear diversity mission, set quantitative
objectives, and hold managers accountable
They spread a wide net in recruitment, to find the most
diverse possible pool of qualified candidates
They identify promising women and persons of color, and
provide them with mentors and other kinds of support
They set up diversity councils to monitor the companys
goals and progress toward them

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Strategic Advantages of
Managing Diversity Effectively
Companies that promote equal employment opportunity
generally do better at attracting and retaining workers from all
backgrounds
Businesses with employees from varied backgrounds can
often more effectively serve customers who are themselves
diverse
The global marketplace demands a workforce with language
skills, cultural sensitivity, and awareness of national and
other differences across markets
Companies with effective diversity programs can avoid costly
lawsuits and damage to their corporate reputations from
charges of discrimination or cultural insensitivity

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Balancing Work and Life
Changing demographics, including increasing
number of dual income families, have led people to
adopt wide range of strategies for combining full and
part-time work with the care of children, elderly
relatives, and other dependents

Helping make it work for employees trying to

balance the complex, multiple demands of work and
family life has became a major business challenge

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Child Care and Elder Care
Types of programs companies are offering:
Child Care
Elder Care
Parental and family leave
Work flexibility
Benefits to non-traditional families

Some employees have been reluctant to take

advantage of work flexibility options, for fear of being
labeled mommy track or daddy track
A shift in corporate cultures is needed to truly become a
family friendly company where men and women are fully
supported in their efforts to balance work and family
responsibilities

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Exhibit 17.C Domestic Partner Benefits
Many corporations in the United States have begun to
acknowledge differences in employee sexual orientation and
gender identity. Gay, lesbian, bisexual, and transgender
employees have become a vocal minority, winning important
victories in the workplace.
A 2012 report by the Human Rights Campaign Foundation
found that 86 percent of the Fortune 500 companies included
sexual orientation in their non-discrimination policy, and 60
percent provided health benefits to domestic partners and
same-sex spouses
Lotus Development was the first major employer to offer spousal
benefits to same-sex partners; it was followed by many others,
including AT&T, Chase Manhattan, Microsoft, United Airlines,
and the Big Three automakers.
Other steps companies have taken to support their homosexual
employees have included management training on sexual
diversity issues, visible gay and lesbian advertising, and
transgender-inclusive health coverage

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