THE EFFECT OF WORKFORCE DIVERSITY ON THE PERFORMANCE OF AN ORGANIZATION

CHAPTER ONE

INTRODUCTION

1.1      Background to the Study

It is evident that the advances in art, science and technology have made it possible for global economy to bring the people of the world closer together than we can ever think of. As a result of this, organisations, educational systems and other entities are now embarking on the ways to better serve their constituents. This means, ability of organisations to be able to attract and retain workers based on merit. The ability of organizations to formulate, develop and make use of the necessary policies and procedures in doing this will make it possible for such organisations to have competitive advantage ahead of their counterparts and increase their effectiveness. However, to achieve success and maintain a competitive advantage, we must be able to draw on the most important resource like the skills of the workforce. As a result of the increase in diversity in the workforce, there is the need for organisations to expand their outlook and use creative strategies to achieve better organizational performance. This means, employees must be critically examined in the provision of this resource. This study investigates effect of workforce diversity on the performance of an organization in Nigeria.

Work diversity simply means the co-existence of people from various socio-cultural backgrounds that exists in the industry. Diversity consists of factors like race, culture, gender, age, colour, physical ability, ethnicity, sex and so on (Kundu and Turan, 1999). Diversity incorporates all groups of people irrespective of their levels in the industry. Diversity is made up of organizational culture whereby each employee can make real his or her career aspirations and goals without being limited by sex, race, nationality, religion, or other factors that have nothing to do with performance (Bryan, 1999). Diversity management refers to enabling diverse work to perform its full potential in an equitable work environment where no one has an advantage or disadvantage (Torres and Bruxelles, 1992). However, diversity management has been challenging employers for quite some times now, particularly in the last 20 years, organisations have started coming to realization of the differences in gender, race, ethnicity, sexual orientation, religion, age and other factors more.

In addition, empirical evidence underlines that organisations that have working effective diversity management look for benefit through bottom line returns. It must be noted that sharing of information and constructive task-based conflict management are the core factors in value in diversity argument. Work diversity management is aimed at the recognition of differences as positive features of an organization, instead of problems to be solved (Thompson 1997). McLeod, Lobel and Cox (1996) and Wilson and Iles (1999) revealed that a diverse workforce has a better-quality solution to brainstorming tasks, shows more incorporated habit, in relation to homogenous groups, and can increase organizational efficiency, effectiveness and profitability. However, utilization of the skills and potential of all employees, managing diversity to the full can effectively contribute to the success of the organisation by enabling access to a changing marketplace by mirroring increasing diverse markets (Cox and Blake, 1991; Iles 1995; Gardenswartz and Rowe, 1998) and positively change corporate image (Kandola, 1995). This reveals the reason why, valuing diversity can be an origin of competitive advantage, increasing the quality of industrial life and definitely be good for better business performance (Cassell, 1996). The popularity of the diversity approach emerged from these positive arguments.

However, scholars have revealed that the potential benefits will not become real as a result of greater workplace diversity. Thomas (1990) emphasized that corporate competence counts more than ever, and today’s non-hierarchical, flexible, collaborative management brings an increase in tolerance for individuality. Past research has concluded that managers should actively manage and value diversity. (Agocs and Burr 1996; Liff and Wajcman, 1996; Storey 1999) opined that diversity management can give support for essential industrial development initiatives if designed and executed accordingly. Managing diversity has its origins in the USA (Kandola and Fullerton 1994), but has now become a strategic business issue for nearly all organizations worldwide (Wilson and Iles, 1999).

There are two approaches for organisations that aim to take global diversity; these approaches solely depend on their organizational structure and culture. The first approach is a multi-country approach, where people in various locations develop and implement programmes and initiatives. This model is commonly carried out by much decentralized organisations which can come with a lot of benefits because local leaders take ownership of the initiatives. These leaders look for detailed local knowledge of traditions, customs, laws and cultural issues that require to be addressed. Local commitment tends to be higher in experiencing this approach. On the contrary, the lack of overarching and corporate guidance may mean unsuitable levels of work across locations. Typically, organisations that are using this approach do not have committed and dedicated global diversity staff, but rather personnel that are working on diversity in their spare time. A second approach which is more suitable for more centralized organizations is a top-down approach where diversity is tailored into all business units from the corporate level. Consistence in message is sure for organisations that are experiencing this approach because it offers assistance with development and implementation of programs. It must be understood that care must be taken to ensure that local commitment is implemented. (MacGillivray and Golden, 2007).

Conclusively, Nigeria, the most populous country in the continent of Africa with more than one hundred and seventy populations of which more than half of the population are in working age bracket, managers and employers of  work  organizations  are usually  faced  with  a  critical  problem of  the  management  of  diversity  in  the  work  place. Such a nation  with  various ethnic  backgrounds  and  languages, as well as diverse cultural and religious backgrounds, work diversity  must be of utmost importance to managers and employers as  it will  be important  to understand  the reasons why  employees  behave  towards  each  other  as  individuals  and  as  groups in the way they in their duty posts and  how  these  behaviours will affect the overall productivity of the organizations; the opportunities as well  as  the challenge of work diversity  for organizations and  the strategies the employers and managers can employ to make sure that corporate performance reaches the optimum and  remains  there. Diversity  management  issues  abound  in  organizations  and  it  is  paramount that  they  are  proactively  investigated  and  appropriately  addressed. It is on this basis that this study aims to investigate work diversity management; comparative analysis of public and private sector in Nigeria.

1.2      Statement of the Problem

A significant aspect of every organisation is its management of diversity as it helps in the increase in the organizational output or productivity. Anderson (2012), stressed that this should be a part of the culture of the entire organization. Several research literature clearly define diversity but as a fragmented entity, dealing with each parameter in an isolated manner rather than in totality to see the interplay of a range of parameters Greenberg (2004) this makes the implementation of diversity in organizations a difficult task. Scholars like gave the meaning of diversity and the best practice of it. Reichenberg (2001), clearly gave the best practice in diversity, it is not clear which of the components has the highest weight so that during implementation special intervention strategies are employed in order to have impact. Each component of diversity been handled independently by various scholars Rosado (1994). It is not clear on how to implement diversity without clarity on the component with the highest weight. Diversity cannot be properly implemented without clear strategies Reichenberg (2001).

Study of diversity in organisation has mainly approached diversity in terms focusing on each component instead of having a consolidated approach. A holistic approach is required to manage diversity management practices which the private and public sector in Nigeria must employ in managing diversity has been fragmented, it is not clear which is the key component of diversity so the necessary strategies are put in place to mitigate any challenges. Morrison, (1995) opined that more field studies need to be conducted in order to give provision for more insight into diversity in organizations and into the way in which processes and practices are executed. Managing diversity is more than simply acknowledging differences in people. Managers and employers may also be faced with losses in personnel and work productivity due to prejudice and discrimination and complaints and legal actions against the organization (Devoe, 1999).

Several researches have been conducted in Africa on the benefits of diversity to organizations. In a research on Workforce Diversity Management and Employee Performance in the Banking Sector in Kenya by Munjuri & Maina (2013), it was revealed that cultural diversity management seems more sensitive in the Bank and had an important role. It gives room for better employee retention, increased productivity, boost employees’ morale, an expanded market share and improved customer service. A study carried out by Kundu (2001) on Managing Cross Cultural Diversity stressed that organizations with high levels of well managed diversity are effective in steering corporate cultures that have new perspectives, pioneering capabilities and fresh ideas necessary to survive.

In conclusion, decades of research on the effects of diversity within teams and small groups indicate that diversity can have negative effects, as well as positives ones (Kochan et al. 2003).  They further expatiated that the lack of evidence that links workforce diversity to employee performance may be that the relationship between diversity and the bottom line is more complex than is implied by the popular discussion. There is need to establish how important work diversity management is in organizational performance and also to ensure job satisfaction and job commitment among employees. This research work on the work diversity management; comparative analysis of public and private sector in Nigeria will however bridge the knowledge gap and provide answers to the research questions in this study.

1.3   Research Objectives

The main aim of this study is to investigate work diversity management; by comparing public and private sector in Nigeria. The specific objectives are:

i)             To ascertain the ways in which work diversity can be managed by employers and managers in Nigeria

ii)           To investigate the challenges facing managers and employers in Nigeria in the management of work diversity

iii)         To examine the impacts of work diversity on organizational performance in Nigeria

iv)         To study the prevalence of work diversity in both public and private sector in Nigeria

1.4   Research Questions

The following are some of the questions which this study intends to answer:

i)             What are the ways in which work diversity can be managed by employers and managers in Nigeria?

ii)           What are the challenges facing managers and employers in Nigeria in the management of work diversity?

iii)         What are the impacts of work diversity on organizational performance in both public and private sector in Nigeria?

iv)         What is the prevalence of work diversity in both public and private sector in Nigeria?

1.5   Research Hypotheses

The following will be the research hypotheses to be tested in the course of this study:

i)             Ho: There is no significant effect of workforce diversity on the performance of an organization

ii)           Hi: There is a significant effect of workforce diversity on the performance of an organization.

1.7   Significance of the Study

The study investigates work diversity management; by comparing public and private sector in Nigeria and therefore will be of great benefit to employers of labour as it will expose them to how to manage employees in their organizations in order to avoid work diversity problems both in the public and the private sector in Nigeria which will increase their employees’ performance and which in turn contributes to the growth of the organizations. It will also benefit employees on the ways through which they can avoid the issue of work diversity among their fellow employees in order to derive satisfaction in their respective jobs.

On the other, the study will be beneficial to the researcher as the issues raised in this study are likely to lead to the involvement of various researchers in generating more knowledge from various perspectives. The findings of this study could form a basis for further research to those interested in work diversity management. Lastly, the research students will find this study useful as it will help them to understand deeply the major consequences of work diversity and will suggest in recommendations, ways of such effects and in the long run the researcher could be consulted on work diversity management aspects since he/she will have vast knowledge in the aspect.

 

 

1.7   Scope of the Study

As the research topic would suggest at a glance, the scope of this, is essentially focused on work diversity management; by comparing public and private sector in Nigeria. This study will look into the reasons for work diversity management, the challenges of work diversity management and the impacts of work diversity management on the productivity of the employees in both private and public sector in Nigeria.

1.8   Limitation of the study 

Certain Limitations were encountered in the course of this study. Key among these includes:

Cost Limitation: There was a cost limitation. This means that we could not offer any gift or monetary incentives for the respondents to answer the questionnaire. This might have resulted in certain prospective respondents choosing not to respond to the questionnaire. This might not have created a motivation among respondents not to take a chance to give opinions. Time Limitation: There are two types of time limitation faced during the study. The study was done for a period of four weeks. Hence the results would reflect the impact of the time constraint. The insights of the employees were observed during the period of study. A more extensive study conducted over a larger time period or during a special period of time like when there were higher numbers of issues, can include insights from employees over a broader time period and can bring in further depth into the research.

1.9   Definition of Terms

The following terms were used during the cause of the study.

Employees:  persons who work for another person or for a company for wages or a salary

Employers:  persons or institutions that hire employees. Employers offer wages or a salary to the workers in exchange for the worker's work or labor. One speaks of wages if the employee is paid by the hour and of salary if he is paid a set rate per pay period. Wages are paid for all hours worked, including overtime, but a salary is typically not paid more for more hours worked than the minimum.

Job satisfaction: is the level of contentment a person feels regarding his or her job

Managers: individuals who are in charge of a certain group of tasks, or a certain subset of a company. Manager often have a staff of people who report to him or her.

Productivity: the effectiveness of productive effort, especially in industry, as measured in terms of the rate of output per unit of input.

Work diversity: Similarities and differences among employees in terms of age, cultural background, physical abilities and disabilities, race, religion, sex, and sexual orientation.
Work diversity management: is  the  ability  of  a  manager  to  achieve  success  for  an  organization  by making  the  best  use  of  the  similarities  and  differences among employees in terms of age, cultural background, physical abilities  and  disabilities,  race,  ethnicity,  religion,  sex  and  sexual  orientation,  as  well  as  in  terms  of  personality,  values,  attitude,  perception  and  cognitive  style. 

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