Organizational Diversity

The workforce of the United States continues to grow more diverse. Employment equity legislation has made organizational diversity an issue of legal, ethical, and strategic interest. Data reported in 2005 by the Equal Employment Opportunity Commission (EEOC) indicate an increase in the percentage of people of color in the private sector from 27% in 1998 to 30% in 2003. In 2005 the Department of Labor reported that while foreign-born workers currently account for 15% of the workforce, up from 11% in 1998, they have also accounted for 46% of the net increase in the labor force since 2000. The percentage of women in the workforce has also risen. In 2004, 59% of all women were in the workforce, up from 43% in 1998, as compared to 75% and 73% of men in the workforce in 2004 and 1998, respectively. Additionally, the Bureau of Labor Statistics projections for 2004—2014 predict the number of workers over 55 years old will grow by 49.1%, outpacing growth in the entire workforce by five times. The number of disabled Americans in the workforce increased from 29% in 1998 to 35% in 2004, according to the National Organization on Disability. These trends indicate that the workforce continues to become more heterogeneous on multiple dimensions.

There are two major perspectives on what characteristics the term diversity should encompass in organizational settings. One perspective defines diversity based on the demographic characteristics covered in the civil rights legislation enforced by the EEOC. This defines diversity in terms of race/ethnicity, gender, age, national origin, religion, veteran status, and disability. The other perspective is broader, encompassing the EEOC categories as well as other distinguishing characteristics, including sexual orientation, values, abilities, personality characteristics, education, languages spoken, physical appearance, marital status, geographic origin within the United States, tenure with the organization, functional specialization, and economic status. Although a broader definition of diversity may be more inclusive because it encompasses the many ways in which organizational members can differ from one another, it is also problematic in that it ignores the power differences associated with the powerful impact of race, gender, and disability status. The narrower EEOC definition includes only the legally protected categories—groups whose social identities limit their access to societal and organizational resources.

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Although it is important to acknowledge that diversity can be constructed across multiple aspects of a person, the impact of different identities is certainly not equal. Segregation in organizations and the demographics of organizational hierarchies reflect American society broadly, which shapes the expectations and experiences of employees. Power, authority, and leadership are allocated disproportionately to certain demographic groups; hence, access to higher-level positions is likely to be difficult for historically disadvantaged groups. Although organizations are more diverse in sheer numbers in the workforce, this diversity is not seen within a given job type or across levels within organizations. Data from the 2000 Census indicate that job segregation by race and gender are common in the workplace. According to EEOC data, although White men make up 37% of the private indus-try workforce, they comprise 85% of all officials and managers and only 21% of all service positions. Whereas women of color make up 15% of the private industry workforce, they comprise only 6.3% of the officials and managers and 25% of all service positions. Thus, positions of power and authority in the private sector are populated disproportionately by White males. Low-wage sectors continue to be dominated by women and people of color, where they have little access to training or advancement opportunities; such thwarted access is a well-documented source of stress and turnover.

Employee reactions to diversity in organizations as well as concerns about racial and gender segregation in the workforce are often framed as issues of organizational justice. Researchers have found that government-legislated programs, such as affirmative action and elective organizational diversity initiatives, evoke strong feelings from historically advantaged and disadvantaged group members alike. Historically disadvantaged group members are often disappointed at the limited resources devoted to preventing discrimination. Conversely, members of historically advantaged groups may perceive that too many resources are devoted to achieving equity and preventing discrimination. Research has found that members of both groups experience stress over these concerns.

The experience of stress in diverse organizations depends on where an individual is located in the organizational hierarchy. Segregation into work that is not fulfilling or that limits one’s career opportunities is an experience shared by many foreign-born workers, female workers, and people of color. Additionally, workers may find they have been hired into a department where they are the only member of a visible minority group and thus face the stress of working in a homogeneous environment. Possibly treated or perceived as “token” members of a group, they may be expected to represent their community, racial/ ethnic group, or gender. This situation has been demonstrated to lead to stereotype threat, a situation where an individual is concerned that he or she will confirm a negative stereotype about his or her group. Stereotype threat has been demonstrated to impair performance in these situations and can cause psychological strain. Token members of visible minority groups may also experience the stress of attempting to maintain their cultural identity while adapting to a homogeneous work environment that may not value their cultural identity and may be overtly or subtly racist or sexist. Consequences of this type of stress can include the following: resentment at having to do one’s work as well as adapt to social norms that seem arbitrary, exhaustion at the extra effort required to adapt to the norms of the workplace, frustration and anger in response to racism, lowered performance outcomes, reduced organizational commitment, cynicism, turnover, and long-term physical outcomes such as elevated blood pressure. Such workers are likely to need the support of psychological or wellness services that an organization offers, if they feel comfortable using them. Unfortunately, they may then encounter a psychologist or human resource staff person who fails to understand that the homogeneous environment is a source of stress and therefore does not provide real support for the individual, or worse, compounds the experience of social isolation, which leads to further reduced work and negative health outcomes.

There is also research on the stress experienced by historically advantaged group members when they find themselves working in diverse work settings. In a study on the effects of diversity on psychological and behavioral commitment to organizations, researchers found that White men experienced the greatest difficulty in adapting to diverse work units. The impact of having greater gender and racial diversity led to increased absenteeism, lowered organizational commitment, and the increased likelihood of turnover. Possible factors accounting for this stress may include the concerns that many White Americans have about appearing prejudiced. Thus, it might be more stressful for Whites to work with people of color because of the worry that they may appear prejudiced. Status factors have also been found to influence preferences for type of jobs for both men and women, who prefer to work in male-dominated groups because of men’s historically advantaged status. Researchers have found that gender affects wages; controlling for all other factors, a manager earns more money when his or her subordinates are predominantly male. This research suggests that diversity can be stressful for all concerned, albeit for different reasons.

Initially, organizations were motivated to address diversity by the need to comply with the EEOC legislation. However, as affirmative action programs have been challenged in court cases, legal compliance has become only one of the reasons that organizations cite for engaging in diversity efforts. Currently, most organizations that are engaged in diversity initiatives describe their interest in diversity as a reflection of the belief that it makes good business sense to do so. The business case for focusing on diversity suggests that to stay competitive, organizations must respond to demographic changes by learning to strategically manage a diverse workforce and appeal to a diverse customer base. Some organizations have responded by hiring according to the demographics of their customers. Unfortunately, this approach can exacerbate job segregation and limited career mobility by channeling women and racial/ethnic minorities into areas where their customer base matches their identity group. The emphasis on the business case may also create the impression that issues of discrimination and inequality are of little importance, thus heightening the sense of cynicism among women and racial/ethnic minorities, for whom these are issues of central psychological importance.

The limitations of this approach have been noted by researchers who suggest that a more optimal way to capitalize on demographic diversity is by focusing on the potential for learning and innovation that a diverse workforce offers. The variety of perspectives that accrue from different cultural or experiential backgrounds can offer an organization new and potentially more flexible, improved ways of working. This requires openness to change and innovation generally, because it invites genuine debate over how to do the work of the organization and who should have the opportunities to do that work. A learning approach could help reduce job segregation. Although research on the benefits of diversity remains mixed, some patterns are emerging. Those organizations that have adapted a learning and innovation approach to diversity and that have been able to create a climate where individuals can truly learn from the diversity of perspectives that exists within their organizations have been financially successful.

The workforce of the United States will continue to become more diverse, providing challenges and opportunities for organizations. In addressing this, organizations have used different definitions of diversity in crafting their responses. The approach that best addresses issues of power and intergroup conflict is one based on the EEOC guidelines, since the guidelines pertain to the groups that have experienced the greatest limitations in the workplace, as well as high levels of stress. However, those who have not historically experienced discrimination are now experiencing stress in adapting to more diverse organizations. Counseling psychologists will play a critical role in helping workers cope with the stress of working in diverse organizational environments. Researchers have identified significant potential for organizations that use diversity proactively, as a source of learning and innovation, rather than in a narrower and more reactive fashion. This is an important area for research in understanding how to leverage diversity for both individuals and organizations.


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