Chapter 2 Diversity and Inclusion at Work

Chapter 2: Diversity and Inclusion at Work 2.1 Open to All and Color Proud: The Case of Gap Inc. The San Francisco, California based Gap Inc. is a clothing giant, where Diversity and Inclusions are high among these values. The company signed the "Open to All" business pledge affirming that it would treat customers, employees, and suppliers with dignity and respect, and it would provide a welcoming and safe environment to all regardless of sex, sexual orientation, national origin, race, ethnicity, religion, and disability. 2.2 Demographic Diversity and Inclusion Diversity refers to compositional differences among people in a work unit. *Differences that lead people to perceive others as similar to or different from themselves *Defined by any characteristic, such as; gender, race, age, education, tenure, or functional background While many organizations publicly rave about the benefits of diversity, many find it challenging to develop an inclusive culture. Benefits of Diversity and Inclusion What are the benefits of diversity for groups and organizations? Groups that are diverse tend to experience lower levels of cohesiveness, higher levels of conflict, lower levels of team performance, and higher levels of turnover. * Human beings find it easier to communicate with each other when they interact with others who are similar. Inclusion: The degree to which individuals can bring the aspects of themselves that make them unique while also being treated as insiders *ensures that all individuals are allowed to participate in the organizational life fully, their voices are heard, and concerted efforts are made to remove barriers to the fair treatment of everyone. We need to treat diversity as a necessary first step, but insufficient without inclusion. Higher Creativity in Decision Making An important potential benefit of having a diverse workforce is the ability to make higher quality decisions. *Individuals are more likely to consider more alternatives and think outside the box when making decisions. *Increases creativity in decision making. Better Understanding and Service of Customers A company with a diverse workforce may create products or services that appeal to a broader customer base. *Companies with more women have been responsible for introducing innovative ideas to the market, such as the online subscription and personal shopping service Stitch Fix.

Chapter 2: Diversity and Inclusion at Work On a negative note, companies lacking diversity often introduce products that do not meet the needs of a particular segment of the population. A company with a diverse workforce may understand the needs of particular groups of customers better, and customers may feel more at ease when they are dealing with a company that understands their needs. Higher Job Satisfaction *When employees feel that they are fairly treated, they tend to be more satisfied. *When employees perceive that they are being discriminated against, they tend to be less attached to the company, less satisfied with their jobs, and experience more stress at work. Organizational practices aimed at creating a diverse and inclusive culture help employees to develop trust in the organization and management, and have been shown to have advantages in facilitating employee engagement. In organizations where people experience or observe discrimination, employees suffer from higher levels of stress and experience a sense of injustice, resulting in more negative outcomes Higher Stock Prices Companies that do a better job of creating and managing a diverse workforce are often rewarded in the stock market, indicating that investors use this information to judge how well a company is being managed. Companies that announce settlements for discrimination lawsuits often show a decline in stock prices afterward. Lower Litigation Expenses Companies doing a particularly bad job in diversity management face costly litigations. *When an employee or a group of employees feel that the company is violating EEOC laws, they may file a complaint. *The EEOC acts as a mediator between the company and the person, and the company may choose to settle the case outside the court. If no settlement is reached, the EEOC may sue the company on behalf of the complainant or may provide the injured party with a right-to- sue letter. Higher Company Performance Companies that manage diversity more effectively tend to outperform others. *Research shows that in companies pursuing a growth strategy, there was a positive relationship between racial diversity of the company and firm performance. *Those with the largest percentage of female executives performed better than those with the smallest percentage of female executives. Similarity- Attraction Phenomenon : The tendency to be more attracted to individuals who are similar to us

Chapter 2: Diversity and Inclusion at Work *These phenomena may explain some of the potentially unfair treatment based on demographic traits. If a hiring manager chooses someone who is similar over a more qualified candidate who is dissimilar in a characteristic such as sex, race, or age, the decision will be unfair and a barrier to achieving diversity in the workplace. Surface-level Diversity: Traits that are highly visible to us and those around us, such as race, gender, and age. *Researchers believe that people pay attention to surface diversity because they are assumed to be related to deep-level diversity, which includes values, beliefs, and attitudes. Deep-level Diversity: Diversity in values, beliefs, and attitudes. *Research shows that surface-level traits affect our interactions with other people early in our acquaintance with them, but as we get to know people, the influence of surface-level traits is replaced by deep-level traits such as similarity in values and attitudes. Faultlines : An attribute along which a group is split into subgroups. challenge while *Teams that are divided by faultlines experience a number of difficulties. managing May avoid communicating with each other, reducing the overall cohesiveness of the team. a multiculture work KForce. Research shows that teams with faultlines experience more conflict, are less cohesive, and have less satisfaction and performance. * Faultlines are more likely to emerge in diverse teams, but not all diverse teams have faultlines. Research shows that even groups that have strong faultlines can perform well if they establish certain norms. * Having a norm stating that members should not discuss the issue under consideration before the actual meeting may be useful in increasing decision effectiveness. Stereotypes and Unconscious Biases An important challenge of managing a diverse workforce is the possibility that stereotypes and unconscious biases about different groups could lead to unfair decision making. Stereotypes: Generalizations about a particular group of people. Unconscious (or implicit) biases: Stereotypes about specific groups that are held outside of conscious awareness. *The problem with stereotypes and unconscious biases is that individuals may rely on stereotypes when making decisions, instead of collecting actual data and verifying their assumptions. *As a result, stereotypes may lead to unfair and inaccurate decision making.

Chapter 2: Diversity and Inclusion at Work *Stereotypes and prejudices are associated with more covert and interpersonal forms of discrimination, such as acting less warm and friendly toward the stigmatized person, being more rude toward this person, or cutting the interaction short.