An Investment that Pays off: Diversity Climate and Performance
Several recent articles have stressed the importance of diversity climate to encouraging the retention of people from underrepresented groups in organisations. Recent research demonstrates that climate also has an impact on job performance. The authors, working in the US, compared sales figures in store units with different diversity climates. A key finding was that a more positive diversity climate was associated with raised performance by Black staff to the extent that "Blacks' sales per hour exceeded those of White personnel in highly pro-diversity stores". Sales by Black staff were boosted by approximately $20.00 per hour.
As the authors point out, "the study illustrates the "dollar value" of effective diversity management". They estimate that the effect of a highly pro-diversity climate will be a gain in sales in excess of $20,000 a year by Black staff. Although sales by White staff were unchanged, the study should add further encouragement to organisations to ensure their diversity climate is optimised. In essence, this means ensuring that you advocate fair human resource policies and socially integrate underrepresented employees. There are three levels to address:
1. Individual. Removal of discrimination and stereotyping
2. Group. Harmonising groups within an organisation
3. Organisation. Integration of underrepresented personnel into higher-level positions and networks.
Of course, establishing a positive diversity climate will carry a price but this article will encourage employers to see the price as an investment rather than a cost. The return on investment might be particularly appealing to employers with relatively large numbers of ethnic minority staff in customer-facing roles - shops, banks, government agencies spring to mind immediately.
How can Human Assets Help
Our mission is to ensure that clients have the best possible talent to fulfil their roles and hence to deliver their business strategies. This means sourcing, developing and retaining the full diversity of people with talent and so addressing diversity climates is a key consideration in our work. For example, we are currently engaged in the design and delivery of a development centre for underrepresented groups as part of a positive action programme by a large customer-facing organisaiton. To find out more about how we might help you please contact Charles Woodruffe at charles.woodruffe@humanassets.co.uk or telephone +44(0)20 7831 9512.
Reference
McKay, P.F., Avery, D.R., and Morris, M. A. Mean racial-ethnic differences in employee sales performance: The moderating role of diversity climate. Personnel Psychology, Vol 61 No 2, Summer 2008, Pps 349 - 374.