Executive Briefing

Tailoring Diversity Practices Produces Different Results

By Dori Meinert Jul 1, 2013

July Cover

Companies that have adopted more diversity practices have higher levels of racial diversity in their managerial ranks, researchers at the University of Texas say. But the types of diversity practices used can have different results.

While organizations spend millions annually on diversity programs, the benefit of those programs to increase workplace diversity is rarely documented, the researchers say.

To rectify that, they studied 137 Fortune 1,000 companies for 2002 and 2003. They looked at two specific bundles of diversity practices:

Minority opportunity-based practices, which include mentoring programs, employee network groups, internships and career tracks for high-potential employees.

Manager accountability practices, which include financial incentives when managers meet organizational diversity goals and evaluating managers on diversity-related tasks in their performance appraisals.

Companies that used bundles of diversity practices had higher levels of racial diversity in their managerial ranks than companies that had single diversity practices, says Orlando C. Richard, associate professor of HR management and diversity coordinator at the University of Texas in Dallas, who led the research.

The minority opportunity-based practices benefited black and Asian individuals, while the manager accountability approach benefited Asians more. More research is needed to determine why, the researchers say. It could be that there are more Asians in the talent pool, that they are more qualified or that white managers favor Asians because of a "model minority" bias.

Company size also affects diversity efforts. Smaller companies are more flexible and experience less inertia, making it easier to adapt and change, Richard notes.

"Our results add an exclamation point to the notion that minority subgroups with under-representation should be addressed distinctly," the researchers wrote. "Companies should not use a 'one size fits all' approach.

"Those companies desiring a competitive advantage should develop diversity program effectiveness metrics, distinguish among the various minority subgroups they desire to target, and consider contextual factors that will act as a hindrance or impediment," they continued.

"The Link Between Diversity and Equality Management Practice Bundles and Racial Diversity in the Managerial Ranks: Does Firm Size Matter?" was published in the March-April 2013 issue of Human Resource Management.

Measuring Turnover

Only 42 percent of organizations have a formal process for measuring turnover, according to a survey of 977 management professionals by AMA Enterprise, a division of the American Management Association.

Another 29 percent claim to have an informal process for tracking turnover, while 12 percent say their organizations don't track turnover at all, according to the survey conducted from Dec. 18, 2012, to Jan. 6. Seventeen percent of the managers don't know if their organizations track turnover.

Almost one-third of the managers don't know what their optimal turnover should be, while 46 percent of respondents said ideal turnover would be 10 percent or less, the survey showed.

The findings highlight the gap between employers' declared commitment to employees and the steps taken to support that commitment, says Sandi Edwards, senior vice president of AMA Enterprise.

"Addressing turnover needs to be a priority and driven by the most senior levels of management. It requires a partnership between management and HR," Edwards says.

"In particular, managers need to be sure they have identified the critical talent needed for future success and make every effort to retain and develop those employees."


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