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Learn how to make the business case for diversity, October 25-27.
Companies are increasingly using metrics or “diversity scorecards” to measure progress in hiring, promoting and retaining women and minority employees. Some even link metrics to key business objectives, and ultimately to compensation. But experts caution that it’s much more than a numbers game.
In addition to quantitative measures, diversity and inclusion success should be measured, and rewarded, based on qualitative factors—including key behavioral changes that can create cultural shifts.
“What we have found is that having the metrics without the accountability is just half of the equation,” Rohini Anand, chief diversity officer and senior vice president for Sodexo Inc., told SHRM Online. “So we want to make sure that we have the commitment and engagement of management at all levels.
“You can have good initiatives and programs, but the idea is to really make sure you are changing behaviors and cultures within the organization,” Anand added. “We’ve found that good, robust metrics can help provide incentives for the right behavioral outcomes.”
Critical Misses Pose Obstacles
There are few statistics on exactly how many companies hold managers and executives accountable for diversity, but Edward E. Hubbard, a Petaluma, Calif.-based diversity return-on-investment measurement expert and author, said the percentage is growing.
“Diversity certainly adds value to the bottom-line,” Hubbard said, adding that, “the primary leverage in diversity is utilizing differences as opposed to just looking at representation by itself.”
Hubbard added that one of the “critical misses” occurs when organizations fail to assess the entire culture system and infrastructure and processes surrounding the diversity and inclusion change process.
“Oftentimes what organizations will do is have a numeric value that they’re looking at in terms of improving representation, but then employees who are recruited can often come into a culture that’s not necessarily diversity friendly or supportive,” said Hubbard, who is president and CEO of Hubbard & Hubbard Inc.
Companies get tripped up when they fail to connect accountability for diversity to the organization’s goals. “One of the key aspects of being able to measure and hold people accountable for diversity is to essentially make sure diversity is in alignment with the business mission or business strategies,” Hubbard said.
For example, a large corporation might want to improve market share while a government or nonprofit organization might want to accomplish a more challenging mission.
Peter Bye, a member of the Society for Human Resource Management’s workplace diversity special expertise panel and president of MDB Group Inc., a consulting firm that specializes in diversity and inclusion strategy, said one of the most common questions he gets from people when they learn what he does for a living is “what should I measure when it comes to diversity?”
Bye admits that his initial response can be rather disarming: “I have no clue,” he often says. “To answer that question, I need to look at what you’re trying to achieve. I first want to understand, from more of a strategic and business-oriented view, what are your key business objectives?
“Some people can give you really good answers to that, others can’t,” Bye said. “But they need to in order to become the most effective.”
Rewards for ‘Staying on Course’
Sodexo, based in Gaithersburg, Md., recently ranked sixth on DiversityInc’s list of top 50 Companies for Diversity. Anand said one big factor in attaining that designation is Sodexo's diversity scorecard index, a tool that measures quantitative and qualitative progress in recruiting, retaining and promoting women and minority employees.
Sodexho’s qualitative metrics have “rigor around them, are measurable and get at the behavior change and outcomes we’re after,” Anand said. These include good faith efforts to build a diverse and inclusive workplace and include measures such as diversity-related training participation rates, networking group participation, and achievement of diversity council objectives, affirmative action goal attainment, and the like.
In 2002, Sodexo made the strategic decision to begin holding managers and executives accountable for diversity when it began linking scorecard results to a significant portion of management bonuses that can range from 10 to 15 percent of the total bonus for managers and 25 percent of the total bonus for the executive team.
She noted that bonuses for diversity and inclusion efforts are “decoupled from the finances of the company” and paid regardless of company financial results in any given year.
“We believe that this is a long-term commitment and a journey,” Anand noted. “If sales are down or if the economy is poor, you can’t stop your focus on diversity and inclusion or you’ll lose ground and traction. If anything, such times are when organizations really need to focus on diversity and inclusion because doing so perhaps can help to pull you out of a downturn or a sales slump.”
As for the results, Anand said the percentage of minority employees at the company has increased 23 percent since the diversity scorecard and accountability program was implemented, while the percentage of female employees has risen 11 percent.
Accountability ‘Sits on Everyone’s Desk’
Allstate Insurance Co. in Northbrook, Ill. looks at diversity as it relates to talent, reputation and markets. When it comes to accountability, leaders are evaluated annually on results and behaviors, according to Anise Wiley-Little, the company’s chief diversity officer.
“We embed the accountability for diversity into many things and we find that it is most effective if it shows up in multiple places and in different ways throughout the corporation,” said Wiley-Little, who added that accountability for diversity “sits on everyone’s desk.”
Allstate’s annual Quality Leadership Measurement Survey (QLMS) is a detailed survey that drills down to the unit level with specific measures as to how the individual manager is performing on leadership aspects of the job, including diversity execution. Questions range from whether people are treated with “dignity and respect” and if individuals are allowed to advance “regardless of race or gender” in that manager’s unit.
All levels of managers are held accountable for diversity through the QLMS and organizational success factors, which is part of their annual performance review that determines pay decisions.
Likewise, Organizational Success factors—which are the same for all leaders regardless of their level—are a set of competencies, including diversity, that each individual manager is held accountable for, Wiley-Little noted.
Thomas J. Wilson, Allstate’s chairman, president and CEO, receives yearly data on workforce diversity components for each of his direct reports from demographics, promotion rates and opportunity, retention and turnover for their area of business “which has implications on their overall performance and those of their leaders,” Wiley-Little noted.
Measuring New value Proposition
At Georgia Power in Atlanta, diversity and inclusion initiatives include a long-term management and organizational culture change process designed to expand management skills and accountability and to build trust around leading diverse work teams so everyone feels valued, respected and productive, “and that includes white men,” according to Frank McCloskey, vice president of diversity for Georgia Power.
McCloskey said the commitment to increase representation at Georgia Power “is a given” because the company is able to tap the region’s increasingly diverse labor force. Of the company’s estimated 9,000 employees, 27 percent are minorities and 23 percent females; of its 30 officers, 20 percent are minorities and 24 percent are females.
Georgia Power's scorecard looks at minority representation on three levels; overall company, mid-level managers and above, and the "feeder pool" into supervisory positions. Second, the company measures supplier diversity spending. Finally, it uses three work environment surveys to benchmark management and culture change initiatives; an internal employee survey, Fortune's Great Place To Work Trust Index and DiversityInc annual surveys.
Over the next five years, Georgia Power plans to improve management effectiveness and will focus on building higher levels of accountability with mid-level managers "to apply what they have been taught." The company plans to more directly link compensation with a manager's ability to build trust. After all, McCloskey said, “it doesn't matter what ‘best list’ your company is on. Ultimate success will be determined by that one-on-one relationship between an employee and their manager.”
Growing Accountability at Major Health System
The 8,900-employee Johns Hopkins Hospital and Johns Hopkins Health System in Baltimore takes several steps to hold managers and executives accountable for diversity and inclusion. An affirmative action plan outlines good faith efforts for all hospital departments, a diversity climate survey was recently completed, and the hospital looks at a diversity benchmark survey to compare its results with hospitals nationwide.
“Our Hopkins 2020 vision is the key driver for us,” said John Fuller, director of workforce diversity for Johns Hopkins Hospital, referring to “Diversity & Inclusion 2020,” a multiyear strategic plan adopted in 2008.
“We are trying to increase the total number of under-represented minorities in the top 100 medical and administrative senior-level positions to 20 percent by the year 2020,” Fuller said.
“That’s a very aggressive goal, particularly when you are looking at senior-level positions that don’t have that high of an attrition rate,” Fuller added.
“But the president and senior leadership of Johns Hopkins are very involved and committed and want to make this happen.”
Leadership performance appraisals include statements regarding diversity and affirmative action good faith efforts and hires, according to Fuller. The hospital measures demographics of new hires and attrition of existing employees and its goal is to use data from its diversity climate survey to help enhance diversity accountability.
Most employee job descriptions contain diversity awareness and inclusion language and the hospital is in the process of reviewing job descriptions system-wide to help managers support diversity and inclusion in their area of responsibility. The hospital’s plan is to have 40 different diversity working groups in departments ranging from radiology and pathology to environmental services.
When it comes to creating accountability for diversity and inclusion, experts suggest that organizations:
Keep the process clear, simple and understandable. Make sure that the idea of scorecards and accountability is aligned with the culture of your organization, Sodexo’s Anand said. “If you don’t have metrics and scorecards for other things you can’t just have them for diversity.”
Think carefully about the behaviors that you want. Sodexo first focused heavily on outcome or “quota” metrics such as recruiting, retention and promotion, when in retrospect, Anand said, “we should have focused more on the qualitative measures because those are the behavior changers.”
Remember that measures are fine, to a point. “We have certainly learned over time that you can have too many measures,” said Wiley-Little of Allstate. “Although as a financial services company results are everything, and we measure everything, having too many can be overwhelming.”
Pamela Babcock is a freelance writer based in the New York City area.
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