There is a broad agreement on the fact that strategic human resource management is an important function of any business. It was believed in the 19th century, that human resource management does not play any vital part in adding value in the business. However, modern research terms the strategic human resource management as important as any other function of the business. In fact, it declares the strategic human resource management as important as marketing, accounting or sales. The most important resource for any business is its people. It is the people who are running all the important functions of a company. From accounting to marketing, and from sales to collection, everything is done by the people. Hence, managing them well can give a business a sustainable competitive advantage which can help the company achieve the heights of success (Huselid, Jackson, Shuler). The finding of the study clearly reflected the fact that the human resource management is directly linked with better financial performance and higher productivity. Hence, all the companies need to manage their human resource activities strategically in order to obtain a strategic competitive advantage. (Husefield, Jackson and Schuler, 1997). Huselid (1995) also finds out in his research that the good strategic performance in the human resource or strategic human resource is directly related to the profitability of the firm, and higher productivity of the employees. In other words, the careful planning of the human resources in an organization has a direct impact on the performance of the company in term cash flows, productivity, profitability and, the financial health of the company.
A study done by Sheridan (1995) clearly indicates that the diversity management and culture management in the workplace is the most important factors in the strategic human resource management. The study used the sample of two types of firm. One types consisted of three firms where cultural management, and diversity management were the priority of the top management. In the second type of the firm, the work related values were given the priority. At the end of the performance period, it was found that the firms with cultural management and diversity management priorities outperformed the firms where only the world related values were given importance. This clearly shows that importance of culture management and diversity in the organization. It is extremely important for the success of any organization. It is vital for the businesses in the service sector as well as the business in the manufacturing sector to continuously develop, and update programmes that will increase the diversity of workers in the organization. These programmes should also aim to promote people from different cultures, backgrounds, ethnicity, values and religion to higher-level management positions. This will ensure the development of a culture that will look after the needs of all set of people in the organization, and will not be limited to just one or two types of people or classes of people. In other words, diversity management will enable the organization to develop an all inclusive culture, and all inclusive policies for the production workers that will be translated to the success of the organization. Hence, they should be treated as very important, and vital for the success of the organization, and its ability to do the business effectively and efficiently with the given resources and financial independence.
Just as human resource management is vital for the progress of any business. It is also found that the business, and the company may have problems pertaining to the management of human resource. These problems can make or break a business. When a company is a multination or has branches in more than one country, it becomes increasingly difficult to manage the human resource well. When a company moves to different regions, it hires people from different regions. Its human resources become a mix of people from different backgrounds, cultures, casts, and creeds. This is when problem starts rising. Even when a company is located in one region, there are problem relating to human resource diversity. A firm needs to hire both genders, and people from different backgrounds. This is when the problems for a company starts, usually when it is a multinational. Some companies have set a ceiling on how high a person from a certain religion or minority can grow in an organization. Similarly, some of the organizations have set a ceiling on the growth of women in the management aspects of companies. This problem is more common in the technology oriented companies. These companies hire and outsource jobs to people around the world. Almost 90% of the jobs in these companies are global. Problems start when these companies fail to manage diversity in the top management of the company, and it is happening more often now than ever before. Fung (2014) of Washington Post believes it to be the most common strategic problem for our companies, and not just the tech companies, and also believes that there is an immediate need of corrective action before the things go out of hands for the Human Resource Management Departments of various companies. A quick and immediate action will make sure that these companies do not lag behind the competition in terms of human resource which has a direct impact on the success of the company.
According to Egan (2014), the diversity in the workforce is no longer a hidden reality. It has evolved over time, and many companies are accepting the fact that diversity in the workforce has become synonymous with innovation and growth of the firm. Suisse Bank has recently issued an important statement in which it has declared diversity as an important part of their policy in order to achieve product innovativeness and in order to continuously offer exciting products to their clients. Similarly, L’Oreal and Deutsche Bank are among other companies who are giving special attention to the diversity management in their workforce, and consistently making important policies in order to promote the diverse workforce. In the same study, Egan (2014) finds out that the media management and budgetary control are the most important issues which hinder the progress of any company toward the workplace diversity. As we are living in a volatile economy, the focus for many companies is for survival, and they are also waiting for the right time to promote diversity in their workforce. A similarly study done in the manufacturing sector also predicts that enhancement in the human resource diversity is directly related to the quality and productivity of the workers. Hence, diversity should be encourage in the human resource of the companies in both the service sectors and the manufacturing sectors (Youndt, Snell, Dean and Lepak).
In response to the problems identified by Fung (2014) that the technology oriented companies do not promote minorities or women in the top management a lot of things can be suggested to these organizations. First of all, the paper has clearly identified how important it is for the organizations to be diverse, and have an all inclusive culture. Failing to do so will result in loss of productivity and efficiency for the organization. No company can afford to do this in the times of economic uncertainty and cut-throat competition. The companies have to be as efficient as possible to reduce the costs and remain competitive.
As a first step, these technology companies should acquire data regarding the current personnel working in the organization. This data should be bifurcated by gender, region, background and religion. This will give these organizations an idea about the current diversity position of the organization. As it is known that these organizations is lacking in workplace diversity, the data will give them idea from where to start. Suppose that the share of women working in the organization is only 15%. This will be the starting point for these organizations. It will tell them that in the future hiring, women applicants should be given more preference in order to increase their share in the organization.
Similarly, a data collection should also be conducted to find out the share of women in the top management. If it is less than the share of what other companies are giving to the women, such as FMCG, Manufacturing etc, then the tech companies should increase the number of women in top management and executive levels positions also. This will ensure that the level of diversity in the workforce and the top management is increased. It will benefit the organization in terms of innovativeness, new ideas, and the new ways of tackling the important business problems.
The same exercise, as suggested for women, should be conducted for each minority and ethnicity. The technology companies to ensure that the share they are giving to each of these minorities is not less than what is being offered in the other sectors such as Manufacturing sector, Service sector, and Fast Moving Consumer Goods Organizations.
Source: (Kreitz, 2008)
In a research conducted by Patricia Kreitz, a nine-point model was proposed for diversity promotion in an organization. She believes that the most important part of any diversity improvement process is the willing of top leadership. Top leadership should clearly outline the diversity promotion objective in order to make sure that the middle and higher level of management follow these directives. Secondly, there should be a clearly defined strategy by the organization on promoting diversity. This should also include performance management objectives where the human resource management is evaluated on how their policies have increased or decreased the level of diversity in an organization. The measurement of the performance should be done on the basis of workforce surveys. These surveys should collect the percentages of people from different minorities from working in an organization. If any policies developed by the Human Resource department have discouraged the diversity in the organization they should also be held accountable. Succession planning should also be based on the model of diversity planning. For example, recently retired posts should be replaced by people who will increase the level of diversity in the organization and its management. New recruitment should also be on the basis of diversity promotion in the organization. For example, if it is found that number of women in the organization is less than the acceptable level, then the new recruitments should encourage the women to fill those posts so that their ratio in the organization is increased. and the level of diversity is increased in the organization. The last, but the most important step that is being proposed by Kreitz (2014) is the diversity training in the organization. There are two approaches of diversity training. First of all, the human resource management staff should be trained on how to increase the diversity in the organization. Secondly, the training policies of the company should be in line with the future diversity requirements of the company. For example, again if we take the example of the number of women in the management position is less than the training programmes that are being developed by the human resource department should take into more account with a view of increasing the number of women in the management position in order to increase the level of diversity in organization. Similarly, not only women, but people from all minorities, classes, backgrounds, religion, ethnicity and creed should be taken into account at the time of designing the training programmes based on the future needs of the organization.
Thomas (2004) believes that the organization will do well if they take diversity as a strategy to succeed rather than an additional chore. When Gestner took helms at IBM, he changed his top-tier management to reflect the diverse marketing they will be selling their products. From 1995 to 2004, he increased the number of female executives by 350% and also included people from different diverse ethnic backgrounds in his team to develop new strategies for entering into new markets. The way Gestner introduced diversity in the organization and in top management position was unique and other companies can follow it to achieve success. Gestner established eight task forces. Each task-force consisted of people from different background, ethnicity and different regions. Each of these task-forces was given a control of an important division or a sub-division within a company. There were required to manage each of these divisions on their own using the diversity that they have at their disposal. These task-forces achieved great success and increased the revenue of the company. This is how Gestner’s introduction of diverse management in an organization helped him achieve growth in the company’s revenue and success.
Williams (2014) believes that there is a need to introduce interrupter bias in the systems of the companies in order to encourage more diverse workforce. It is believed that when it comes to promotions and bonuses, women are found be far below men. All the organizations base their policies on meritocracy and a system when men outperform women. Men are likely to be promoted more, given higher amount of bonus and are likely to outperform women in terms of sales and other performance drivers. In other words, the research shows that men are better than women in the areas of organizational performance. However, in order to promote diversity this needs to be changed. A term called “interrupter bias” needs to be introduced in the organizations in order to make sure that man and women get equal opportunity of getting promoting, getting a raise and earning a bonus. For example, a research proves that women are less likely to negotiate their salaries. This has resulted in them getting lower salaries than men. In a recent experimental study it was found that by adding the word “salary negotiable” reduced the salary difference of men and women applying the job by 45%. Hence, some simple words should be added into the organizational policies in order to encourage women to negotiate their salary and position in order to make them more competitive and equal to men. Indirectly, it will increase the share of women in the top management and this will reduce the problem of diversity in the workplace.
In the end, it can be concluded that the major problem highlighted for technology giants and multinationals like Yahoo, Linkedin, Google and Twitter is that they are woefully behind other firms and sectors in terms of diversity management. It was found that they have very few women in their top management positions. This is a big diversity problem. Many companies of the past and future have tried to combat the issue and, these tech giants should also tackle the issue immediately. It can suggested to them to provide a strategic planning and strategic vision of promoting diversity as suggested by Kreitz (2008). There should also be a top leadership commitment towards diversity and these companies should develop programmes that are based on diversity training. They should increase the role of women and minorities in the top leadership positions. If they think that it will be too expensive to hire more of every minority, then the task forces should be established in each area of the organization consisting of people from different background, genders and ethnicity. This will ensure that diversity is present in all the divisions and sub-divisions of a company without the company having to incur extra cost. The last suggestion and probably the most important suggestion for these technology giants is to introduce interrupter bias in their job advertisement and promotion letters. This will ensure that the differences between minorities are likely to be diminished. For example, Asians are introverts and do not bargain salaries, whereas Native Americans are extroverts. Similarly, men are likely to ask for higher salaries and women are unlikely to negotiate their salaries. By establishing a policy which allows everyone to negotiate their salary, the differences will be reduced and diversity management will encourage at all levels and divisions with the organizations. This will ensure that the diversity in the technology oriented organizations is in line with the firms operating in the other sectors. It will also ensure that these companies will do well strategically, as the research shows that the firms with better, and more diverse workforce is likely to outperform the firm that has one type of people. In other words, it is very important for the tech giants like Twitter, Yahoo, Linkedin, and Google to immediately develop a plan that will promote the organizational diversity and in turn will make the firms more profitable, and more efficient in terms of new ideas and financial well-being.
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