d'netto and sohal 1999

InternationalJournal ofManpower20,8

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International Journal of Manpower,Vol. 20 No. 8, 1999, pp. 530-547.# MCB University Press, 0143-7720

Human resource practices andworkforce diversity: anempirical assessment

Brian D'Netto and Amrik S. SohalMonash University, Victoria, Australia

Keywords Equal opportunities, Multicultural society, Human resource management, Australia

Abstract Workforce diversity has become an important issue in Australia. This study examinedthe extent to which human resource management practices were being used by organisations inAustralia to manage workforce diversity. The study also assessed the perceived challenges andbenefits of diversity in the workforce. The findings of this study indicated that overall,management of workforce diversity is only `̀ mediocre''. In particular, inadequate diversitymanagement practices were found in the areas of recruitment and selection and training anddevelopment. As migrant employees do not create any problems and are very compliant, thechallenges that workforce diversity presents does not receive adequate attention by organisationsin Australia. However, these organisations seek several benefits from their multiculturalworkforce. The implications of these findings are discussed.

IntroductionDiversity may be defined as the presence of differences among members of asocial unit (Jackson et al., 1995). Diversity is an increasingly important factor inorganisational life as organisations worldwide become more diverse in terms ofthe gender, race, ethnicity, age, national origin and other personalcharacteristics of their members (Shaw and Barrett-Power, 1998). Today, theworkforce comprises people who are different and share different attitudes,needs, desires, values and work behaviours (Deluca and McDowell, 1992;Morrison, 1992; Rosen and Lovelace, 1991).

In Australia, current demographic trends indicate that the composition ofthe workforce is changing. Australians now comprise people from more than130 different language backgrounds. More than 220 nationalities arerepresented in the population. Over 42 per cent of Australia's population wereeither born overseas or have at least one parent who was born overseas. About17 per cent of the population in Australia speak a language other than Englishat home. About 21 per cent of Australia's small businesses are operated bypeople of non-English speaking background. In addition, it is expected that 20per cent to 25 per cent of the Australian population will be of Asian origin bythe year 2030 (Nankervis et al., 1999).

In spite of the growing importance of workforce diversity, very littleempirical research has been done to assess management of diversity inAustralia. The need for better management and utilisation of diversity in theAustralian workforce has been identified by the Industry Task Force onleadership and management skills as one of the challenges facing organisationsin Australia and affecting their performance, development and effectiveness

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(Industry Task Force, 1995). However, recent research into diversitymanagement practices in the Australian manufacturing industry indicated thatthe performance of these manufacturing organisations was only mediocre(Dagher et al., 1998). The denial of people management problems creates anatmosphere that leads to inefficient utilisation of large numbers of employees,especially those who are different in terms of race, gender, age, religion,lifestyle and appearance and leads to the inefficient functioning of thecorporation with a resulting negative impact on the corporate bottom line(Fernandez, 1991).

This paper focuses on `̀ multiculturalism'', one of the most important aspectsof workforce diversity in the Australian workplace. This study sought toassess whether organisations in Australia are using effective human resourcepractices to manage workforce diversity. The results of this research willprovide significant contribution to the effective management of workforcediversity in Australia.

Human resource management practices and workforce diversityManaging diversity means establishing a heterogeneous workforce to performto its potential in an equitable work environment where no member or group ofmembers has an advantage or a disadvantage (Torres and Bruxelles, 1992).Managing diversity includes a process of creating and maintaining anenvironment that naturally allows all individuals to reach their full potential inpursuit of organisational objectives (Jenner, 1994; Thomas, 1994). Diversitymanagement emphasises building specific skills, creating policies and draftingpractices that get the best from every employee. It assumes a coherentenvironment in organisations and aims for effectiveness, productivity andultimately competitive advantage. Through effective integration of diversitymanagement principles in the key human resource functions of recruitment andselection, training and development, performance appraisal and remuneration,an organisation can effectively manage workforce diversity.

Diversity practices in recruitmentSuccessful organisations can benefit from workforce diversity by creating anorganisational environment which attracts people from diverse labour markets.Managing diversity promotes competitive edge by recruiting the best peoplefor the job, regardless of ethnicity, age, gender or other individualcharacteristics (Cornelius, 1999). Since organisations often resort to internalpromotions to fill vacancies, recruiting a diverse workforce at critical entrypoints to the organisation also ensures that a diverse pool of talent is availablefor promotion. To achieve these objectives, recruitment and selection processesmust be based on organisational and job-relevant criteria and managers whorun these processes should be skilled in assessing the criteria (Kandola andFullerton, 1994).

Unfortunately, most of the research has indicated that steps and criteriafollowed by organisations to select and test candidates are inadequate or


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inappropriate for a number of applicants including minorities (Loveman andGabarro, 1991; Morrison, 1992; Rosen and Lovelace, 1991; Schreiber et al., 1993).Many organisations in Australia conduct blanket literacy and language testingin recruitment. These tests bear no relationship to the specific job requirements.In addition, interviewers have little or no understanding of techniques suitablefor interviewing applicants from different ethnic backgrounds (Caudron, 1990;Morrison, 1992).

Effective management of diversity recognises that people from differentbackgrounds, cultures and experiences can bring new ideas to the workplace.Several `̀ best practices'' have been recommended to improve management ofworkforce diversity in the area of recruitment and selection. These include thedevelopment of a job description and selection process that cover job relevantduties, qualifications, and experience and complies with anti-discriminationlegislation. Other practices include attracting applicants by includingadvertisements in ethnic language press in addition to daily newspapers,presence of diverse managers on selection committees and implementingtechniques that allow diverse people to answer questions to the best of theirability and potential (Morrison, 1992; Schreiber et al., 1993). Interviewsconstitute an important part of the selection process. However, researchershave found that interviewers have little or no understanding of specialinterviewing techniques that can be used when dealing with applicants fromdifferent ethnic backgrounds (Caudron, 1990; Morrison, 1992).

Diversity practices in training and developmentThe goal of training and development programs of all organisations should beto maintain or improve the performance of individuals and, in so doing, that ofthe organisation (Anthony et al., 1999). Effective management of workforcediversity involves not just recruiting diverse employees but also retainingthem. One way of increasing retention rates is by providing adequate trainingand development opportunities to employees. In the case of multiculturalemployees, training may also assist in understanding special rules andregulations that apply to the Australian workplace. Diverse employees oftenfeel neglected and do not perceive any career paths. Employee developmentprograms can address this problem, by preparing employees for futurepromotions.

Best practices recommended in the area of training include: identifyingspecific training needs which are linked to the organisation's goals andobjectives; assessing individual worker's training needs (both traditional andnon traditional) to enable participation within a training program; developingindividual annual training plans which cover knowledge, operational andinterpersonal skills, facilitating individuals' entry into job/technical skillstraining; evaluating literacy, language and numeracy to assess ability toundertake job/technical training; linking training to award restructuring,enterprise agreements, process improvement and pay scales; and identifyingpresent skills of staff through an audit process which assesses language,


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literacy, numeracy and skill competency levels (Adler, 1986; Grace, 1994;Morrison, 1992; Schreiber et al., 1993). In Australia, where 23 per cent of thepopulation are from non-English speaking backgrounds, literacy trainingassumes significant importance. Training programs for diverse employees canhelp to eliminate group differences in career outcomes and generate respect forindividual differences in attitudes, values and behaviour.

Diversity practices in performance appraisalEffective performance management can make a major contribution towards theachievement of business objectives while maximizing the contribution ofemployees (Cornelius, 1999). A good performance appraisal system can help toenhance employee performance by evaluating how employees are doing on thejob and giving them the chance to correct their mistakes and acquire new skills(Stewart, 1986). A performance appraisal system should be objective notsubjective, relevant to the job and the company, and fair to all employees andoffer no special treatment (Schuler et al., 1992). However, workplace diversityscholars point to the glass ceiling that is a barrier to promotion intomanagement (Powell and Butterfield, 1994). Multicultural employees are oftenperceived as not having the `̀ right skills'' to move into management positions.Thus, the glass ceiling creates artificial barriers based on attitudinal ororganisational bias that prevent qualified individuals from advancing upwardin their organisation (US Department of Labour, 1991).

Several steps can be taken to improve the effectiveness of performanceappraisal practices in the area of diversity. Minorities can be regularly includedon panels that evaluate, select, and promote managers. The problem ofassessing candidates who are `̀ different'' can be reduced, if some of the decisionmakers are non-traditional managers. Migrant representation on such panelscan help to create objective criteria and fair performance appraisal practices.Multicultural employees must have equal opportunities and adequatepreparation to take on demanding assignments in the future (Loden andRosener, 1991; Morrison, 1992; Schreiber et al., 1993). Performance appraisaltechniques should focus on appraising the individual's performance, notpersonality. Fulkerson and Schuler (1992) argue that the appraisal processshould be as culturally neutral as possible. Organisations can include effectivemanagement of workforce diversity as one of the criteria on which allmanagers will be assessed. For example, actions taken by the manager to hireand promote minorities and women can be used as performance criteria(Morrison, 1992; Sessa, 1992). Performance appraisal systems will improveemployee performance only when these systems are seen as fair and unbiased.

Diversity and remunerationRemuneration systems seek to improve employee performance by rewardingthose who have made a contribution to the organisation's performance. Goodremuneration systems ensure that there is a direct relationship between effortand reward. Thus, a performance-based pay system is viewed as being


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effective when the process of providing measurable rewards is appropriatelylinked to the individual or group performance. This is achieved within anagreed framework of planned goals, objectives and standards (Armstrong andMurlis, 1994). An effective pay system is the backbone of all policiesconcerning the acquisition and utilisation of human resources. The keyoutcome of an effective performance-based pay system is to improve anorganisation's overall performance. According to Lowery et al. (1996), the otherkey aim of a pay system is to retain the most valuable employees bydistributing the rewards in such a way that these employees are left with afeeling of satisfaction. An effective performance-based pay system shouldsustain high levels of performance from the organisation's human resources,lead to employee satisfaction and increase organisational commitment. Thus,performance-based pay systems can help to reduce wage disparities formigrant employees, since there is a direct relationship between pay andperformance.

Another method of reducing inequalities in income for multiculturalemployees is by giving good performers challenging assignments (Rosenand Lovelace, 1991; Schreiber et al., 1993). Such assignments prepare theseemployees for promotion to more senior positions in the organisation(Loveman and Gerber, 1991; Schreiber et al., 1993; Kogod, 1992).Unfortunately, research indicates that the main problems that affectculturally diverse employees are inequality in income and bonuses, jobrecognition, promotions and assignment of responsibilities (Jackson et al.,1992; Grace, 1994). In addition, many traditional managers still prefer to givenon-traditional employees responsibilities on a `̀ trial'' period before theybecome permanent (Morrison, 1992). This creates mistrust, lowers morale,and demotivates the non-traditional workforce. Cabezas and Kawaguchi(1988) found that an income gap exists between white managers andminority groups for the same amount of work and qualifications. This gapwas attributed to barriers which created some discrepancies in recognition.Prejudice, for instance, contributes to an unwillingness to pay highersalaries, grant benefits, or give minorities freedom to do their jobs withoutconstant monitoring. Studies by Goldin (1990) and Gerhart and Rynes (1991)revealed that there is still reluctance to give non-traditional managers thesame authority and rewards that go to their white male counterparts.Differences in rewards for similar performance result in loss of motivationand lower job satisfaction.

Challenges and benefits of workforce diversityAustralian organisations face many challenges from workforce diversity.Meeting diversity challenges requires a strategic human resource plan thatincludes a number of different strategies to enhance diversity and promote theproductivity and effectiveness of the twenty-first century workforce (Elmuti,1993). Human resource managers must solicit a trainable population, checkrequired skills and competencies against the job, market jobs sufficiently ahead


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of needs, and extend the workforce boundaries to include the nationals of othercountries. Organisations which plan for the anticipated workforce and acceptcultural diversity management as a progressive technique will benefit frombetter employee retention, increased productivity, less absenteeism, bettermorale, an expanded marketplace and improved customer service (Manninget al., 1996).

Human resource practices from top to bottom need to be re-examined tocope with the new strengths and challenges of diversity, so betterapproaches can be created by management to recruit new talent, retain them,and manage them more effectively (Denton, 1992; Rosen and Lovelace, 1991).Human resource managers are faced with the challenge of convincing theirsenior management that diversity programs are beneficial to theorganisation. Some organisational leaders are concerned that implementingdiversity initiatives is too expensive, upsets productivity and causesdisruption in the workplace. Prejudice and hostile work environments alsopose internal stumbling blocks to managing workforce diversity effectively(Robinson et al., 1994).

An important barrier that affects full integration of ethnic employees in theAustralian workforce is the issue of communication, mainly English literacy(Adler, 1986; Loden and Rosener, 1991). A number of steps might be taken bymanagement to ensure effectiveness in communication. For example,translating summaries of the documents into the main workplace languages,providing English language and literacy training for migrants, trainingmigrant staff on workplace cultural issues, and training all staff in cross-cultural communication are examples of such activities (Adler, 1986; Morrison,1992).

Good workforce diversity practices in the area of human resources, arebelieved to enhance employee and organisational performance (Adler, 1986;Deluca and McDowell, 1992; Fernandez, 1993; Grace, 1994; Hall and Parker,1993; Morrison, 1992; Schreiber et al., 1993). Managing diversity involvesleveraging and using the cultural differences in people's skills, ideas andcreativity to contribute to a common goal, and doing it in a way that gives theorganisation a competitive edge (Deresky, 1994; Fernandez, 1993; Morrison,1992). Recent studies have shown a strong correlation between good diversitypractices and profits (Hayles and Mendez, 1997). Diversity allows increasedcreativity, a wider range of perspectives, better problem definition, morealternatives and better solutions (Adler, 1986 ). To reap these benefits, diversitymust be managed effectively.

Research questionsWhile the literature reviewed has identified several effective diversitypractices, there is little evidence that such practices are being adopted inAustralia. Hence, this study seeks to assess the adequacy of the practices usedby organisations in Australia to manage workforce diversity. Specifically, thefollowing research questions were investigated in this study.


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Main research questionDo organisations in Australia adequately use effective practices for managingworkforce diversity?

Related research questions

. Do organisations in Australia adequately use effective recruitmentpractices for managing workforce diversity?

. Do organisations in Australia adequately use effective training anddevelopment practices for managing workforce diversity?

. Do organisations in Australia adequately use effective performanceappraisal practices for managing workforce diversity?

. Do multicultural employees perceive a difference in the remunerationand rewards they receive compared to other employees in theorganisation?

. To what extent is workforce diversity considered a problem/challengeby organisations in Australia?

. To what extent is workforce diversity considered to be beneficial toorganisations in Australia?

MethodologyData collectionThe study included 500 large organisations in Australia. The sample wasselected at random from the Australia On Disc database. Data were collectedusing a structured questionnaire. The total length of the questionnaire was fourpages and took about 15 minutes to complete. The questionnaire used in thisstudy consisted of three major sections: biographical data, challenges andbenefits, and diversity management practices in the four human resourcesareas under study. The second and third sections of the questionnaire usedseven-point Likert scales (1 = strongly disagree to 7 = strongly agree).Remuneration practices were measured using a 12-item scale (D'Netto, 1994;Newman and Krzystofiak, 1990). Cronbach's (1951) alpha coefficient wascomputed to test the internal consistency of the scales. The results were asfollows: (challenges: eight-item scale a = 0.87, benefits of diversity: 11-itemscale a = 0.93, recruitment: eight-item scale a = 0.77, training and development:10-item scale a = 0.84, performance appraisal: eight-item scale a = 0.70,remuneration: 12-item scale a = 0.97). Nunnally (1978) has stated that areliability of 0.70 or higher is acceptable. In the present study, reliabilitycoefficients range from 0.70 to 0.97. The questionnaires were mailed to `̀ TheHuman Resource Managers'' of the companies included in the sample. Eachquestionnaire was accompanied by a covering letter which briefly explainedthe purpose of the study. A self-addressed prepaid envelope accompanied the


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questionnaire. Respondents were asked to complete the questionnaire and mailit directly to the researchers. A reminder letter was sent to all respondents threeweeks after the original mail out.

ResultsA total of 105 completed and usable questionnaires were received, yielding anoverall response rate of 21 per cent. The age group of the respondents rangedfrom 25 to 65 years. Of the respondents, 58 per cent were male and 42 per centwere female. Of the respondents, 37.4 per cent were below the age of 35 years,46.5 per cent were between 36 and 50 years old and 16.1 per cent were above 50years old. Of the organizations, 84 per cent were Australian owned and 88.4 percent were public companies. Of the companies, 52.7 per cent had overseasoperations. Of the respondent organisations, 32.1 per cent had less than 100employees, 29.5 per cent had between 100 to 499 employees and 38.4 per centhad 500 or more employees. Thus, the sample included small, medium andlarge organisations; of the organisations, 35.7 per cent had less than 10 per centmigrant employees, 23.3 per cent had 10-20 per cent migrant employees and 41per cent had more than 20 per cent migrant employees.

Main research questionThe results of the study indicated that diversity management practices inAustralian organisation is `̀ mediocre''. The overall variable (all HR diversitypractices) had a mean of 3.83[1] (see Table I). The overall performance oforganisations in each of the four human resources areas is also indicated inTable I.

Related research questionsResearch question No. 1In order to assess whether organisations in Australia have effective diversitypractices in the area of recruitment, the mean score for the combinedrecruitment variable was calculated (see Table I). The mean scores for theindividual diversity practices in recruitment were also calculated. The resultsare presented in Table II.

The results of the mean scores in Table I for the overall recruitment functionand in Table II for the individual diversity practices in recruitment revealed

Table I.Mean scores of the

human resourcescombined variables

Variable Mean

All HR diversity practices 3.83Recruitment 3.03Training and development 3.20Performance appraisal 4.57Remuneration 4.53

Note: 1 = strongly disagree through 7 = strongly agree


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that the overall use of diversity practices for the recruitment function inorganisations is slightly below average. The mean score for the overallrecruitment variable was 3.03. This indicates that the current recruitmentpractices do not adequately meet the needs of a more diverse population. Inaddition, the results in Table II indicate that organisations in Australia do notadequately advertise in ethnic newspapers, nor do they have adequateprograms and policies for attracting migrant employees.

Research question No. 2The mean score in Table I for the overall training and development functionwas 3.20, indicating that the overall response is once again below the mid-pointof the scale. Organizations in Australia do not appear to have adequatediversity policies and programs in the area of training and development. Theresults in Table III indicate that migrant career management programs,cultural sensitivity courses and education programs to reduce stereotyping areinadequate. However, assessment and analysis of training needs appears to beadequate.

Table III.Diversity practicesused by organisationsin the training anddevelopment function

Item Mean

Employees' needs are assessed irrespective of their origin, to enable fullparticipation

5.05

Individual training plans are developed 4.68Present skills of staff are identified through an audit process 4.03Literacy, numeracy and language skills are evaluated 3.64Developing managerial skills for working in a multicultural environment 2.95Education programs to reduce stereotyping 2.73English courses for migrant employees 2.58Cultural sensitivity courses 2.23Managers having the title of diversity managers 2.09Migrant career management programs 2.06


Table II.Diversity practicesused by organisationsin the recruitmentfunction

Item Mean

Top management supports migrant recruitment 4.77Current job descriptions and selection processes reflect migrants' needs 3.71Migrant employees are present on selection committees 3.05The company has policies aimed at attracting migrant employees to dealwith migrant customers

2.91

Presence of migrant employees in HRM department 2.86Special programs that aim to recruit migrants each year 2.01Job advertisements appear in ethnic newspapers 1.88



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Research question No. 3In the area of performance appraisal, organisations appear to have gooddiversity management practices. The overall mean score for performanceappraisal was 4.57. Respondents stated that appraisal ratings were focused onthe individual's performance and that objective criteria and fair practices wereused for everyone. Yet, the same respondents stated that there was inadequateinclusion of culturally diverse employees on appraisal panels and that moreconsideration for migrants needed to be introduced (Tables IV and V).

Research question No. 4The mean score in Table I for the overall remuneration function was 4.53,indicating that the use of diversity practices in this function is good.Respondent organisations were satisfied that the salary and benefits ofmulticultural employees was quite good, when compared to other employees inthe organization.

Table IV.Diversity practices

used by organisationsin the performanceappraisal function

Item Mean

Appraisal ratings are focused on the individual's performance, notpersonality

6.19

Migrants do not have to be higher performers that Australians to getpromoted

5.91

Objective criteria and fair practices for everyone 5.86The cultural background of the appraiser does not influence theperformance ratings of the appraisee

5.71

Several multicultural employees are at the top of the organisation 3.56Culturally diverse employees are included on appraisal panels 3.31More consideration for migrants has been introduced 3.29Top management directly intervenes to ensure cultural diversity goals aremet

2.73


Table V.Comparison of the

remuneration ofmulticultural

employees with otheremployees

Item Mean

Compensation 4.79Working conditions 4.65Work load 4.58Work importance 4.56Status/recognition 4.56Job security 4.55Advancement opportunity 4.49Feedback 4.49Social interaction 4.44Benefits 4.43Work variety 4.41Authority/control/autonomy 4.41

Note: 1 = well below average through 7 = well above average


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Research question No. 5The results shown in Tables VI and VII revealed that the mean score for thecombined problems/challenges variable was 5.11 (see Table VI). The meanscores in Table VII indicate that workforce diversity is not seen as posingmajor problems/challenges to organisations. In fact, migrant employees do nothave higher absenteeism rates and appear to work well within the organisation.

Research question No. 6The mean score for the benefits combined variable was 4.46. The results inTable VI and Table VIII indicate that organisations in Australia seek several

Table VIII.Benefits sought byorganisations fromworkforce diversity

Item Mean

Managing cultural diversity can create competitive advantage 4.85Full participation of all individuals 4.72More innovative solutions 4.62Better customer service 4.56Highly motivated employees 4.54Higher productivity 4.46More diverse opinions in decision making 4.40Higher morale 4.35More satisfied employees 4.33Less internal conflict 4.17Lower turnover 4.03


Table VII.Challenges facingorganisations fromworkforce diversity

Item Mean

No increased absenteeism or higher turnover 5.65Migrant employees are given opportunities to improve technical andmanagerial skills

5.34

Migrant employees adapt well to the organisation's culture 5.20No significant increase in conflicts 5.10No significant communication problems 5.08No significant cross-cultural problems 5.04Complying with equal opportunity legislation 4.82No significant increase in training costs 4.68


Table VI.Mean scores of theproblems/challengesand benefits ofworkforce diversity(combined variables)

Variable Mean

Challenges 5.11Benefits 4.46



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benefits from a multicultural workforce. In particular, organisations believethat managing diversity can create competitive advantage and provide bettercustomer service. They also believe that good management of diversity wouldresult in highly motivated employees and increased productivity.

DiscussionResearch on management of workforce diversity in Australia has been sparseand has not adequately assessed the extent to which diversity practicesidentified in the literature are being used by organisations in Australia. Hencethis study sought to examine how effectively corporate Australia was usinggood human resource management practices to manage workforce diversity.The study also investigated the challenges and benefits of workforce diversity.

The main research question sought to assess the use of diversity practices atthe overall level by combining the four human resources functional areastogether. The results revealed that, overall, the use of diversity practices inAustralian organisations is `̀ mediocre''. This was indicated by the fact that thehuman resources combined variable had scored a mean of 3.83, slightly betterthan the mid-point of the scale. Several researchers have argued that suchinadequate management of workforce diversity is not beneficial to theorganisation. Employees are not able to reach their full potential andorganisational performance is not enhanced (Jenner, 1994; Thomas andGregory, 1994).

There are a number of explanations for the absence of good diversitymanagement practices in Australia. Firstly, workforce diversity has assumedthe status of a key success factor in business and society only since the mid-1980s. This concept is still new to many organisations in Australia. Thus,acceptance and integration of workforce diversity practices will take aconsiderable amount of time (Council for EEO, 1990; Industry Task Force,1995). Secondly, it appears that Australian managers do not pay attention toworkforce diversity because migrant employees do not create many problemsand appear to comply willingly with organisational rules and regulations.Thirdly, for several decades Australia was sheltered from the world market.Hence, organisations did not really consider using their multiculturalemployees as a source of competitive advantage in global markets.

Research question 1 examined the adequate use of effective recruitmentpractices for managing workforce diversity. The analysis of data revealed thatdiversity practices in recruitment had a mean of 3.03, indicating that diversitypractices in this function were less likely to be applied by organisations. Anumber of researchers have indicated that Australian employers will be facinga shortage of skilled labour in the near future, while the number of migrants inthe workforce will increase (Australian Bureau of Statistics, 1993; Castles andMiller, 1993; Council for EEO, 1990). Recruitment provides the entry point forthis diverse pool of talent. The absence of good diversity practices in therecruitment process will result in the failure to benefit from a multiculturalworkforce in the future. The results of this study indicate that while there is


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strong top management support for recruitment (mean = 4.77), this supportdoes not translate into effective policies and practices at lower levels. There isinadequate inclusion of migrants on selection panels and in human resourcedepartments. Ethnic newspapers, an important source of recruitment ofmigrant employees, appear to be neglected. In addition, there are inadequatepolicies and programs for the recruitment of migrant employees. CorporateAustralia appears to be failing to capitalise on the abundance of skills that existin the migrant community. Anecdotal evidence and informal discussion with anumber of migrant applicants indicates that insistence on `̀ Australian workexperience'' by a large number of organisations presents an insurmountablehurdle for new migrants, especially when this requirement is often irrelevant toactual job performance. The results of this study are in concurrence with pastresearch dealing with the inappropriateness of recruitment and selection testsand procedures (Coudron, 1990; Loveman and Gabarro, 1991; Morrison, 1992).The findings of this study indicate that urgent attention should be paid todevelopment and use of proactive recruitment policies and practices to manageworkforce diversity effectively. It is difficult to understand how organisationsin Australia can be committed to enhancing organisational productivity whilecontinuing to adopt recruitment policies and procedures which actually blockthe entry of non-traditional employees into the organisation.

Research question 2 dealt with the adequacy of diversity practices in thetraining and development function. Past research has indicated that theincrease in the shortage of skilled labour, the increasing number of migrantemployees, the increasing competitive environment and the rapid rate ofchange puts an organisation under pressure to adapt to these changes, througheffective training programs and courses to empower its diverse workforce(Jackson et al., 1992; Loveman and Gabarro, 1991). Thus, it is surprising to findthat in spite of the growing need for training and development, the findings ofthis study indicated `̀ below average'' performance by organisations in trainingand development for diverse employees (mean = 3.20). Organisations seem tobe unwilling to adopt appropriate diversity practices to manage their trainingand development function more effectively. While training and developmentimproves an employee's knowledge and skills, it also serves to reduce turnover.Programs for training and developing migrant employees can help to reducethe feeling of alienation and provide career paths for these employees. Theresults indicated that while identification and assessment of training needs isgood, relevant training programs to deal with diversity are inadequate. Forexample, there are inadequate programs to deal with issues such as culturalsensitivity, stereotyping and managerial skills for working in a multiculturalenvironment. In addition, organisations do not appear to be paying enoughattention to developing the English language skills of multicultural employees.This may be because they do not see communication as a problem. However,unless migrant employees possess a good understanding of English, they willnot be able participate effectively in group/team discussions. Such failure to


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participate often results in migrant employees being perceived as being `̀ tooquiet'' or not smart enough. Such inaccurate perceptions have a negativeimpact on the promotion prospects of migrant employees.

Research question 3 addressed the issue of diversity practices in relation toperformance appraisal. Good diversity practices in the area performanceappraisal are essential to reduce discrimination in recognition of merit andbreak the glass ceiling (Powell and Butterfield, 1994). The findings indicatedthat organisations in Australia had relatively good diversity managementpractices in the area of performance appraisal (mean = 4.57). Respondentorganisations were emphatic that appraisal ratings focused on the individual'sperformance and not personality (mean = 6.19). In addition, respondents statedthat objective criteria were used and that migrant employees did not have to behigher performers than others to get promoted. These findings are encouragingand indicate that managers do not discriminate against multiculturalemployees when assessing employee performance. However, there is no directintervention by top management to ensure that diversity goals are met (mean =2.73). In addition, the practice of including migrant employees on promotionpanels is relatively uncommon. Migrant representation on promotion panelscan help to reduce notions of discrimination.

Research question 4 sought to compare the remuneration of multiculturalemployees with Australian employees. Past research has indicated that a lack ofcareer planning and organisational discrimination in promotional opportunitiesagainst diverse employees creates mistrust, deteriorates morale and results inwage disparities (Loveman and Gabarro, 1991; Morrison, 1992; Schreiber et al.,1993). Contrary to the fears of the researchers, the results of this study indicatedthat organisations do not discriminate against diverse employees in the area ofremuneration (mean = 4.53). Overall, diversity practices in the area ofremuneration and benefits, appear to be adequate. The presence of strong tradeunions and centralised wage fixing in Australia for several decades may havecontributed to this absence of discrimination in remuneration. In all 12 areas ofremuneration, respondent organisations indicated that there was no significantdifference between multicultural employees and others.

Research question 5 aimed to assess the extent to which workforce diversitywas considered a problem/challenge by organisations in Australia. Researchersconsider workforce diversity as an enormous challenge which requires cross-cultural understanding in a constructive and creative manner, throughestablishing a cooperative, harmonious and productive working environment(Council for EEO, 1990; Office of Multicultural Affairs, 1989; Industry TaskForce, 1995). However, the results of this study appear to indicate thatorganisations in Australia do not see workforce diversity as presenting majorproblems/challenges to their organisation (mean = 5.11). While this is indeedpositive, managers appear to ignore the issue of workforce diversity and thechallenges it presents, just because there are no `̀ problems''. Migrant employeesdo not have higher absenteeism or turnover rates than others. Organisationsdid not experience any cross-cultural problems, communication problems or


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increase in training costs. In fact, migrant employees appear to be adaptingwell into the organisation culture. These positive perceptions about migrantemployees are good. However, because migrant employees do not createproblems, the specific needs of this group are of ignored. Organisations oftentend to be reactive and pay attention only to issues which they see asproblematic. However, by not acknowledging cross-cultural differences andspecific training needs, organisations run the risk of failing to realise the truepotential of migrant employees (Fernandez, 1991).

Research question 6 sought to assess the extent to which organisations inAustralia seek to benefit from workforce diversity. Past research has indicatedthat workforce diversity can create opportunities not achievable in thetraditional workforce (Cox and Blake, 1991; Hall and Parker, 1993). Thefindings of this study indicated that organisations strongly believe thatworkforce diversity can provide substantial benefits (mean=4.46). Respondentorganisations sought benefits such as improved competitive advantage, higherproductivity, greater participation and increased motivation from migrantemployees. The sad irony is that while organisations seek several benefits, theydo not appear to have good diversity practices to attract and retain thesediverse employees.

In summary, the findings indicate that organisations believe they canincrease productivity considerably through effective management of diversityin the workforce. However, the overall performance in management ofworkforce diversity is average. Considerable positive changes need to be madein the areas of recruitment and selection and training and development. Whileorganisations seek several benefits from their multicultural workforce, they donot appear to give adequate attention to the issue of diversity as migrantemployees are very compliant. However, proactive diversity managementpractices are essential to realise the true benefits of a multicultural workforce.

Limitations of the studyThis study has some limitations. First, this study focussed only onmulticulturalism. Other dimensions of diversity, such as age and gender, werenot included in this study. Second, the research design combined migrants fromEnglish and non-English speaking backgrounds. The aim was to assess thegeneral use of diversity practices within organisations irrespective ofemployees' country of origin. Migrants from Anglo-Saxon backgrounds arequite different when compared to migrants from Asian backgrounds. Thisstudy does not test these group differences. Third, the respondents in thisstudy were all part of the `̀ management'' team. Hence, it is likely that theirresponses to the adoption and efficacy of diversity management practices havea positive bias. This study did not include `̀ employee'' responses.

Implications for future researchThe findings of this study have several implications for future research. First,this study focussed only on four human resources areas. Future research can


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assess the use of diversity management practices in other areas such asleadership, teamwork, decision making, etc. Second, the respondents of thisstudy were human resources managers in 500 different organisations acrossAustralia. This study can be replicated using `̀ employees'' as a sample. Thiswill facilitate a comparison of `̀ employer'' and `̀ employee'' perceptions of theextent of diversity management practices in Australia. Third, this study used aquestionnaire for collection of data. Researchers can adopt `̀ triangulation''(collecting data using three different methods), so as to enhance the reliabilityof the results of the study. For example, focus groups and interviews mayactually capture other diversity issues. Fourth, this study can be replicated inother countries to assess Australia's diversity management performance in thein global market. Finally, the recent introduction of enterprise bargaining andthe decentralisation of the wage system, may have a significant effect in thearea of remuneration. Strong union influence in the workplace in the pastappears to have resulted in the absence of wage discrimination. As unioninfluence continues to decline, future research will need to assess the effect ofthis decline on migrant wages.

Note

1. In all the Likert scales used in this study, scores closer to 1 are an indication of poordiversity management, while scores closer to 7 are an indication of good diversitymanagement.

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