Submitted To: Ms Sarah Yaqoob

Submitted By: Ramsha Nasir

Moshin Masood

M.Murad Saqib

Submission date 24/5/2013

Assignment No: Final Report

Class: BBA 24, 5TH Semester

Subject: Business Research Methods

Topic : Exploring the Determinants of Diversity Climate

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PURPOSE

The study contains an organization level investigation which highlights diversity climate among workforce of organization.

ABSTRACT

Workforce diversity has become an important issue in Pakistan. This study examined the extent to which human resource management practices were being used by organizations in Pakistan to manage workforce diversity. The study also assessed the perceived challenges and benefits of diversity in the workforce.

INTRODUCTION

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

In today's society, cultural diversity is at the highest point it has ever been. As companies are becoming more diverse, it is becoming more important for them to understand and manage that diversity. People of different backgrounds, races, ages, sex, and/or religions create a diverse workforce. There is an importance of having a diverse workforce in order to provide better performance overall. With a diverse workforce, there arises a need for new management strategies, which require organization leaders and managers to know the differences among their employees and to know how to handle situations involving these differences. As Dr. Sondra Tiedemann, a leading expert in workplace diversity, stated, ``whether you are a business owner, executive, salesperson or customer- service professional, your success will increasingly depend on your ability to function in a culturally diverse marketplace'' (Thiederman, 2000).

The growth in diversity is continually on the rise. Today, one in four people in this country belong to a minority or are foreign-born (U.S. Census Bureau, 2001).

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ANTECEDENTS TO DIVERSITY CLIMATE

Workforce diversity has become an important issue in Pakistan. This study examined the extent to which human resource management practices were being used by organizations in Pakistan to manage workforce diversity.

The organizations seek several benefits from their multicultural Workforce. The term “diversity” was not widely used until the mid 1980s. In a review of the management literature, Edelman, Fuller, and Mara-Drita (2001) show the rise of diversity rhetoric started in 1987 and peaked in the early 1990s. A multitude of factors have been included in the definition of diversity, and definitions can be extremely broad, such as, “any attribute that another person may use to detect individual differences” (Williams & O’Reilly, 1998, p.81). Broad inclusive definitions of diversity have been shown to have a positive influence on perceptions of diversity programs (Rynes& Rosen, 1995; Robinson & Dechant, 1997). However, the utility of overly broad definitions is questionable, as it makes diversity difficult to measure and study effectively. On the other hand, more narrow definitions can undermine the intent of diversity initiatives, as excluded groups become alienated. A balance will be attempted by breaking down diversity into more useful categories while incorporating a broad overall inclusive definition of diversity. Although individuals can differ across a wide variety of categories, researchers have made a distinction between visible and non-visible characteristics (Milliken & Martins, 1996). Visible categories include, but are not limited to, age, ethnicity, gender, and race. Less visible categories include, but are also not limited to, physical abilities, educational background, sexual orientation, geographic location, income, marital status, parental status, and religious beliefs. Beyond this dichotomy, diversity has been divided into surface-level and deep-level categories in order to describe the functional difference that diversity presents (Phillips & Loyd, 2006). Surface-level diversity refers to demographic characteristics, such as race and gender, while deep-level diversity explains functional differences, such as work experience. The current research will consider diversity broadly as any relevant categories that can affect workplace interactions. This definition allows for a comprehensive review of factors that influence diverse interpersonal interactions at work. Some researchers have suggested that every dimension of diversity, regardless of how it is defined, has the potential to facilitate or inhibit group performance (Earley& Mosakowski, 2000). From a pragmatic standpoint, development of a diversity related measure that limits the definition of diversity could easily overlook important dimensions that affect workplace interactions. Diversity may also be defined as the presence of differences among members of a social unit (Jackson et al., 1995). Diversity is an increasingly important factor in organisational life as organisations worldwide become more diverse in terms of the gender, race, ethnicity, age, national origin and other personal characteristics of their members (Shaw and Barrett-Power, 1998). Today, the workforce 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). Diversity presents unique challenges for management as it is linked to both positive and negative organizational performance outcomes (Mannix& Neale, 2005). Diversity, by itself, may not be sufficient to achieve competitive advantage. Effective diversity management becomes an important issue for organizing diverse teams present unique challenges for management, as they are linked to both positive and

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negative performance outcomes. As effective management of a diverse workforce is a necessity for many organizations, there exists a need for better assessment of diversity related skill sets.

The organizational climate literature provides insight and a theoretical framework for understanding how collective perceptions of diversity climate might emerge. Within the organizational climate literature, an important distinction is made between the individual and organizational psychological climate (James 1982). Individual psychological climate refers to individual level inferences regarding what is important, valued, and rewarded through exposure to the organizational environment. These perceptions are based on both formal and informal features of the organization including policies, practices, and organizational routines (Schneider et al. 1996). When situational characteristics are experienced and interpreted consistently across employee populations, uniform and shared inferences regarding organizational values and priorities are possible (Schneider1990; Schneider and Reichers 1983). Therefore, organizational climate is defined as collective perceptions among employees regarding the practices, procedures, and kinds of behaviors that are supported and rewarded in their work environments (Schneider 1990). Climate perceptions are believed to provide an important intermediate measure linking organizational programs with employee attitudes and behaviors and, ultimately, firm performance outcomes (Bowen and Ostroff 2004; Ferris et al. 1999).Also consistent with this reasoning, signaling theory suggests that employees rely on organizational cues and signals in the interpretation of an organization’s commitment and goals (Spence 1973).

Signaling theory suggests that salient organizational features serve as signals to both applicants and current employees. For example, applicants have been found to interpret an organization’s corporate social performance as signals regarding the organization’s values and norms (Greening and Turban 2000) and working conditions (Turban and Greening 1997).Among current employees, Saks and McCarthy (2006) found support for signaling theory logic in demonstrating that organizational policies and procedures facilitate perceptions consistent with a general valuing of diversity. Common in these findings is the notion that features of the organization are important in shaping employee perceptions of the organization. The development of shared perceptions, or climate, is more likely in circumstances where the environment provides salient unambiguous signals regarding organizational priorities—often defined as a ‘‘strong’’ situation (Bowenand Ostroff 2004). Strong situational characteristics dominate otherwise idiosyncratic perceptions of the environment and serve as the primary determinant of affective and behavioral responses (Mischel and Mischel 1976; Ross and Nisbett 1991). Applied to perceptions of a diversity climate, we are concerned with those situational characteristics, or signals, likely to manifest in uniform perceptions regarding the organization’s support for diversity.In the following discussion, several organizational characteristics are discussed which are likely to be important in the creation of strong situational characteristics and the development of collective perceptions of support for organizational diversity. These organizational signals include the establishment of formal programs designed to support diversity, the racial/ethnic composition of management, and managerial values related to employee management. Relationships between these organizational characteristics and a diversity climate are hypothesized.

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DIVERSITY CLIMATE:

Diversity climate is defined as organizational member’s attitudes and perceptions towards people from cultural groups other then owner. It’s a climate which refers ways of operations, behavior and actions which are expected and rewarded in an organization. (Sehneiger and renpsch1998).

Diversity, defined as the degree of intra-organizational representation of people with different group affiliations of sculptural significance (Cox 1994), is purported to expand the plurality of perspectives and experiences within an organization and can serve as a strategic resource to the organization in securing a competitive advantage (Richard 2000)

“It is very helpful to suggest that diversity is not so much an end in itself as it is a condition of our society and the condition of the World in which we live.”

(Frank Wong Vice President for Academic Affairs University of Redlan Diversity Management)

The 1990s saw the development of a new trend in the form of workforce diversity mainly because of the liberalization and globalization of markets (Jain and Verma, 1996). At the same time the liberalization of economies and struc- tural adjustment policies brought about by the Brentwood institutions opened the doors to free market economies. Organizational efforts and investments in the intentional management of diversity continue to grow (Carrell et al.2006; Frankel 2009). Therefore, diversity initiatives typically involve employee recruitment and promotion strategies targeting underrepresented groups and mechanisms to both tap the latent perspectives with in organizations and, ultimately, bring them to bear on organizational policy decisions (Richard and Kirby 1997; Coxand Blake 1991).

One consequence of the implementation of diversity initiatives should be changes in employee perceptions regarding the importance of diversity within the organization (Cox and Blake 1991; Gelfand et al. 2005).For this reason, efforts to understand the consequent diversity climate, or ‘‘aggregate perceptions about the organization’s diversity-related formal structure characteristic sand informal values’’ (Gonzalez and DeNisi 2009,p. 24), is an important line of research. Indeed, diversity climate provides important information regarding the efficacy of organizational diversity programs by providing direct insight into the actual employee experience with the organization. As Schneider et al. note (2003, p. 126), ‘‘… it is one thing to know what the VP of HR says happens …and it may be another to hear how employees experience practices.’’ For this reason, it can be argued that these employee perceptions are a more telling indicator of the organization’s actual support for diversity (Kossek andZonia 1993; Rynes and Rosen 1995).Past research concerning diversity climate supports these assertions by demonstrating its association with a wide array of important organizational outcomes, including the heterogeneity of an organization (Kossek and Zonia1993), turnover intentions (McKay et al. 2007), organizational commitment, job satisfaction, career commitment, career satisfaction, and satisfaction with managers (Hickes-Clarke and Iles 2000).

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Diversity climate has also been shown to mitigate the adverse effects of diversity such as increased relationship conflict, decreased productivity, and intent to quit, and lower organizational commitment (Gonzalez and DeNisi 2009). Further, employee perceptions of the organization’s support for diversity, a construct that is conceptually similar to diversity climate perception, were positively associated with organizational commitment and decreased absenteeism across racioethnic groups, including non-minority employees (Avery et al. 2007).Finally, of particular importance to the present study, when considered at the organization level, diversity climate was found to moderate the relationship between diversity and firm productivity and return on profit (Gonzalez and DeNisi2009). This research suggests that diversity climate is an organizationally important intermediate outcome worthy of empirical attention, leading to calls for research directed to understanding its causes (Gonzalez and DeNisi 2009).Further, the development of a diversity climate is an important consideration for organizations wishing to capitalize on the positive effects of diversity. For example, a primary goal of diversity programs is to recruit, promote, and retain a diverse workforce. Logically, an organization’s ability to recruit and retain a diverse workforce is linked directly to its ability to develop a reputation for valuing diversity. As organizations compete for talented and qualified employees, diversity management programs may become a deciding factor for many recruits. By enhancing perceptions that the organization supports diversity, organizations will be more able to attract and retain minority employees than their less committed competitors (Cox 1994).

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DIAGRAM FIG: 1

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FORMALLY ESTABLISHED DIVERSITY PROGRAMS:

One obvious antecedent to the development of higher aggregate level diversity climate is the establishment of diversity programs. HR practices, including diversity initiatives, can be salient features of the organization and, as such, important in shaping employee perceptions of the climate. HR practices are argued to operate as symbolic signals to employees in the communication of organizational priorities and values (Guzzo and Noonan 1994; Rousseau 1995; Tsui et al. 1997).

This includes inferences regarding their role in the organization, the nature of the relationship with the organization, and behaviors important to organizational functioning (Bowen and Ostroff 2004; Rousseau 1989, 1995). In this way, an organization’s investment in diversity-related initiatives should have the effect of sending a visible and salient signal to employees that the organization is committed to achieving and leveraging diversity (Avery et al. 2007).

Perceptions resulting from the implementation of diversity practices should be consistent with the meaning and intent of these practices. For example, diversity programs such as targeted efforts at recruiting and promoting adverse workforce are signals that an organization values diversity. Following this logic, as shown in Fig. 1, the use of diversity-related programs should be positively associated with employee perceptions of diversity climate. (Jeanquart-Baron 1996).Diversity management programmes include efforts to celebrate, value, and support the differences among an organization’s employees. In general, diversity management programmers fall into two categories: changing organizational systems and employee development. Strategies focusing on changing organizational systems include: • offering flexible work arrangements (for example, flextime, flexiplace, job sharing, etc.);In contrast, employee development strategies include two types of training: awareness-based diversity training and skill-based diversity training. Awareness-based diversity training is designed to raise people’s awareness of diversity issues in the workplace and to get them to recognize the underlying cultural assumptions they make about people. It is primarily a cognitive approach. On the other hand, skills-based diversity training is designed to develop skills needed to interact effectively with others (for example, intercultural communication and facilitation skills such as handling cross-cultural conflict). We believe that the traditional diversity training programmers outlined above fall short in three ways. First, the training is often viewed as an inoculation rather than an on-going treatment of habitual ways of thinking and feeling. Second, while the diversity training acknowledges the need for both cognitive (awareness) and behavioral learning (skill building), many of these training programmes often minimize or overlook the linkage between our thoughts and behaviors. Third, the goal of much of this training is to encourage the dominant cultures (that is, males, whites, able-bodied, etc.) to accept and value people who do not “look or think like them”[8]. Often overlooked is the role and responsibility of both majority and minority group members in the process of managing diversity. If managing diversity means “enabling every member of your work force to perform to his or her potential”[9, p. 112], then all employees must work independently and collectively towards this end. Consequently, the primary purpose of this paper is to propose a method in which the counter-productive, cross-cultural behaviors and attitudes that hamper employee effectiveness can be self-monitored and managed over time by all employees. The desired outcome is to assist employees in self-managing their feelings (for example, isolation, stress) and thinking (for example, intolerance, frustration, prejudice). Specifically, the proposed method involves self-

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management of one’s mental processes and is a practical application of recent cognitive-based leadership research (that is, thought self-leadership).

At the programmatic level, one simple and concrete way to inform others that a career counselor or vocational psychologist is supportive of the struggles of culturally diverse persons who are seeking career counseling is by creating a supportive atmosphere in the office. There is much power in these often quite subtle signs. It can be as simple as having a selection of culturally-appropriate books on your bookshelf integrated with all of your other professional literature. This will help some clients realize that you are prepared to work with individuals from diverse cultures. Placing such professional and popular literature in the office waiting room will send a very overt signal that the counselor is culturally-affirming. Popular magazines and newspapers focused on various cultural communities send obvious signals to all clients and may even help majority-culture clients gain more information about their culturally diverse co-workers (Bowman, 1995; Chung & Harmon, 1994; Fouad, 1993; Leong & Gim-Chung, 1995; Riveraet al., 2007).

HYPOTHESIS 1:

The existence of diversity programs will be positively associated with the diversity climate among others.

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MANAGERIAL EXPERTISE AND DIVERSITY CLIMATE

In this section, we review applications of Diversity programs in expertise management. Although research in expertise management largely aligns with that in document management, review on diversity climate effect on management and information retrieval, in an attempt to identify to expertise management in diversity climate.

Managerial expertise is an important asset in diversity climate .Capturing such expertise is critical for companies to maintain their competitive advantages. Expertise management, as a broad concept that covers various aspects of this knowledge capitalization process, has spawned research efforts in many fields including Knowledge Management, Computer Supported Collaborative Work (CSCW), etc. Many similar concepts such as expertise capitalization/leveraging, skill mining, competence management, intellectual capital management, expertise network, knowledge sharing system and the like are widely discussed in these research communities. (Schneider and Reichers 1983; Schneider1990; Schneider et al. 1996), (Bowenand Ostroff 2004; Ross and Nisbett 1991).

Several studies have demonstrated that members from under-represented groups are sensitive to

diversity-related dimensions of their organization’s climate. Thomas and Wise (1999) and Mor

Barak et al. (1998) found that racial/ethnic minority group members were more sensitive to the

organizational diversity climate than were Caucasian men. Chrobot-Mason (2003) found that

minority participants perceived a dimension of the diversity climate, that of diversity promises

(including the consideration of minority perspectives) to be distinct from general organizational

promises..Other scholars have adopted a broader perspective by exploring the more general relationship between psychological contract breaches and employees’ turnover intentions (Lo

and Aryee, 2003; Robinson and Morrison, 2000; Tekleab et al., 2005). For example, Lemire and

Rouillard (2005), Suazo (2009), and Turnley and Feldman (2000) reported that psychological

contract violations were associated with employee outcomes, including organizational commitment and turnover.

Organizational agents who convey impressions about the importance of diversity in the company’s mission statements may lead applicants of color to have certain expectations about the sophistication of diversity strategies and organizational climate. If these expectations are

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unmet, the incongruence may lead to perceptions of a psychological contract violation. These violations may traverse several dimensions of injustice, including disrespectful behavior by organizational agents (Bies and Moag, 1986) and unfair procedures (Rousseau, 1989). Perceived violations can lead to negative employee emotional reactions, attitudes and behaviors. the employing organization and higher levels of turnover (Robinson and Rousseau, 1994; Turnley and Feldman, 1999). We turn now to each of these dimensions of organizational justice.Bies and Moag (1986) described interactional justice as perceptions of fairness, such as demonstration of respect and dignity toward the subordinate by the employee’s supervisor. Several studies suggest that interactional justice moderates diversity. Climate perceptions and employee outcomes: Roberson and Stevens (2006) analyzed accounts of diversity incidents described by employees in a large organization. They examined incidents involving treatment by management, work relationships, respect between groups and diversity climates. They found that treatment by management, in effect interactional justice, was a dominant theme in the incident descriptions. In their review of the justice literature, Turnley and Feldman (1999) proposed that individuals’ response to unfavorable organizational actions will be less severe when the aggrieved individuals perceive interactional justice. Kickul (2001) found that negative affect was high following a contract breach when interactional injustice was high. Similarly, Kickul et al. (2001) found that anti-citizenship behavior was higher after a breach when both interactional and procedural justice were low. Kickul et al. (2002) found that interactional injustice interacted with intrinsic contract breach to predict lower citizenship and job satisfaction and higher turnover intentions. In a study of knowledge workers, Thompson and Heron (2005) found that following a perceived contract breach, high levels of interactional and procedural justice combined to increase worker commitment to their organizations. In a study that examined the influence of behavioral integrity (the alignment between what a manager says and what s/he does in treatment of subordinates), Simons et al. (2007) reported that Black employees were more sensitive to managerial behavioral integrity than were members of any other racial group. Based on these findings, we hypothesize that interactional justice and perceptions of a fair diversity climate would interact to affect work outcomes (herein organizational commitment and turnover intentions), for employees of color.

HYPOTHESIS 2:

Managerial expertise will moderate the relationship between the diversity program and diversity climate.

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DIVERSITY AMONG MANAGERS (HETEROGENEITY AMONG THE

MANAGEMENT TEAM)

The race and gender in the supervisor–employee relationship have proven important in shaping both affective and behavioral outcomes among the employees (Avery et al. 2007). For example, employees with dissimilar managers, along ethnic and gender lines, perceive less support and more discrimination than employees with demographically similar managers (Jeanquart- Barone 1996). This suggests that the racioethnic composition of the managerial team serves as an important and salient organizational signal regarding support for diversity. Extending this logic to the organizational level, actual diversity among management teams may operate as a salient and visible signal of the organization’s support for diversity. In the same way dissimilarity between the supervisor and employee results in negative outcomes in the dyadic relationship, overall heterogeneity of managerial team would seem important in the development of collective perceptions of a climate for diversity. As McKay and Avery (2006) state, ‘‘a potentially vivid signal of a firm’s diversity climate is to actually see or meet a number of minority employees…’’ When employees examine their organizational environments and draw conclusions regarding the overall support for diversity, a more diverse management team offers salient, unambiguous evidence of this support. (Arthur 1994; Baron and Kreps 1999; Delery and Doty 1996; Guthrie 2001; Pfeffer 1998; Walton 1985) and ‘‘relational’’ (Sun et al. 2007), (O’Reilly and Pfeffer 2000). (Argyris 1964; Likert 1961, 1967; McGregor 1960, 1967)The concern of diversity management is quite new. Therefore, few studies have beenexecuted to assess workplace diversity or to investigate discrimination. Kasımog˘lu and Halıcı (2000) developed a scale relating to discrimination for human resource management in the Turkish Higher Education Institutions. The results indicated that political opinions, religious beliefs, local community, gender, and age differences are influential on discrimination.Managing diversity means establishing a heterogeneous workforce to perform to its potential in an equitable work environment where no member or group of members has an advantage or a disadvantage (Torres and Bruxelles, 1992). Managing diversity includes a process of creating and maintaining an environment that naturally allows all individuals to reach their full potential in pursuit of organizational objectives (Jenner, 1994; Thomas, 1994). Diversity management emphasizes building specific skills, creating policies and drafting practices that get the best from

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every employee. It assumes a coherent environment in organizations and aims for effectiveness, productivity and ultimately competitive advantage. Through effective integration of diversity,. management principles in the key human resource functions of recruitment and selection, training and development, performance appraisal and remuneration, an organization can effectively manage workforce diversity.

Diversity practices in recruitment

Successful organizations can benefit from workforce diversity by creating an organizational environment which attracts people from diverse labor markets. Managing diversity promotes competitive edge by recruiting the best people for the job, regardless of ethnicity, age, gender or other individual characteristics (Cornelius, 1999). Since organizations often resort to internal promotions to fill vacancies, recruiting a diverse workforce at critical entry points to the organization also ensures that a diverse pool of talent is available for promotion. To achieve these objectives, recruitment and selection processes must be based on organizational and job-relevant criteria and managers who run these processes should be skilled in assessing the criteria (Kandola and Fullerton, 1994). Unfortunately, most of the research has indicated that steps and criteria followed by organizations to select and test candidates are inadequate or inappropriate for a number of applicants including minorities (Loveman and Gabarro, 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 different backgrounds, 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 relevant duties, qualifications, and experience and complies with anti-discrimination legislation. Other practices include attracting applicants by including advertisements in ethnic language press in addition to daily newspapers, presence of diverse managers on selection committees and implementing techniques that allow diverse people to answer questions to the best of their ability and potential (Morrison, 1992; Schreiber et al., 1993). Interviews constitute an important part of the selection process. However, researchers have found that interviewers have little or no understanding of special interviewing techniques that can be used when dealing with applicants from different ethnic backgrounds (Caudron, 1990; Morrison, 1992).

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Diversity practices in training and development

The goal of training and development programs of all organisations should be to maintain or improve the performance of individuals and, in so doing, that of the organisation (Anthony et al., 1999). Effective management of workforce diversity involves not just recruiting diverse employees but also retaining them. One way of increasing retention rates is by providing adequate training and development opportunities to employees.. Diverse employees often feel neglected and do not perceive any career paths. Employee development programs can address this problem, by preparing employees for future promotions. Best practices recommended in the area of training include: identifying specific training needs which are linked to the organisation's goals and objectives; assessing individual worker's training needs (both traditional and non traditional) to enable participation within a training program; developing individual annual training plans which cover knowledge, operational and interpersonal skills, facilitating individuals' entry into job/technical skills training; evaluating literacy, language and numeracy to assess ability to undertake job/technical training; linking training to award restructuring, enterprise agreements, process improvement and pay scales; and identifying present skills of staff through an audit process which assesses language, literacy, numeracy and skill competency levels (Adler, 1986; Grace, 1994; Morrison, 1992; Schreiber et al., 1993). In Australia, where 23 per cent of the populations are from non-English speaking backgrounds, literacy training assumes significant importance. Training programs for diverse employees can help to eliminate group differences in career outcomes and generate respect for individual differences in attitudes, values and behavior.

HYPOTHESIS 3:

Heterogeneity of management team is positively associated with diversity climate.

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MANAGERIAL RELATIONAL VALUESFinal contextual factors we consider in development of a diversity climate are the values and attitudes of the managers responsible for establishing and implementing diversity initiatives. (Tsui et al. 1995, 1997).(Arthur 1994; Baron and Kreps 1999; Delery and Doty 1996; Guthrie 2001;Pfeffer 1998; Walton 1985, Sun et al.2007) It means that if accompany have diversified management team i.e. people from different sects and background they will eliminate all types of discriminations faced by their sects and backgrounds and it will help to create training programs for employees and staff which will enhance diversity climate.(42 J Bus Psychol (2010) 25:39–53), (Abrahamson and Fairchild 1999). Though most often anecdotally derived, the adoption of a relational employment mode is suggested to begin with a fundamental valuing of and investment in employees by organizational leaders (O’Reilly and Pfeffer 2000). While this line of reasoning has a rich theoretic history (e.g. Argyris 1964; Likert 1961, 1967; McGregor 1960, 1967), few studies isolate and measure these basic beliefs of organizational leaders. However, when considered in relationship to diversity initiatives, the degree to which organizational leadership believes in the strategic importance of employees, referred to here as relational values, is a natural complement to both the adoption and implementation of diversity practices. However, these relational values cannot be experienced directly until they are enacted in the form of managerial practices and programs. (42 J Bus Psychol (2010) 25:39–53)

Diversity practices in performance appraisal

Effective performance management can make a major contribution towards the achievement of business objectives while maximizing the contribution of employees (Cornelius, 1999). A good performance appraisal system can help to enhance employee performance by evaluating how employees are doing on the job and giving them the chance to correct their mistakes and acquire new skills (Stewart, 1986). A performance appraisal system should be objective not subjective, relevant to the job and the company, and fair to all employees and offer no special treatment (Schuler et al., 1992). However, workplace diversity scholars point to the glass ceiling that is a barrier to promotion into management (Powell and Butterfield, 1994). Multicultural employees are often perceived as not having the ``right skills'' to move into management positions. Thus, the glass ceiling creates artificial barriers based on attitudinal or organizational bias that prevent qualified individuals from advancing upward in their organization (US Department of Labour, 1991).Several steps can be taken to improve the effectiveness of performance appraisal practices

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in the area of diversity. Minorities can be regularly included on panels that evaluate, select, and promote managers. The problem of assessing candidates who are ``different'' can be reduced, if some of the decision makers are non-traditional managers. Migrant representation on such panels can help to create objective criteria and fair performance appraisal practices. Multicultural employees must have equal opportunities and adequate preparation to take on demanding assignments in the future (Loden and Rosener, 1991; Morrison, 1992; Schreiber et al., 1993). Performance appraisal techniques should focus on appraising the individual's performance, not personality. Fulkerson and Schuler (1992) argue that the appraisal process should be as culturally neutral as possible.

Organizations can include effective management of workforce diversity as one of the criteria on which all managers will be assessed. For example, actions taken by the manager to hire and promote minorities and women can be used as performance criteria (Morrison, 1992; Sessa, 1992). Performance appraisal systems will improve employee performance only when these systems are seen as fair and unbiased.

Diversity and remuneration

Remuneration systems seek to improve employee performance by rewarding those who have made a contribution to the organisation's performance. Good remuneration systems ensure that there is a direct relationship between effort and reward. Thus, a performance-based pay system is viewed as being effective when the process of providing measurable rewards is appropriately linked to the individual or group performance. This is achieved within an agreed framework of planned goals, objectives and standards (Armstrong and Murlis, 1994). An effective pay system is the backbone of all policies concerning the acquisition and utilisation of human resources. The key outcome of an effective performance-based pay system is to improve an organisation's overall performance. According to Lowery et al. (1996), the otherm key aim of a pay system is to retain the most valuable employees by distributing the rewards in such a way that these employees are left with a feeling of satisfaction. An effective performance-based pay system should sustain 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 for migrant employees, since there is a direct relationship between pay and performance. Another method of reducing inequalities in income for multicultural employees is by giving good performers challenging assignments (Rosen and Lovelace, 1991; Schreiber et al., 1993). Such assignments prepare these employees for promotion to more senior positions in the organization (Loveman and Gerber, 1991; Schreiber et al., 1993; Kogod, 1992). Unfortunately, research indicates that the main problems that affect culturally diverse employees are inequality in income and bonuses, job recognition, promotions and assignment of responsibilities (Jackson et al., 1992; Grace, 1994). In addition, many traditional managers still prefer to give non-traditional employees responsibilities on a ``trial'' period before they become permanent (Morrison, 1992). This creates mistrust, lowers morale, and demotivates the non-traditional workforce. Cabezas and Kawaguchi (1988) found that an

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income gap exists between white managers and minority groups for the same amount of work and qualifications. This gap was attributed to barriers which created some discrepancies in recognition. Prejudice, for instance, contributes to an unwillingness to pay higher salaries, grant benefits, or give minorities freedom to do their jobs without constant monitoring. Studies by Goldin (1990) and Gerhart and Rynes (1991) revealed that there is still reluctance to give non-traditional managers the ,same authority and rewards that go to their white male counterparts. Differences in rewards for similar performance result in loss of motivation and lower job satisfaction.

HYPOTHESIS 4:

Managerial relational values will be positively associated with extensions of diversity programs.

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METHODOLOGY

The research paper demonstrates to discover the factors that influence customer satisfaction. The research use following research methodology.

POPULATION

Telenor Employees were taken as population for this research study. Survey was conducted from Top, Middle and Lower Management of Telenor.

QUESTIONEIR

For data collection a structured questionnaire was used as an instrument. Series of close ended questions were composed in order to get appropriate information from respondents. Questionnaire was divided into two parts, first was based on Demographical background. Second part based on dependent Variable (Diversity Climate) and Independent Variables (Diversity Programs, Heterogeneity Management Team & Management Relations Values) and Moderating Variable. (Managerial Expertise).

Five point Likert Scale was designed to measure the variables and the purpose was to indicate those variables that can be the reason to compel customers toward any other service provider

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Section 1: (Please tick the appropriate checkbox below)

Age

20 or below 21-25 26-30 31-35 36-40 41 or above

Gender

Male Female

Highest level of education

SSC HSSC Bachelors MBA/Ms/M.Phi/MBBS PHD

Monthly earning

Below 10,000 11,000-20,000 21,000-30,000 31,000-40,000 41.000-50,000 Above 50,000

Years with this organization

Less than a Year 1-5 Years 6-10 Years 10 or above

Nature of job

inside the organization outside the organization others

Section 2 (Please circle the appropriate checkbox below)

Diversity Programs Strongly Agree Agree Neither Disagree or Agree

Disagree Strongly disagree

1. Targeting and growing employee diversity is an important consideration in our recruitment and selection efforts.

1 2 3 4 5

2. We have a formal diversity policy and program in place for this department.

1 2 3 4 5

3. We take deliberate steps to grow the diversity of our work force by targeting and recruiting minority candidates.

1 2 3 4 5

4. We have processes in place to incorporate the perspectives of employees of all backgrounds and experiences in decisions in this department.

1 2 3 4 5

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Diversity Climate Strongly Agree Agree Neither Disagreed or Agree

Disagree Strongly Disagree

5. I feel that I have been treated differently here because of my race, sex, religion, or age

1 2 3 4 5

6. Different opinions, ideas, and perspectives are valued

1 2 3 4 5

7. Dept. chairs here make promotion and tenure decisions fairly, regardless of such factors as the faculty member’s race,sex or social background

1 2 3 4 5

8. I believe this firm strives to have a very diverse workforce

1 2 3 4 5

Managerial Expertise Strongly Agree Agree Neither Disagreed or Agree

Disagree Strongly Disagree

9. Does your organization have a formal succession planning process?

1 2 3 4 5

10. Proportion of Mgmt. Positions held by Women/Minorities? Disable Persons

1 2 3 4 5

11. Do you recognize and use the knowledge and expertise of staff that have insight into the audience you are targeting by involving these staff in the design/review process?

1 2 3 4 5

12. My Management is flexible and understands the important of balancing my work and personal life.

1 2 3 4 5

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Heterogeneity among the management team

Strongly Agree Agree Neither Disagree or Agree

Disagree Strongly Disagree

13. I am considerate of coworker’s group differences when I work with them.

1 2 3 4 5

14. Do you have diversity and equality of opportunity practices and policies in your company

1 2 3 4 5

15. Devalued your work and efforts. 1 2 3 4 516. Made false negative statements or

circulated negative rumors about you.

1 2 3 4 5

17. Paid little attention to your statements or showed little interest in your opinion.

1 2 3 4 5

18. Addressed you in unprofessional terms.

1 2 3 4 5

19. I am treated with respect by colleagues.

1 2 3 4 5

Managerial Relational Values Strongly Agree Agree Neither Disagree or Agree

Disagree Strongly Disagree

20. In my opinion, our employees’ capabilities are our main source of competitive advantage’

1 2 3 4 5

21. Employees will work harder if I show that I care about them personally

1 2 3 4 5

22. My primary responsibility is to create an environment that maximizes employee productivity and contribution level.

1 2 3 4 5

23. As long as employees continue to do a good job, they can expect to stay here as long as they want.

1 2 3 4 5

24. One of my core responsibilities as a leader is to prepare others for future promotion.

1 2 3 4 5

25. I believe that it is management’s obligation to provide all employees with long-term career opportunities.

1 2 3 4 5

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PROCEDURE

Questionnaire was distributed among 300 people. From the target sample 300 questionnaires were received Study used 50 questionnaires for final analysis and conducted descriptive statistics and correlation and regression analysis.

DEMOGRAPHIC PROFILE

Table below shows the demographical analysis of 50 respondents.

GENDER

Frequency Percent Valid PercentCumulative

Percent

Valid MALE 35 48.6 70.0 70.0

2.00 15 20.8 30.0 100.0

Total 50 69.4 100.0

AGE

Frequency Percent Valid PercentCumulative

Percent

Valid 20 OR BELOW 7 9.7 14.0 14.0

21-25 38 52.8 76.0 90.0

31-35 5 6.9 10.0 100.0

Total 50 69.4 100.0

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NATURE OF JOB

Frequency Percent Valid PercentCumulative

Percent

Valid INSIDE THE ORGANIZATION 23 31.9 46.0 46.0

OUTSIDE THE ORGANIZATION 3 4.2 6.0 52.0

others 24 33.3 48.0 100.0

Total 50 69.4 100.0

EARNING

Frequency Percent Valid PercentCumulative

Percent

Valid BELOW 10,000 34 47.2 68.0 68.0

11,000-20,000 1 1.4 2.0 70.0

21,OOO-30,000 6 8.3 12.0 82.0

31,000-40,000 8 11.1 16.0 98.0

6.00 1 1.4 2.0 100.0

Total 50 69.4 100.0

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EDUCATION

Frequency Percent Valid PercentCumulative

Percent

Valid SSC 1 1.4 2.0 2.0

HSSC 15 20.8 30.0 32.0

BACHELORS 32 44.4 64.0 96.0

MASTERS 2 2.8 4.0 100.0

Total 50 69.4 100.0

RESULTS AND ANALYSIS

For the analysis part of this research SPSS 18 were used. The following results has attained after inserting the linear regression

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CorrelationsTable 1

DIVERSITYPROGRAM

DIVERSITYCLIMATE

MANAGERIALEXPERTIZE

HETROGENITYOFMANAGEMENTTEAM

MANAGERIALRELATIONA

LVALUES

DIVERSITYPROGRAM Pearson Correlation 1 .580(**) .522(**) .460(**) .364(**)

Sig. (2-tailed) .000 .000 .001 .009

N 50 50 50 50 50

DIVERSITYCLIMATE Pearson Correlation .580(**) 1 .611(**) .674(**) .455(**)

Sig. (2-tailed) .000 .000 .000 .001

N 50 50 50 50 50

MANAGERIALEXPERTIZE Pearson Correlation .522(**) .611(**) 1 .691(**) .422(**)

Sig. (2-tailed) .000 .000 .000 .002

N 50 50 50 50 50

HETROGENITYOFMANAGEMENTTEAM

Pearson Correlation .460(**) .674(**) .691(**) 1 .429(**)

Sig. (2-tailed) .001 .000 .000 .002

N 50 50 50 50 50

MANAGERIALRELATIONALVALUES

Pearson Correlation .364(**) .455(**) .422(**) .429(**) 1

Sig. (2-tailed) .009 .001 .002 .002

N 50 50 50 50 50

** Correlation is significant at the 0.01 level (2-tailed).

The influence of the diversity program on the diversity climate the r is .580 this indicates a moderate positive linear relationship.

The influence of heterogeneity of management team on the diversity climate is 0.674 this indicates a moderate positive linear relationship.

The influence of Managerial relational values on the diversity program are 0.364 this also indicates a moderate positive linear relationship.

Positive coefficients tell us there is a direct relationship:  when one variable increases, the other increases.  So the coefficient for the relationship between Diversity Program and Diversity Climate is .580, and it is positive.  This tells us that, just as we predicted, as Diversity program

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increases, Diversity Climate increases.  Which means that the relationship is “perfect” (a coefficient of 1). 

Regression

After setting linear regressions, the following results were acquired.

In the table adjusted R-square is showing that the dependent variable (Diversity Climate) is 52.30 % influenced by independent variables (Managerial Relational Values, Diversity Programs & Heterogeneity among Management). Since R Square is far from one so it indicates that these variables have less but positive impact on Diversity Climate of the organization.

Table: 1

Model Summary

Model R R SquareAdjusted R

SquareStd. Error of the Estimate

1 .750(a) .562 .533 .51468

a. Predictors: (Constant), MANAGERIALRELATIONALVALUES, DIVERSITYPROGRAM, HETROGENITYOFMANAGEMENTTEAM

ANOVA

The below table of ANOVA explained that overall model was significant. Since the sig. value is less than 0.05 so it indicates that the model is statistically significant. It is clear that all the independent variables, that is, Managerial Relational Values, Diversity Programs & Heterogeneity among Management).are connected to the dependent variable, that is, Diveristy Climate.

Table: 2

Model Sum of

Squares df Mean Square F Sig.

1 Regression 15.626 3 5.209 19.664 .000(a)

Residual 12.185 46 .265

Total 27.811 49

a. Predictors: (Constant), MANAGERIALRELATIONALVALUES, DIVERSITYPROGRAM, HETROGENITYOFMANAGEMENTTEAM

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b. Dependent Variable: DIVERSITYCLIMATE

Coefficients (a)

Model

Unstandardized Coefficients

Standardized Coefficients t Sig.

B Std. Error Beta B Std. Error

1 (Constant) .322 .318 2.012 .041

DIVERSITYPROGRAM .362 .130 .313 2.787 .008

HETROGENITYOFMANAGEMENTTEAM .467 .115 .470 4.058 .000

MANAGERIALRELATIONALVALUES .201 .159 .140 2.263 .002

A Dependent Variable: DIVERSITYCLIMATE

Results of Pearson Correlation are shown in given table. The table indicates the relationship between the overall Diversity Programs, Heterogeneity Management Team & Management Relations Values. The results indicate that the overall Diversity Programs has a significant relationship with the Heterogeneity Management Team & Management Relations Values. (r=0.467, p<0.00). This particular finding confirms the hypothesis

H3 the influence of heterogeneity of management team on the diversity climate indicates a moderate positive linear relationship.

H4 the influence of Managerial relational values on the diversity program this also indicates a moderate positive linear relationship.

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RELIABILITY OF THE SCALE

The table below shows the reliability of the data collected from respondents. The following table show that the data collected from mentioned sample is reliable and respondents answered accurately because the variables are exceeding from 70% or are near to 70% which is the standard of acceptance for reliability.

The below table calculations suggest that the responses given by respondents of the study are reliable.

Reliability of the variablesS.No Variable Cranach’s Alpha

1 Diversity Climate .607

2 Diversity Programs ..609

3 Heterogeneity Management Team .798

4 Management Relations Values .714

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Moderating Variable

Descriptive Statistics

Mean Std. Deviation N

DIVERSITYCLIMATE 2.5050 .75338 50

MANAGERIALRELATIONALVALUES 1.9100 .52187 50

HETROGENITYOFMANAGEMENTTEAM 2.3686 .75873 50

DIVERSITYPROGRAM 1.9150 .65194 50

Correlations

DIVERSITYCLIMATE

MANAGERIALRELATIONA

LVALUES

HETROGENITYOFMANAGEMENTTEAM

DIVERSITYPROGRAM

Pearson Correlation DIVERSITYCLIMATE 1.000 .455 .674 .580

MANAGERIALRELATIONALVALUES .455 1.000 .429 .364

HETROGENITYOFMANAGEMENTTEAM .674 .429 1.000 .460

DIVERSITYPROGRAM .580 .364 .460 1.000

Sig. (1-tailed) DIVERSITYCLIMATE . .000 .000 .000

MANAGERIALRELATIONALVALUES .000 . .001 .005

HETROGENITYOFMANAGEMENTTEAM .000 .001 . .000

DIVERSITYPROGRAM .000 .005 .000 .

N DIVERSITYCLIMATE 50 50 50 50

MANAGERIALRELATIONALVALUES

50 50 50 50

29

HETROGENITYOFMANAGEMENTTEAM 50 50 50 50

DIVERSITYPROGRAM 50 50 50 50

Model Summary

Model R R SquareAdjusted R

SquareStd. Error of the Estimate Change Statistics

R Squar

e Chang

e F Change df1 df2 Sig. F ChangeR Square Change F Change df1 df2

1 .750(a) .562 .533 .51468 .562 19.664 3 46 .000A. Predictors: (Constant), DIVERSITYPROGRAM, MANAGERIALRELATIONALVALUES,

HETROGENITYOFMANAGEMENTTEAM

ANOVA (b)

Model Sum of

Squares df Mean Square F Sig.

1 Regression 15.626 3 5.209 19.664 .000(a)

Residual 12.185 46 .265

Total 27.811 49

A. Predictors: (Constant), DIVERSITYPROGRAM, MANAGERIALRELATIONALVALUES, HETROGENITYOFMANAGEMENTTEAM

B. B Dependent Variable: DIVERSITYCLIMATE

30

31

Collinearity Diagnostics (a)

Model Dimension

EigenvalueCondition

Index Variance Proportions

(Constant)

MANAGERIALRELATIONA

LVALUES

HETROGENITYOFMANAGEMENTTEAM

DIVERSITYPROGRAM (Constant)

MANAGERIALRELATIONA

LVALUES

1 1 3.857 1.000 .00 .00 .00 .00

2 .060 8.019 .12 .18 .00 .85

3 .049 8.875 .12 .06 .99 .14

4 .035 10.567 .76 .76 .01 .01

a Dependent Variable: DIVERSITYCLIMATE

CONCLUSION

The main aim of this research was to find the Workforce Diversity in the organizations from the above results, following findings and conclusion is drawn. It is concluded that Diversity Climate is the key factor contributing towards Workforce Diversity in the organization. Keeping the findings of this research it is very obvious that the organizations should always continue to emphasize on Diversity Programs, Heterogeneity Management Team and Management Relations Values in organizations

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