SHRM of Workforce Diversity and Work-Life Demands - Literature review Example

Name: xxxxxxxxxxxxxxxx Course: xxxxxxxxxxxxxxxx Institution: xxxxxxxxxxxxxxxx Subject: Literature Review Date: xxxxxxxxxxxxxxxx SHRM of workforce diversity and work-life demands Introduction Armstrong (2000), views Strategic Human Resource Management (SHRM) as a proactive management process that links Human Resource Management (HRM) practices to the strategic goals and objectives of an organization so as to promote performance and increase the competitive advantage of an organization. Workforce diversity is an increasingly imperative aspect of human resource management. In HRM, workforce diversity is considered as a multifaceted factor that is defined as the visible and invisible differences between the various personnel within the organization. The management of workforce diversity can have positive impacts on the organization in that it can lead to flexibility and innovation thus promoting the competitive advantage of the organization (Hartel & Fujimoto, 2010).On the other hand, poor management of workforce diversity can contribute to high turnover and decreased work satisfaction. The practise of developing and implementing HRM policies and practises with the aim of promoting the positive outcomes of work-force diversity is often referred to as diversity -oriented HRM. Diversity-oriented HRM can be incorporated into a number of HRM practices namely; training and development of the workforce and recruitment and selection. These HRM practices in most cases provide convenient, balanced and fulfilling work life for the workforce this can in turn increase the competitive advantage of the organization (Hartel & Fujimoto, 2010). This paper seeks to provide an incisive review of contemporary research literature and theory. It will critically evaluate how SHRM of workforce diversity and work-life demands can impact the competitive advantage of an organization. Moreover, this paper will identify evidence that support and challenge the existing views with regards to SHRM of workforce diversity and work-life demands. In addition, this paper will identify the limitations and assumption put across in research studies or views revolving around how SHRM of workforce diversity and work-life demands can impact the competitive advantage of an organization. Workforce diversity and Diversity-oriented SHRM Judy & D’Amico (1997), observes that workforce diversity in the 21st century extends beyond the traditional perceptive of viewing diversity in terms of race and gender. Currently, workforce diversity can be viewed in terms of age, physical abilities, values and beliefs, culture, economic position, and management ideologies among many other factors. The current corporate culture accentuates on the concept of inclusion which is based on societal beliefs that every individual deserves an equal opportunity and that each individual should be treated with respect and dignity. Values on equality, dignity and respect form the cornerstone of workforce diversity (Gardenswartz et al, 2003). Furthermore, demographic changes have affected the available talent and labor pool thus causing work force diversity to be considered as an imperative factor in today’s competitive market place (Hart, 1997). Studies confirm that a diverse workforce performs better when diversity oriented SHRM practices are implemented. These practices support and assert that diversity within the workforce is a valuable asset to the organization. The Australian society is steadily becoming multicultural due to the increased migrant population (Wilkinson & Cheng 1999; Australian Bureau of Statistics 1999).Therefore the efficiency, level of innovation, competitiveness and market share of an organization in largely dependent on the organization’s ability to manage work force diversity within the organization (Barker & Härtel 2004). Sadly, the literature available presently gives little information on the management practices in which diverse workforces can be based on (Pelled, Eisenhardt & Xin 1999). Moreover, the literature available presently reflects a conflicting picture on the effects of diversity on interactions in the organization. Some studies portray the positive impacts of workforce diversity whereas other studies show the negative effects of diversity in the workforce. (Härtel & Fujimoto 1999; Milliken, & Martins 1996). A study conducted by Goodman et al (2003), sought to establish the outcomes of implementing specific SHRM practices on measures of diversity within the workforce. The findings of this study were based on a survey that was conducted on HR managers in various organizations. The results of this study showed a positive relationship between the representation of women and emphasizing employee promotion and development. Konrad and Linnehan (1995) establish that greater representation of minorities and women in management positions is likely to occur in HRM structures that are identity conscious and those that clearly put into account the demographic representation in HRM decision making with regards to matters such as goals on diversity hiring. By using data from the National Organization Survey, Reskin & McBrier (2000), revealed that organizations which have formalized HRM practices revolving around hiring and firing had a high percentage of minority groups and women in management positions. Reskin & McBrier theorized that when formal HRM practices are adopted, promotion opportunities and status positions were less likely to be given on the basis of ascribed characteristics such as gender. Conversely, some research studies depict that SHRM diversity practices cannot be linked to the increase of workforce diversity. Rynes and Rosen (1995) in their study of “Society for Human Resource Management (SHRM) members” established that there is little support for the correlation of diversity training and the increase of diversity within the work force. Furthermore, Konrad and Linnehan (1995) established that there was no link between the percentage of minorities in higher positions of management and formalized SHRM structures. In addition, Blum, Fields and Goodman (1994), found out that organizations with great work force diversity can be worse work places characterized by high turnover and low salaries. Generally research studies have shown a positive link between workforce diversity and SHRM. Nonetheless, the impact of SHRM diversity practices on the overall performance of organizations will be discussed below. SHRM diversity practices Training Training in the context of diversity in the workforce, plays a significant role when it comes to retaining and developing employee talents and skill. Training enhances harmony within the workforce and enables employees to learn about the values of their counterparts. Furthermore training helps employees to develop their leadership skills and it also help the organization to improve on its cross cultural communication (Grant, & Kleiner, 1997). Training also raises awareness and understanding of diversity by revealing hidden biases and assumptions thus heightening sensitivity to the differences between members in the work force. It also helps individuals within the workforce to foster group and individual sharing. Diversity trainings that are based on skills help to improve the morale creativity and productivity of employees through intercultural communication. Organizational training such as team building, mentorship programs and leadership development promote collaboration and growth within the organization. Basically, training is an effective tool that can be used to better the performance of employee thus promoting the competitive advantage of an organization (Grant, & Kleiner, 1997). Attracting and Retaining Talent Competition for talented and skilled personnel is gradually increasing in most industrialized countries. One of the key challenges facing organizations today revolves around attracting skilled personnel and retaining the old talent. Many HRM leaders attract and retail skilled personnel through programs like reward initiatives and work arrangements that are flexible. On the other hand, some studies depict that a good number of organizations do not pay much attention to promotion and retention strategies. For instance, top talents from minority groups seek leadership opportunities whereas the management of organizations still claim that they experience difficulties attracting talent for leadership positions (Towers Perrin HR Services, 2004). In many organizations, the “revolving door syndrome” is apparent particularly for minorities and women. In such cases minority groups and women feel like they are disadvantaged by the management practices and policies in the organization and as a result they perform averagely or poorly some may seek employment elsewhere. In order to retain minorities and women within the organization, HR managers should meet the work –life demands of these groups by providing flexible work arrangements, succession planning, communication forums, career development and mentoring programs(Hewitt Associates , 2004). By Aligning the HR diversity practices with the strategic goals of the organization Hubbard (2004) observes that in order for an organization to fully utilize the potential of its employee, it is essential for the organization to align its HR diversity practices with its strategic organizational goals. One of the ways in which this can be realised is through clear definition of the expectations of diversity initiatives and the role that diversity plays within the organization. This can be embedded in the organizations’ philosophy, vision and mission statements. Moreover, it is essential for the organization to communicate commitment by providing the needed resources, time and budget. Organization can also communicate commitment by recruiting diversity or marginalized groups within the organization for leadership positions (Hubbard, 2004). A study conducted by Matton & Hernandez (2004) established that effective diversity initiatives revolve around dialogue, networking and evaluation. Based on this study, organizations can enhance their competitive advantage by initiating and maintaining continuous dialogue with employees and the personnel in leadership on diversity management strategies. Furthermore, Matton & Hernandez (2004) observe that networking with different HR professions is imperative since it helps the HRM of an organization to learn the various approaches of managing diversity and countering the existing challenges. In addition it is essential for an organization to conduct a top-bottom evaluation regularly on the organization programs and policies in order to determine the existence of any challenges or biases (Matton & Hernandez, 2004). Impact of SHRM diversity practices on the competitive advantage of organizations Cox and Blake (1991) assert that organizations that value diversity and implement SHRM diversity practices exhibit a higher-quality of group decision making, innovation, more organizational flexibility and greater creativity. These factors can be attributed to divergent thinking, great marketing capability and ability to attract and retain the best talent within the organization. Moreover, these objectives are actualized through interventions and HRM strategies such as altered selection processes and conflict management. Some of these HRM interventions target both formal and informal outcome, formal outcome include productivity and turnover whereas informal outcomes include cultural experiences, team work, employee interactions and individual commitments to organizational goals (Cox & Blake, 1991). Richard, Kochan & McMillan-Capehart (2002) note that a diverse workforce that has effective SHRM diversity practices can increase customer demand for the organization’s services and products. According to the Resource-based strategic theory, organizations that have greater cultural diversity effectively attract diverse product markets, furthermore these organizations posses a more complex and unique social resources (Richard, 2000).Catalyst (2004) carried out a study with the aim of determining the relationship between organization performance and gender diversity in top management. The findings of his study depicted that in organizations characterized by top management gender diversity there was a 35% higher return as compared to other organizations. Another field study examined the effects of gender and racial differences on organizational performance. Based on the findings of this study, the authors concluded that there are few direct effects of SHRM diversity practices on the overall performance of organizations (Kochan et al, 2003). It is therefore evident that research studies that suggest that the relationship between organizational performance and the presence of SHRM diversity practices may not be direct-simple negative or positive relationship. Rather, this relationship is dependent on the kind of strategy that is followed with regards to growth or innovation. A survey conducted in over 500 banks by Richard’s (2000) established that banks that constituted of racial diversity and SHRM diversity management strategies realised higher returns on net income and equity per employee as compared to banks which had a diverse workforce with no SHRM diversity management strategies. Frink et al. (2003) observes that an inverted U- shaped relationship between organizational performance and gender composition may vary by industry. Based on the findings of different datasets, Frink et al. suggest that an increase in the representation of women is related to the employee perceptual measures of productivity .Richard et al. (2002) points out that these cross-sectional studies are based on literature revolving around organizational outcomes of a particular industry. In other words, some of these research studies do not the address the question of variance of organizations or industries. In addition these studies do not establish whether diversity or SHRM diversity practices are the main cause of increased competitive advantage in organizations (Richard et al. 2002). Conclusion The Australian society is steadily becoming multicultural due to the increased migrant population (Wilkinson & Cheng 1999; Australian Bureau of Statistics 1999).Therefore the efficiency, level of innovation, competitiveness and market share of an organization in largely dependent on the organization’s ability to manage work force diversity within the organization (Barker & Härtel 2004). In HRM, workforce diversity is considered as a multifaceted factor that is defined as the visible and invisible differences between the various personnel within the organization. Workforce diversity is an increasingly important factor in human resource management. The management of workforce diversity can have positive impacts on the organization in that it can lead to flexibility and innovation thereby enhancing the competitive advantage of an organization (Hartel & Fujimoto, 2010).At the same time, ineffective management of workforce diversity can lead to high turnover and decreased work satisfaction. Studies confirm that a diverse workforce performs better when diversity oriented SHRM practices are implemented. On the other hand, some research studies depict that SHRM diversity practices cannot be directly linked to the overall performance of organizations. Literature available presently reflects a conflicting picture on the effects of diversity on interactions in the organization. Some studies portray the positive impacts of workforce diversity whereas other studies do not depict a direct relation between SHRM diversity practices and the overall performance of organizations (Richard et al. 2002). References Armstrong, M. (2000). 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