Culturally Diverse Workforces: Opportunities and Challenges
Organizations are facing major challenges associated with having more culturally diverse workforces.? The concerns about workforce diversity prior to the last decade focused almost exclusively on gender and racial differences.? This article will focus on cultural diversity that is attributable to national/ethnic, occupational and generational differences.? It will explore both opportunities and challenges associated with these differences.??
National/ethnic Diversity
National/ethnic diversity in a workforce is not necessarily due to organizations crossing national borders… even if they do not go out to the world the world comes to them.? The mobility of people and critical skill shortages have resulted in people being able and willing to go to places where they can best achieve their objectives.? In some cases remote work arrangements mean no one has to move. Organizations employing these individuals must cope with their cultural orientations in some fashion if they are going to be able to attract and retain them.? There is a large body of research on cultural diversity attributable to national/ethnic differences.? Trompenaars sums up the challenges presented to organizations with his “3 Rs.”? First, organizations must recognize cultural differences.? Second, they must respect the rights of people to hold different beliefs.? And third, they must reconcile the issues raised by cultural differences.(1) In the book? Rewarding Performance Globally we explored the tradeoff between trying to use a single performance and rewards management strategy globally and customizing strategies to fit local contexts and cultures.(2)?
Occupational Diversity
Occupational diversity is often not recognized as a source of cultural differences.? But the manner in which people are educated/trained, the nature of the work they perform and the way in which their performance is measured all differ across occupations.? For example, technical professionals (i.e., Engineers and Scientists) tend to be more focused on their profession and their standing within their profession than on their employing organization.? They will adhere to the professional standards relevant to their work even though there may be conflicts with the priorities of the organization, resulting in a dilemma: should the product design be “good enough” or “as good as it can be?”? When organizations define, measure and reward the performance of professionals they often find that the cycle of the work does not align with administrative cycles and that performance metrics are difficult to define and measure objectively.(3)
Generational Diversity
Generational diversity has received considerable attention over the last decade, since for the first time it is common for organizations to employ people from three and even four generations at the same time.? Names have been given to these cohorts and characteristics of each generation studied extensively.? Largely due to the environmental circumstances within which each of these generations matured and were socialized their priorities and expectations differ in many ways.(4)
Recognizing Cultural Diversity
In order for employees to believe that workforce management policies and practices are fair, competitive and appropriate they must be consistent with their beliefs, values, priorities and expectations.? So how does the organization identify the sources of diversity so they can be considered when human resource management strategies are formulated?
If the individual employees were to be mapped into a classification system with three dimensions (a cubic model) the three sources of cultural difference could be integrated into a decision-making tool.? For example, a twenty-five-year-old Brazilian Accountant would be expected to differ from a forty-five-year-old German Machinist or a fifty-five-year-old American Engineer.??
But there are two major potential problems with this approach.? First, stereotyping individuals based on these three dimensions is apt to produce a false sense of reality.? Some Brazilians will behave more like Americans than some Americans. Some Germans are more like Americans than some Americans.(5)? This overlap makes clean classification into national/ethic categories simplistic.? Although occupations can be separated into clusters how will the borders of these clusters be defined… is a Design Engineer in R&D treated the same as a Facilities Engineer in Manufacturing?? Finally, although age expressed in years provides a quantitative metric how does one define the boundaries between the classifications?? The Traditional – Boomer – Generation X – Generation Y/Millenial? - Generation Z classifications most often used in the literature are arbitrary and it is very likely that late Boomers may behave more like early Gen Xers than late Gen Xers.
Even if the classifications using the three dimensions are acceptably accurate, what does an organization do to respond to them?? Separate staffing, development, performance management, rewards management and employee relations strategies for each cell in the cube could be impractical.? The discrimination laws existing in countries such as the U.S. would create a full employment guarantee for lawyers.
So, the critical question is when the differences are recognized, what should the organization do to address them?
Respecting Cultural Differences
If organizations employ a “my way or the highway” mindset they can create a mismatch with individual values and beliefs and expose themselves to unintended consequences that could significantly damage employee satisfaction and engagement.? That could then lead to unwanted turnover, inability to attract the required talent and/or diminished employee motivation and performance. ? An example would be accommodating employee preferences for allocating an incentive fund earned as a result of plant performance.? If the employees in one plant whose cultural makeup embraces a collectivist view they may believe it took everyone to produce the results and that everyone should share equally, while employees in another region where a more individualistic perspective prevails the people might tend to believe individual performance should be appraised and rewarded, which approach should the organization adopt?? Mandating the same approach is unlikely to maximize the perceived fairness in both plants… if one or the other approach is used there will be winners and losers, based on their preferences, and the same amount of money will still be spent.? The organization also loses because one-half of its employees are dissatisfied.
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But attempting to accommodate employee preferences is often restricted by laws and regulations. Differentiating in conditions of employment based on differences other than job-related performance can be illegal or unacceptable.? Even though many people are happiest when those they work with are “like them” attempting to produce a homogenous result may put the organization in legal peril. They may also forego the benefits of a cognitively diverse workforce. Attempting to accommodate someone’s wishes sends the strong message that the organization cares about its people and that it respects their right to be different.? But segregating work units by gender may violate U.S. law, even if the practice were prevalent in a country where a U.S. firm had set up operations.
Reconciling Cross-Cultural Issues
Reconciling issues caused by differences is often much more difficult than recognizing and respecting differences.? Even though an employer might accept that some employees believe that younger workers should not earn more than older workers it would be difficult to enforce a merit pay system that was indifferent to age and still avoid discontent among the workers holding that belief.??
Some organizations feel they must adhere to the policies and practices that have made them successful, even if it means not doing business in countries where they are not accepted.? Lincoln Electric for decades used pay systems they believe are a source of competitive advantage and withdrew from countries where their philosophy was in conflict with local cultural preferences.? Other organizations might have conceded and adopted practices that were in line with local preferences, even when they did not think these practices to be the optimal choice.? After all, if an organization does not succeed in using approaches that employees perceive as fair, competitive and appropriate motivation and satisfaction are bound to suffer.??
The Bottom Line
Diverse workforces are a reality in today’s globalized environment.? Being able to manage a diverse workforce is a critical management competency.? Ignoring, rejecting or failing to deal with differences in employee values, beliefs and preferences will result in poor business results and prevent organizations from realizing an optimal return on their most important asset.
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About the Author:?Robert Greene, PhD, is CEO at Reward $ystems, Inc., a Consulting Principal at Pontifex and a faculty member for DePaul University in their MSHR and MBA programs. Greene?speaks and teaches globally? on human resource management. His consulting practice is focused on helping organizations succeed through people. Greene has written 4 books and hundreds of articles about human resource management throughout his career.