New research underlines the link between diversity and productivity

Sirota Consulting has examined the attitudes of over 3,000,000 employees worldwide and identified a compelling case for managing diversity proactively.

In Summary
Organisations that create an environment of inclusion can expect their business to be one that:

- Fosters innovation;
- Creates a safer work environment;
- Drives employee engagement, commitment and pride;
- Sees a positive impact on customer satisfaction;
- Drives financial performance.

Douglas Klein, President of Sirota comments:
In our research weíve been able to show that the employment needs and expectations of employees across the globe are not unique, but universally shared

These employment needs and expectations can best be summarised in 3 categories:

- Camaraderie - Having warm, interesting, and cooperative relations with others in the workplace; achieving a sense of community, belonging, collegiality Achievement - Doing things that matter and being enabled to do them well; receiving recognition for accomplishments and taking pride in them Equity - Being treated justly in relation to the basic conditions of employment, particularly with respect to others in the organisation and minimum personal/societal standards

The final theme, Equity, has been shown to be closely related to employeesí perceptions of inclusion and tolerance of others. In organisations where just one of these factors is left unmet, levels of employee enthusiasm can be reduced ñ none more so than when equitable treatment is perceived by employees to be absent. In this case, overall enthusiasm can drop dramatically. This reinforces the need for managers to invest the time and resources needed to deal proactively with the things that drive equity - diversity being an important element.

This research underlines the point that diversity is more than simply compliance, in terms of factors such as ethnicity and gender in the workforce. It is about the value to organisations of equality and inclusion ñ of diverse ideas, viewpoints, talent and experiences.

Nick Starritt, Managing Director of Sirota Europe, comments:
Many HR professionals in the UK have heard from colleagues in the USA that diversity is a big issue, but in the USA ñ as could well become the case in the UK ñ diversity has been tainted by mandates from government. Excesses of quotas and targets can so easily derail diversity initiatives, and the UK is headed this way unless organisations can identify and understand the real business benefits behind delivering diversity. Our research points out some of these benefits, as well as revealing connections between what employees want and what drives successful business performance.


The Study in context
Sirota Consulting has been surveying employee attitudes globally for more than 30 years. The objective of Sirotaís survey process is to assist management in monitoring and improving the human side of organisation effectiveness. It is people who produce well or poorly, stay or leave, cooperate with or resist management -- and they take these actions based on their views (not managementís) of their work and work environment. The attitude survey is a systematic approach for going directly to the work force. It involves carefully designed questionnaires to measure what employees know, how they feel, why they feel the way they do, and how their knowledge and feelings affect their behaviour. Sirota Consulting typically studies areas such as leadership effectiveness (vision, trust, etc.), basic employee treatment (respect for employees, diversity, etc.), performance direction (clarity, kind and challenge of goals), performance enablement (authority, information, communication, cooperation, etc.), reward and recognition (financial and non-financial), the work itself (challenging, skills utilised, etc.), process quality, and work and lifestyle balance, etc. These areas are studies because they are major determinants of employee engagement (satisfaction, commitment, pride and loyalty) and behaviour. As such, they represent key facilitators of, or impediments to, an organisationís ability to meet the needs and requirements of its customers and to achieve its financial goals.

Nearly all of Sirotaís surveys include demographic data, covering aspects such as gender, race, tenure and ethnicity. Less frequently, Sirota includes other dimensions such as sexual orientation or disability. Apart from these dimensions, less obvious but very important diversity can be found in terms of the views of managers versus non-managers, and by segmenting employees between professional, administrative and hourly-paid categories. All these constituencies constitute a varied ñ and literally diverse ñ data set and spectrum of attitudes. From their huge database, Sirota has identified a sub-set of three million employees who have self-coded themselves in ways that allow analysis by diversity demographic. It is this worldwide sample that forms the basis for the research.

As a final note, while the study segments the data into classical dimensions of diversity (gender, race, occupational category etc.), the authors take the view that what is increasingly apparent is the desire that successful organisations have to create an atmosphere of inclusion, where all employees can contribute. Indeed, the data reveals that without an inclusive environment, diversity initiatives may be wasted or even counter-productive.


The Results
Sirota notes that definitions of what constitutes diversity are changing, away from a focus simply on group membership (i.e. race or gender) towards an approach that values inclusion. This means asking questions that address dimensions of what has become known as the ëEmployment Value Propositioní, i.e. the totality of what the employee perceives to be on offer at the workplace. This includes employment ethics, employee involvement, whether individuals are treated with respect & dignity, encouraged to innovate etc.

The composition of the database is worth summarising. Of the three million employees, the preponderance is North American in nationality but the database includes three-quarters of a million employees from outside North America. Similarly, while the majority (69%) is white more than 700,000 are not. There is roughly equal representation of the two genders. 1 out of 6 in the database is a manager. Tenure of the three million is fairly evenly spread in clusters from those with less than 2 years service, through to those with between 10 and 20 years service.

Sirotaís research ñ including and beyond this study ñ shows that, in general, all classes of employee seek three things from their work: to experience equity, achievement and a sense of camaraderie. Equity comprehends the feelings of being treated justly in relation to the basic conditions of employment - from a safe work environment to satisfactory compensation and, being treated respectfully and fairly. Achievement addresses the need workers feel to take pride in oneís accomplishments by doing things that matter, and doing them well ñ as well as pride in the organisationís accomplishments. Camaraderie is a third goal: to have warm, interesting and cooperative relations with others in the workplace. From more than 30 yearsí research, Sirota has found these three needs to be consistently present in all organisations, irrespective of age, gender or other demographic characteristic. What changes of course, is the degree to which employees feel these things are present in the workplace. What also differs is how various groups react to the leadership and management practices they experience inside their respective organisations.

In common with most attitudinal survey researchers, Sirota asks multiple questions about dimensions of the work environment, using a five point scale that typically asks for reactions from each respondent from strongly agree (or ëvery favourableí), to strongly disagree (or ëvery unfavourableí). Data are reported typically in terms of ëpercent favourableí ñ which is the combination of those recording ëvery favourableí and ëfavourableí responses (the favourability score). Generally, a five-point difference in scores is significant and noteworthy.
High-lights from the data include the following results.

In answer to the question: Has your company created an environment where people of diverse backgrounds can succeed? The data shows:

Little difference by gender, except in N.America where men at 81% are more favourable than women at 76% In ethnicity terms, the majority group is invariably more positive. Whites in N.America record the highest scores at 80% and blacks the lowest at 65%. In Europe, the favourability scores show a tighter distribution, ranging from a high of 74-75% for both white and blacks, to a low of 64% for those of Latin ethnicity. Interestingly, Latinos elsewhere record the most positive scores ñ even when in the minority group. In Africa, the whites (predominantly in South Africa) exhibit much lower favourability at 58% than the blacks at 75% Favourability wanes as tenure increases, uniformly across all continents. New employees (less than 2 years service) record among the most positive scores of all classes, at between 82-85% in Europe and N.America, for example. After 10 years service however, this drops significantly to 75-76% for the two corresponding groups Management is markedly more positive than non-management. 5 point differences occur in both Europe and N.America between these respective populations.

When asked about overall satisfaction with their company, the data shows similar patterns, except that:

The majority group is often not the most positive. Thus, Asians in N.America are more favourable than whites, whereas whites and blacks are more favourable than Asians inside Asia/Pac, and Latinos are consistently more positive about their overall job satisfaction than other ethnic groups.

When measured between various job levels (management, professional, administrative and hourly), the data shows significant differences in favourable attitudes. Management exhibit a markedly more positive attitude at 63% than either professional or administrative staff; hourly paid workers trail all other categories at 51%. Unbundling the various aspects of overall satisfaction reveals further significant disparity of views. Thus, on the question of ethics inside their organisations, hourly workers score 17 points lower than management (in their perceptions of the company acting ethically). While some hourly workers feel the company could act more ethically many often comment on how they feel they are being treated by the company ñ and equate poor treatment with lower ethics. It is findings like these that begin to inform the larger debate on the creation of a truly incusionary environment.

In terms of attitudes among those employees with different sexual orientation, the data reveals ñ perhaps not surprisingly ñ lower scores among homosexuals than heterosexuals. Homosexuals are less positive about the workplace environment than heterosexuals across a wide variety of dimensions. Although the dataset is much smaller than used for the other analyses (approximately 4000 people chose to record themselves as homosexual when asked, out of a total population of approximately 105,000), the data reinforces the point that employers who wish to appeal to individuals regardless of sexual persuasion have plenty of work to do to create an inclusive environment.

Among the most significant insights from the data is the question of what most drives enthusiasm and engagement: the personís demographics or the management practice? Resoundingly, the answer is the latter. When the data is clustered under the themes of Equity, Achievement & Camaraderie ñ the three factors universally desired by employees ñ and where all three elements are present to a high degree, we see that 45% of respondents score very favourably. In other words, approaching one-half of the population selects the highest score in the rating scale when all three elements are perceived to exist. But when equity (the feelings of being treated justly in relation to the basic conditions of employment) is missing or rated low, we see that number plunge by more than two-thirds, and only 13% score with the most favourable rating. Equity ñ a key component of an inclusive environment in our data ñ is therefore a principal driver of enthusiasm and engagement.

In other research Sirota Consulting has calculated the effect of allowing person-level demographics (race, gender, tenure, etc.) to compete with culture ratings (as measured by an employee survey), with regards to the impact on key outcomes like employee engagement. While person demographics certainly play a role (that is, tenure in the organisation does ñ over and above everything else ñ predict engagement levels), culture ratings are ~700 times more important. Thus, the strongest lever a CEO has to create an engaged and committed workforce is the culture he/she creates through company and leadership practices. Addressing diversity from a demographics perspective (while needed and necessary for legal compliance purposes) is therefore a tactical response, not a business strategy.

Does Diversity and Inclusion Affect Business Results?
When survey data is coupled with available operating data ñ itself as diverse as safety in manufacturing plants to tornado prediction times at weather forecasting bureauxñ the results reveal important correlations. We can see the extent to which answers to questions such as, Differences among individuals (e.g. gender, race, and disability) are understood and accepted in my place of work correlate with operating performance or customer satisfaction ñ and it does. In one study, the strength of the correlation between employee responses to the question, Individual differences are respected/valued in this organisation and external customer satisfaction was 0.91 ñ an extraordinary high correlation, and much higher than for any other single dimension or question. In effect, the response to this question was a very good surrogate for a measure of customer satisfaction.

In another study of 25 manufacturing plants within the same organisation, we saw a significant correlation between responses to the question: ëXYZ Company has created an environment where people with diverse backgrounds can succeedí and safety. This should not be interpreted as saying that diversity per se makes for a safer working environment, but rather that where management acted to create an environment that made people feel included, it had the effect of strengthening focus on the responsibility to act in a safe manner. So, the bulk of units achieving the highest employee attitude scores achieved no accidents, while none of the units with a low score did so.

And in yet another study looking at opportunities to achieve higher manufacturing output by improving employee attitudes, we saw data that indicate if diversity (in this case an inclusive environment) and attendant factors were improved, an $11 million per annum positive impact could be realised.

The data from multiple studies reinforces the correlation between dimensions of diversity and key operating outcomes.


The Conclusions
The results indicate that successful diversity is more than compliance; itís about the value of inclusion of diverse ideas and viewpoints, diverse talents and experiences, in service of improved decision-making and problem solving.

In examining attitudes from three million employees worldwide, itís clear to us that diversity matters. When an inclusive environment accompanies diversity:

- It fosters innovation
- It creates safer work environments
- It drives employee commitment / engagement and pride
- It can impact customer satisfaction
- It can drive financial performance

Organisations need to remain acutely aware of how their employee constituencies view the work environment. Job level, ethnicity, persons with disabilities, etc. all add-up to form the workforce. Talent does not arrive in uniform packages and the competition for it suggests employers should seek as broad an access point to talent as possible.

This data not only urges employers to constantly monitor (and take action on) how all employees are reacting to leadership and management practice ñ but also suggests that inclusive management practices are superior.

Having an inclusive work environment speaks directly to culture ñ and therefore to the practices of an organisationís Leaders and their values ñ it is not simply a programme.

Companies that want to benefit from an inclusive environment must actively manage those aspects of the workplace that directly impact key employee needs: equity, achievement and camaraderie. Are leaders held accountable for behaving in ways consistent with these needs as well as the organisationís values? If the answer is ëyesí, we assert that employee engagement and enthusiasm will be high. If this is the case, customers will most likely feel the difference and business will benefit.