Best practices for 21st century business

Managing the diversity revolution: best practices for 21st century business

David Aronson

Diversity Today

It’s every CEO’s worst nightmare. He’s packing his briefcase for the evening when he gets a panicky call from his public relations firm. There’s a story set to appear in tomorrow’s Wall Street Journal: A class action suit is going to be filed against the company alleging pervasive racial discrimination. The lawyer spearheading the case has won multi-million dollar lawsuits against several Fortune 500 firms. Worse, there are rumors that a major civil rights figure may be launching a boycott against the company, damaging its reputation in ways that will take years to undo.

Then a call comes in from the VP in finance: The company’s shares in early evening off-hours trading have dropped by three points, and are falling fast. Oh, and there’s probably nothing to this–the VP’s voice drops to a whisper–but has he heard anything about an incriminating audio tape? Something about racist language at a recent executive staff meeting?

Still consulting with finance, the CEO is interrupted by the persistent beep of call waiting. It’s the New York Times. The questions come fast–faster than he can answer them. Any response to the lawsuit? Was he aware of the racial tension at his Decatur, Illinois, plant? How many senior VPs in the firm are African American? Just the one? Out of how many?

Nothing quite this dramatic, of course, has ever occurred to any real company. Even when disaster strikes, it’s usually spread out over a period of weeks or months. Still, if the timeline has been condensed for dramatic effect, the incidents it describes are real enough, as any reader of the business pages will recognize. The $132 million dollar settlement at Shoney’s is dwarfed by the $176 million settlement at Texaco, which in turn is trumped by the $192 million settlement at Coca Cola. Small wonder that diversity and anti-sexual harassment training have mushroomed into a billion dollar business, or that company chieftains woo civil rights leaders today as assiduously as they romance Congress.

As companies scramble to avoid lawsuits, however, they’re discovering something surprising: Diversity, it turns out, can be good for them. “How well an enterprise works–how productive it is in a highly competitive global economy–depends on whether it has people who are comfortable working across lines of race, class, religion, and background,” say former Ivy League university presidents Derek Bok and William Bowen. “Diversity is a business imperative because it affects competitiveness.”

This article takes that proposition as its theme. In a nation that is becoming increasingly multiethnic, and in a world that is ever more interconnected, diversity has become an inescapable business reality. Managed well, diversity can be a source of competitive advantage; managed poorly (or simply left to its own devices), a source of frustration, resentment, and yes, even disaster.

Business can’t be given the task of reforming society or of righting the nation’s historical wrongs. That is a task for everyone–individually and collectively. But business can make sure that the doors of opportunity are held open to all. If there is one consistent message to be gleaned from the existing research and from the experience of countless corporations, it is that responding proactively to diversity is not only the right thing to do, it’s also the smartest. As Jocelyn Roberts, a human resources manager for a DC-based technology company, noted, “We view diversity as something more than a moral imperative or a business necessity. We see it as a business opportunity.”

The Demographic Revolution

The challenge of the 20th century, the great African American scholar W. E. B. DuBois wrote prophetically in 1903, would be the problem of race. For American business leaders, the challenge of the 21st century may also prove to be race–as well as ethnicity, gender, age, religion, disability status, and sexual orientation, to list just a few of the many ways that Americans now define and distinguish themselves.

To understand why race–and, increasingly, these other dimensions of personal identity–continue to be so salient, consider the demographic changes now underway. In 1900, fully 87 percent of people living in the United States were white; most of those who weren’t white were African Americans living in the Deep South. By 1950, those percentages hadn’t changed much, although large numbers of blacks were migrating north in search of better opportunities in the industrializing cities. Today, however, less than 75 percent of Americans are non-Hispanic whites. There are just as many Hispanics as blacks, and growing populations of Asian and Middle Eastern Americans. By 2050, there will be nearly twice as many Hispanics as African Americans, and–in absolute numbers–more Asian Americans than there are African Americans today. By the middle of this century, non-Hispanic whites will no longer be a majority of the population. In other words, we will all be minorities.

No nation in history has experienced such a swift–indeed, such a revolutionary–change in its demographic composition. Yet it is a revolution that almost never makes the headlines. Like the frog that doesn’t notice that the water in the pot is heating up, we rarely grapple with the true significance of all the incremental changes taking place. The increasing number of fashionable Asian restaurants in our cities, the proliferation of Latino entertainers on our TVs; these are mere hints of something much deeper and vaster happening below the surface. The United States, as the writer Farai Chideya has argued, is making the transition from being a majority-white nation concerned with black and white issues, to a majority-minority nation insufficiently aware of–and insufficiently prepared for–its emerging multicultural identity.

Businesses, of course, have a particular interest in dealing with the practical realities of this change–if they don’t want to end up like the proverbial frog. Indeed, the changes are even more dramatic at the business level. Because immigration skews a population young, the labor force of today and tomorrow will be even more diverse than the population at large.

In addition, race and ethnicity are now just part of the “diversity equation.” The civil rights movement gave rise to a host of other groups seeking recognition, further complicating the picture. Women, religious minorities, the disabled, gays and lesbians–these are just a few of the groups that have given such a kaleidoscopic quality to today’s political and social landscape. Today, only 29 percent of families composed of a married couple with children live in a traditional two-parent household with a stay-at-home mom and a working dad. Especially when Americans not living in such an arrangement are taken into account, it is clear the nation is a long way from the era of Father Knows Best.

Ted Childs, vice president for workforce diversity at International Business Machines (IBM), points out another reason diversity is key: There are more than 12 million women-and minority-owned businesses in the United States, transacting more than $1.4 trillion in business each year. The percentage of women- and minority-owned firms has more than doubled in the past decade. The number of Hispanic-owned businesses alone jumped from 400,000 to 2 million between 1986 and 1996. And Asian Americans have founded more than 600,000 new businesses over the past two decades. Today, Childs points out, there are more than 83 million people of color in the United States, who, combined, have an income or spending power equivalent to the GNP of such mid-size nations as France, the U.K., or Spain. “White men in America only have so much money,” Childs says. “If you measure a business by how it grows, you have to focus on people of color and the elderly. They are the nation’s fastest growing demographics.”

For Maria Johnson, vice president, Office of Diversity, Health, and Worklife Initiative, at Fannie Mae, diversity is also a bottom-line issue. Fannie Mae specializes in the secondary mortgage market; the company has an interest in seeing as many people own homes as possible. Fannie Mae’s analyses suggest that the housing saturation gap–the difference between the number of people who own their own homes and the number who could–is much higher for various minority groups than it is for whites. “We estimate that at any moment, about 75 percent of whites could own their homes, and about 70 percent do. The saturation gap is only about 5 percentage points. For some minority groups, such as Hispanics, the gap is more like 20 points, so every dollar invested [in encouraging them to buy homes] yields higher returns.”

Much of the early impetus behind the diversity movement in corporate America came from the Hudson Institute’s 1980 report, Workforce 2000. That report made headlines by predicting that by the year 2000, only 15 percent of entrants to the workforce would be white males. As it turns out, that statistic wasn’t quite accurate, or to put it more charitably, wasn’t quite understood accurately. The 15 percent referred to net new entrants, a figure that represents the number of those who are entering minus those who are retiring for each group, expressed as a percentage of the total. (1) There has been something of a backlash as a result of this misunderstanding, with several analysts contending that the significance of diversity has been exaggerated. It is important therefore, to speak clearly and accurately. Between 1998 and 2008, about 42 million people will have entered the workforce. Forty-one percent will be ethnic/racial minorities. Around 29 percent will be white women. And slightly more than that–roughly 30 percent–will be white men (see figure 2). If this is far from the 15 percent cited in the headlines, it is still an extraordinary change from say, 1940, when white men constituted 69 percent of the workforce.

The changes are even more striking considering the other factors in effect. Fifty years ago, whites and blacks may hae both worked in an office building, but chances are that the white worked as, say, a lawyer, and the black as a janitor. Today’s workplace, while still imperfect, is far more integrated. Indeed, sociologists tell us that work remains the one relatively integrated setting left: There is, they say, a worrying trend toward resegregation in our neighborhoods, schools, civic associations, and so on.

In addition, the nature of work is changing. The factory worker stamping rivets on an assembly line circa 1930 may have worked side-by-side with the fellow cranking the boiler, but they didn’t need to work together in the way that, say, a Web designer has to work with the marketing crew and simultaneously coordinate with the technical experts. It’s difficult to quantify the extent of this change, but the new, post-industrial economy clearly puts a premium on team-based, knowledge-driven production.

Finally, globalization is affecting us all, propelling immigrants to new lands, knitting together ever-richer information networks, and releasing capital across borders, like water seeking level. These processes will fundamentally alter the nature of the corporation itself. As management guru Peter Drucker has said: “It is still generally assumed that the domestic economy, as defined by national boundaries, is the ecolog of enterprise and management…. But in today’s transnational [environment], the country is only a ‘cost center.’ Management and national boundaries are no longer congruent.” America is becoming, as more than one writer has noted, the world’s first universal nation.

In short, the critics of the diversity movement are wrong. Diversity is indeed here to stay, for reasons both domestic and international. Politics, economics, technology, and demography are all propelling us toward a more interdependent, multicultural world. But the fact that it is inevitable doesn’t make diversity any simpler or easier. In fact, diversity poses a host of new challenges for business leaders. Among these challenges: Getting the most out of a multicultural workforce; appealing to an increasingly segmented consumer market; clearing complex regulatory hurdles; and, not least, avoiding lawsuits and negative publicity.

Hidden Costs and Neglected Opportunities

The argument for managing diversity has both positive and negative dimensions. On the negative side, managing diversity poorly entails costs. the most spectacular, of course, are the costs of litigation and negative publicity. It will be years before Texaco (now ChevronTexaco) lives down one executive’s infamous 1994 remark that “the black jellybeans are always stuck on the bottom.” Its share price dropped $5 after news of that tape recorded remark surfaced. (2)

Other negative outcomes, such as turnover and absenteeism, can be measured and “priced out,” and intermediate values can be derived from workplace statisfaction surveys. A series of workplace surveys by Innovations International found that compared to white men, women and people of color were more likely to report that their talents and abilities were being significantly underutilized at work: White men on average report 85 percent of their abilities are being used; white women, 75 percent; and people of color, only 65 percent. Simply form a business perspective, the waste of human capital implied by this discrepancy is troubling.

One estimate in the early 1990s was theat the turnover rate for women was 100 percent higher than for men, and 40 percent higher for blacks than whites. In 1988, Mobil found that women were leaving the compnay at rates 2.5 times the average for men, after controlling for child bearing. With the costs of replacing workers averaging $5,000-$10,000 for hourly wage earners, and well over $100,000 for senior managers, these costs add up quickly.

As revealing as these numbers are, they barely scratch the surface of the true costs of poor diversity management, because most of its consequences are difficult if not impossible to quantify. How to measure the loss of productivity entailed by negative attitudes, inefficiencies arising from intergroup workplace tensions, and overlooked opportunities? There are opportunity costs, as well. What if Brand X hadn’t foreseen the potential of the Hispanic market, and lost this growing niche to Brand Y? What if 25 percent of women managers weren’t burned out or cynical about their firm’s stated commitment to “family values,” when it requires them to work 60-hour weeks as an unstated condition of advancement? It is safe to assume that most of the burden associated with diversity failures comes in the form of a penalty or tax against a firm’s optimum performance, rather than in the form of direct outlays, for example, to settle litigation.

But Is It Good for You?

Managing diversity is about more than avoiding negative outcomes. Diversity advocates make a stronger claim: Managed well, they say, diversity can be a positive force, spurring creativity, dynamism and excellence, renewing and refreshing the corporation, and ultimately improving the bottom line. Authors have made different arguments in favor of diversity, and five consistently come to the fore:

One is the resource-acquisition argument, which states that companies with the best reputations for promoting diversity will attract the best workers. Why? Because, as their share of the labor force increases, more and more of the best workers will be drawn from the ranks of women and minorities. They’ll naturally prefer an environment known to be friendly to their concerns–as will ever-increasing numbers of white men who favor working in progressive, dynamic environments. Or as Ernest Hicks, manager of corporate diversity and college partnerships at Xerox, says, “People don’t go to work for companies that have bad reputations for diversity.”

Another is the resource-maximization argument, which states that a firm gains a competitive edge if it is able to hire, retain, and promote top performers, regardless of their racial/gender status. Overcoming the factors that unduly limit employees’ potential liberates talent that may have been stymied or gone under-utilized. The goal, says Carl Brooks, president of the Executive Leadership Council, a group of senior African American executives, “is to create an environment where everyone feels an opportunity to be discovered and utilized to their capacity.”

A third argument is creative problem solving. This claim relies on the common-sense notion that the more perspectives that can be brought to bear on a problem, the more and better solutions you are likely to generate. Other research suggests that exposure to diversity helps individuals develop more complex understandings of the world, leading to more productive and creative problem solving. In other words, diversity not only spurs work groups to be more creative, but inspires individuals to become more creative as well.

A fourth argument is the marketing argument, which, simply put, says that successful marketing requires a thorough and intimate knowledge of the culture you are marketing to. Diversity consultants invariably cite the example of Ford attempting to sell its Nova cars to Hispanics, seemingly unaware that “no va” means “doesn’t go” in Spanish. A more recent example is the U.S. Army’s new motto, “An Army of One,” which was translated into Spanish as “Yo soy el army.” Only advertisers familiar with shades of meaning and the actual speech habits of Hispanic Americans would select the English word “Army” over the Spanish “Ejercito’–which for many recent immigrants from countries with turbulent pasts has decidedly negative connotations.

A fifth argument relates to globalization. It says that the skills, languages, and cultural competencies of America’s diverse workforce are an invaluable resource in helping firms compete abroad. America’s immigrants, for example, can help forge economic links between the United States and their countries of origin; their bilingual children help U.S. multinationals penetrate foreign markets.

Diversity Dilemmas

A number of conceptual and intellectual dilemmas bedevil the diversity movement. Like vast tectonic plates, they determine much of the diversity movement’s topography, its fissures and mountain ranges and occasional volcanic controversies, yet remain largely hidden from view.

One of them is how to acknowledge and discuss group differences without resorting to stereotypes. One of the nation’s most prominent diversity consultants, for example, has written a whole book about the differences between groups. In it, one learns that “personal style is important in the way African Americans talk, walk, dress, work–in every aspect of life”; that Asian Americans value modesty and humility; and that “Latin Americans highly value their emotions.” These generalizations come perilously close to being stereotypes. Is the alternative, then, to pretend that group differences don’t exist? Many diversity experts would say no: It is important, they say, to recognize that groups differ along important lines, and to respect and value those differences. But what precisely do those differences consist of? Here, angels fear to tread, and even most consultants turn mute. So what is the confused manager to do?

The answer, it would seem, is to be alert to the potential for differences without presuming them of any particular individual. Say, for example, you’re chairing a meeting discussing prospective job candidates with several colleagues you don’t know particularly well. One, a Midwesterner of Norwegian descent, speaks favorably of a certain candidate, but without any real emotional emphasis. There are at least three possible readings: 1) your colleague likes the candidate, but doesn’t care enough to make a big deal of it; 2) your colleague likes the candidate, but is naturally taciturn; 3) your colleague likes the candidate, but is culturally conditioned, being from Garrison Keillor country, to reign in displays of enthusiasm. On the basis of what you know so far, you probably can’t tell how much consideration to give your colleague’s expressed preference. What do you do? Well, you can ask your colleague to elaborate on her point of view; you can, after the meeting, discreetly ask others who know her better how emphatically she tends to express herself; you can ask her to summarize her view in a memo; or you can simply take note of the ambiguity, and continue to observe her in future interactions. The point of being aware of cultural differences is not to mechanically ascribe everything to those differences, but to become more skillful at making the kind of nuanced judgments that are critical to long-term business success.

A second conceptual dilemma dividing the diversity movement has to do with the set of problems or issues that are seen as particularly problematic. Because diversity is ultimately about changing how individuals and groups interact, and the terms on which they interact, the endeavor can founder along fundamental questions: What determines human behavior: Psychology? Culture? Institutional structures? What weight should we assign each of these elements, and how do we model their interaction? These are among the perennial questions of social scientists, and it shouldn’t be a surprise that diversity consultants don’t have any conclusive answers to them.

Unfortunately, rather than recognize this dilemma for what it is, many diversity consultants have tended to hold up a piece of the puzzle and present it as the whole. Thus, some focus on the continuing problem of stereotyping and subconscious prejudice. Others argue that behavior, not opinions, are the proper focus of diversity initiatives. For them, people’s thoughts and feelings are their own business; what counts is that they don’t behave in a racist or sexist manner on the job. Still others focus on changing the corporate culture. They argue that too much attention to the individual employee pins responsibility on the wrong agent. If a diversity initiative fails, they say, it is usually not because some individual employees have failed, but because the company’s rules, procedures, practices, and so on, favor certain groups over others. To bring this circle to a close, those who insist on psychological approaches then criticize the institutionalists for failing to appreciate the many subtle ways that prejudice affects even the most benign and well-intentioned. The resulting cacophony can sound like a proverbial group of blind men describing an elephant–an unusually large and cumbersome elephant, at that.

This essay generally adopts a wide-angle approach, trying to get as much of the elephant into the picture as possible. In the sections that follow, it looks at the cultural and institutional factors that affect intergroup relations and that can–often inadvertently–serve to benefit some groups at the expense of others. It surveys the literature of several disciplines, from social psychology to anthropology to management theory, to sketch out some of the key insights of each into the complex set of forces that influence how we behave toward each other. And it offers its own synthesis of views about how to develop a diversity approach that respects differences without sacrificing the essential unity and discipline that any corporation needs to succeed.

Cultural Divides

Not all diversity-related problems arise out of the prejudices and stereotypes that we may consciously or subconsciously harbor about each other. Consider the case of James and Hiroko, two casual friends at a regional accounting firm, jointly assigned to be team leaders of a task force developing the company’s Web site. Their boss hoped the two friends would bring complementary strengths to the project, and the two honestly looked forward to working with each other. Brash, self-confident, intense, James, a seventh-generation American of Dutch-English descent, had a quick, analytical mind and the ability to energize the people around him. Hiroko, a first-generation Japanese American who had grown up in America as a diplomat’s daughter, was quieter, more reflective, with an elegant personal aesthetic that her boss hoped would rub off on the Web site.

Yet it wasn’t long before James found himself frustrated by what he viewed as Hiroko’s failure to participate in the fast-paced give-and-take of the task force meetings. Again and again, he would discuss matters beforehand with Hiroko and win her approval on critical decisions, only to find that she would fail to support his proposals–or worse, concur with an opposing idea. He couldn’t understand why Hiroko consistently sought to waste valuable time in the meetings doing work that could be accomplished more efficiently by individual members of the team working on their own. And he was dismayed that Hiroko refused to honestly confront the problems they were having, despite his best efforts to broach them with her. “I thought Japanese were supposed to be so efficient and team-spirited,” he thought, ruefully.

Hiroko, for her part, had imagined that she was used to American directness, but found James remarkably insensitive. She couldn’t understand why he was so quick to shoot down ideas that originated from others, or even show them the courtesy of properly considering them. It seemed only common sense to her that the task force would work on the big items collectively–otherwise what was the good of putting the team together? And truth be told, James’ aggressive body language and tendency to invade her space made her nervous, though she knew this was just the American way, magnified, perhaps, by James’ outsize personality.

In this case, neither James nor Hiroko began with negative emotions or stereotypes of each other–if anything, the stereotypes they might have subconsciously harbored were distinctly positive. The problem lay in the cultural gap between the two, the way each person “read” the other on the basis of assumptions and understandings they had acquired over years of socialization. The sad aspect of this case is that both James and Hiroko knew of the danger of making cultural assumptions and tried to overcome them. James tried to engage Hiroko in a flank discussion of the problems they were encountering; Hiroko knew, and made allowances for, American styles of self-expression and body language. Yet both, in the end, proved unable to overcome their own cultural assumptions and beliefs, and the value-laden judgments that came with them.

The anthropologist Edward Hall, one of the early pioneers of the “culture” concept, famously said that we are “captives of our culture,” rarely more conscious of it than a fish is of water. Culture, in this case, means something different from what it means when we say of someone who likes the ballet and opera that she is “very cultured.’ In the anthropological sense, culture refers to the totality of ways that we understand and interact with our environment and each other–the norms, values, beliefs, understandings, orientations, and so on, that govern our actions and behaviors.

As the metaphor of the fish in water suggests, our own culture surrounds us yet remains largely invisible. Think, by way of analogy, of a person’s accent or language. Usually, we think of other people as speaking with an accent. Few of us are aware that we speak with any discernible accent until we are put in the situation of being different from the norm. Even then, we silently wonder why they don’t speak like us.

Culture extends and amplifies this problem. As in the case of our accent or language, the awareness that our normal, habitual, “default” way of doing things is particular, rather than universal, usually only arises when we are faced with someone who does things differently–or when we, ourselves, become aware that we are different. Unlike language, however, it’s not always clear what the difference consists of. Most of what constitutes a culture is hidden from us by its very ubiquity. It is not just the words that differ, but the assumptions, beliefs, and values that underlie which words get said and in what context. We know what the Portuguese word for knife is; or at least, we know that Portuguese has a more-or-less exact corresponding word for knife (an assumption we couldn’t make, by the way, of some hunter-gatherer tribes in the Amazon jungle). But we don’t know, except by long immersion in the culture, what a Brazilian way of doing business is, what norms of reciprocity, timeliness, formality, trust, hospitality, hierarchy, status, and so on, should govern any given situation. All we can be sure of is that they probably differ in important respects from our own.

The problem is that we instinctively expect others to behave more or less as we do. We’ve been taught–our whole experience in the world has taught us–what to expect, what’s normal, fair, or reasonable. We rely on those expectations to make sense of the world and to be able to function credibly within it. When those expectations are foiled, we can become frustrated, angry, or withdrawn. Craig Storti, an ex-Peace Corps volunteer who has written an excellent book (“The Art of Crossing Cultures”) about cross-cultural adaptation, says that the key is to become aware of our emotional reactions to cross-cultural differences as they arise.

This is no easy process. Most of the time, we simply have emotions. True, we may seek to control them by tamping them down, or by inhibiting our expression of them, but for the most part, we don’t think self-critically about our emotions as we are experiencing them. Becoming aware of what we are feeling, and being able to articulate that feeling with some specificity, is, therefore, something of a learned skill. But it is, Storti argues, one that can have a big payoff (see figure 3).

[FIGURE 3 OMITTED]

Storti focuses on culture shock, the cumulative, multiple pressures that come from living abroad. It is a wearying condition, like always being the new kid in a school where they don’t speak your language, teach unfamiliar subjects, and serve food you’re not used to. But many of the same dynamics are at work whenever individuals of different cultures come together. The potential client from Turkey, the Hispanic co-worker, the Thai subordinate: Increasingly, all of us are being forced to deal with people who come from different cultures. (3) And how effectively we perform our job depends in part on how well we can work across cultural divides.

But how, short of a deep immersion in a culture, can we develop the intercultural facility Storti speaks about? Without the daily, in-depth, experience of encountering differences, how can we learn to behave in a culturally sensitive manner? Today’s visitor may be from Turkey, but tomorrow’s will be from Brazil, and next week’s from South Africa. The same variety is true of our employees. We can’t be expected to know and understand the cultural background of every person we do business with.

Part of the answer to that question is that no one expects us to. If your business requires you to be in regular contact with a specific group–whether you’re a restauranteur or a banker–learning a little about the culture and people you are in contact with will almost certainly repay the effort, and learning a lot about them can be a life-enriching process. But in most cases, it is enough simply to be aware that differences can arise. Monitoring your behavior, and reflecting on the other person’s, can help guide you toward an accommodation. You don’t need to be an expert; people will appreciate your sensitivity provided you seem to be making a good-faith effort to comprehend them.

Institutional Factors

No question has spawned as much debate in the diversity field as the question of how an organization ought to change if it is to accommodate diversity. In part, this is because the question is highly abstract; even people who might agree about the right course of action in any specific instance can disagree passionately about their rationale for pursuing it. There is, as well, a tendency among diversity experts to cordon off different answers to the question as though each represented a major shift in policy, before articulating their own (patented and improved) approach. In fact, most of the diversity strategies that have been developed probably aren’t as distinctive in practice as they are in theory. Still, it is worth outlining some of the more common responses.

The first might be said to be the “Golden Rule” approach. This approach demands of all employees that they treat each other as they, themselves, would wish to be treated. It is probably the default diversity management strategy among small to mid-size firms without formalized human resource functions–in other words, among firms where the policy is largely unarticulated. It understands that discrimination and prejudice are wrong, and its underlying goal is to see to it that the employees get along. What it does not do is recognize that more subtle forms of discrimination exist, or acknowledge that the company itself needs to do things differently to ensure that everyone is given a fair chance to succeed.

The “Right the Wrongs” approach was popular in the 1970s and early 1980s but has since been waning. For many years, it served as the primary basis for affirmative action programs. The emphasis of this approach is on ensuring that women and minorities are granted their “fair share” of opportunities throughout the organization. In practice, many of these programs focus on entry-level positions, with the expectation that the effects will radiate upwards through the organization over time. Part of the reason this approach is waning is that those expectations have not been met to the degree it was hoped.

The “Assimilation” approach takes a more aggressive posture to ensuring the success of minorities and women. It understands that traditionally excluded groups are not as likely to possess the soft skills and competencies of the historically dominant group, and makes proactive efforts to “socialize” them into the organization. An example of such a policy might be a special orientation session for new recruits of color, or mentoring programs designed to familiarize nontraditional groups with the organization’s values and mores.

The “Multicultural” approach, by contrast, is predicated on the notion that minorities and women bring strengths rather than deficiencies to the organization. It seeks ways to capitalize on these strengths. The primary exponent of this approach is R. Roosevelt Thomas, who urges corporations to revisit the assumptions that define the work culture in order to make the organization work more effectively for all its employees. Thomas identifies several of the most common of these assumptions: The notion of the manager as the team captain, whose primary job is to lead by the example of his or her performance, rather than as the coach, whose job it is to elicit the best performance of everyone on the team; the idea that the company is a family, which can, he says, seem paternalistic to many minorities; and the notion that managing diversity is an event rather than a process.

A few years after Thomas’ seminal publication in the Harvard Business Review, David Thomas (no kin to Roosevelt) and Robin Ely published their own managing-diversity approach in the same publication. For Thomas and Ely, the diversity field has already undergone one significant shift: It has moved from a “discrimination-and-fairness” paradigm to an “access-and-legitimacy” paradigm, which they characterize in terms similar to the ones Thomas uses to describe the movement from affirmative action to multiculturalism. That shift, they say, entails a recognition of the positive benefits of having a diverse workforce. Its raison d’etre is the need to respond to the nation’s increasing heterogeneity through a more representative labor force. Its strength is its emphasis on the business rationale, a motivation the entire company could support. Its weakness, say Thomas and Ely, is that it tends to push minorities into pigeonholes such as human resources or community outreach. There has not been a corresponding effort to integrate them into the company’s mainstream, revenue-generating work.

The “learning-and-effectiveness” paradigm that Thomas and Ely propose is based on “rethinking primary tasks and redefining markets, products, strategies, missions, business practices, and even cultures” by incorporating employees’ perspectives into the main work of the organization. It promotes equal opportunity and recognizes cultural differences, but it goes beyond the earlier two paradigms in asking of the corporation that it internalize differences among employees so that it learns and grows from them.

For Thomas and Ely, the key to making such an organization viable, to giving employees a feeling that they have a stake in the company, is to change its culture. That cultural transformation takes many forms. It means pushing the organization toward the demands of flexibility, openness, and spontaneity over hierarchy, control, and secrecy. It means focusing on the employee’s workplace satisfaction, on supporting both individual initiative and group cohesiveness. It means redefining the role of the loyal subordinate. “By condemning loyalty construed in terms of unquestioning servitude and praising people who have the courage to question, blind obedience can be stigmatized,” say a team of management professors from Columbia University. And it means emphasizing cooperation and teamwork, consensual problem solving and decision making. All these traits, say experts, are likely to provide the context in which a diversity of opinions, personalities, and types can flourish. Conversely, they are also likely to be the types of organizations that most benefit from diversity.

The next section will examine how to put these ideas into practice.

Best Practices

Overview

Once upon a time, it was going to be so simple. White men, forced by law to change, would set aside the prejudices and stereotypes they had used to exclude other groups for so long. Liberated from their oppression, people of color and women would quickly achieve social and economic parity.

Today that dream can feel like chimera. Though they disagree passionately about the reasons, both the right and left agree that the manifest inequalities that marked social relations during the days of Jim Crow have not faded nearly as much as most people had hoped they would. A vast gulf in perceptions prevails: Most people of color and women believe that racism and sexism are alive and well; most white men believe that incidents of discrimination are the exception, and worry more about false accusations than about eliminating ongoing disparities. Much of the diversity field ultimately springs from this conundrum: We have achieved a formal legal equality but not economic and social equality.

For business leaders, this dilemma plays out in various ways: In decisions over who to hire, promote, or terminate, but also in issues as mundane as who sits with whom at the cafeteria. The great challenge for diversity managers is to reconcile complex and sometimes competing notions over basic values of fairness and equality. It is to balance the fact that social systems, left to their own devices, tend to reproduce themselves along race, class, and gender lines, with interventions that do not create unintended inequalities of their own. It is to create a level playing field that yields results that are not only fair, but seen as fair, by very different constituency groups.

The following section outlines how an organization might square these various circles. It discusses how to go about instituting a diversity initiative, summarizes the principles on which one should be based, and provides a menu of real-world practices that companies have found useful. Diversity is an intrinsically controversial topic. But these policies and practices can help companies forge a consensus on how best to proceed.

A Strategy

With apologies to Tolstoy, most successful diversity programs are alike, but every unsuccessful one is unsuccessful in its own way. This section focuses on the common, underlying principles of successful diversity efforts–the strategies, rather than the tactics. In later sections,

we’ll take a look at the nuts-and-bolts, the actual policies and procedures that make for successful diversity initiatives. In this section, the focus is at a higher level of abstraction: Not on what needs to be done, but on what needs to be the case, the preconditions, for any effort to succeed.

Perhaps the single most important ingredient in successful diversity programs is commitment from the top. In fact, it’s safe to say that no diversity effort has ever really succeeded without that commitment. Diversity is too amorphous, too easily relegated to a second-tier status, to be driven by subordinates. If diversity is not a leadership priority–and just as importantly, seen as a leadership priority–it can wither on the vine, a succession of half-instituted, uncoordinated measures. That doesn’t mean that the CEO must oversee the day-to-day management of the initiative. But it should be clear that the top brass are taking the efforts seriously, and that they expect everyone else in the company to do so as well. As Ted Childs of IBM puts it, “Employees devote their energies to what the management spends its time on, because that’s how they know what management truly believes to be important.”

Jack, a sales executive with a software design company, remembers what can happen when leaders fail to “walk the talk” on diversity issues. “Diversity was always something of a joke” at his old firm, he says. “Every once in a while, the top brass would issue some memo about how everyone at the firm is valued and how we should respect our differences, and everyone would say, ‘Yes, boss,’ and then we would go on doing exactly what we were doing beforehand. It bred a certain amount of cynicism–about diversity, but ultimately, about the leadership itself. Most of the rank-and-file engineers felt these were just token pronouncements designed to keep the company in the clear if there was ever any lawsuit.”

There is the opposite danger, of course. And that is that the leadership gets too far in front of the rank-and-file, that it is perceived as bullying or threatening. Diversity is already a loaded topic. People bring a great deal of anxiety, fear, and hope to the table once a diversity initiative is announced: “Does this mean that I won’t get that promotion because I’m not the right race/sex, etc.?; Does this mean I’ll finally be able to sign my partner up for health benefits, and if so, is it time for me to come out of the closet? Does this mean I’m going to be sued/fired/reprimanded for that racy joke I told last week at lunch?” If leaders act too quickly, fail to educate employees, and attempt to diversify by fiat rather than by coaching, the effort can end badly.

“There’s nothing worse than management suddenly ‘getting religion,'” says Tyler Vance, a diversity consultant who has seen “too many” such efforts backfire. One firm invited him to come in after a particularly disastrous presentation by one of the senior vice presidents. “The VP gave the keynote speech at a corporate retreat on diversity,” Vance recalls. “He pulled out all these charts and graphs, which basically showed that the company, no surprise, was filled with white men. And then he pulled out a new set of charts, demonstrating how the company’s racial/gender profile would be expected to change over the next five years. Well, you don’t need to be a genius to figure out how all the white men reacted. The whole weekend was spent discussing ‘reverse racism’ and ‘double standards.’ It took months to neutralize the bad feelings that developed out of that one speech.”

That brings us to the second principle: Bring people on board. Explain diversity in a way that encourages employees to feel they have a stake in its success. That means making sure that they understand three things, says Vance.

* First, that diversity is about inclusiveness; that it’s not simply a code word for minority concerns, but embraces a new way of thinking about maximizing the potential of everyone within the organization.

* Second, that diversity is not simply the right thing to do, it’s also the smart thing to do. Whether it’s fostering intergroup understanding within the corporation, or improving the company’s ability to serve an increasingly diverse market or client base, diversity has increasingly become a business imperative.

* Third, that they will be consulted in the development of the diversity plan. “There is no better way to get people on board than by encouraging them to participate from the outset,” says Vance. “Often, employees will have better, more effective ideas about how to proceed than the leadership. Diversity can’t be micromanaged; set goals and help your team achieve them.”

Once you’ve secured commitment from the top and begun bringing people on board, the next step is to assess where the organization currently stands. This is commonly done through a diversity audit. There are perils associated with conducting a diversity audit–the main one being that the company may be forced to disclose the results in the event of litigation. (Of course, the same audit cannot be used as a sword against litigant claims without then becoming discoverable.) Furthermore, as Cyrus Mehri, one of the nation’s leading employment lawyers points out, the danger only really comes about if the company simply shelves the subsequent report. “When your folks come to you [with a report of racial disparities], instead of ignoring them, take them seriously.” That, he says, is what Coca Cola failed to do, both with an internal report and a Department of Labor analysis. As a result, he says, “litigation became the last resort.”

Because the methodological issues are so complex, an outside consulting firm is usually retained to conduct the audit. There is, unfortunately, an unusually wide variety in the quality of diversity-related consulting firms. A good consulting firm will employ a well-credentialed team of social psychologists, sociologists, and lawyers with experience in civil rights, employment law, and organizational behavior. The best will typically draw staff from the major federal enforcement agencies as well as from academia and private firms specializing in diversity-related issues.

A typical diversity audit consists of three elements: A demographic profile of the company by race and gender, cross-checked against income or job rank/category; a survey of employee attitudes and opinions regarding diversity issues and the company’s handling of them; and an analysis of corporate policies, systems, and practices that may have disparate impacts on different groups within the workforce. A fourth element is sometimes added: An investigation into the company’s efforts to reach traditionally underserved and emerging markets. In this case, the goal is not to conduct a market analysis (which the company is presumably much better equipped to undertake), but to examine the extent to which the company itself has explored the viability of alternate profit centers. To maintain privilege, circulation of the completed audit, with its findings and recommendations, is usually restricted to senior management.

The next step in the process is the development of a strategic plan to promote diversity. The audit answered the question: “Where are we now [when it comes to diversity]?” The strategic plan follows up by addressing the twin questions: “Where do we want to be?” and “How do we get there?” To put it differently, an audit is the diagnosis; a plan is the proposed course of treatment. A strategic diversity plan typically consists of the following elements:

1. A brief, cogent analysis of the business case for diversity as it specifically relates to the company. A financial consulting firm will have different reasons for undertaking a diversity initiative than a baby food manufacturer. Articulating why diversity is “mission critical” helps a company set its priorities. A baby food maker may be particularly intrigued by the market potential of Hispanic and Asian immigrants; a white shoe financial consulting firm may be motivated by political and legal considerations to diversify its executive labor force.

2. Recommendations regarding mechanisms, such as affinity groups, vertical representative committees, or Web-based anonymous suggestion boxes, for involving employees in the diversity initiative and incorporating their concerns and ideas. This enables continuous feedback and response, giving managers the opportunity to adjust and improve on their performance.

3. Proposals for institutionalizing the diversity initiative through the creation (or strengthening) of a diversity-related office at the executive level with well-defined responsibilities and powers. Chief among these powers should be the ability to investigate, assess, measure, and make recommendations directly to the chief operating officer. A second and equally important function of the office should be to act as a clearing house for companywide practices and policies, such as internal marketing, minority internship, training, or mentoring programs, that promote diversity.

4. A list of clearly defined goals, based on existing outcome “gaps” discovered through the audit, setting forth the reasons for their adoption and determining what resources and commitments are necessary to accomplish them. Note that it is not enough simply to set goals; to say, for example, that mid-career female attrition rates should drop by 25 percent over the next five years, or that the market share for a new demographic base should increase by 50 percent. By themselves, these are merely wishes. The plan must clearly enunciate how these goals are to be achieved. The goal of lowering attrition rates of mid-career women might be reached through providing various types of maternal assistance, such as in-house day care facilities, flexible hours, or the creation of part-time “parental” tracks. For items that are not clearly gaps or problems, the goal should be continuous monitoring and improvement.

5. A clearly defined set of diversity metrics. Measuring progress is essential, and although diversity would appear to be a relatively nebulous concept and therefore difficult to measure, there are in fact many ways to proceed. The audit should have provided baseline numbers regarding hiring, performance evaluations, disciplinary actions, complaint ratios, promotion and attrition or retention figures, workplace satisfaction surveys, company demographics, market shares, and so on. Annual reviews of these figures can help firms identify areas of concern and achievement.

6. Finally, a strategic plan should contain accountability metrics. If diversity is a bottom-line issue, then it should be granted bottom-line priority. That means making managers accountable for their success or failure in this area, and rewarding or punishing them accordingly. Superior performance merits promotions, bonuses, awards, and other types of recognition.

Developing a strategic diversity plan is a lengthy, laborious process. But most companies that have been through it find the exercise well worthwhile. “Developing a plan forces a company to think through its priorities and come to grips with the issues raised by diversity,” says consultant Tyler Vance. “The process itself throws up a lot of issues: Who gets consulted, who gets to make the decisions.” Vance cautions against outsourcing too much of this work: “Companies are sometimes tempted to hire an outside consultant to draw up a diversity plan for them. And a competent consultant can come back with an itemized list of 15, or for that matter 150, recommendations. But a really good consultant can do something more important: Help the company internalize the process of change.”

Vance acknowledges the difficulties inherent in this approach. “I think there’s a certain amount of trepidation that diversity initiatives will undermine the leadership, that it’s opening a Pandora’s box for airing resentments or grievances.” That fear is generally overblown, says Vance. But to make sure that the conversation doesn’t veer off track, the key is to be clear about what’s at issue: “The question is not how to become a more fair, or just, or compassionate organization. The question is much more practical: How can we leverage the diversity of our organization to our competitive advantage? How can we make sure that all of our employees’ human capital is being fully utilized?”

Of course, answering that question requires more than just a set of principles. It requires tactics, policies, and procedures. These will be discussed in the next section.

A Collection of Tactics

A good diversity program embodies values that are consistently upheld and regularly reaffirmed. But it is a hollow shell unless it follows through on its commitments with day-to-day practices that produce real-world results. The practices that follow are drawn from actual companies that have been at the forefront of efforts to promote diversity. For the sake of analytical convenience, they are sorted into six categories: Recruitment and Hiring; Promotion and Career Advancement; Terms and Conditions of Employment; Dispute Resolution; Management Accountability; and other, system-wide practices. But many of the ideas behind them are applicable across the board. Indeed, there is something of a new consensus emerging: The best practices for diversity are those that are not specific to any one group, but that promote opportunities for all. As Maria Johnson, head of diversity for Fannie Mae, points out, “Instead of special programs, the focus should be on helping everyone reach their potential and achieve their dreams–whether it’s home ownership, completing college, or simply knowing that there is an emergency day care facility available.”

Recruitment and Hiring

Many employers have found that it takes a conscious effort to hire a diverse workforce. If they don’t make the effort, they end up with a workforce that is de facto segregated by job description, with whites, Asian Pacific Americans, and a sprinkling of African Americans constituting the professional staff, and blacks and Hispanics among the clerical and blue-collar workers. How and why does this happen? Well, in part, it reflects disparities in professional and academic achievement. There are proportionately fewer Hispanic lawyers than there are Hispanics among the general population. It would be mathematically impossible for every law firm in California to have a number of Hispanic partners on staff proportional to their population in the state.

But there are other reasons as well. Think about how a lot of recruiting takes place, particularly at smaller organizations: So-and-so’s nephew is looking for a job, the uncle mentions it to a buddy of his at the bar, the buddy knows about an opening at the plant where he works, and vouches for the kid to his supervisor. The next day, the nephew gets called in for an interview. If we lived in a completely integrated society, this sort of practice wouldn’t result in racial or ethnic disparities. But we don’t: The nephew, the uncle, and the buddy are all likely to be of the same ethnic group, and a process that did not involve anyone making conscious, intentional efforts to discriminate ended up having a disparate impact.

There are other seemingly neutral practices that can also result in disparate impacts. Just as many whites might not be comfortable applying for a job at, say, Ebony magazine, so many people of color may feel uncomfortable or reluctant to apply at, say, a local, family-owned hardware store. Even a well-intentioned employer seeking to diversify its workforce may not know where to advertise or what accommodations can be made to provide for qualified individuals with disabilities.

But increasingly, firms are not content to leave it at that, and are making conscious efforts to increase their potential applicant pool. In fact, more and more companies seem to agree about the necessity of engaging in this kind of affirmative action, even as older forms of affirmative action come under increasing judicial scrutiny. “We understand the need to change, and we are,” says David Bullard, of Amex International. “At the same time, we don’t want to feel compelled to act because of court decisions. Making an effort to increase the diversity of the applicant pool and candidate slate is the best way we’ve found to balance merit with fairness in our hiring decisions.”

Among the efforts now underway to increase the diversity of the applicant pool are internships and work/study programs, community outreach efforts, and aggressive recruiting drives among nontraditional employee groups. At the Bureau of National Affairs (BNA), a publishing company based in Washington, DC, that specializes in legal information services, representatives attend numerous job fairs sponsored by minority associations and colleges. The BNA sponsors its own scholarship program, which provides funds to students at minority universities and gives them the opportunity to work as interns. The BNA has also developed an editorial traineeship which grooms minority staff with potential to become professional journalists and editors.

Promotion and Career Advancement

Many of the barriers that act against hiring minorities also militate against their promotion. In-group favoritism (the old-boy network), the Pygmalion effect, the proportional dearth of qualified candidates, inadequate knowledge about where to advertise openings, all play a role. Many minorities in corporate America feel that they don’t have access to the same informal mentoring that helps their white colleagues climb the corporate ladder; that they don’t get the honest performance evaluation and searching feedback that can contribute to their growth; and that they don’t get the opportunities to take on risky or high-profile assignments that lead to senior positions.

Fannie Mae is a mortgage financial services company based in Washington, DC, and one of the few Fortune 500 companies with an African American CEO. It has developed an extensive mentoring program consisting of three elements: A speaker series, which seeks to expose employees to positive role models within Fannie Mae and beyond; a mentor/protege program, which provides one-on-one coaching between senior and junior managers; and a Buddy program, which is designed to pair new hires with established ones to help familiarize them with the company’s workings. Partly as a result, says senior workforce manager Maria Johnson, Fannie Mae is among the nation’s leaders in corporate diversity. “If you compare our employment rates to the relevant labor poor, we far exceed those standards at every level. Of our 168 officers, the most senior executives on our staff of 4,800, 23 percent are minority.”

Mentoring has proven to be among the most promising of today’s best practices. Harvard Business School professor David Thomas, who has conducted the most extensive investigation to date of successful minority executives, argues that “people of color who advance the furthest [up the corporate ladder] all share one characteristic–a strong network of mentors and corporate sponsors who nurture their professional development.”

Affinity groups are more controversial. Most large companies accept and tolerate them; a number actively promote them and seek out their input; and a few don’t allow them at all. Those that don’t argue that affinity groups can divide employees and fracture a company’s identity. They worry that affinity groups may become advocates for specific individuals and grievances, and may even lead to adversarial relations with management. Other companies with more positive experiences of affinity groups report that there is little tendency for them to lead to division. And even when groups do become advocates on specific issues, this can lead to a strengthened organization. May Snowden of Kodak says that it is “okay if differences emerge” under employee network groups. “Differences make for a robust culture, for the complexity and chaos that are marks of strength.”

Terms and Conditions

The minimum legal requirement that firms must meet is equal pay for equal work. (4) As obvious as that principle is today, it was not so obvious even a generation ago, when it was assumed, for example, that men should be paid more because they “had families to raise.” In the meantime, other issues have emerged: The workplace has to develop family-friendly policies, religious and disability accommodations, and anti-sexual harassment and discrimination training and procedures. How well a company cares for its employees above and beyond meeting the legal minimum plays a significant role in employee satisfaction, retention, and productivity

Fannie Mae is another leader in worklife balance issues. It offers tuition reimbursement for employees pursuing college degrees, emergency day care, five days’ annual family leave, on-site physicals, and–reflecting its primary business mission–up to $16,000 to help employees buy their first home. These programs help all employees, says diversity director Maria Johnson, but particularly those at the lower end of the pay spectrum, by giving them access to the tools they need to improve their own lives. “We think there’s a compelling productivity case to be made for these programs. They pay for themselves in terms of increased employee productivity, loyalty, and retention.”

IBM has pioneered workforce accommodations for disabled workers, and through its engineering innovations, made it possible for many thousands of people with disabilities, both within the company and without, to lead fuller, more productive lives. From architectural modifications, to electronic bulletin boards for the mobility impaired, to telecommunications devices for the hearing impaired: Many of the devices that have become almost routine forms of accommodation were first developed at IBM.

Alternative Dispute Resolution

Alternative dispute resolution (ADR) refers to those policies and practices that help bring about an early, satisfactory, and fair resolution to complaints regarding employment discrimination. They can be as simple as talking to the supervisor about unwanted attention from a colleague, to peer mediation and mandatory arbitration. (5)

Among the strategies companies have developed, one feature stands out: The creation of multiple and redundant places for voicing and resolving complaints. One company, for example, offers the option of opening a dialogue with the supervisor, the supervisor’s supervisor, or the human resources department, or talking directly with an ombudsman. Another company offers five options: Dialogue with the supervisor or a higher level of management, an employee hotline, a conference with a company representative, mediation, or arbitration.

Other Best Practices

Companies have developed a broad range of practices designed to promote and celebrate diversity. They range from aggressive efforts to identify and do business with minority-owned firms, to cultural heritage appreciation days. Fannie Mae, for example, recognizes and supports an array of affinity groups, from Native American to Gay and Lesbian. It draws on these groups to sponsor an annual, weeklong diversity celebration, and it recognizes, throughout the year, heritage observance months with programs and celebrations that give employees the chance to learn about other cultures, and to share aspects of their own.

United Parcel Service (UPS), the package delivery service, has a Community Internship Program, which places senior managers in communities of need. More than 1,200 senior managers have participated in the program since its inception in 1968, at a cost of $10,000 per employee. For four weeks, managers work in distant cities, becoming immersed in cultures far from their homes. They work in homeless shelters, mentor inner-city youth, aid immigrant farm workers, build schools, and visit the home-bound. This experience gives executives the opportunity to “walk in another’s shoes,” building sensitivity, cultural understanding, and social responsibility. But the program is not simply charitable, insists Rick Boehler, UPS’ director of workforce diversity. It also helps attune UPS executives to the increasingly complex needs of a diverse workforce and consumer base. “They’re amazed at how much they learn,” says Boehler. “They come back and nearly universally say the experience has made them better managers.”

Management Accountability

Undergirding all of these policies and practices is manager commitment and accountability. If managers aren’t committed to promoting diversity, and if they are not held accountable for the results, then diversity tends to become an optional, relatively unfocused effort that produces spotty results. Many companies these days are tying executives’ compensation packages to how well they perform on diversity-related matters. Often, the total amount is small: 5 percent or so. But the effect is to institutionalize and regularize a process so that diversity isn’t neglected.

Fannie Mae is once again a leader in this area, with an Office of Diversity at the vice-presidential level reporting directly to the president and chief operating officer. The office’s mission is to help foster a culture that maximizes and supports diversity at all levels, monitor compliance, operate the dispute resolution process, and administer the corporate mentor program. It also works with the human resources department to conduct assessments of the culture, and the training department to develop diversity training programs. Fannie Mae’s Diversity Advisory Council is a standing committee of senior management and representatives of employee support groups that maintains communication and ensures that the company remains responsive to the needs of all its employees.

Eastman Kodak’s global reach means that diversity is not merely a national issue, but a truly global one. The CEO has committed the company to increase to 40 percent the percentage of women, minorities, and non-U.S. nationals nominated as succession candidates to key positions. It holds its managers responsible for reaching these goals through performance ratings, and evaluates them on their ability to build and maintain a diverse workforce and encourage employees to develop their talents.

The Human Factor

Thus far, the focus has been on the firm, on what companies as institutions can do to maximize the benefits and minimize the risks of diversity. This decision to put the firm first was deliberate: Too many diversity initiatives focus exclusively on the individual. They assume that if the individual manager or executive is made conscious of his deficits, he (and it is usually assumed to be a he) will cease to behave in ways that unfairly limit the potential of minorities and women. The problem with this perspective is not that it is false, but that it is insufficient. No firm can rely simply on changing the hearts and minds of its employees. If it is to proactively capitalize on the nation’s diversity, it must develop a broad range of policies and practices to help ensure that today’s workplace works for everyone.

That is not to say, however, that individuals do not have an important role to play in successfully addressing diversity issues. This section examines some of the knowledge, skills, and abilities that firms should seek to inculcate in their employees to further their success at managing diversity. These skills can be taught through training, orientation, and development programs; they can be emphasized in regular corporate communications; and they can be exemplified by actions that the firm and its leadership undertake. They are not a substitute for other diversity measures (such as a minority contractor program), but they can be an important complement to them.

Perhaps the first quality firms should seek to develop and reward in their employees regarding diversity is the ability to accept, and to be comfortable around, human differences. It may seem that this is too amorphous a quality to foster, but that is not the case. Many of the day-to-day problems that arise from diversity come about because of the fears, anxieties, and tensions that people feel in dealing with those who are different from themselves. It is these emotions that hinder more relaxed social relations among groups, and that can trigger or exacerbate conflict. The best way to alleviate these is to create an environment in which the fact of human difference is acknowledged and esteemed. E pluribus unum can be a corporate motto as well as a national one. This ethic needs to be woven into the corporate culture, in everything from the art it places in the entrance to the CEO’s communications to staff.

A second trait companies should aim to foster in their employees is an understanding of the nature of prejudice and discrimination. This needs to be done carefully if it is not to backfire. Too often, in the past, white men were simply accused of being prejudiced; if they tried to deny it, they were doubly accused, first of being prejudiced, and then of trying to cover it up. The result could feel like a Salem witch trial.

There is a better way. Rather than trying to confront and expose the individual’s latent prejudices, the company should offer a simple, clear explanation of how prejudice operates and of the subtle ways that it may affect one’s judgment. This sort of presentation can be done in a training session or as part of the new hire orientation. It shouldn’t focus on accusation; it shouldn’t assume the worst of anyone. The goal should be to invite reflection: “How might I be affected by these quite natural and unfortunately universal tendencies?” There is no guarantee, of course, that those most in need of this sort of reflection will actually undertake it, but fostering a corporate culture in which the nature of prejudice and stereotyping are clearly understood can go a long way toward eliminating them.

A related trait that companies can promote is ambiguity tolerance. This psychological term refers to an ability to live with uncertainty; to respond to ambiguous, complex, or multifaceted situations and people without rushing to judgment. It’s what ordinary people call having an open mind. People who are close-minded experience ambiguous situations as threatening. Feeling threatened, they respond with hostility toward the person provoking that uncertainty, even if that person hasn’t done anything to harm them. That is why we so often say of group hatred that it is “irrational.” The person doing the hating isn’t responding to any actual threat, but to the perception of a threat induced by his or her own inability to deal with ambiguity. Again, this is not a skill that can be easily taught, in the way, for example, that one might train people in handling a new photocopy machine. But it is a trait that can be esteemed, “talked up,” made part of the corporate ethos, and demonstrated by example among the leadership.

One other “emotional skill” that companies can foster is an appreciation for the challenges and difficulties that other groups face, an ability to imaginatively project one-self into the shoes of another. When it

is said of whites, or of men, for example, that they “just don’t get it,” what is being expressed is a frustration that they don’t appreciate the work involved in fitting into a culture dissimilar to their own; the stress of being seen as a “representative” rather than as an individual; the effort to make others feel comfortable; the need constantly to be on alert against behaving in ways that might be interpreted stereotypically; and the wearying effects of rarely knowing how much race or gender are actually influencing the situation. Is this store clerk being rude to me because I’m black or because he’s unpleasant? (Whites may wonder the same if they receive bad service from blacks, but they visit far fewer black-owned or -managed businesses than blacks frequent white-owned businesses.) Nor do members of the majority always understand the informal benefits that come from “belonging,” such as access to the grapevine or honest performance feedback.

On the other hand, many women and minorities don’t understand how difficult that imaginative leap is. Because they experience discrimination daily, they don’t understand how the majority can fail to “get it,” and they wrongly conclude that this failure is a symptom of some deeper dishonesty or deliberate decision. The fact is, however, that most people understand only what they have experienced; what they haven’t experienced isn’t emotionally available to them. Here again, a non-threatening, nonjudgmental educational approach is the wisest course. Too often, in the past, the approach has been to berate the majority for their failure to “get it”; the impact on their consciousness has been temporary, at best. Far better to educate through personal testimonials, stripped of rancor. Clear, honest accounts of the challenges and occasional pain that are part of the daily experience for the many who are not in the majority can deepen the consciousness of those who are far more than more aggressive approaches.

Close cousin to this emotional understanding is a greater factual knowledge of the realities concerning race and diversity. This knowledge can take three forms: First, a greater knowledge of the history and current realities of groups that are traditionally included under the rubric of diversity. A recent poll found that a large majority of whites believe that whites and blacks enjoy equal incomes, economic opportunities, and educational attainment. This might be said to represent a clear triumph of ignorance over prejudice. It means that most whites don’t believe that the majority of blacks are poor, welfare-prone, and so on. On the other hand, it also means that many whites simply don’t know the facts about race today. Clearly, a deeper knowledge about the ongoing inequalities that mark relations between groups, and an awareness of the demographic transformation now underway, can lead to a heightened appreciation for the need to proactively address these issues.

Second, knowledge about the risks and benefits of diversity can generate a greater level of commitment to change. The fact that there is a solid business case for diversity can be a compelling argument to skeptics who are unimpressed with the moral arguments for diversity.

Third, anyone who works closely with people of another culture, race, gender, and so on, particularly in a management role, would do well to be attentive to them as individuals. Susan Fiske, the Princeton psychologist, has noted that powerful people pay less attention to subordinates because they don’t depend on them, have other things on their mind, and may have a strong need to feel dominant. “Stereotyping and power are mutually reinforcing,” says Fiske, “because stereotyping itself exerts control, maintaining and justifying the status quo.” Thus, encouraging managers to be attentive to their subordinates as individuals can diminish a situational tendency to view them as (stereotypical) members of a group or category.

The role of the organization in fostering a climate of respect and mutual consideration has been touched on at several points but needs to be made explicit. As Fiske has written, “an organization can make certain values salient, can encourage the constructive sides of people’s self-concepts, can promote norms of fairness, and so on. Conversely, an organization can ignore these issues and let the powerful take the easy way out, not bothering to pay much attention to the powerless.” The importance of local or organizational norms is that they encourage or inhibit a climate in which individuals can be harassed or discriminated against. Harassment or discrimination is often a symptom of an organizational rather than an individual failing. What may seem to majority managers to be inappropriate and isolated behavior all too often feels to minority and women employees like the visible tip of an iceberg of discriminatory practices tacitly condoned from the top. That is one more reason why it is not enough to let the organizational “ship” drift on matters related to diversity; it must be consciously steered away from the iceberg.

Aside from valuing and modeling certain habits of the heart and mind, organizations can coach their employees on a host of practical skills that will improve their diversity management. Most of these skills are part and parcel of good management techniques: Knowing how to listen, give feedback, foster constructive conflict, and mediate disputes are not skills that are specific to managing diversity, but they are essential to it. Integrating diversity-related material into executive and management soft-skill training programs is a critical component of an overall diversity program.

If there is a single lesson underlying these prescriptions, it is that managing diversity well is not simply about race or gender or ethnicity; ultimately it is about managing people as if people mattered. Again and again, diversity managers at top companies stress a central message: A company’s greatest resource is its people. Managed humanely, given the chance to compete, “the opportunity to be discovered” in Carl Brooks’ memorable phrase, they will respond with dedication and loyalty. “The secret is that it’s not just about blacks or women,” says Brooks. “It’s also about the white man who maybe didn’t go to the right school, or who doesn’t play golf, and who can remain undiscovered forever. If people feel like they have an opportunity, they’ll work. If not, they’ll go home every night at 5 pm.”

Fulfilling the Dream

Does diversity only benefit those who are, in a sense, already “in the game”? Skeptics sometimes argue that corporate diversity won’t help the bottom quarter or quintile of people who have never learned the skills that corporate America needs. Companies are, after all, in the business of making money. Those who have been consigned to the margins of our society generally don’t make a particularly lucrative market or attractive labor force.

Al Zollar, the general manager for IBM’s Lotus Software division, and as such one of America’s leading African American high-tech executives, disagrees. “I go to schools and ask the kids how much they think I make. They tell me $20,000 or $25,000 year, because that’s what their expectations are. They don’t know that you can be an African American and make it.” By giving young people an attainable vision of success, Zollar and other nontraditional executives give back to their communities the most precious resource of all: Hope. “Thanks to Martin Luther King and people of my father’s age, my generation has the opportunity to succeed in ways that past generations could only dream about. We have an obligation to seize that opportunity, both to redeem the past and to help forge a brighter future.”

A Best Practices Cheat Sheet

General Principles:

* Engage in an ongoing study and evaluation of the organization’s current efforts to promote diversity.

* Eliminate any policies and practices that present ongoing barriers to minorities.

* Decide what the organization’s short-and long-term diversity goals should be.

* Develop a coherent plan to reach these goals, and set aside sufficient resources to help bring them about.

* Establish clear policies, communicate them to all employees, and follow them rigorously.

* Conduct periodic reviews of policies and programs to establish how well they are working to promote diversity.

* Make diversity a bottom-line issue and hold managers accountable for achieving results.

Recruitment:

* Define carefully and accurately the job selection criteria, such as the particular skills and abilities required, before the selection process begins.

* Partner with minority associations and educational institutions, participate in minority career festivals, and advertise in minority media.

* Develop educational outreach programs, such as scholarships, internships, and work/study programs.

* Explore community involvement options that bring the company goodwill and that open lines of communication.

* Work on eliminating barriers to hiring minorities, and communicate to all stakeholders the company’s ongoing efforts to expand the candidate pool.

* Make sure that all of those responsible for hiring are fully briefed on the company’s policies and legal requirements regarding affirmative action and diversity.

Promotion and Advancement:

* Make an affirmative effort to identify and develop high-potential employees across all lines–racial, gender, disability, and so on.

* Enable employees to expand their potential by making educational and training opportunities widely available.

* Establish broad-based mentoring programs that cut across affinity groups, and make sure that mentors are given the training they need to successfully nurture junior employees who are women and people of color.

* Provide employees with tools, such as career resource centers and evaluation programs, to help them proactively manage their own careers.

* Keep promotion policies transparent and ensure that opportunities are accessible to all.

* Study and validate promotion and compensation policies and procedures.

Terms and Conditions:

* Develop family-friendly policies and flexible work arrangements that help employees cope with the work/family dilemma.

* Provide anti-sexual harassment and discrimination training to all employees, and make sure they participate.

* Keep informed about emerging technological innovations that help bring people with disabilities into the workforce.

* Adopt a presumption that reasonable accommodations can be found for most issues, ranging from religion to pregnancy to disabilities.

* Conduct a periodic “disability-friendly” audit of the physical work environment.

* Develop a system to monitor compensation and performance appraisal to ensure that they are discrimination-free.

Termination and Downsizing:

* Communicate the reasons for the termination clearly and succinctly.

* Minimize the pain of downsizing by encouraging voluntary departures and early retirement.

* Consider providing grief and anger management counseling immediately after the termination.

* Train managers to follow procedures that minimize corporate liability.

* Provide as much assistance to the terminated employees as possible, including training and education, job placement, and counseling.

Alternative Dispute Resolution:

* Consider implementing any or all of the following: employee hotline, ombudsman program, peer review panel, senior management review panel, mediation program, and an arbitration program.

* Eschew the temptation to institute a binding arbitration program as a condition of employment.

* Clearly communicate a “no retaliation” program and discipline severely anyone who violates it.

Management Commitment and Accountability:

* Get the CEO on board and keep the CEO on board. No diversity initiative can succeed without strong CEO support.

* Articulate a clear reason why it is necessary for the company to pursue diversity in the 21st century, and communicate that vision to all employees.

* Establish clear goals and mile markers to measure performance.

* Tie management compensation, in part, to success in meeting and exceeding diversity-related goals.

* Create an organization capable of ongoing self-evaluation and self-correction on diversity issues.

* Take steps to increase the diversity of the board of directors, and ensure that they require proper accounting and self-reporting procedures, and hold management accountable for diversity goals.

Other Practices:

* Conduct diversity and harassment training for all employees, and make training part of the orientation for new hires.

* Support the formation of affinity groups, and consult with them in developing diversity-related policies and projects.

* Make a proactive effort to hire minority- and women-owned contractors whenever possible.

* Promote heritage festivals and diversity-related celebrations.

* Market diversity in-house as a critical component of the company’s ethos.

* Make company policies, practices, and goals, as well as employees’ diversity-related rights and responsibilities, fully known and understood.

* Hire outside diversity consultants with the same care you would hire, for example, safety experts, or financial consultants.

Figure 1. U.S. population by race and ethnic group, 2000, 2025,

and 2050

2000 2025 2050

White non-Hispanic 71% 62% 53%

Hispanic 12% 18% 24%

Black 12% 13% 13%

Asian 4% 6% 9%

American Indian 1% 1% 1%

SOURCE: U.S. Census Bureau, Projections of Resident Population,

various years. Based on 1990 Census data with a projection of

moderate immigration growth.

Note: Table made from pie chart.

Figure 2. Entrants to the labor force, 1998 to 2008

White men 29.9%

White women 28.6%

Black men 7.5%

Black women 9.0%

Hispanic men 8.2%

Hispanic women 8.0%

Asian and American Indian men 4.3%

Asian and American Indian women 4.5%

NOTE: Racial categories exclude Hispanics who may be of any race.

SOURCE: Fullerton, Monthly Labor Review (November 1999).

Note: Table made from pie chart.

Table 1. Business ownership by race and ethnic group, 1987 and 1992

Number of firms Firms per

(thousands) 1,000 population

Race/ethnicity 1987 1992 1987 1992

White, non-Hispanic 12,482 15,298 57 80

African American 424 621 15 20

Hispanic 422 772 21 32

Cuban 61 92 63 84

Mexican 230 379 19 25

Puerto Rican 35 47 11 17

Other Hispanic 104 263 23 47

Asian/Pacific Islander 355 565 57 68

Korean 69 99 102 113

Asian Indian 52 89 76 93

Chinese 90 148 63 79

Vietnamese 26 58 49 78

Japanese 53 62 66 69

Filipino 40 60 33 37

Hawaiian 4 8 22 34

American Indian/Alaska Native 21 41 14 19

Aleut 1 1 54 47

Eskimo 2 2 44 38

American Indian 18 38 10 18

NOTE: Hispanics may be of any race. African American, Asian/Pacific

Islander, and American Indian/Alaska Native totals include some

Hispanics.

* Authors’ estimates based on total population figures derived from

interpolation of published figures.

SOURCE: U.S. Census Bureau, Survey of Minority-Owned Business

Enterprises, various volumes.

References

(1) If 100 classmates graduate from high school, of whom 90 are white, and 110 freshmen enter, of whom 95 are white, then the number of net entrants to the school is 10. Of these, five are white and five are nonwhite. (In other words, the school has five more whites than it did, and five more nonwhites.) Thus, 50 percent of the net entrants to the school are nonwhite, even though nearly 87 percent (95/110) of the entering class is white. The Hudson Institute’s 15 percent figure simply represents a fact about the composition of the growth of the workforce, not about the workforce as a whole.

(2) Some of the original reports about particularly offensive remarks attributed to Texaco officials turned out to be inaccurate. However, the overall thrust of the comments was certainly ill-advised.

(3) Even the sexes sometimes seem to belong to different cultures. When the Tom Hanks character in “A League of Their Own” exclaimed “There’s no crying in baseball!” he was genuinely shocked that the women on his team were distraught that he was yelling at them. The male ballplayers he had previously coached “understood” that a manager was supposed to yell at his players; they didn’t take it personally. The women, on the other hand, interpreted the yelling through the lens of their own experience: If they were yelling at someone the way the Tom Hanks’ character was yelling at them, it would be because they were truly upset. Hanks’ character, for his part, interpreted crying as a sign of severe emotional distress and weakness. So both sides “overinterpreted” each other’s behavior in light of their own understanding of what was natural and proper to the situation.

(4) Equal Pay Act 29 U.S.C. [section] 206(d)(1) (1994).

(5) Mandatory arbitration programs have generated many complaints. The primary one is that the adjudicators are usually drawn from senior leadership in the industry, and so are not balanced by race or gender. In its investigation of the securities industry, the U.S. Commission on Civil Rights found that 97 percent of the judges on the arbitration panel pool were white men. Women and minorities who are considering whether or not to file discrimination grievances must find that statistic rather daunting. For this reason and others, the Equal Employment Opportunity Commission generally discourages mandatory binding arbitration as a condition of employment; increasingly, however, the courts are finding such policies lawful.

RELATED ARTICLE: How have minorities fared in corporate America?

One person with a particularly upclose view of developments in the field is Carl Brooks, president of the Executive Leadership Council. The ELC is an organization of 250 senior-level African American executives and entrepreneurs. “Progress is slower than we had anticipated,” he admits. “The big issue is not outright racism, it’s breaking into the club. We’re accepted as senior partners, but with a few exceptions haven’t yet made that transition to top-level board members and CEOs.”

The view that the situation hasn’t changed as much as it could have appears to be confirmed by the statistics regarding workplace discrimination. Indeed, from the frequency of the headlines about workplace lawsuits and the steadily mounting sums awarded as a result of Equal Employment Opportunity Commission (EEOC) complaints, it can seem like the situation has improved very little.

* Highly publicized lawsuits at Texaco in 1997 and Coca Cola in 2000 were settled for $1 76 million and $192 million, respectively (see table 1).

* The number of charges filed with the EEOC has grown by 100 percent over the past decade (see figure 1).

[FIGURE 1 OMITTED]

* The average settlement award for an employment practice liability lawsuit has increased fourfold since 1994 alone (see figure 2).

[FIGURE 2 OMITTED]

* Six of every 10 corporations have been hit with at least one sexual harassment lawsuit in the past five years, according to the Society for Human Resource Management, and firms with more than 250 employees report an average of six sexual harassment complaints a year.

Meanwhile, white males continue to predominate at the higher levels of most corporate structures. Hispanics, African Americans, and American Indians are more likely than whites or Asians to work in lower-paying semi-skilled jobs or as service workers. They are less likely to hold white-collar jobs, and if they do, they are more likely than whites or Asian Pacific Americans to work as typists, clerks, or salespeople than as managers or professionals. As of this writing, only two Fortune 500 companies are run by women; only four are led by members of an ethnic minority group. Fully 18 percent of Fortune 500 companies count no women among the ranks of their corporate officers; 11 percent have no people of color.

That’s the bad news. The good news is that great strides have been made over the past few decades. Since 1960, the percentage of African American workers in managerial or professional positions has increased sixfold. In the past decade alone, the percentage of black managers or professionals has jumped 6 points, from 16 to 22 percent (see figure 3). The number of black senior executives at Fortune 500 companies has roughly doubled, says Brooks. And 89 percent of Fortune 500 companies now have at least one ethnic minority on board, compared with 56 percent in 1990.

[FIGURE 3 OMITTED]

The gains for women are even more impressive. The percentage of women managers and professionals went from 14 to 29 percent over the past decade. Women make up 12.5 percent of corporate officers in Fortune 500 companies, up from 8.7 percent in 1995, and the number of Fortune 500 companies with a woman top earner went from 29 to 83 (see figure 4). (1)

It is important to emphasize these improvements, because a constant drone of bad news can suggest that the problems are too far-reaching or intractable to be much affected by anything business executives do. In fact, there has been a great deal of progress–and more progress is likely, because many of the initiatives that began 10 to 20 years ago are just now bearing fruit in the form of senior, top-level managers and executives.

Figure 4. Percent of women managers

49.6 of managerial and professional specialty positions

40.5% of U.S. labor force

12.5% of corporate officers

11.7% of board directors

6.2% of highest titles

4.1% of top earners

2 Fortune 500 CEOs

Table 1. Major settlements

Settlement

Company amount (in millions) Charges

Coca Cola $192.5 Race

Texaco $176 Race

Shoney’s $132.5 Race

Home Depot $87.5 Gender

Publix $81.5 Gender

Denny’s $54 Race

Southern California

Edison $11 Race

SOURCES: Scott Leith, “Coke Near Trial on Bias Lawsuits,”

The Atlanta Journal and Constitution, Apr. 3,

2002, p. 3D; Los Angeles Times, “EEOC Seeks Role in

Texaco Settlement,” Nov. 21, 1996, p. D3; L.A.

Winokur, “Shoney’s Progress Noted Since Settlement,”

The Atlanta Journal and Constitution, Nov. 16, 1997, p.

3Q; “Apple Ad Debut,” USA Today, Sept. 22, 1997, p.

1B; Simon Barker-Benfield, “In an Employment Scene

That is Evolving for Workers of Both Genders,” The

Florida Times-Union, Feb. 2, 1997, p. A-1; “An Encouraging

Sign,” Los Angeles Sentinel, July 12, 1994, p. 6;

Allyson Quibell, “Big Deals, Big Suits,” The Recorder,

Oct. 3, 1996, p. 4.

(1) Women of color have not been as fortunate: They make up only 1.3 percent of corporate officers, and only six women of color are top earners. There are insufficient data on other major ethnic/racial groups.

RELATED ARTICLE: The protected categories.

A paradox lies at the heart of many diversity initiatives. Most define diversity in the broadest possible terms–encompassing, to quote from one diversity manual, “all the ways that we are human, including our values, perspectives, personalities, and experiences.” The impulse behind these definitions is noble: to make sure that everyone feels included–even groups, such as white men, who might feel threatened or excluded by diversity initiatives. In practical terms, however, several elements of personal identity usually come to the fore in diversity initiatives: Race, Ethnicity, Gender, Age, Religion, Disability, and Sexual orientation (REGARDS). That is because these dimensions of a person’s identity remain the most socially significant. It is along these lines that people are most likely to be discriminated against–that is, to be treated unfairly because of some irrelevant group characteristic. And it is along these lines that groups have organized to protest their mistreatment and protect their rights. This section very briefly explores the situation and concerns of each of the major groups.

AFRICAN AMERICANS

African Americans remain America’s most visible minority. Throughout our history, they have been the minority group that defines what it means to be a minority group in America, and their story is ineluctably entwined with the nation’s own struggles to live up to its highest ideals. Until very recently, they were also the largest minority group in terms of population. Their political activism, their achievements in high-profile fields such as entertainment and sports, and their rich cultural legacy give them a visibility that other minority groups are only beginning to approach. (When asked to estimate what percentage of Americans are black, most Americans, black and white, guess in the range of 25-40 percent; in fact, only a little more than 11 percent of Americans are black.)

Less well appreciated is the economic strength of black America. Stereotypes of blacks as poor, criminal, welfare-dependent, lazy, and so on, are not only wrong, but can lead people to underestimate the extraordinary potential of this group, considered both as a market and as a workforce:

* African Americans have the highest buying power of any minority group, at $532 billion per year (1998), up 73 percent since 1990.

* Almost 50 percent of African Americans own their own homes.

* African Americans outpace the general population in terms of growth in household income, small business creation, mortgage origination, and higher educational attainment.

Unfortunately, African Americans continue to face substantial hurdles in corporate America. Many feel they are forced to contend with unvoiced attitudes, suspicions, and stereotypes that they are having constantly to overcome. Among these assumptions: that they are “affirmative action hires,” and therefore less deserving than others of their position; that they are less capable or intelligent or hardworking; that at heart they have negative and resentful attitudes. African Americans are also most likely to report feeling the need to suppress aspects of their personalities and identities in order to blend in with the corporate culture. And they report having to work harder simply to be given the same opportunities as others.

LATINOS

News that Latinos had effectively surpassed African Americans as the nation’s largest minority group was the biggest headline to emerge from the 2000 Census. But even before then, Hispanic communities were capturing the attention of marketers, advertisers, and politicians.

The diverse cultures, traditions, and countries of origin of Hispanic Americans virtually guarantee that any summary of their accomplishments will be incomplete. Their historical experiences run from colonization and conquest to immigration and exile. The Hispanic American civil rights movement, led by such inspiring leaders as Cesar Chavez, helped bring Hispanic Americans into the mainstream of American social and political life. With more than 30 million inhabitants of the United States now self-identifying as Hispanics, they have come to exert a growing influence on the cultural and intellectual life of the nation. This influence extends from the popularity of Latin Beat to the efflorescence of Hispanic literature. It is an influence that will only continue to grow, as more than one-quarter of the U.S. population is expected to be Hispanic by the year 2050. Hispanics represent a burgeoning market as well as a growing labor force. The total purchasing power of the group has more than doubled since 1990, and is now estimated at $450 billion. More than one million Hispanics report an annual income of more than $75,000. Younger, on average, than non-Hispanics, they are also the most geographically concentrated, with more than 80 percent residing in just five states: California, Texas, New York, Florida, and Michigan. Hispanics face a distinct set of problems. They are, proportionately, the least well-represented of the major ethnic and racial groups among the managerial and professional elite. Indeed, only 1 percent of executives at corporations having more than 100 workers are Hispanic. This statistic partly reflects language and educational barriers. Approximately half of all school-age Hispanics are obtaining high school diplomas, compared with nearly 90 percent of blacks and whites. But, say advocates, the disparity also reflects ongoing stereotypes of Hispanics as macho, temperamental, and low-skilled. In addition, some evidence suggests that Latinos have not been given the sustained attention that many firms have recently paid to African Americans, and that mechanisms for recruiting Hispanics (for example, college job fairs) are not as developed as they could be.

ASIAN PACIFIC AMERICANS

Although they are the nation’s fastest growing population group, Asian Pacific Americans are often overlooked. They are the most diverse ethnic/racial group, exceeding even Hispanic Americans, since they encompass Japanese, Indians, Chinese, Korean, Pacific Islander, Filipino, Vietnamese, and other nationalities, each with their own language and a complex and often contentious history of interaction. They range from pre-literate Hmong refugees, to highly skilled immigrant Indian software designers, to seventh- and eighth-generation Japanese American World War II veterans. Considered as a group, Asian Americans have done well: the average household income is $6,000 higher than that of Caucasians, and $21,000 higher than that of African Americans. They also enjoy the highest educational level of any racial/ethnic group in the United States. Thirty-eight percent hold bachelor’s degrees versus 22 percent of non-Hispanic whites, 11 percent of African Americans, and 10 percent of Hispanics. High levels of entrepreneurial activity have also boosted Asian American incomes. According to the Small Business Administration, 56 percent, or $275 billion, of all minority business sales come from Asian Americans, compared with $184 billion from Hispanics and $59 billion from blacks.

However, these statistics can mask gross disparities among different Asian Pacific American communities and contribute to the stereotype of Asians as a “model minority,” whose hard work, intelligence, and success rebut allegations that discrimination and prejudice remain problems in this country. On the contrary, many Asian Pacific Americans report having experienced various types of discrimination. For example, they are often mistaken for noncitizens and asked where they learned such good English. They are viewed as technically competent, but lacking in interpersonal and leadership skills. Many Asian Pacific Americans continue to experience a “glass ceiling,” limiting their mobility into the highest ranks of executive and administration positions. And a recent poll of American attitudes and beliefs found that a substantial majority still subscribe to stereotypical judgments about Chinese Americans–for example, that they are “clannish.”

AMERICAN INDIANS AND ALASKA NATIVES

American Indians/Alaska Natives are perhaps the most invisible minority due to their relative small size. Comparatively little data is collected by mainstream (i.e., non-Native) organizations, so the needs and characteristics of Native populations often go unrecognized, particularly within the business sector. There are, however, 4.5 million American Indians/Alaska Natives in the United States, making up 1.5 percent of the total population. Within that group are widely varied cultural and tribal distinctions.

Because of their unique circumstances and government relationships, Native Americans remain largely clustered and are less integrated with the rest of society than other racial/ethnic minority groups. It is estimated that 40 percent of American Indians live on reservations; the remaining 60 percent live either close to reservations or farther away in rural communities. Relatively few live in urban environments. The majority of the American Indian/Alaska Native population resides in the West (43 percent) and South (31 percent). Among Alaska Natives, the vast majority live in remote rural villages, highly segregated from the state’s economic epicenters.

An unfortunate history of domination and removal has left a large number of Native Americans in a situation of poverty and economic depression, with little opportunity for advancement, particularly on geographically and socially isolated reservations. Native tribes and villages have some of the highest poverty and unemployment rates in the country, at 33 and 43 percent, respectively, for those living on or near reservations. Some reservations, such as Pine Ridge in South Dakota, experience unemployment rates as high as 85 percent and poverty rates at more than 60 percent. The same destitution is visible in Alaska Native villages, where one-fifth of inhabitants live below poverty, and in some, unemployment rates exceed 80 percent.

Despite federal obligations to tribes and villages, there has been little improvement in economic conditions and opportunities over the years. As table 1 indicates, there are proportionately fewer Native-owned firms than are owned by any other group. There is untapped potential among Native populations, an opportunity universally ignored by big businesses and private industry. Corporate attempts to improve diversity should include outreach to and recruitment of Native populations, particularly in saturated regions of the country.

WOMEN

In 1943, the Office of the Secretary of War issued a pamphlet titled “You’re Going to Employ Women,” which contained the following: “A woman worker is not a man; in many jobs she is a substitute–like plastics instead of metal–she has special characteristics that lend themselves to new and sometimes much superior uses.” As the cigarette ad insists, women have come a long way since then. Or have they? Although women are a majority of the population, and some 46 percent of the workforce, they are often grouped as a minority or “protected category,” both in law and in practice. The reason? They continue to be subject to various kinds of job-related discrimination, from pay inequities to harassment to “glass ceiling” limits on their career. A few examples:

* A 1995 report found that 95 percent of senior managers in the largest U.S. companies were men.

* According to a 1996 study, less than 3 percent of federal contracts went to women. Male physicians earn $1,553 per week, compared with $899 for females; male securities and financial professionals earn $1,118 per week, compared with $641 for females.

* Overall, research groups continue to find large discrepancies in income by gender, with women earning about 74 cents for every dollar men earn. (1)

The proportion of women in the labor force has grown steadily over the past five decades, from 29 percent in 1950 to 47 percent in 1997. They are expected to reach parity by 2010. And women’s labor participation rate (the percentage of women in the job market) grew from 33 percent in 1950 to 61 percent in 2000. Two-thirds of women with children under the age of 6 now work, up from 47 percent as recently as 1980.

However, employers are only beginning to come to grips with the consequences of these trends. The traditional career path, a “lock-step, full-time march to a one-way, one-time retirement,” developed during the heyday of the male breadwinner, remains the norm at most firms. But it is, as one demographer has expressed it, an “antiquated career template.” Today most working husbands have working wives, and most children have working mothers. Increasingly, firms will find it advantageous to adapt new and innovative strategies to retain women employees, through flex and part-time schedules “mommy (or parenting)” tracks, family leave, and telecommuting, for example.

OLDER AMERICANS

The graying of the American worker is one of the dominant trends in today’s labor force. The oldest of the baby boomers hit 55 in 2001, and as this demographic bulge moves toward the rear of the population snake, it will force employers to rethink many of the assumptions that they–and society in general–have long operated under. Labor participation rates of the elderly have drifted downward for nearly a century, for example, as Social Security and pensions have provided guaranteed income. But many boomers will want to continue working past the traditional retirement age, either because they enjoy their work or because they need the income. (Few observers expect Social Security and Medicare to remain as generous in the years after 2020 as they are today. The benefits that enabled the past two generations of Americans to retire in relative ease are unlikely to persist, say experts, because the proportion of working to elderly adults will shift dramatically over the coming decades, from about four-to-one in 1995 to about two-to-one in 2030.) Employers will have to reconsider retirement planning and benefit programs. They will also have to figure out how to make room for middle-aged subordinates who find their opportunities for advancement blocked by the continuing presence of senior personnel.

PEOPLE WITH DISABILITIES

There are as many as 54 million Americans with disabilities, including some 1 7 million who are of working age. Of these, some 32 percent, or 5.8 million, are currently employed. Fully 56 percent of those who say they are able to work are currently working, up from 46 percent in 1986. And 72 percent of those who aren’t employed say they would prefer to be working. Four trends are likely to increase the number of disabled Americans in the workforce:

* First, in part because of the aging of America, there are ever-larger numbers of people with disabilities.

* Second, new technology–everything from sophisticated speech recognition software to robotically enhanced wheelchairs–is making it possible for many of those with disabilities to lead more productive lives.

* Third, there is a greater public awareness of the potential of this group of employees, in part because of the public education activities of such advocacy groups as the National Organization on Disability and the Department of Labor’s Office of Disability Employment Policy.

* Fourth, new laws, such as the Americans with Disabilities Act and the many state variants this 1990 federal law inspired, have given disabled Americans opportunities they may have been denied earlier. (2)

All of this is good news not only for disabled Americans, but for their employers as well. Because they are genuinely grateful for the opportunity, employees with disabilities in the workplace are more reliable, more dependable, more punctual, and more loyal employees than their non-disabled counterparts, according to the Office of Disability Employment Policy, which collects data and empirical evidence. (3) Furthermore, most of the changes necessary to accommodate disabled Americans cost businesses very little. One detailed analysis of a major retail store found that the total cost of all changes amounted to $45 per accommodated worker. Business is also waking up to the market potential of this group. Collectively, people with disabilities possess a disposable annual income of more than $175 billion. Add the incomes of household family members, and that number is more than a trillion dollars. A 1994 study conducted by National Family Opinion, Inc., for the 1996 Paralympic Games showed that people with disabilities are more likely to purchase goods and services from companies that are “disability friendly.”

GAYS AND LESBIANS

It is difficult to estimate the economic strength of gays and lesbians, in part because no one really knows what percentage of Americans are actually gay and lesbian. Estimates range from 2 or 3 percent to upwards of 10 percent. Although data suggesting that gays and lesbians have higher incomes than the average American have been widely publicized, gays and lesbians are, in fact, found throughout the spectrum of income distribution: some are poor, a few are rich, and most are in the middle. (4) There appears to be a distinction, however, between gays and lesbians, with lesbians earning less, despite relatively similar education levels as gay men. Income differences also are evident along color lines. (5) There is some intriguing evidence that gays and lesbians played a disproportionate role in creating the Internet economy One recent study found a significant correlation between the size of a city’s gay population and the vibrancy of its new economy sector. Increasing numbers of companies are recognizing the advantages of promoting a “gay-friendly” image. Among the strategies companies have used: implementing human resource policies that recognize domestic partners as spousal equivalents for insurance and pension benefits; developing advertising that features positive images of gays and lesbians; and selling products specifically to the community through gay- and lesbian-focused media. The evidence suggests that these kinds of efforts pay off: A vast majority of gays and lesbians say they prefer brands that recognize and include them, while 87 percent report boycotting companies known to have negative stance toward the population.

(1) The significance of this statistic is much disputed. It does not take into account the fact that men and women choose different careers, such as police versus elementary school teachers, which may pay differently. Nor does it register the fact that men and women, even within the same career, often choose different trajectories, with women more likely to take several years off at midcareer to bear and raise children. There has been surprisingly little solid research on what the residual differential is when these and other potentially relevant factors are controlled for. However, thoughtful analysts estimate that there probably remains a small but statistically significant gap.

(2) Recent Supreme Court decisions such as Chevron v. Echazabal, 122 S.Ct. 2045 (2002), US Airways v. Barnett, 122 S.Ct. 1516 (2002), Toyota v. Williams, 122 S.Ct. 681 (2002), and Barnes, et al. v. Gorman, 122 S. Ct. 2097 (2002) on ADA will significantly impact the lives of people with disabilities. Joan Durocher, Op Ed, “The Supreme Court and The Americans with Disabilities Act,” National Council on Disability, July 25, 2002, accessed at www.ncd.gov/newsroom/news/r02-371.html.

(3) The President’s Committee on the Employment of People with Disabilities was the government agency that collected data for decades and was replaced in FY 2001 by the Office of Disability Employment Policy.

(4) M.V. Lee Badgett, “Income Inflation: The Myth of Affluence Among Gay, Lesbian, and Bisexual Americans,” Lambda Legal Defense and Education Fund, Dec. 1, 1998.

(5) Judith Bradford, Kristen Barrett, and Julie A. Honnold, “The 2000 Census and Same-Sex Households,” National Gay and Lesbian Task Force, Oct. 9, 2002.

RELATED ARTICLE: An interview Cyrus Mehri.

Having spearheaded discrimination lawsuits against Texaco and Coca Cola that fetched record settlements, Cyrus Mehri, now 40 years old, is one of the nation’s leading employment discrimination lawyers. But it’s not the sums he’s won for his clients that have most impressed observers; rather, it’s the broad institutional changes he’s helped bring about at these companies. In the Coca Cola case, for example, the changes include the creation of an outside seven-member independent task force mandated to ensure compliance with the settlement and to oversee Coca Cola’s diversity efforts. Now at Mehri & Skalet, PLLC, a Washington, DC-based firm, Mehri spoke with CRJ in late October 2001. More information on Mehri is available at the firm’s Web site, www.Findjustice.com.

CRJ: Let me begin with a very broad question. Do you see the cases you’ve litigated so far as exceptions or as symptoms? In other words, how severe a problem do you think racism and discrimination are in corporate America?

Mehri: These aren’t problems that are specific to any one company. What corporate America views as its best practices in diversity fall far short of what fairness requires. We’re ready to take on any company in the country because we believe the problems are not isolated to Coca Cola or Texaco. Corporate America itself has a problem with systemic discrimination.

CRJ: Expand on what you mean by “systemic discrimination.”

Mehri: Let’s take it by topic or corporate structure. There’s a glass ceiling where African Americans are brought in the door, but not allowed to get up to the higher echelons. Name the best-known companies in America and once you get to the executive committees really running these companies, you’ll see there’s virtually no diversity there. The second issue is what we’ve coined the “glass wall” problem, where we see that the few African Americans who have reached the higher echelons are channeled away from the power positions and profit centers. So there’s a lot of camouflaging of the problem by laying out EEO-1 report numbers. But if you look behind these reports, you’ll see that there’s still widespread discrimination. How does this happen? One problem we’ve seen is a lot of companies either don’t have a job-posting system or have a system that’s really a farce. So they’ll have this elaborate electronic posting, where a job supposedly gets announced and you can compete for it. But the reality is that whole classes of jobs are exempted from the posting system. Or there are ways to circumvent the posting requirement, by tailoring the job description so narrowly that only the preselected candidate is qualified. Or you’ll have a secret system, what’s called a high-potential list of fast-track executives, which exists side-by-side with the explicit system. And the people drawing up that list are all white males. So what in fact is happening is the same tap-on-the-shoulder, good-old-boy network that prevents people from competing on their merits as existed before.

Another problem area is in compensation. What tends to happen is that companies give an undue discretion to managers and fail to examine how compensation is being distributed and whether there are any inequities. They take the ostrich approach. High-tech companies distribute stock options that make people millionaires–or at least they used to make people millionaires–and then fail to really look at how their stock options are being distributed. And if they do look, they don’t take corrective action.

CRJ: Describe what the legal climate was like when you began doing this work.

Mehri: We started doing this work in 1993, at the start of the Texaco case, when there were few private firms enforcing the law. From the late 1970s to the early 1990s, there was a 90 percent decline in the number of employment class action cases generally. So we faced a situation where many of the plaintiffs had been forced to do their homework on their own. And they had demonstrated that there were problems. They’d prepare reports showing how African Americans were under-represented, how they were locked out of the real power centers of the company. But senior management responded by saying things like, “What are you guys, a bunch of black panthers?” They’d take the reports and stick them in the drawer. And that just shut down the dialog, so litigation became a last resort. And that’s when we were called in.

CRJ: What kind of impact do racism and discrimination have, both on the individual and on the company, generally?

Mehri: What we’ve seen is that [black] employees are extremely loyal to their company, extremely proud to be part of it. They may have gone further than any of their family members in previous generations, so they have a sense of “Who am I to complain?” But then they’ll see that subordinates are making more money than they are, or they’ll see African Americans being shown the door one after another, and the hurt goes far beyond the feeling of being out of pocket. It has a profound and disillusioning impact, a demoralizing impact. Part of the emotional struggle is that the discrimination is so subtle. It takes a long time before people begin to see it as systemic. It’s not until we meet with people, until we have 15 or 20 potential class members in the same room, that they realize that what is happening to them is happening to others, and they understand the more sweeping nature of the problem.

The irony is that it’s really holding back these companies, because they are missing out on world-class people. African Americans and other minorities are disproportionately leaving corporate America because they end up feeling like the system is unfair, that they are being locked out. And all they are asking for is an equal chance to compete.

CRJ: Many people would say, “Look, it’s the 21st century. The Archie Bunkers and Bull Connors of the world are long gone. How is it that these problems still remain?”

Mehri: I think there are different problems in the white-collar and blue-collar workforce. In the white-collar workforce, what you see is that decisions about compensation and promotion are ostensibly based on the evaluation system, but none of these companies have really gone out and validated these systems to make sure they’re fair. They’re based on giving undue discretion to managers who set different criteria for each person, and they’re not linked back to a careful job analysis based on the actual content of each person’s job.

What we’ve found in company after company is that the evaluation systems may have eight categories, with a lot of business terms, but they basically boil down to handing out “A”s and “B”s and “C”s, like a school report card. And African Americans are overrepresented in the “B”s. They get underrepresented in the “A”s and “C”s. So they give African Americans just enough of a grade to keep people happy or pacified, but not enough of a grade to advance. So there is something terribly wrong with how corporate America is handling its evaluation systems.

CRJ: And what is happening among the blue-collar workforce?

Mehri: There are a couple of issues happening there. One is that there is a dramatic increase in the number of hostile work environments in the manufacturing center.

The other thing we’re seeing is more and more unfairness in the way testing procedures are handled in the hourly workforce. So you might have a test that determines how you go from being an hourly employee to being an electrician, and that rating is worth $3 or $4 an hour–a tremendous economic difference. And what we’re finding is that these tests are antiquated, they’re decades old, they’re not job related, and they’re having a huge disparate impact. Then we’re finding instances where there’s a kind of closed-door cheating to help the white employees pass. And this battle, over paper-and-pencil tests, is going to become a new old frontier, you might say. A new frontier for us, but a battle that was supposedly fought and won over a generation ago.

CRJ: Say I’m the CEO of a Fortune 500 company, and I come to you and say: “OK, how do I improve, how do I ‘Cyrus Mehriproof’ my organization?”

Mehri: (laughs.) You know, I’ve never been asked by companies to come in, but if I were I could help turn them around. Let me give you a list, but in no logical order. First, I’d have a genuine job-posting system that works and goes as far up the food chain as possible. In terms of pay grades, everything but the most senior management positions should be listed. I would not have any secret promotions, any secret high-potential list. And if you are going to have a fast-track list be very sure to communicate it, and what the criteria for selection are. No more closed-door, golf-buddy selection process.

I’d also make sure that the boards of directors of these companies take a more active role. Make sure that they receive reports, and use diversity as a factor for new board member selection. So start from the very top. I’d also link managers’ compensation to how well they do in EEO performance. That will go a long way. Companies should have more mentoring and affinity group programs, to help people develop professionally. And finally, they should do a much better job of gathering data and internal reporting. They need to do a much better job of monitoring their compensation, evaluation, and promotion systems.

CRJ: Tell us a little about the recent study, “Double Standard on Appeal: An Empirical Analysis of Employment Discrimination Cases in the U.S. Courts of Appeals,” (1) you commissioned on how employment discrimination cases fare in the federal appellate courts.

Mehri: This was a study conducted by very distinguished, esteemed scholars from Cornell Law School, and what they found, by looking at the hard data over a 20-year period, was that appellate courts seem to have a double standard for employment discrimination cases. When a plaintiff appeals, he or she has no more than a 5 percent chance of reversing the defendant’s victory at trial. But when a defendant appeals a plaintiff’s trial victory, the defendant has a 43 percent chance of reversal. Only prison cases fare worse. The gap is so huge it cannot be explained as anything other than bias against the employment plaintiffs.

What makes this so astonishing is that plaintiffs have already overcome all kinds of obstacles to prevail at trial, and these are very fact-intensive cases. So the results of the study suggest that federal courts use this deference to court findings as a shield for winning employers, but toss that shield away when it comes to reviewing employee claims.

Sadly although this report was widely covered in the press, we haven’t had an adequate response from the judiciary. In fact, we have yet to receive any kind of thoughtful explanation at all, and you can print that.

(1) Theodore Eisenberg and Stewart Schwab,” Double Standard on Appeal: An Empirical Analysis of Employment Discrimination Cases in the U.S. Courts of Appeals,” July 16, 2001, accessed at www.findjustice.com/ms/civil-just/schwab.report.htm.

RELATED ARTICLE: Zero tolerance: a word of caution.

It is tempting, in the face of potential lawsuits and the political climate that exists today, to announce a “zero tolerance policy” with regard to discrimination and harassment. Imposing a zero-tolerance policy gives evidence that management takes the issues seriously, and seems to eliminate the possibility that disparities in treatment will arise, since every incident will receive the same (severe) response.

The problem with these policies is twofold. First, a great many incidents are marginally or even questionably offensive, and inflexibile responses can be more damaging than helpful. If, for example, someone repeats a slightly off-color joke heard on Seinfeld or Letterman, says something self-deprecating about his or her group, or simply discusses recent political scandals, some people might take offense. A zero-tolerance policy would preclude anything but a severe reaction, one that can seem disproportionate to the “crime.” There is no possibility of tailoring the response to the severity of the incident.

The second problem with zero-tolerance policies arises from the first. If a zero-tolerance policy isn’t enforced in a rigorous and literal way, because in some instances it leads to absurd overreactions, the policy as a whole is undermined. A policy, once adopted, must be consistently applied. Anything else leads to greater legal exposure, because it opens the company to charges of picking and choosing when to apply its own stated standard.

A far better approach is to have the company’s response match the severity of the offense. If it must be given a label, call it a “Rapid Reaction” policy. This policy should be explicit, transparent, and communicated clearly and frequently to employees. If incidents arise, they should be dealt with expeditiously and fairly, and there should be mechanisms in place to protect the rights of the person making the accusation as well as due process for the person being accused. Such a policy should be based on principles of inclusiveness and sensitivity. But it should also presume that employees possess an inner fortitude and proportionality. Respecting diversity does not entail surrendering one’s judgment or good sense.

RELATED ARTICLE: Laws governing workplace discrimination.

There is a patchwork of laws governing workplace discrimination. But at the federal level, three are central: Title VII of the Civil Rights Act of 1964 (1) prohibits discrimination based on race, color, religion, sex, and national origin; the Age Discrimination in Employment Act (ADEA) (2) prohibits employment discrimination based on the fact that the employee (or job applicant) is 40 years or older; Title I of the Americans with Disabilities Act (ADA) (3) prohibits employment discrimination against qualified individuals with a disability, “who, with or without reasonable accommodation, can perform the essential functions of the employment position.” (Two other laws, the Equal Pay Act of 1963 (4) and the Pregnancy Discrimination Act of 1978, (5) are much less frequently invoked.)

The first and third of these cover government and private sector employers having at least 15 employees; the second, at least 20 employees. In addition, most states have laws that duplicate, reinforce, or extend the federal laws. The primary aim of these laws is to ensure that all employment-related decisions (e.g., hiring, promoting, and termination) are made without regard to the employee’s (or applicant’s) status as a member of one or more of the protected classes.

Illegal differential treatment is typically classified as being either intentional or adverse-impact. Intentional discrimination occurs when the employer’s motive is discriminatory. Evidence of motive can be direct: for example, when an applicant for a truck driving position is told she will not get the job because of her gender. Evidence of discrimination can also be indirect, as when an individual in a protected class is turned down, and subsequently the employer hires some other nonminority applicant with lesser qualifications.

Adverse impact results from policy that has the effect of discriminating against individuals in a protected class even if the employer’s reason for the different treatment is not based on protected status–unless the employer can prove that the policy is required by business necessity and is significantly related to the job’s requirements. An employer, for example, cannot require that all applicants for a loading dock position be young men. It can require that applicants regularly be able to lift 60 pounds, even if this policy results in disparate treatment of female and elderly applicants. Height and weight standards, fluency in English, arrest and conviction records, and so on, are all examples of neutral criteria that have been found to have an illegal adverse impact by the courts, when employers have proven unable to demonstrate that they are necessary for successfully performing the job.

One notable exception to Title VII and the ADEA is the so-called bona fide occupational qualification (BFOQ). This exception provides for those instances in which it is an objective fact that members of protected classes cannot perform the job in question. For example, a film director is allowed to cast only females for female leads; a Kosher delicatessen is allowed to hire only Jews to serve as butchers. On the other hand, an employer may not turn an applicant down because of customer preferences; for example, a belief that whites won’t buy from a black salesman. (An interesting case now working through the courts involves medical partnerships that preferentially hire female gynecologists, because, they say, more and more women are requesting female doctors.)

In 1977, a notable addition to the antidiscrimination laws occurred when the federal courts found sexual harassment a form of discrimination prohibited under Title VII of the 1964 Civil Rights Act. There are two principal forms that sexual harassment can take. The first is the “quid pro quo,” where submission to the sexual advances of a superior is a term of condition of employment. The second is the so-called hostile work environment, where the employer’s offensive sexual conduct unreasonably interferes with the victim’s job performance. Catalyst, a corporate women’s research group, says that 95 percent of harassment cases involve a hostile environment. (It is an urban myth, incidentally, that a single, unfortunate remark can lead to a successful lawsuit. Courts determine the psychological harm, severity, and frequency of the offense, and whether it is physically threatening, before proceeding.)

The Supreme Court has recently elucidated several steps employers can take to prevent sexual harassment claims.

* First, they can develop and disseminate a written policy against harassment.

* Second, they can institute an effective complaint policy, with a mechanism allowing employees to bypass the supervisors who may be harassing them.

* Third, they can investigate complaints quickly and thoroughly and take appropriate disciplinary action.

* Fourth, they can provide anti-sexual harassment training to their employees, teaching them what sexual harassment is and what to do if they believe that they are being harassed.

The Equal Employment Opportunity Commission (EEOC) is the primary agency tasked with enforcing the nation’s employment antidiscrimination laws. For years, it suffered from poor management and inadequate funding, resulting in a large backlog of cases, slow processing time, and poor customer service. Its performance has improved significantly over the past decade; however, there is still considerable progress to be made.

Most discrimination complaints allege one or more of the following kinds of problems:

* Isolated individuals acting without the sanction of the organization in ways that are intentionally or subconsciously prejudiced. This might be the case, for example, with a supervisor who denies an Asian American woman a promotion into management because she doesn’t seem to him to be “management material.”

* Small groups acting intentionally against members of a minority group. This would be the case, for example, if a group of coworkers were harassing a gay colleague with the tacit approval of their immediate supervisor.

* The organization can establish practices that have a negative impact on certain groups, even though the practices are apparently neutral and were not created with any intent to discriminate. The courts tend to view these allegations with ambivalence.

* Finally, and most controversially, the organization can fail to take action to address one or more of these problems, as manifest by continuing disparities in outcome among different groups. This argument is by far the most common in employment law because it assigns responsibility (and thus liability) to the organization rather than to individuals within it; at the same time, it doesn’t rest on a finding that the company pursued explicitly discriminatory practices (after all, few organizations today adopt such policies), but maintains instead that the company failed to take action that it should have taken. It is no exaggeration to say that much of employment law is concerned with the two issues raised by this sort of claim: the attribution and extent of liability for acts of omission, and the conditions under which disparities can be taken as evidence of discrimination.

Probably no other area of employment law provokes quite as much concern as affirmative action. Intended to remedy present effects of past discrimination, it was originally promoted by Presidents Kennedy, Johnson, and Nixon. (6) However, it has come under increasing criticism for favoring certain groups at the expense of others. Anti-affirmative action measures have passed in California and elsewhere, and the Supreme Court, in several recent decisions, has imposed increasingly greater limitations on affirmative action programs. (7)

(1) Title VII of the Civil Rights Act of 1964, 42 U.S.C. [section] 2000e-2 (1994).

(2) Age Discrimination in Employment Act, 29 U.S.C. [section] 621 (1994).

(3) Americans with Disabilities Act, 42 U.S.C. [section] 12112(a) (1994).

(4) Equal Pay Act of 1963, 29 U.S.C. [section] 206(d)(1) (1994).

(5) Pregnancy Discrimination Act of 1978, 42 U.S.C. [section] 2000e-(k) (1994).

(6) Stephen Cahn, “Stephen Cahn on the History of Affirmative Action,” 1995, accessed at aad.English.ucsb.edu/docss/Cahn.htm.

(7) Michael Fletcher, “Affirmative Action Tops NAACP List,” The Washington Post, July 14, 1998, p. A3.

COPYRIGHT 2002 U.S. Commission on Civil Rights

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