Payoff for Opening Doors
Some U.S. companies are taking a tough stance on a difficult problem: ensuring that minority employees are given equal opportunities in the workplace.
By now, of course, most managers are aware that the growing ethnic and racial diversity of the U.S. is having – and will continue to have – a major impact on the labor force. In 1998, 27% of U.S. residents 18-64 years old were members of ethnic or racial minorities, according to the Census Bureau, and their share is projected to rise to 48% by 2050.
Many managers are less sure, however, about how to manage this increasingly diverse workforce. How do they make sure that minority employees are treated fairly? After all, long-standing disparities among U.S. residents of varying racial and ethnic identities reflect, at least in part, a complex historic inequality of opportunity – in education, hiring, pay and promotion. In the U.S. today, Blacks and Hispanics, in particular, tend to be overrepresented in lower-paying jobs – laborers, service workers and clerical/office workers – while Whites tend to dominate higher-paying management and professional jobs. These trends have helped perpetuate real economic disparities: in 1999, median per-capita income for non-Hispanic Whites was $24,109, but for Blacks it was $14,397 and for Hispanics just $11,621.
Understanding these social and labor trends is one thing. Effectively addressing them in the workplace is another. During the past decade, many kinds of corporate diversity initiatives have been used – consciousness raising, training sessions, analysis of systems and policies – all attempting to increase tolerance and inclusion. Even so, charges of racial bias in pay and promotions and of workplace racial harassment have risen significantly since the mid-1990s. In response to legal pressures and demographic trends, some companies have developed diversity programs that focus more on behavior than attitudes, programs that sometimes include tough talk and action.
Two companies that are credited with insisting on change after being hit with race discrimination suits are Advantica Restaurant Group, parent of Denny's, and Texaco. Both companies approached their diversity problems on a variety of fronts, but Texaco CEO Peter Bijur puts a dominant element of his strategy this way. "I drew a line in the sand and said we would not tolerate disrespect," he says. "Some people acted inappropriately; they are no longer here." Once the CEO made clear that those who did not promote diversity would no longer have jobs, Texaco directly linked compensation of senior managers to meeting diversity goals.
A similar strategy helped put Advantica on Fortune's list of the best companies for minorities in 1998, despite a race discrimination suit and $54 million settlement with some African Americans in the early '90s. Now the company reportedly evaluates all employees, both exempt and nonexempt, on how they value diversity, and it ties merit increases to this competency. Twenty-five percent of senior managers' bonuses is tied to the progress of women and minorities. Top management must be "steadfast, unwavering and verbally overt" in telling all the company's managers, "You will be rewarded on the basis of your ability to hire, develop and retain people of all races, creeds and sexual orientations," said former DuPont executive Kurt M. Landgraf in a Conference Board report called Diversity: An Imperative for Business Success. Fortune consistently names DuPont one of the 50 best companies for minorities. "For over 30 years, I tried all kinds of tactics, including persuasion, cajoling, explaining, sensitivity training, etc.," said Landgraf, "but the single best tool to help attain equality of outcome is signaling to your senior managers that they will be held directly accountable financially for results. You will be astounded by how open-minded people become and the results they achieve."
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Since 1998, Fortune magazine has been listing the 50 best companies for minorities and doing in-depth stories on some of them. To find the latest list, go to Fortune's Web site at
http://www.fortune.com/fortune/diversity/wha.html.
Detailed profiles of minority populations in the United States are available at the U.S. Census Bureau's site at
http://www.census.gov/pubinfo/www/hotlinks.html.
"Diversity in Executive Suites: Good News and Bad News," Korn/Ferry's analysis of interviews with global executives, is at
http://www.kornferry.com/focus/articles/diversit.htm.
Data about occupational distribution among U.S. racial/ethnic groups are available in "Job Patterns for Women and Minorities in Private Industry, 1998," published in April 2000. It is at the U.S. Equal Employment Opportunity Commission's site at
http://www.eeoc.gov/stats/jobpat/jobpat.html.
For projections of U.S. population growth, including racial/ethnic group details, see the U.S. Census Bureau's site at
http://www.census.gov/population/www/projections/natproj.html.
Although not freely available online, a report from The Conference Board, Diversity: An Imperative for Business Success, Report 1256-99-CH, 1999, does provide a lot of insight and corporate examples for putting together successful diversity initiatives.
By now, of course, most managers are aware that the growing ethnic and racial diversity of the U.S. is having – and will continue to have – a major impact on the labor force. In 1998, 27% of U.S. residents 18-64 years old were members of ethnic or racial minorities, according to the Census Bureau, and their share is projected to rise to 48% by 2050.
Many managers are less sure, however, about how to manage this increasingly diverse workforce. How do they make sure that minority employees are treated fairly? After all, long-standing disparities among U.S. residents of varying racial and ethnic identities reflect, at least in part, a complex historic inequality of opportunity – in education, hiring, pay and promotion. In the U.S. today, Blacks and Hispanics, in particular, tend to be overrepresented in lower-paying jobs – laborers, service workers and clerical/office workers – while Whites tend to dominate higher-paying management and professional jobs. These trends have helped perpetuate real economic disparities: in 1999, median per-capita income for non-Hispanic Whites was $24,109, but for Blacks it was $14,397 and for Hispanics just $11,621.
Understanding these social and labor trends is one thing. Effectively addressing them in the workplace is another. During the past decade, many kinds of corporate diversity initiatives have been used – consciousness raising, training sessions, analysis of systems and policies – all attempting to increase tolerance and inclusion. Even so, charges of racial bias in pay and promotions and of workplace racial harassment have risen significantly since the mid-1990s. In response to legal pressures and demographic trends, some companies have developed diversity programs that focus more on behavior than attitudes, programs that sometimes include tough talk and action.
Two companies that are credited with insisting on change after being hit with race discrimination suits are Advantica Restaurant Group, parent of Denny's, and Texaco. Both companies approached their diversity problems on a variety of fronts, but Texaco CEO Peter Bijur puts a dominant element of his strategy this way. "I drew a line in the sand and said we would not tolerate disrespect," he says. "Some people acted inappropriately; they are no longer here." Once the CEO made clear that those who did not promote diversity would no longer have jobs, Texaco directly linked compensation of senior managers to meeting diversity goals.
A similar strategy helped put Advantica on Fortune's list of the best companies for minorities in 1998, despite a race discrimination suit and $54 million settlement with some African Americans in the early '90s. Now the company reportedly evaluates all employees, both exempt and nonexempt, on how they value diversity, and it ties merit increases to this competency. Twenty-five percent of senior managers' bonuses is tied to the progress of women and minorities. Top management must be "steadfast, unwavering and verbally overt" in telling all the company's managers, "You will be rewarded on the basis of your ability to hire, develop and retain people of all races, creeds and sexual orientations," said former DuPont executive Kurt M. Landgraf in a Conference Board report called Diversity: An Imperative for Business Success. Fortune consistently names DuPont one of the 50 best companies for minorities. "For over 30 years, I tried all kinds of tactics, including persuasion, cajoling, explaining, sensitivity training, etc.," said Landgraf, "but the single best tool to help attain equality of outcome is signaling to your senior managers that they will be held directly accountable financially for results. You will be astounded by how open-minded people become and the results they achieve."
====================================================
Since 1998, Fortune magazine has been listing the 50 best companies for minorities and doing in-depth stories on some of them. To find the latest list, go to Fortune's Web site at
http://www.fortune.com/fortune/diversity/wha.html.
Detailed profiles of minority populations in the United States are available at the U.S. Census Bureau's site at
http://www.census.gov/pubinfo/www/hotlinks.html.
"Diversity in Executive Suites: Good News and Bad News," Korn/Ferry's analysis of interviews with global executives, is at
http://www.kornferry.com/focus/articles/diversit.htm.
Data about occupational distribution among U.S. racial/ethnic groups are available in "Job Patterns for Women and Minorities in Private Industry, 1998," published in April 2000. It is at the U.S. Equal Employment Opportunity Commission's site at
http://www.eeoc.gov/stats/jobpat/jobpat.html.
For projections of U.S. population growth, including racial/ethnic group details, see the U.S. Census Bureau's site at
http://www.census.gov/population/www/projections/natproj.html.
Although not freely available online, a report from The Conference Board, Diversity: An Imperative for Business Success, Report 1256-99-CH, 1999, does provide a lot of insight and corporate examples for putting together successful diversity initiatives.