Impact of Employee Diversity on Organisational Performance

This literature review explores the impact of employee diversity on organisational performance. It covers the advantages of having a diverse workforce, such as increased creativity, profit, and brand image, as well as the challenges that may arise. The review concludes that managing workforce diversity is crucial for gaining a competitive edge and improving productivity.

Impact of employee diversity
on the organisational
performance.
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
LITERATURE REVIEW................................................................................................................3
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7
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INTRODUCTION
A literature review is a document that provides published information related to the
particular subject matter. In simple terms, it covers the short summary of various secondary
sources. Literature review plays very important role in research as it assists in developing
academic knowledge by providing a detailed insight of the topic. The data is collected from
various secondary sources such as books, journal, articles, newspaper and many more. The
current investigation is based on the the topic related to the impact of employee diversity on
organisational performance (Bratton, 2020). Employee diversity means a workplace were
composed type of employees works together by having different characteristics such as caste,
religion, sex, ethnicity etc. Employee diversity impacts a lot on organisational performance and
productivity. Diversity in an organisation affects the behaviour and way of working of
employees within workplace. It is very important for an organisation to focus on diversity
because it helps them to improve their organisational performance in better way.
LITERATURE REVIEW
As per the view of Gomez and Bernet (2019), employee diversity is a positive aspect for
the company if it is managed properly. Diversity in simple terms means mixture of different kind
of people. Workforce diversity can be defined as the set of differences among the employee in
terms of caste, sex, age, culture and many more. It is not necessary that people in an organisation
is different from their demographical factor but can also be dissimilar in terms of opinion,
perspective and prejudice. Nowadays, competition is very high it is very important for the
organisation to diversify their workforce because it helps them to gain competitive advantage
from the rivalry. Diversity makes staff heterogeneous and if they are not managed properly than
it becomes challenging for the company. One of the major impact of employee diversity is that it
influence the performance and efficiency of staff. With the change in globalisation, liberalisation
and privatization, organisation is also focusing on acquiring employee from diversified area for
improving their business performance. In modern time with the globalisation and
internationalisation, companies can connect with society and different communities (Kirton and
Greene, 2021). In order to succeed and enhance the sale of the products in international market it
is important to hire diversified employee so that they can help in increasing the performance and
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productivity of business. There are many advantages which company can gain through
diversified workforce they are as follows:
Increased creativity is one of the benefit that a company can gain through diversified
workforce. Having a staff with different perspective and idea help an organisation to be more
creative due to which they can attain competitive advantage within market. Each and every
individual has different ideas and opinions which leads to innovation and creativity. These ideas
helps in improving the performance of business and also attracts more and more customer toward
the brand (Syed and Ozbilgin, 2019). People with different background has different exposure
and perception about the market and people which leads to enhance creativity. If same types of
employee work in an organisation, then there will be less creativity and innovation because all of
them possess same thinking. In short, homogenous group of people have similar thoughts and
perspective which reduces the chance of company to solve problem or bring innovation within
workplace. Thus, group of heterogonous employee will contribute in unique way which
improves the overall performance of company in better way.
Increased profit is the other advantage which is gained by an organisation with
diversified workforce. In many study it is being observed that company having different kind of
people works better as compared to the people with similar opinions or demographic factor.
According to the study of Leslie (2019), it is being identified that companies having diversified
workforce can perform better as they have skills and knowledge which helps company to
perform in effective and efficient manner. Businesses with diversified workforce make better
decision and also solve problem in very innovative way which helps an organisation to gain
competitive advantage over its competitors. If similar group of people works, then it becomes
difficult to collect more ideas and solve the issues related to business activities. Thus, it is
necessary to focus on hiring diversified workforce within an organisation so that they can
contribute their productive outcomes in achieving the goals and objective of business.
New perspective is also a benefit which can be gained by company through workforce
diversity. When companies attract and hire employee from various backgrounds, nationality and
religion then they bring fresh array of perspective it leads to better problem solving and improves
the productivity of business. People with different religion or caste have different perspective
related to the market because they have different way of thinking and perspective. Having new
perspective assist the company to improve their organisational performance. If company cannot
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acquire new talents with different perspective as compared to existing employee, then they
cannot perform innovatively. In recent time to gain market share it is very important for an
organisation to have a different pool of employee because they can make better decision and
also share their creative ideas (Riccucci, 2021).
Enhance brand image is also an advantage which can be gained by an organisation. In
today's market, diversification is important as it helps in increasing the brand image and
reputation of company due to which the success rate of business also gets enhanced. When an
organisation works with diversified staff then they attract more buyers and investor toward
brand. Thus, having a positive brand image helps business to gain more market share and
compete with its competitors in better manner. In fact, brand image is very important for the
company because it helps in differentiating their goods from the rivalry. When an organisation
wants to expand their business in international market, it is important to have diversified staff
because this help them to enhance their brand image in overseas market. Hiring employee of
different nation helps to understand the global market and also increases the knowledge related
to the particular country (Roberson, 2019).
Having more diversified workforce helps in increasing the organisation performance and
productivity in effective manner. But there are some challenges which are faced by an
organisation while having dissimilar group of people which can influence their performance. The
foremost issue that can be faced by the company in absence of proper management of employee
diversity is communication problem. As employee with different language, style, attitude and
behaviour work together which impact the organisation performance because what is understood
by one may be different by other (Rubery and Grimshaw, 2020). And this communication barrier
will impact the performance as sharing of information may be done ineffectively or their will be
some error while transferring message. Another problem is of culture misunderstand which is the
most common problem an employee faces. This misunderstanding will impact their productivity
as morale will be low among employee which will affect the way they ae performing in
company. Another problem can be slower decision making as different employee has various
perspective, opinion and ideas. A proper management is not there they this will slower down the
decision making which will effect performance and productivity (Schneider and et. al., 2018).
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CONCLUSION
From the above gather data from various secondary resources it is concluded that workforce
diversity is strength for the company if it is managed properly. If organisation focus on
improving the difference between the opinion and perspective of diversified staff than it will
helps in increasing organisation productivity and performance. It is also concluded that in recent
time were completion is at peak it is very important for the companies to have diversified
workforce because it help them to gain various advantage. A diversified employee reflects a
change in organisation performance and also Crete a positive market place. Having an employee
with different age, sex, perspective and many more will bring high value in a company. It is the
duty of the mangers in an organisation to Crete an environment where employee is respecting
other staff thoughts, opinion, sex and gender because it assists in competitive edge and increase
productivity. It is also concluded that workplace diversity is an important concept which improve
overall performance and productivity. Workplace diversity provide various benefit to the
business which improve organisation productivity and performance. Some of the advantage are
attach pool of talents, build market image, bring new perspective and many more. It is very vital
for the company to manage their workforce because it helps in gaining competitive advantage
from their rivalry. If organisation managed their diversified employee than they can manage their
business operation in effective and efficient manner.
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REFERENCES
Bratton, J. ed., 2020. Organizational leadership. Sage.
Gomez, L.E. and Bernet, P., 2019. Diversity improves performance and outcomes. Journal of the
National Medical Association, 111(4), pp.383-392.
Kirton, G. and Greene, A.M., 2021. The Dynamics of Managing Diversity and Inclusion: A
Critical Approach. Routledge.
Leslie, L.M., 2019. Diversity initiative effectiveness: A typological theory of unintended
consequences. Academy of Management Review, 44(3), pp.538-563.
Riccucci, N.M., 2021. Managing diversity in public sector workforces. Routledge.
Roberson, Q.M., 2019. Diversity in the workplace: A review, synthesis, and future research
agenda. Annual Review of Organizational Psychology and Organizational Behavior, 6,
pp.69-88.
Rubery, J. and Grimshaw, D., 2020. The organisation of employment: An international
perspective. Bloomsbury Publishing.
Schneider, B. and et. al., 2018. Workforce engagement: What it is, what drives it, and why it
matters for organizational performance. Journal of Organizational Behavior, 39(4), pp.462-
480.
Syed, J. and Ozbilgin, M., 2019. Managing diversity and inclusion: An international perspective.
Sage.
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