ABSTRACT
The purpose of this paper is to examine the
effects of workforce diversity on employee performance. The survey research
design method was adopted for the paper. The instrument used to gather relevant
data for the study was the questionnaire. The study centred on the Nigerian
Banking Sector to examine the level of diversity practiced in terms of gender,
age, ethnicity and educational in Nigerian Organizations. First Bank of Nigeria
Plc, Ota, Ogun State was the focal organization. A total of 81 copies of
questionnaire were disseminated to the respondents of the study and they were
all filled and returned and also relevant for the study. In order to attain the
research objectives, four hypotheses were created. The data were collated and
analyzed using the Statistical Package for Social Sciences (SPSS) percentages
and frequencies tables were used to for the descriptive aspects. To test the
hypotheses, Spearman Rank Correlation Coefficient Analysis was adopted,
Regression Model, Anova were adopted to examine the relationship between
variables and identify the influence of the independent variables on the
dependent variable. The limitation to the study is that the study made use of only
few aspects of workforce diversity and as such, findings can not be generalized
to cover other dimensions of diversity not covered in the study. The research
findings showed all aspects of workforce diversity used in the study has a
significant relationship with employee performance except for ethnic diversity.
It was also discovered that gender, age and educational diversity have strong
influence on employee performance. Hence, based on findings, it is recommended
that management continue to uphold its diversity policies and practices in
order to increase the benefits of diversity. Management should ensure that all
employees are properly trained on diversity issues as these trainings will also
help employees to change those unconscious behaviours that hinder diversity and
inclusion practices. This study will add to the already existing literature on
diversity and it will help First Bank, other organizations, employees,
government and the society as a whole to fully understand diversity issues, how
to manage it and how to reap the benefits.
Keywords: Workforce Diversity, Diversity
Management and Employee Performance
CHAPTER ONE
INTRODUCTION
1.0
BACKGROUND TO THE STUDY
The world’s increasing globalization needs a
lot of interaction among people from various backgrounds than ever before. This
is so because, individuals no longer live and work in narrow surroundings; as
they are currently a part of a worldwide economy competing in nearly all part
of the world (Patel, 2016). On these grounds, organizations are aiming to
become more diversified in order to gain competitive advantage by becoming more
creative, innovative and open to useful change.
Today business workplace is changing at an
increased speed and the change in the employees’ demographics, increase of jobs
in the economy, continuing growth of the globalization and requirement for
efficient and effective collaboration have surfaced as significant forces
driving the importance of diversity in organizations. With the increase of
globalization and competition, the workforce in all industrialized countries
has become progressively heterogeneous. Advances in technology and the advent
of a worldwide economy have brought the people of the world existing in the
same place, nearer to each other. Griffin & Moorhead (2014) pointed out
that having a diverse workforce requires managers to identify and manage the
varied attribute that exist among the employees in the organization. Therefore,
businesses, educational systems and other entities are investigating ways to
better serve their constituents to attract and retain the finest and most
qualified employees (Gupta, 2013). On these grounds, organizations are aiming
to become more diversified in order to gain competitive advantage by becoming
more creative, innovative and open to useful change.
Workforce diversity refers to those
significant differences and similarities that are present among employees
within an organization (Griffin & Moorhead, 2014). Nwinami (2014) said it
represent those uniqueness which includes; an individuals personality, age,
gender, ethnicity/race, religion, marital status, income, the work experience
and all those views which supposes and sustains an organizations core values.
It also means those organizations that are turning out to be more varied with
respect to it workforce composition based on characteristics as age, ethnicity,
expertise, etc. (Robbins & Judge, 2013).
Human resource is an important asset for any
organization, and as such, having a diversified workforce is a primary concern
for most organizations. Although, it has become necessary for organizations to
employ a diversified workforce, at the same time, it has become quite
challenging for organizations with increasing diversified workforce to reap the
benefits of diversity while managing its potentially disruptive effects
(Kreitz, 2008) (Kreitz, 2008; Saxena, 2014). Organizations have recognized the
fact that it is through the collective effort of its diversified workforce that
monetary resources are harnessed to achieve organizational goals.
For organizations to reach its goals, the
skills, knowledge, attitude and efforts of its workforce have to sharpened
occasionally to optimize the effectiveness of its workforce and to enable them
to meet greater challenges. Organizations are made up of individuals and
without the workforce, organizations cannot achieve its goals (Mullins, 2010).
For this reason, the management of its human resources is also a a crucial
issue for organizational leaders (Saxena, 2014).
To be successful, it is imperative that
organizational leaders understand just how the social work environment have an
effect on the employees’ beliefs about work and they must have effective
communication skills to be able to develop the self esteem and confidence in
all its members (Griffin & Moorhead, 2014). Hence, to achieve and maintain
competitive advantage over competitors, managers must be able to draw from the
most valuable resources i.e. the competencies of its workers. Based on the
growing richness of diversity in the world and in the workforce, managers have
to spread out their outlook and use innovative approaches to achieve success.
1.1 Statement of the Problem
The work environment is becoming more complex
due to globalization and competition which as a result has necessitated the
need for a workforce that is made up of people with varying age, experience,
knowledge and backgrounds to maximize competitive advantage (Ragins &
Gonzalez, 2003). According to Childs (2005) organizations that wants to gain
competitive advantage must widen its perspective about workforce diversity and
diversity management, and the management must commit themselves to ensure that
diversity management is a part of it daily operations.
Nigeria is known to be the giant of Africa
with a population of over 180 million people and more than half the population
consists of people of working age (Akinnusi, Sonubi, & Oyewunmi, 2017).
Hence, there is a large pool of talent of which organizations draw from to
achieve its goals. To manage the workforce, managers have created diversity
policies that are in line with the a Labour Act and other laws that have in put
in place to protect all kinds of employees from discrimination because of his/
her social categorization (Ugwuzor, 2011). However, Foma (2014) opined that
some organizations in a bit escape lawsuit or other legal actions and to also
put on a public show that makes them gain good corporate image, they pretend to
embrace diversity rather than show a genuine desire for it by demonstrating
true commitment to the principles of diversity and inclusion.
As Ugwuzor (2011) citing Mustapha (2005)
pointed out, in Nigeria, there appear to still be cases of tribalism, regional
identities, nepotism and discrimination both in the public and private
organizations. Cases of ethnic bias and other forms of discrimination still
take places in organizations during hiring, promotion and other
employer-employee relation practices. Hence, managements are faced with the big
challenge of managing its diverse workforce and the challenge of making sure
that conflict of interest in policies and practice implementation are minimized
(Akinnusi, Sonubi, & Oyewunmi, 2017).
Though some organizations train their new
intake upon hiring on job related issues yet, individuals still take decisions
and showcase attitudes and bahaviour that go against diversity principles. One
reason could be that with diversity practices, employees enter into an
environment that compels everyone to work together with other workers that are
dissimilar to them. This kind of forced inclusion can create an environment of
conflict amongst employees, discrimination and other challenges of diversity.
Nwinami (2014) said so long as individuals
with differences work in the same environment, diversity in the workplace will
always be an issue. Though our individual differences can promote creativity
and increase satisfaction at work nonetheless, it can be the root of conflict
and frustration betweens groups (Mullins, 2010). Hence, some organizations
leaders have failed to understand how the workforce interacts with one another
as individuals and as groups, and how the behaviour of the workforce can affect
both employee and organizational performance (Ugwuzor, 2011). Performance is
affected when managers fail to understand diversity and are not skilled enough
to manage issues of diversity (Assefa, 2014). Another problem is the issue of
organizations still depending on the old programs that they have been using
over the years to manage the present issues of workforce diversity, minimize
bias and increase diversity and inclusion in the workplace. It is important for
management to know that the diversity plan that works or is encouraged by one
organization may not work in another as it may be challenged by the
hierarchical structure that is present in such organization. For this reason,
some organizational leaders lack the knowledge on how to effectively management
diversity, create an inclusive environment and what strategies to employ to
assist them in dealing with issues of diversity in the organization.
From the web search on workforce diversity,
it was discovered that only very few researches on workforce diversity and its
relative effect have been conducted in Africa precisely Nigeria. Some that
exist, focused more on diversity effect on organizational performance or productivity,
not so much have been done to inspect the relationship and effect of workforce
diversity and employees’ performance which in turn improves the entire
organizational performance. Few of such studies that exist, have failed to
deliver detailed examination of what workforce diversity is. Nigeria just like
most countries of the world is diverse in its population content (e.g. people)
and the people are ethnically or culturally diverse. Not only ethnically
diverse, it is also characterized by other aspects of diversity which are even
evident in organizations (e.g. age, gender, educational background etc.)
Therefore, this study seek to add to already existing literature on workforce
diversity by examining empirically and theoretically concept of workforce
diversity in terms of age, gender, ethnicity and educational background and its
relationship with employee performance (effectiveness and efficiency).
1.2 Research Objectives
The general objective of this study was to
examine the relationship between workforce diversity and employee performance
in an organization. The specific objectives of this study are to:
1. To examine the relationship between gender
diversity and employee effectiveness in organization.
2. To investigate the relationship between age
diversity and employee effectiveness in organization.
3. To examine the relationship between ethnic
diversity and employee efficiency in organization.
4. To inspect the relationship between
educational background and employee efficiency in an organization.
1.3 Research Questions
1. Is there any significant relationship
between gender diversity and employee effectiveness?
2. Is there any significant relationship
between age diversity and employee effectiveness?
3. Is there any significant relationship between
ethnic diversity and employee efficiency?
4. Is there any significant relationship
between educational diversity and employee efficiency?
1.4 Research Hypotheses
Hypothesis 1:
Ho: There is no significant relationship
between gender diversity and employee effectiveness.
H1: There is a significant relationship
between gender diversity and employee effectiveness
Hypothesis 2:
Ho: there is no significant relationship
between age diversity and employee effectiveness.
H1: there is a significant relationship
between age diversity and employee effectiveness
Hypothesis 3:
Ho: there is no significant relationship
between ethnic diversity and employee efficiency.
H1: there is a significant relationship
between ethnic diversity and employee efficiency.
Hypothesis 4:
Ho: there is no significant relationship
between educational diversity and employee efficiency.
H1: there is a significant relationship
between educational diversity and employee efficiency.
1.5 Significance of the Study
The aim of this study was to examine the
effect of workforce diversity on employee performance by investigating the
correlation between workforce diversity and employee performance in an
organization.
Workforce diversity is a significant topic
for government, organizations and the society (Akinnusi, Sonubi, &
Oyewunmi, 2017). First and foremost, the findings of this study will add to
existing knowledge that will aid in understanding of the workforce diversity in
general and its relevance to employee performance, which in turn leads to
organizational performance and it will be essential to organizations that are
equipped with diversified workforce.
To researchers and academicians, the study
will serve as a reference to other researchers who intend to conduct similar or
related studies on workforce diversity in the future as it will provide
reliable insight that are useful for educational purposes. This study has also
provided information that could form the basis for future research.
To employers and management of organizations,
this study has provided in-depth knowledge explaining how workforce diversity
has an effect on performance. The study provides key information in terms of
recommendations and suggestions that will be useful in improving the general
policies and practices of workforce diversity management in organizations. It
provides information that will help organizational leaders to be able to make
out solid strategies and best practices for hiring or recruiting, developing,
retaining, engaging and motivating a high performing diversified workforce.
This study is also beneficial to organizations striving to create a culture
that is inclusive rather than exclusive. Also, multinational organizations will
also understand the need for diversity management so as to manage its workforce
across the globe and also understand the social structures (i.e. the religion,
language, etc.) of the country where it is operating.
To Employees: This study will help the
employees to accept and respect the unique diversity of follow colleagues who
are not only similar to them but also those who are dissimilar. It will help
them to realize that working together can help improve their performance.
To Government: Diversity management is a
vital topic for a country like Nigeria that is so culturally diverse. This
study will help the government in its quest to manage the diversity of its
population across regions. It will awaken the government to look into the issue
of diversity and ensure the laws that suppose diversity are obeyed by every
organization. This study will help the government to fully embrace the richness
of our diversity and harness the benefits that comes from it.
To Society: Nigeria as a country is rich in
ethnic diversity. This study will be an eye opener to our society as it will
help people to begin to see diversity as a blessing rather than a curse that
needs to be avoided. It will help the society to see the need for having
diversity. It will confirm that we as a society can work together because of
our differences not despite our differences. The community will see the need to
value the many cultural differences that makes up the nation Nigeria.
1.6 Research Methodology
In answering the research questions, the
research made use of primary and secondary source of information.
Primary source made use of information
gathered from First Bank of Nigeria through structured questionnaire prepared
by the researcher. The questions concentrated on finding out the organization’s
view on workforce diversity in characteristics like; age, gender, educational
background and ethnicity and how they affect employees’ performance.
The secondary source of information was
gathered from books, journals, conference papers and the internet regarding
workforce diversity. The secondary data were collected by surfing the internet,
reviewing books and other related academic materials to get hold of relatable
information for the research.
1.7 Scope of the Study
The study was restricted to only First Bank
Nigeria Plc. It examined the effect of workforce diversity on employees’
performance in First Bank. The study was also limited to few workforce
diversity- age, gender, ethnicity and educational background diversity and also
limited to employee performance. The population of the study was limited to
employees of employees of First Bank Nigeria Plc., Ota (Main Branch and Ota II
branch), Ogun State.
1.8 Limitation of the Study
It is imperative to note that the research
findings only reveal the view of the organization under study. Therefore, it is
can not to be assumed to be generally applicable to all organizations. Time
factor can be considered as the main limitation to the study. The findings of
this study were solely based on the information provided by the respondents and
the information gotten from the secondary source of data. Another limitation to
the study is that the researcher only looked at few dependent variables.
However, other variables exist which can reflect the differences in employees’
performance.
1.9 Outline of the Chapters
The study is broken down into chapters for
analysis and comprehension.
Chapter One: gives an overview of the study
by providing background information of the study, the statement of the problem,
the research objectives to be achieved. This chapter further outlines the
research questions to be answered, the hypotheses to be tested, significance of
the study, scope of the study, and limitations of the study, as well as the
background study of the organization under view and finally definition of terms
to aid the users understanding of the key terms. Chapter Two- centers on the
reviewed literature of the academic arguments from the secondary sources of information
like; books, journal articles, etc. This chapter also present some empirical
studies which were reviewed by the researcher to allow the researcher to put up
the hypotheses and theoretical framework for the study. Chapter Three discusses
the research methodology adopted for the study in terms of the research design,
the population of the study, sampling technique and the sample, and the data
collection technique. Chapter Four, presents the analyses and interpretation of
the data collected. Chapter Five which is the last chapter of the research
study, it gives the summary of this research finding, conclusions and provides
recommendations.
1.10 Background Study of the Organization
• First Bank of Nigeria
First Bank Nigeria Limited is Nigeria’s
premier and most valuable banking brand, and largest financial services
institution by total assets and gross earnings. With more than 10 million
customer accounts, First Bank has more than 750 of its branches that provide an
extensive variety of corporate and retail and financial services. The Bank has
global presence as a result of its subsidiaries like FBN (UK) Ltd in London and
Paris, FBN in Ghana, Republic of Congo, The Gambia, Sierra-Leone, Guinea,
Senegal, and also other representative offices in Beijing, Abu Dhabi and
Johannesburg.
FBN has been constantly building
relationships with its customers which focused on the fundamentals of excellent
governance, optimized risk management and leadership and strong liquidation
since it was established in 1894. For five times in a row starting from 2011,
2012, 2013, 2014 and 2015, First Bank has been named the “Most Valuable Bank
Brand in Nigeria” by the global well-known “The Banker Magazine” of the
Financial Times Group; and “Most Innovative Bank in Africa” in the EMEA Finance
African Banking Awards 2014. Also, the Bank clinched the “Best Retail Bank in
Nigeria” award by The Asian Banker for the fifth consecutive time.
The Bank has a diverse working environment
that welcomes people of different genders, ethnicities, ages, culture and
abilities. At the top of the banks structure, commitment regulatory compliance
and culture is the issue of diversity and inclusion. The bank integrates
diversity policies and awareness into its corporate practices and has over the
years seen itself as equal opportunity employer. To ensure that diversity is
incorporated into its policy, the bank has a diversity team that is responsible
for ensuring that the Bank has a diverse workforce and an inclusive workplace
offering opportunities for the talents of all its employees to create value and
develop innovative solutions for the markets it serves. The Bank also sets
aside a Diversity and Inclusion Day to create awareness and ensure an inclusive
workplace culture. The Bank also opens its recruitment and posting doors to
everyone, so long as they have the qualification not minding the ethnical or
cultural differences, age or gender. To ensure that gender diversity is
included in its policies, the Bank reviewed it gender policies and demographics.
The Bank has a male and female ration at 61% and 39% respectively across its
workforce, while at it management level the male and female ratio is 66% and
34% respectively. At the Board level, the male and female ratio is 84% and 16%
respectively. FirstBank currently has nine women on its respective boards of
subsidiaries that make up FBN Holdings and this has been recognized as the
highest of any holding company in Nigeria.
The Bank has a diversity objective to
recognize industry leader in workforce diversity and leveraging diversity for
its growth and the success of the customers and the communities it serves, by
creating a working environment where the various workforce generations will
thrive.
1.11 Operationalization of Research Variable
Operationalization is a mathematical
presentation of the variables in a construct. The research questions and
hypothesis consist of x and y variables. X is the ‘independent’ variable and ‘input’
variable. It is also considered as the ‘cause’ of behavior, while Y is the
‘dependent’ variable. It is the ‘effect’ ‘outcome’ or ‘response’ variable.
Therefore, the mathematical presentation of
the variables is given as;
Employee performance is a function of
workforce diversity
y= f(x) i.e. EP=f( WD)
Where y= dependent variable and x=
independent variable
Thus, x= workforce diversity- independent
variable is the variable with many components.
That is, x=f (x1, x2, x3, x4…xn)
x1= gender
x2= age
x3= ethnicity
x4= educational background
y= (y1…yn)
Where;
Employee Performance – dependent variable
y1= employee effectiveness
y2= employee efficiency
These diversity variables (age, gender,
ethnicity and education diversity) are important for explaining the variance in
employee performance (effectiveness, efficiency) Employee performance can be
determine by other factors such as motivation, employee engagement, capacity,
promotional rate, etc.
1.12 Definition of Terms
Diversity: means any characteristic that
makes people different from one another (Robbins & Judge, 2013). It is the
differences and similarities between employees in terms of gender, age, educational
background, ethnicity, sexual orientation, or other dimensions. Diversity
includes everybody (Daft, 2008).
Workforce: is a combination of male and
female employees coming from various backgrounds, older or younger employees,
workers who are physically challenged and various other workers who are
different from each other (Rao & Bagali, 2014).
Workforce Diversity: this refers to the
important similarities and differences that exist among employees of
organizations (Griffin & Moorhead, 2014). It means a workforce composed of
people with different human qualities or who belong to various cultural groups
(Daft, 2008).
Age, Gender, and Educational background:
these are physical dimension of diversity and they refer to demographic
diversity which is indicated by the number of people having different
demographics in the company, ultimately which will affect employees’
performance (Assefa, 2014).
Age Diversity: looks at the ability to accept
the different types of age within a business environment.
Gender Diversity: is when a company is
represented by a more equal proportion of men and women. It is the equal
treatment and acceptance of both male and female in an organization. Ethnic
Diversity: Ethnic diversity implies diversity in language, religions, races and
cultures. (Gupta, 2013). It refers to a socio-cultural workforce diversity
which is specified by the number of people who have dissimilar ethnicity in the
company.
Diversity Management: is defined as
acknowledging, understanding, valuing, celebrating, and accepting differences
among people with respect to age, gender, ethnicity, class, mental and physical
ability (Gupta, 2013).
Employee performance: performance is the act
of carrying out an action, or an accomplishment or achievement. Employee
performance is how well an employee is effectively fulfilling his/ her job
requirement or discharging his/ her duties so as to achieve good results
(Durga, 2017). Armstrong (2012) citing Vroom (1994) said performance or
effectiveness is a function of ability and motivation. Thus, employees need
both ability and motivation for effective performance.