Diversity Management: Expert-Identified Leading Practices and Agency Examples
Released: 2005-02-04T00:00:00

Letter

Background

During the 1980s and 1990s, the composition of the U.S. workforce, as documented in demographic statistics, became increasingly diverse. In 1987, a landmark report entitled Workforce 2000, written by researchers with the Hudson Institute for the Department of Labor, described the increasing diversity of the American workforce by the year 2000. Among the demographic changes the report projected was a rise in the average age of the workforce and an increase in the number of women and minorities entering the workforce. Against this backdrop of expectations for an increasingly diverse workforce, by the 1990s, an industry of consultants had developed, offering books, videos, and training to sensitize workplaces “to the different perspectives and needs of a more diverse workforce.” Dr. R. Roosevelt Thomas, Jr. is generally credited with originating the term “managing diversity” in 1990.

The concept of managing diversity includes everyone and therefore serves as a complement to equal employment opportunity (EEO). EEO focuses on those groups protected by law from employment discrimination. By law, employment actions are to be free from prohibited discrimination on such bases as race, color, religion, gender, national origin, age, or disability. For purposes of this review, workforce diversity refers to ways in which people in a workforce are similar and different from one another. In addition to the characteristics protected by law, other similarities and differences commonly cited by the literature include but are not limited to background, education, language skills, personality, sexual orientation, and work role. OPM includes workforce diversity as a critical success factor for one of the six elements of human capital leadership—results-oriented performance culture—in its Human Capital Assessment and Accountability Framework. OPM uses the critical success factors in this framework when scoring a federal agency’s implementation of Strategic Human Capital under the President’s Management Agenda. Among other things, OPM examines whether an agency maintains an environment characterized by inclusiveness of individual differences and is responsive to the diverse needs of employees as a critical success factor.

Experts Identified Nine Diversity Management Practices as Leading

Of the experts in the field of diversity management we spoke with or whose publications we reviewed, the majority cited nine practices as leading. These practices are (1) commitment to diversity as demonstrated and communicated by an organization’s top leadership; (2) the inclusion of diversity management in an organization’s strategic plan; (3) diversity linked to performance, making the case that a more diverse and inclusive work environment could help improve productivity and individual and organizational performance; (4) measurement of the impact of various aspects of a diversity program; (5) management accountability for the progress of diversity initiatives; (6) succession planning; (7) recruitment; (8) employee involvement in an organization’s diversity management; and (9) training for management and staff about diversity management. Experts and the literature generally agree that some combination of these identified practices should be considered when an organization is developing and implementing diversity management.

Agencies Provided Examples of Their Implementation of the Cited Practices

We met with officials from the 10 agencies selected for our review, and these officials provided examples of diversity management practices that their respective agencies had implemented and considered to be leading practices. We judgmentally chose from the examples agencies provided to illustrate the implementation of the nine practices that a majority of experts cited as leading. The following sections of this report further describe the nine practices as well as provide examples of how the selected agencies have implemented them.

Top Leadership Commitment

As we testified in 1999, perhaps the single most important element of successful management improvement initiatives is the demonstrated commitment of top leaders to change. Similarly, top management commitment is a fundamental element in the implementation of diversity management initiatives. According to the literature, leaders and managers within organizations are primarily responsible for the success of diversity management because they must provide the visibility and commit the time and necessary resources. A leader committed to diversity management communicates the organization’s support for diversity in newsletters, policy statements, speeches, meetings, and Web sites. Communication of this commitment from senior management throughout the organization sends a clear message to others in the organization about the seriousness and business relevance of diversity management.

Diversity as Part of the Strategic Plan

Because successful change management initiatives in large public and private sector organizations suggest that it can often take 5 to 7 years to substantially complete such initiatives, it is important to institutionalize them by integrating the initiatives into agencies’ strategic planning efforts.

As we have said, sustaining top leadership commitment to improvement is particularly challenging in the federal government because of the turnover of senior agency political officials. In 2003, we reported that governmentwide, the average tenure of political appointees for 1990 through 2001 was just under 3 years. Integrating diversity management into an organization’s strategic plan fosters a culture change that supports and values differences. One recognized expert we talked with also pointed out that an organization must link diversity to its overall strategic plan to ensure that diversity initiatives are not viewed as an “extra,” which could make them vulnerable to cuts, for example, when funds are tight.

Diversity Linked to Performance

By focusing on diversity management and looking for more ways to be truly inclusive, leading organizations have recognized that diversity can contribute to the achievement of improved individual and organizational performance. According to the literature reviewed, diversity management makes good business sense that enhances productivity and innovation. For example, promoting diversity might help an organization expand services to meet the needs of a more diverse customer base. The literature also stated that fostering a diverse and inclusive workplace could help organizations reduce costs by reducing turnover, increasing employee retention across demographic groups, and improving morale.

Measurement

Quantitative and qualitative performance measures “help organizations translate their diversity aspirations into tangible practice.” For example, an organization can track data on its workforce to evaluate the effectiveness of the organization’s diversity management efforts and the progress it is making in those efforts. Organizations also can track the return they receive on investments in such areas as diversity training and recruitment to evaluate the progress they are making in those efforts. In addition to analyzing quantitative workforce data, organizations can use qualitative data derived from interviews, focus groups, and surveys for identifying employee perceptions—including available opportunities and work environment/culture—among various segments of their workforces. For example, organizations can ask employees a series of general organizational questions in such areas as climate, organizational commitment, promotions, job satisfaction, supervision, and performance evaluations. Over time, trends in responses are the types of qualitative information that can help organizations assess how their diversity initiatives are progressing in achieving organizational goals and objectives. Finally, in a 2001 report on human capital and workforce diversity, the National Academy of Public Administration stated that good performance measurements shared some common traits regardless of the environment in which they were used, including being based on reliable and accurate data that are consistent and compatible with existing business systems and processes. VA, for example, provides data on its workforce, including data on those in the leadership pipeline (i.e., employees in grades 13, 14, and 15), to all managers through their personal computers.

Accountability

We have previously pointed to the importance of holding managers accountable for contributing to the achievement of an organization’s strategic goals through performance management and rewards systems. According to diversity management literature, accountability is also a key element for organizations to ensure the success of a diversity management effort by providing a means for ensuring that managers at all levels are made responsible for diversity in their organizations and evaluated on their progress toward achieving their diversity goals and their ability to manage a diverse group of employees. An organization may make managers’ performance ratings and compensation dependent, in part, on their success in achieving diversity-related goals. For federal senior executives, such accountability is consistent with section 4313 of title 5, which provides performance appraisal criteria for those in the Senior Executive Service (SES), including the achievement of EEO requirements. This accountability also is consistent with EEOC’s recent instructions to federal agencies for implementing EEO Management Directive 715. The instructions describe the requirement that agencies inform managers and supervisors that success and a positive evaluation will include an assessment of how that manager contributes to the agency’s EEO program by emphasizing to managers and supervisors that equality of opportunity is essential to attracting, developing, and retaining the most qualified workforce, with such a workforce being essential to ensuring the agency’s achievement of its strategic mission.

Recognizing that an agency’s people are vital assets and people achieve organizational goals and results, OPM’s regulations on SES performance management call for appraisal of executives using measures that balance organizational results with employee perspectives. In 2002, we reported that senior executives can foster fairness and diversity by protecting the rights of all employees, providing a fair dispute resolution system, and working to prevent discrimination through equality of employment and opportunity. We found examples of senior executive performance expectations included (1) taking steps to implement EEO requirements; (2) requiring all subordinate managers and supervisors to receive diversity awareness and EEO training; and (3) establishing a zero tolerance standard for discrimination, harassment, and hostile work environments.

Succession Planning

Succession planning is a comprehensive, ongoing strategic process that provides for forecasting an organization’s senior leadership needs; identifying and developing candidates who have the potential to be future leaders; and selecting individuals from among a diverse pool of qualified candidates to meet executive resource needs. Succession planning and management can help an organization become what it needs to be, rather than simply recreate the existing organization. Leading organizations go beyond a “replacement” approach that focuses on identifying particular individuals as possible successors for specific top-ranking positions and engage in broad, integrated succession planning and management efforts that focus on strengthening both current and future capacity. They anticipate the need for leaders and other key employees with the necessary competencies to successfully meet the complex challenges of the 21st century.

Succession planning also is tied to the federal government’s opportunity to change the diversity of the executive corps through new appointments. As we testified in October 2003, the federal government faces large losses in its SES, primarily through retirement but also because of other normal attrition. The SES generally represents the most experienced and senior segment of the federal workforce. The expected loss of more than half of current career SES members through fiscal year 2007, as well as significant attrition in the GS-15 and GS-14 workforce—the key source for SES appointments—has important implications for federal agencies and underscores the need for effective succession planning. This presents the government with substantial challenges for ensuring an able management cadre and also presents opportunities to affect the composition of the SES. In September 2003, we reported that agencies in other countries use succession planning and management to achieve a more diverse workforce, maintain their leadership capacity, and increase the retention of high-potential staff. Our work has shown that federal agencies will need to enhance their efforts to improve workforce diversity as the SES turns over.

Recruitment

Recruitment, a key process by which federal agencies attract a supply of qualified, diverse applicants for employment, is the first step toward establishing a diverse workforce. To ensure that organizations are reaching out to diverse pools of talent, they can widen the selection of schools from which they recruit to include, for example, historically Black colleges and universities, Hispanic-serving institutions, women’s colleges, and schools with international programs. In addition, the literature discusses the importance of organizations building formal relationships with such schools to ensure the cultivation of talent for future talent pools. The literature states that organizations also may want to consider partnering with multicultural professional organizations and speaking at their conferences to communicate their commitment to diversity to external audiences and strengthen and maintain relationships. Although the focus of recruitment efforts in the diversity management literature is with colleges and universities, given the number of federal employees, including those in the SES, who are eligible for retirement in the next few years, there will be a need for the federal government to also recruit midcareer employees, which we are defining as employees who are generally 40 and over and have 10 or more years of work experience.

Employee Involvement

According to the literature, involving employees in diversity management helps them contribute to driving diversity throughout an organization. Employees may become involved in their organizations’ diversity management efforts by forming employee diversity task forces, councils, boards, and networks (also called advisory, advocacy, support, affinity, or resource groups) to identify issues, recommend actions, and help develop initiatives. Organizations also can establish advisory groups that include representatives from many specific groups. In addition, mentoring programs are a popular method for organizations to develop and retain newer employees and require the involvement of more senior or experienced employees. The diversity management literature also describes employees reaching out in their communities.

Forming Advisory Groups to Facilitate Change

Most of the 10 agencies had some type of diversity advisory board.

According to one expert, mentoring programs became popular in the mid- 1980s as part of organizations’ efforts to improve the promotion and retention of women and minorities. However, as mentoring success stories continued, organizations increasingly realized that mentoring relationships could benefit all employees, not just those from the protected groups. Mentoring can help new employees adjust to an organization’s culture. It also can help identify and develop high-potential employees, improve employee productivity and performance, and promote retention and diversity.

Several sources described organizations’ encouraging employees to volunteer in their communities to help make the communities aware of what the organization does. In addition, in its recent instructions to federal agencies for implementing EEO Management Directive 715, EEOC suggests that agencies allocate mission personnel to participate in, among other things, community outreach programs with private employers, public schools, and universities.

Diversity Training

According to the literature, diversity training can help an organization’s management and staff increase their awareness and understanding of diversity as well as help them develop concrete skills to assist them in communicating and increasing productivity. Such training can provide employees with an awareness of their differences—including cultural, work style, and personal presentation—and an understanding of how diverse perspectives can improve organizational performance. It also should teach employees about the importance of the organization’s diversity goals and the skills required to work effectively in a diverse workforce. In addition, to increase employee effectiveness in a diverse environment, one source stated that training should include teambuilding, communication styles, decision making, and conflict resolution. This is consistent with EEOC’s recent instructions to federal agencies for implementing EEO Management Directive 715, which requires that agencies develop supervisors and managers who have effective managerial, communication, and interpersonal skills to supervise most effectively in a workplace with diverse employees. Finally, as we recently reported on training in the federal government, agencies should attempt to assess the effectiveness of their training efforts. Such an assessment can help decision makers in managing scarce resources and help agencies improve results.

Agency Comments

On November 10, 2004, we provided a draft of this report to EEOC and OPM for review and comment. In written comments, the Director of EEOC’s Office of Federal Operations generally agreed with the findings of the draft report and stated that expanding agency knowledge of the available tools to achieve diversity is critical to the government’s success in maintaining a workplace that is inclusive and responsive to the needs of an increasingly diverse workforce (see app. IV). The Director stated that federal agencies can learn from the experiences and successes of others and that this report would assist in that effort. He added that future studies of diversity management practices are warranted and could explore the effectiveness of these practices, particularly measurement. We agree. We have an engagement under way that reviews measurement practices for EEO and diversity management in selected federal agencies. We also have begun work that is to provide examples from the private sector of the leading diversity management practices identified in this report. In written comments, the Director of OPM generally agreed with the findings of the draft report, noting that the agencies identified merit recognition for their efforts in diversity management (see app. V). The Director of OPM also noted that the area of diversity is an important element in the President’s Management Agenda. In addition, the Director of OPM provided technical comments, which we incorporated.

We also provided drafts of the relevant sections of this report to cognizant officials from the 10 agencies we reviewed. We made technical clarifications based on these comments where appropriate.

As arranged with your office, unless you publicly announce its contents earlier we plan no further distribution of this report until 7 days from the date of this letter. At that time, we will send copies of this report to other interested congressional parties, the Director of OPM, and the Chair of EEOC. We also will make copies available to others upon request. In addition, the report is available on GAO’s home page at http://www.gao.gov.

If you or your staff have questions about this report, please contact me on (202) 512-9490 or Belva Martin, Assistant Director, on (202) 512-4285. Key contributors to this report are listed in appendix VI.

Objectives, Scope, and Methodology

Our objectives were to identify (1) leading diversity management practices and (2) examples of those practices in federal agencies.

Objective 1: Identifying Leading Practices

To identify leading diversity management practices, we first reviewed literature on diversity management. This review included academic literature on diversity management, books and articles written by consultants and practitioners, and reports produced by government agencies and research organizations.

We then met with various federal officials and experts in diversity management. This included officials from the central leadership agencies—the Equal Employment Opportunity Commission (EEOC), Merit Systems Protection Board, U.S. Office of Personnel Management (OPM), and the U.S. Office of Special Counsel. At the National Academy of Public Administration (NAPA), we met with one former official—a former Director of the Center for Human Resource Management—and two current officials—the Director and Deputy Director of the Center for Human Resources Management. These officials were helpful in suggesting experts to contact in the field of diversity management.

On the basis of our literature review and our discussions with federal and NAPA officials, we established criteria for and identified a list of recognized experts. These criteria included the expert’s recognition in the professional or academic community, depth of experience in diversity management, and relevance of his or her published work or research to diversity management.

We defined recognition as an acknowledgment of expertise from officials of such organizations as NAPA, the Society for Human Resource Management, and the Private Sector Council. We defined experience as having practical or academic experience in diversity management for at least 7 years. After the experts were selected, we gathered their views on leading practices using questions from a data collection instrument. We reviewed their responses and counted the number of times an expert or a publication by an expert cited a diversity management practice. We identified as leading those practices that a majority of experts cited in interviews or publications as leading practices, best practices, or components of a successful diversity initiative.

Our characterization of diversity management practices is methodologically dependent on the experts contacted and sources reviewed. We recognize that had we interviewed other experts or reviewed other sources that other practices may have been identified as leading. We also recognize that diversity management practices are dynamic in nature and other practices that were not cited by a majority of our sources may, over time, achieve greater acknowledgment. In addition, we did not evaluate the effectiveness of the cited practices, although many of these practices are consistent with practices identified in prior GAO reports on human capital management.

Objective 2: Identifying Examples of Leading Diversity Management Practices in the Federal Government

To identify agency examples of leading practices in the federal government, we reviewed diversity management literature and met with officials from NAPA and others who directed us to agencies that may have implemented some of the expert-identified practices. Through our literature search, we located a 2001 paper by Dr. J. Edward Kellough of the University of Georgia and Dr. Katherine Naff of San Francisco State University. This paper ranked federal agencies’ diversity management programs based on results from a 1999 governmentwide survey, which was administered to 160 agencies and subagencies. We used this paper for selecting federal agencies because it employed a systematic methodological approach for gauging agencies’ diversity management programs. Through our literature search, we found no other research subsequent to the paper that assessed agencies’ diversity management programs using a systematic methodological approach that covered a large number of agencies and subagencies. Of the organizations responding to the governmentwide survey, 138, or 86 percent, returned usable questionnaires. These organizations represented more than 80 percent of the federal civilian workforce, including components from the 23 largest departments and agencies as well as the U.S. Postal Service and most of the smaller agencies.

In their paper, Drs. Kellough and Naff identified five separate aspects of agencies’ diversity management programs that address characteristics of diversity training efforts, internal communications regarding programs, activities reflective of broader resource commitments to the programs, the scope of programs in terms of the dimensions of diversity addressed.

Drs. Kellough and Naff assigned scores by summing agency responses to each of the relevant survey items. From the Kellough-Naff list, we chose the 10 agencies with the highest summary ranking to examine in more detail. These agencies were the U.S. Coast Guard, National Institute of Standards and Technology, the Department of Veterans Affairs (headquarters), Federal Bureau of Prisons, U.S. Postal Service, National Oceanic and Atmospheric Administration, Veterans Health Administration, Food and Drug Administration, Federal Aviation Administration, and National Institutes of Health.

We developed a list of topics related to diversity management practices to facilitate our discussion with agency officials. The list included identification of leading diversity management practices, definition of diversity, measures of success, barriers to implementation, and examples of leading practices that have been implemented. We provided the list to each agency. For some agencies, when we were able to obtain information on their diversity management practices before meeting with them, we developed more extensive questions. We then conducted interviews with officials from these agencies who were responsible for diversity management and equal employment opportunity (EEO). During these interviews, we covered the material on the list, and agency officials described what they considered to be the agencies’ leading diversity management practices. Agency officials also provided documents that illustrated their agencies’ diversity management efforts, including the expert-identified practices.

The agency examples of diversity management practices in this report do not represent all the potential ways that an agency can implement diversity management initiatives or address the specific diversity management practice being discussed. Because our review objectives did not include evaluating the effectiveness of agencies’ implementation of diversity management practices, we did not evaluate the effectiveness of the agency examples. Further, the fact that an agency is profiled to illustrate the implementation of a particular diversity management practice is not meant to imply agency success or lack of success in the implementation of other diversity management practices or diversity management overall.

We did our work in Washington, D.C., between July 2003 and October 2004, in accordance with generally accepted government auditing standards.

Summary of Selected Antidiscrimination Laws

Over the past 40 years, Congress has enacted a number of laws prohibiting employment discrimination with the intent of ensuring equal opportunity in employment, both in the public and private sectors. Among these enactments is Title VII of the Civil Rights Act of 1964, amended in 1972 to include the federal sector, which makes it illegal for employers to discriminate against their employees or job applicants on the basis of race, color, religion, sex, or national origin. The 1972 amendment also requires federal agencies to maintain an affirmative program of equal employment opportunity.

Section 501 of the Rehabilitation Act of 1973, as amended, prohibits discrimination against qualified individuals with disabilities who work or apply to work in the federal government and requires federal agencies to prepare affirmative action plans. Title I of the Americans with Disabilities Act (ADA) of 1990 prohibits employment discrimination against qualified individuals with disabilities in the private sector and in state and local governments. In 1992, the Rehabilitation Act was amended to adopt the ADA standards in determining whether a federal employer engaged in prohibited discrimination.

The Age Discrimination in Employment Act of 1967, amended in 1974 to include the federal sector, prohibits employment discrimination against individuals who are 40 years of age or older.

The Equal Pay Act of 1963 protects men and women who perform substantially equal work in the same establishment from sex-based wage discrimination.

Recognized Experts

Susan Black Vice President, Catalyst, Canada Todd Campbell Diversity Initiative Manager, Society for Human Resource Management Taylor H. Cox, Jr.* CEO, Taylor Cox Associates John P. Fernandez* President, Advanced Research Management Consultants Edie Fraser President, Diversity Best Practices Lee Gardenswartz & Anita Rowe* Partners, Gardenswartz & Rowe Carol A. Hayashida Former Deputy Director, Center for Human Resources Management National Academy of Public Administration Robert C. Holland* Director, Diversity Analysis Research Team, SEI Center for Advanced Studies in Management, Wharton School, University of Pennsylvania Karen A. Jehn* Faculty Coordinator of the George Harvey Program for Redefining Diversity, Wharton School, University of Pennsylvania J. Edward Kellough Director, Department of Public Administration and Policy, University of Georgia Ann M. Morrison* Honorary Senior Fellow, Center for Creative Leadership Katherine C. Naff Associate Professor, Department of Public Administration, San Francisco State University Nancy Nelkin Director Audit Services, Equal Employment Advisory Council Jeffrey A. Norris President, Equal Employment Advisory Council Al Ressler Former Director, Center for Human Resources Management, National Academy of Public Administration Myra Howze Shiplett President, Randolph Morgan Consulting, LLC Pete Smith Former President, Private Sector CouncilR. Roosevelt Thomas, Jr. President, The American Institute for Managing Diversity Mauricio Velasquez* President, The Diversity Training Group Jo Weiss Former Vice President of Advisory Service and Member Relations, Catalyst Trevor Wilson President, TWI, Inc.

We also spoke with officials from and reviewed publications of the U.S. Equal Employment Opportunity Commission, the U.S. Office of Personnel Management, and the Corporate Leadership Council. For experts with an asterisk by their names (*), we reviewed their publications but did not interview them.

Comments from the Equal Employment Opportunity Commission

The Honorable David M. Walker Comptroller General of the United States U. S. Government Accountability Office Thank you for the opportunity to review and comment on the draft report, Diversity Management: Expert-Identified Leading Practices and Agency Examples (GAO-05-90).

I commend you for identifying leading diversity management practices and their use in the federal government. Expanding agency knowledge of the available tools to achieve diversity is critical to the government’s success in maintaining a workplace that is inclusive and responsive to the needs of an increasingly diverse workforce.

The agency examples included in the report should demonstrate the principles of workforce diversity. Federal agencies can learn from the experiences and successes of others.

While this report will assist in that effort, additional studies are clearly needed to explore this area in more depth.

EEOC believes that Management Directive-715 will be an invaluable tool to help agencies to improve their workforce diversity and could assist in this effort. As you know, EEOC expects to begin receiving federal agency MD-715 reports beginning in January, 2005 and EEOC can begin providing data that would facilitate GAO’s knowledge base in such an evaluation. In short, future studies of this area are warranted to evaluate whether the identified diversity management practices have actually achieved or improved workforce diversity in general or in the federal agencies covered.

One of the nine important factors to diversity management GAO cites is “measurement.”

A future study could also examine initiatives to measure diversity and how particular measures relate to the cited practices. Because GAO reports are widely read throughout the federal government and viewed as being highly authoritative, and because there are so few reports on diversity in the federal sector, future studies could explore in more depth the effectiveness of leading diversity practices.

The Honorable David M. Walker This report defines diversity as the ways in which people in a workforce are similar and different from each other, including race, ethnicity, gender, age, background, education, work role and personality. A future report might provide a discussion of the means through which agencies can determine how the multitude of similarities and differences that individuals bring to the workplace are important to creating a “high performance organization” with “a positive work environment where . . . all can reach their potential and maximize their contributions to an organization's strategic goals and objectives.”

Such a study would be a valuable supplement to this report. Several organizations in this area could be consulted in studying the relationships among these variables such as Diversity Inc. and the National Multicultural Institute. Diversity Inc, for example, periodically publishes various lists showing the top companies for diversity and which also purport to show a relationship between diversity and profitability.

Again, thank you for the opportunity to submit the EEOC’s views on your draft report.

Comments from the Office of Personnel Management

GAO Contact and Staff Acknowledgments

GAO Contact

Acknowledgments

In addition to the individual named above, Karin K. Fangman, Eric Gorman, Emily Hampton-Manley, Sharon Hogan, Belva Martin, Kiki Theodoropoulos, Michael R. Volpe, and Gregory H. Wilmoth made key contributions to this report.