Section 2: Social Diversity in the Workplace

Describe how contemporary organizations both benefit and struggle with diversity oriented themes and topics

Diversity has been around since the beginning of time, however, the way society has dealt with diversity has changed. It has been proven that diverse companies are more successful in their output and profitability. However, many companies still struggle to develop and maintain a diverse work environment.

In this section, we will examine the benefits of social diversity and how it impacts a company’s culture and profitability. We will also analyze current investigations and controversies around diversity. And finally, we will examine strategies companies can use to help foster and maintain diverse workplaces.

Learning Outcomes

  • Discuss the benefits of social diversity
  • Analyze diversity controversies and investigations
  • Describe strategies companies use to maintain and encourage diversity

Benefits of Social Diversity

While social justice, legal compliance, or maintaining industry standard employee environment protocols is typically the initial impetus behind [inclusion and diversity] efforts, many successful companies regard I&D as a source of competitive advantage, and specifically as a key enabler of growth.

—McKinsey & Company. Delivering Through Diversity, Jan 2018.

Practice Question

Four people holding hands.

In the workplace, employee diversity can be a source of competitive advantage. Here are a few specific advantages:

  • Leveraging a cross-cultural (in the broadest sense of the word) awareness to identify opportunities and avoid blind spots
  • Increasing the productivity of employees who feel valued
  • Improving an organization’s employer brand and, therefore, ability to recruit and retain talent
  • Improving the market relevance and market value of a company/organization

Apple’s Health App

As a case in point, consider Apple’s Health App that claims to allow you to “keep tabs on a wide array of data that matters to you—from measurements of your blood pressure and blood glucose to records for your weight and reproductive health.” Despite the promised capability to track reproductive health, the app was launched without a provision for monitoring menstrual cycles in what was critiqued as a stereotypical case of gender blindness. TechCrunch writer Sarah Perez summarized the disconnect, noting that menstrual tracking is a key function that “roughly half the population would expect to see included in a comprehensive health tracking app.” And as Perez noted, perhaps that’s not surprising given that 80 percent of Apple’s engineering staff is male.

Perez concludes: “the issue with the Health app is a perfect example of how not having the right [gender] balance internally can actually impact innovations and technology developments.”1 Over a year after the product’s initial launch, Apple still hadn’t addressed the oversight and didn’t respond to Splinter writer Kashmir Hill’s request for comment, prompting her to suggest that the answer to her question why there’s still no period-tracking in HealthKit might be answered by the composition of the executive team: nine men and one woman.

For a financial performance view, let’s consider McKinsey Consulting’s research on diversity in the workplace. In a 2015 report titled Why Diversity Matters, McKinsey highlights the following findings, based on the composition of top management and boards:

  • Companies in the top quartile for racial and ethnic diversity are 35 percent more likely to have financial returns above their respective national industry medians.
  • Companies in the top quartile for gender diversity are 15 percent more likely to have financial returns above their respective national industry medians.
  • Companies in the bottom quartile both for gender and for ethnicity and race are statistically less likely to achieve above-average financial returns than the average companies in the data set (that is, bottom-quartile companies are lagging rather than merely not leading).
  • In the United States, there is a linear relationship between racial and ethnic diversity and better financial performance: for every ten percent increase in racial and ethnic diversity on the senior-executive team, earnings before interest and taxes (EBIT) rise 0.8 percent.
  • Racial and ethnic diversity has a stronger impact on financial performance in the United States than gender diversity, perhaps because earlier efforts to increase women’s representation in the top levels of business have already yielded positive results.

In their 2018 publication, Delivering Through Diversity, McKinsey Consulting again reported finding a “positive, statistically significant correlation between executive team diversity and financial performance.” Although correlation is not causation, the report notes that “there is a real relationship between diversity and performance that has persisted over time and across geographies.”2 The conclusion drawn from their 2015 Why Diversity Matters report still applies: “diversity is a competitive differentiator shifting market share toward more diverse companies.”3

Diversity Investigations

Although there are many documents and pieces of legislation in place to protect people from harsh and unfair treatment, not everyone abides by those rules. In this section, we are going to discuss five different cases against employers for discriminatory practices against their employees. Hopefully, these cases will help shed some light on diversity issues that are still present in today’s society. Just as importantly, they will demonstrate how the Equal Employment Opportunity Commission and current legislation are working together to help foster diversity and inclusion in the workplace.

Robert Braden vs. Lockheed Martin4

In 1995, Robert Braden’s employer of 11 years merged with Lockheed Martin, an aerospace and defense contractor. Braden continued to work for Lockheed Martin for over 15 years until he was laid off in 2012 at the age of 66. At the time he was laid off, Lockheed Martin did not give him any explanation for his termination. When Braden did some investigating, he found out that of the 110 employees that shared his same job title, four other employees were also laid off. All four employees were over fifty-years-old.

Braden then argued that he was compensated less than his counterparts due to his age. Braden then explained one of his supervisors gave him a low review score. When Braden asked why, his manager explained that upper management believed he had been with the company for too long. Braden then used his state’s anti-discrimination law in combination with the age discrimination portion of the Employment Act of 1967 to file a lawsuit against his previous employer. In order to win his case, Braden had to prove that he was let go for only his age and for no other reason. With the evidence presented, Braden won his case and was awarded $51 million in damages. Lockheed Martin now has one of the largest age discrimination verdicts ever awarded to a single plaintiff.

Butler vs. Home Depot, Inc.5

In 1996, Vicki Butler filed charges against Home Depot’s West Coast Division for discrimination based on gender, claiming that Home Depot’s hiring strategies, job assignments, compensation, and promotion opportunities were heavily based on gender. Butler said that Home Depot had no objective hiring processes in place and job assignments for men and women greatly differed. She claimed that women were primarily in cashier positions while men were in sales and management roles. Even worse, no pay scales were mandated to ensure equal compensation. Instead, pay was left up to the predominantly male management team.

This case was tried as a class action lawsuit and brought to court as a violation of the Civil Rights Act of 1964 and the California Fair Employment and Housing Act. The case was settled for $87.5 million and included a seven-year period in which Home Depot was responsible for making changes to their hiring and staffing practices. Home Depot also made a commitment to increase the number of women in management positions within the seven years following the settlement. Lastly, the two founders of Home Depot spoke out about their experience with the case and preached the importance of creating an all-inclusive work environment to help fight against discrimination.

EEOC vs. Big 5 Sporting Goods Corp.6

Robert Sanders was a new management trainee for Big 5 Sporting Goods store in Oak Harbor, Washington. Sanders was the only African-American employee at the location and was harassed and even received death threats from his trainers. Sanders was called names like “spook” and “King Kong” and fellow employees told him he had the “face of a janitor.” In addition, assistant managers allegedly told him they would “lynch” him or “hang” him if he called in again. They also offered to help him kill himself whenever he was ready to commit suicide. Sanders began to miss work from the stress of the harassment and was eventually terminated by Big 5.

After unsuccessfully attempting to settle outside of court, Sanders brought Big 5 to court with the help of the EEOC. The EEOC argued that Big 5 had violated Title VII of the Civil Rights Act of 1964 and Sanders was awarded $165,000 for lost wages and damages. Big 5 was required to meet additional requirements including training the entire staff on how to prevent, report, and correct workplace racial harassment.

EEOC vs. Scott Medical Health Center7

EEOC vs. Scott Medical Health Center was one of the first sexual orientation discrimination lawsuits filed by the EEOC. Dale Massaro was a telemarketer for Scott Medical and claimed he was harassed because of his sexual orientation. His supervisor used derogatory comments towards Massaro and asked inappropriate questions about his personal relationships. Massaro reported the harassment to Scott Medical’s CEO and was told that his manager was just performing his job functions.

The EEOC helped Massaro sue Scott Medical claiming that they had violated Title VII of the Civil Rights Act of 1964. This was one of the first cases where the federal court system recognized sexual orientation as a part of gender discrimination.

Practice Question

EEOC vs. AbercromBie & Fitch

In 2008, Samantha Elauf applied for a job with Abercrombie & Fitch. Elauf was a practicing Muslim and wore a hijab on a daily basis and to her interview. She claimed that Abercrombie & Fitch did not hire her because her religious practices did not fit with their dress code requirements. Elauf argued that Abercrombie’s unwillingness to hire her and make dress code accommodations for her religious beliefs was a direct violation of Title VII’s prohibition against religious discrimination.

The verdict went back and forth over the next 7 years. In the initial trial, the jury voted in favor of Elauf. However, Abercrombie & Fitch appealed and the US Tenth Circuit Court of Appeals ruled in the company’s favor. Finally, in June of 2015, the Supreme Court overturned the Circuit Court’s decision and awarded Elauf with monetary damages totaling $25,670. The Supreme Court explained that if the company had even a hunch that her head cover was for religious purposes, they were guilty of violating Title VII of the Civil Rights Act of 1964.

Encouraging Diversity

Photograph of four employees working on computers. There are two black women and two black men.Let’s imagine a company has decided to put time and effort into creating a more diverse workforce. They reevaluate their hiring process and recruit to a wider variety of individuals. After filling all open positions, they were successfully able to fill their diversity goal while still hiring the most qualified people for the job. So this means their company is now diverse, right? Well, on paper that might be an accurate statement; however, what the company does after they hire a diverse group of employees is equally as important. If companies hire for diversity but then endorse conformity, are they really diverse? The answer is no. Promoting diversity is key to having a diverse organization. If you hire a variety of individuals and they feel isolated when they start working, word will travel quickly and prevent minorities from applying for future job openings.

So how does a company promote diversity? There are many strategies companies can use to foster an inclusive working environment. First, people need to know that is it okay to acknowledge differences. Being aware of differences is the first step in ensuring your actions and words are respectful and inclusive in nature. Some companies even offer Implicit Bias Training to help their employees identify biases they may not have realized they had. Harvard’s Project Implicit provides online Implicit Association Tests (IAT) which can reveal implicit attitudes you may have towards certain groups of people. Having open conversations about inclusiveness and acceptance of people from all backgrounds is key to a healthy working environment. The bottom line is; it is important to treat people the way they want to be treated.

A group of 12 individuals (5 men and 7 women). There are four people of color in the group.
Diversity Committee at Milbank, Tweed, Hadley & McCloy LLP

Successfully diverse companies encourage open lines of communication. It is okay to ask appropriate questions if you do not understand someone’s culture or background. Also, if you offend someone with your words or your actions it is important to apologize and understand how you offended them to avoid doing it again in the future. Having a work environment that will support these conversations is key to inclusion and acceptance. There are very simple and fun ways to celebrate diversity. Establishing a holiday calendar with a wide variety of holidays is a great way for people to learn about other cultures and religions while also getting to know their coworkers. There are even smaller day-to-day activities that can make a big difference. For example, when scheduling a lunch meeting try not to schedule it during a coworker’s religious fasting, or make sure to choose a place with vegetarian options for the coworker that doesn’t eat meat. While these may seem like small examples, they can make a big difference!

What happens if someone feels discriminated against? There needs to be a set process in place to voice these concerns and correct the issue. Oftentimes there is a Diversity Champion in each organization who is there to foster a diverse environment. Human resources and unions are also key players in ensuring a fair and unbiased working environment. It is important for organizations to have a number of resources available to employees so they are able to seek assistance, guidance, and support when needed. There should be a combination of both formal, informal, and anonymous complaint options provided.

As with many company processes, diversity training and initiatives need to be implemented through all three levels of influence. If these initiatives are not introduced through the individual, group, and organizational level, they will not be successful. Creating a goal to ensure a more diverse workplace is just the first step on a long list for developing a diverse company. It is the day-to-day interactions and conversations that will lay the foundation for a diverse company.

Practice Question

Diversity is everywhere. If you learn to embrace and appreciate it, chances are you will learn more about others and yourself than you ever thought possible!


“Enforcement and Litigation Statistics.” US Equal Employment Opportunity Commission. Accessed April 22, 2019.

Reynolds, Katie. “5 Strategies for Promoting Diversity in the Workplace Hult Blog.” Hult Blog. June 26, 2018. Accessed April 22, 2019.

  1. Perez, Sarah. “Apple Stops Ignoring Women’s Health With iOS 9 HealthKit Update, Now Featuring Period Tracking,” Tech Crunch, 09 Jun 2015. Web. 26 June 2018.
  2. McKinsey&Company. Delivering Through Diversity, Jan 2018. Web. 26 June 2018.
  3. McKinsey&Company. Diversity Matters, 2015. Web. 26 June 2018.
  4. “Employee Wins Massive Age Discrimination Lawsuit Against Lockheed Martin.” The Spiggle Law Firm. April 10, 2018. Accessed April 22, 2019.
  5. Butler vs. Home Depot, Inc. (United States District Court, N.D. California. January 25, 1996);”Butler v. Home Depot, Inc.” Goldstein, Borgen, Dardarian & Ho. Accessed April 22, 2019.
  6. “Big 5 To Pay $165,000 To Settle EEOC Race Discrimination Lawsuit.” US Equal Employment Opportunity Commission. September 18, 2018. Accessed April 22, 2019.
  7. Long, Daniel R. “EEOC Scores Victory in Sexual Orientation Discrimination Lawsuit.” Labor & Employment Law Perspectives. November 27, 2017. Accessed April 22, 2019.

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