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Diversity messages may backfire when companies focus on diversity’s benefits for bottom line

Companies that justify their diversity efforts by saying that a diverse workforce will improve their bottom line risk alienating the diverse employees that they hope to attract, according to research published by the American Psychological Association.

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Companies that justify their diversity efforts by saying that a diverse workforce will improve their bottom line risk alienating the diverse employees that they hope to attract, according to research published by the American Psychological Association.

That’s because such “business case” justifications for diversity can backfire, by making members of underrepresented groups – such as LGBTQ professionals, women in STEM (science, technology, engineering and math) fields and Black students – feel that they will be judged based on their social identity if they join the company.

“These business-case justifications are extremely popular,” said lead author Oriane Georgeac, PhD, a professor at the Yale School of Management. “But our findings suggest that they do more harm than good.”

Many companies offer either a “business case” explanation for why they value diversity (e.g., “we value diversity because it will help us better serve our customers and improve our bottom line”), or a “fairness case” explanation (e.g., “we value diversity because it’s the right thing to do”). Georgeac and co-author Aneeta Rattan, PhD, a professor at London Business School, sought to explore how common these two justifications are and how they affect potential employees’ impressions of what it would be like to work at a given company.

First, the researchers gathered the online diversity statements of every company on the Fortune 500 list and used artificial-intelligence-based language analysis to analyze whether each statement presented primarily a business case or a fairness case for diversity. Overall, they found that about 80% of the companies offered a business-case justification for valuing diversity, while less than 5% offered a fairness-case explanation; the rest made no public diversity statements or did not offer any justification.

Next, the researchers conducted five online experiments in which they asked job seekers from three underrepresented social identities – LGBTQ professionals, female STEM-job seekers and Black students – to read business-case or fairness-case diversity statements from fictional companies and to answer questions about how much belonging they anticipated feeling there, and how much they would want to work there.

On average, the researchers found that among the LGBTQ professionals, female STEM-job seekers and Black students, reading business-case diversity statements undermined participants’ anticipated sense of belonging to the company, and in turn, their desire to join the company, compared with reading fairness-based diversity statements or diversity statements that provided no explanation.

Further analyses found that one explanation for why the business-case justifications affected these participants was that it increased participants’ “social identity threat,” or their concern that the company would see and judge them, as well as their work, in light of their social identity.

“On the surface, this rhetoric may sound positive,” Georgeac said. “However, we argue that by uniquely tying specific social identities to specific workplace contributions, business-case justifications for diversity justify the fact that organizations may attend to individuals’ social identities when forming expectations about, and evaluating, their work. In other words, business-case justifications confirm to women and underrepresented group members that they must worry about their social identities being a lens through which their contributions will be judged. And this is threatening to these groups.”

Some of the experiments in the study also compared the responses of members of underrepresented groups to those of well-represented groups. The researchers found that the business case may sometimes also threaten members of some well-represented groups.

“Men in STEM showed no differences in their responses to the different types of diversity justifications they read, but white Americans after the murder of George Floyd did appear to be threatened by the business case, relative to the fairness case or no case. This seeming discrepancy across well-represented groups is fascinating and calls for further investigation,” Georgeac said.

“The Business Case for Diversity Backfires: Detrimental Effects of Organizations Instrumental Diversity Rhetoric for Underrepresented Group Members Sense of Belonging,” by Oriane Georgeac, PhD, Yale School of Management, and Aneeta Rattan, PhD, London Business School, appeared in the Journal of Personality and Social Psychology

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Study finds empowering workers can backfire

To be clear, this isn’t an argument against empowering employees – that’s still a good idea. Rather, this is highlighting the fact that empowerment by itself isn’t enough.

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There is an increasing body of work demonstrating the benefits of empowering workers, but a new study finds that efforts to empower employees need to be coupled with efforts that allow those employees to do their jobs well. If institutional obstacles make it difficult for workers to thrive, empowering them can lead to unethical behavior.

Empowered employees are workers who have been given considerable discretion regarding their work and who feel that their work is meaningful. Research has found that empowering workers leads to better job performance, greater creativity, and improved employee retention, among other benefits.

“We wanted to know if there were circumstances where empowered employees would use their increased power and discretion to behave unethically – and we found that there are other things leaders need to do if they want to garner the benefits of empowerment and reduce associated risks,” says Brad Kirkman, co-author of a paper on the study.

“To be clear, this isn’t an argument against empowering employees – that’s still a good idea. Rather, this is highlighting the fact that empowerment by itself isn’t enough.” Kirkman is the General (Ret.) H. Hugh Shelton Distinguished Professor of Leadership in North Carolina State University’s Poole College of Management.

To explore potential risks associated with empowerment, the researchers focused on “hindrance stressors,” which are work demands that make it difficult for employees to do their jobs well. Hindrance stressors include things like red tape, unclear job tasks, conflicting requests from supervisors, or coworkers getting undeserved rewards or promotions.

The researchers hypothesized that if employees are empowered but face significant hindrance stressors, they could become “morally disengaged.” This, in turn, could lead to unethical pro-organizational behavior, such as lying to make their company look good, withholding negative information from customers or clients, or concealing information from the public.

To see if there was any relationship between empowerment, hindrance stressors and unethical pro-organizational behavior, the researchers conducted two studies.

In the first study, the researchers enlisted 344 adult workers as study participants. The workers were initially asked how empowered they felt at work and to what extent they faced various hindrance stressors. Two weeks later, the study participants were asked questions that were designed to assess their moral disengagement and to what extent they might engage in unethical pro-organizational behavior.

“We found that the more hindrance stressors empowered employees faced, the more likely they were to become morally disengaged and to engage in pro-organizational unethical behavior at work,” Kirkman says. “In other words, empowered employees felt pressure to pay back their organization, but when they were thwarted from doing so due to hindrance stressors, they said they would behave unethically in order to do so.”

Because the first study was purely hypothetical, the researchers then conducted a second study to see whether hindrance stressors actually influenced empowered workers to behave unethically.

For this second study, the researchers recruited 394 workers as study participants. Study participants were asked to imagine that they were acting on behalf of a fictional workplace. The description of the fictional workplace varied: some descriptions were of an empowered workforce, while other were not. Similarly, descriptions varied in the number of hindrance stressors in place. The participants were then told that they would be participating in a contest, where the winner received a $1 million cash prize for their fictional employer.

Researchers then gave the participants a list of 10 anagrams and told them to solve as many as possible. However, none of the anagrams were actually solvable. The researchers wanted to see which study participants would lie about having solved the anagrams.

The researchers found that when participants had an empowering leader but also faced higher hindrance stressors, the probability of cheating increased by 75% compared to when participants had a leader who did not empower them. However, when employees had an empowering leader but few hindrance stressors, the probability of cheating decreased by almost 30% compared to participants who had a leader who did not empower them.

“The take-away message here is clear: empowerment is critical for today’s knowledge economy, but leaders also need to remove the types of obstacles that prevent their employees from exercising their empowerment,” Kirkman says.

“And if there are hindrance stressors that management can’t address right away, leadership needs to help employees develop coping strategies to deal with the resulting frustration.”

The paper, “The Hidden Dark Side of Empowering Leadership: The moderating role of hindrance stressors in explaining when empowering employees can promote moral disengagement and unethical pro-organizational behavior,” is published in the Journal of Applied Psychology. The paper was co-authored by Tobias Dennerlein of the University of Navarra.

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WeClean creates more job opportunities for local communities

Company is here to stay long-term, aims to hire over 1,200 employees by 2025.

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Creating job opportunities while providing quality laundry services is what fully integrated laundry service provider WeClean has always committed to since its establishment in 2017.

“We’ve always set out to help not only consumers but also provide the necessary employment to Filipinos within the local community. Our aim by 2025 is to have 500 operating and successful branches across the Philippines and in nearby Southeast Asian countries that will help us hire and offer jobs to roughly over 1,200 employees,” shares Alejandro Gonzalez Sacramento, WeClean Head of Operations.

To date, WeClean has opened and is operating over 64 branches in the metro with 130 employees ensuring that quality laundry services are offered to their growing customer base. “We are hiring aggressively right now as we continue opening branches and extending our operating hours from 6am to 10pm and we are already open 24 hours in our branch in Ocampo. We are eyeing to be able to hire more people in the next few months so that we are able to open another four to six branches,” Gonzalez mentions.

The company is also targeting to acquire more laundry shops to bring the total number of operating branches to 100 before the year ends, so it is vital for WeClean to find the right people and hire more branch personnel.

Hiring Process

WeClean believes in the adage where happy workers bring satisfied customers. They offer competitive wages and ensure all mandatory benefits set by the government are implemented and strictly followed to ensure that their staff and employees are happy and proud of working at WeClean. “We make sure our employees are happy and receive not only their basic pay but also on holidays and overtime. They are also given SSS, PAG-IBIG, and PhilHealth benefits,” shares Gonzalez.

In the last two weeks, WeClean has recently hired 15 more attendants, placing their current count of employees to 145. They have job postings on social media and are likewise working with some HR agencies to ensure they get the right personnel for their branches.

They hire both undergraduates and college graduates with experience working in the laundry business or service industry. WeClean is also on the lookout for customer-oriented individuals who can not only greatly appeal and deal with customers on a daily basis but also tech-savvy individuals who are able to learn new things as the company is digitizing their branches with POS machines.

“We are very much open in considering employees for our various roles across our 64 branches in the country. We train our personnel with our equipment, our services, and in running the businesses as well,” highlights Gonzalez.

Strengthening Accessibility

In its aim to further digitize and make laundry services more accessible to those in the metro, WeClean finalized its partnership with Grab and is the first laundry business to be available in the Grab app.

“We continue to innovate and ensure that we are where our customers are – online. We are hoping to help more Filipinos in their laundry chores so they can focus on what is more important to them like spending time with the family,” muses Gonzalez.

The WeClean app is also in its final stages before it is publicly made available in the country. To learn more about WeClean Philippines, visit weclean.ph.com or their Facebook  page for updates and announcements.

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Narcissistic bosses stymie knowledge flow, cooperation inside organizations

The study found that unit-head narcissism can prevent knowledge sharing. That tendency diminished in fast-changing or complex environments because narcissists had an excuse to pursue external ideas. But when businesses have high inter-unit competition, narcissists are more tempted to distinguish themselves from other units.

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Narcissism is a prominent trait among top executives, and most people have seen the evidence in their workplaces.

These individuals believe they have superior confidence, intelligence and judgment, and will pursue any opportunity to reinforce those inflated self-views and gain admiration. According to new research from the University of Washington, narcissism can also cause knowledge barriers within organizations.

When different units in the same company share information, it boosts performance and creates a competitive advantage. Narcissists hinder this knowledge transfer due to a sense of superiority that leads them to overestimate the value of internal knowledge and underestimate the value of external knowledge.

“Many big companies are what one would describe as multi-business firms, an organizational form where you have a corporate parent and subsidiary units,” said co-author Abhinav Gupta, associate professor of management in the UW Foster School of Business. “The financial logic for why these firms exist is so that knowledge and skills that reside in one unit can be used in another unit.”

But units don’t work with each other as much as companies would like, Gupta said. The study, published April 4 in the Strategic Management Journal, revealed that certain personality traits of executives — specifically narcissism — impede the flow of information.

“Narcissism affects people’s desire to be distinctive,” Gupta said. “It’s correlated by people wanting glory for themselves. We hypothesized that business-unit heads that have those traits would be the ones to say, ‘We don’t want to work with you. We have sufficient skills and knowledge and abilities that we will work independently.’ That was very strongly borne out based on our research design.”

The authors surveyed business units of a headhunting company in China that helps organizations recruit talent and search for technical personnel. These units must share knowledge about building talent pools, identifying skills and persuading prospects to accept offers.

Researchers asked unit heads to rate, among other factors, their own narcissistic traits, the environmental complexity of the local market and perceived competition with other units. They then asked deputies to rate the level of knowledge imported from other units.

Narcissism was measured using the self-report Narcissistic Personality Inventory 16-item scale, which presents pairs of statements and asks individuals to select the one that best describes them. One pair consisted of “I like to be the center of attention” and “I prefer to blend in with the crowd.”

The study found that unit-head narcissism can prevent knowledge sharing. That tendency diminished in fast-changing or complex environments because narcissists had an excuse to pursue external ideas. But when businesses have high inter-unit competition, narcissists are more tempted to distinguish themselves from other units.

The research has multiple implications for companies, Gupta said. For example, when filling roles that require knowledge sharing, managers might watch for signs of narcissistic personality traits. Companies could also design an organization and reward structure that encourages cooperation among current personnel.

“There are two views of how multi-business firms create value,” Gupta said. “One perspective is you want to run an organization like an internal market. All the units are actively competing for resources from the corporate headquarters, and that competition is what enables superior performance.

“This research kind of goes against the grain of that. If you create the perception of competition inside an organization, then that will have some downstream effects. You will be essentially foregoing some essential knowledge-sharing activities.”

The study was funded by the National Natural Science Foundation of China.

The other co-authors were Xin Liu of Remin University of China, Lin Zhang of Peking University, Changqi Wu of Shangdong University and Xiaoming Zheng of Tsinghua University. 

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