Managing workplace diversity: performance of minority employees.
Globalization is fast changing the demographic mix of workforce in organizations across countries. Therefore the concept of diversity and its management become imperative. Diversity management (DM) is planning and implementing organizational systems and practices to manage people so that the potential advantages of diversity are maximized while its potential disadvantages are minimized (Cox, 1993). The term originated in North America in the late 1980's and since then it has seeped into countries across the world (Hays-Thomas, 2004; Kaiser & Prange, 2004; Nyambegera, 2002; Ozbilgin & Tatli, 2008; Palmer, 2003; Pattnaik & Tripathy, 2014) DM started as an initiative to provide equal employment opportunities and today it has translated into an industry wide policy on diversity. It refers to a mixture of people with different group identities within the same social system (Fluery, 1999). Diversity includes factors such as race, gender, age, color, physical disability, and ethnicity (Kundu & Turan, 1999).
Paradigms of Diversity
Organizations look at diversity from different paradigms, which in turn shape their philosophy on diversity. The moral paradigm believes that discrimination is wrong, illegal and immoral (for example discrimination on grounds of race, caste and religion). The social need paradigm believes that our solutions to diversity for a country or region must be different and unique from the rest (for example the needs of 'differently-abled' in an organization or how to bring the economically and educationally backward population into the national main stream). The competitive advantage paradigm believes that there is a competitive rationale behind the belief in diversity and adopting inclusion as a policy (1). For example, Mckinsey (2014) reported that companies in the top quartile for gender or racial and ethnic diversity are more likely to have financial returns above their national industry medians. Companies in the bottom quartile in these dimensions are statistically less likely to achieve above-average returns. Diversity thus is a competitive differentiator. (2)
Types of Organization & Diversity Policies
Cox (1994; 2001) divides organizations in to three types: the monolithic organization, the plural organization, and the multicultural organization and presents a diversity management paradigm for each type. They are as follows:
The monolithic organization is demographically and culturally homogeneous. For example, most Chinese companies are monolithic from a cultural and ethnic perspective. (Powell & Graves, 2003). A monolithic organization in North America or Europe will have a majority of white men and relatively few women and members of ethnic and racial minorities (Cox, 1994; 2001).Similarly in India almost all organizations will have primarily Indians as employees. Such organizations will have a culture that will perpetuate the homogeneity of its workforce through its hiring and promotion practices.
The plural organization: has a heterogeneous workforce, relative to the monolithic organization, and typically makes efforts to conform to laws and public policies that demand and expect workplace equality. It will take active steps to prevent discrimination in the workplace such as audits that assures equality of compensation systems and manager trainings on equal opportunity issues and sexual harassment. Although women and members of minority groups are represented in larger numbers, they make up only a small percent of the management, particularly top management, and are still expected to assimilate into the majority culture. Examples of plural organizations include companies in which members of minority groups constitute a sizable proportion of the workforce but only a small percent of the managerial positions. Most Indian organizations are attempting to become plural through policies of reservation, second careers for women and work life balance.
The multicultural organization is characterized by a culture that fosters and values cultural differences--truly and equally incorporates all members of the organization via pluralism as an acculturation process, rather than as an end resulting in assimilation. It is more an ideal than an actual type because very rarely do companies achieve this level of integration. However, Cox (1994; 2001) indicate that it is important to understand this type and use it to create a vision for effective diversity management.
Diversity in a Globalized Environment
Along with the above classifcations, in a globalizing economy diversity can also be understood as intra national and cross national (Lee, 1997; Park, 2008). Intra national diversity management refers to managing a diverse workforce of citizens or immigrants within a single national organizational context and crossnational diversity management, refers to managing a workforce composed of citizens and immigrants in different countrie. Each of these types of diversity management presents different challenges and dilemmas, and each requires a different set of policies and programs
Homogenous & Heterogenous organizations
Conventional human resource (HR) practices tend to produce and perpetuate homogeneity in the workforce as a result of the A-S-A (attraction-selection-attrition) cycle (Schneider, 1987; Schneider, Smith & Paul, 2001). Typically, individuals are attracted to organizations that appear to have members with values similar to their own. In turn, organizations select new members who are similar to their existing members because their hiring continues to make everyone feel comfortable (Garcia, Posthuma, & Colella, 2008). Recruitment practices often emphasize hiring people from sources that have historically been reliable and selecting candidates whose characteristics are similar to those employees who have been successful in the past. As a result, employees who do not fit in well with the dominant organizational culture eventually leave or are fired; creating a selective attrition process that supports and maintains a workforce that is homogeneous (Schneider, Smith & Paul, 2001). In the long run, this trend is unhealthy for organizations in that it limits their talent pool, their long-term growth and renewal, and their ability to adapt to environmental changes and tap into new markets.
In recent decades, human resource managers have recognized the need to adopt effective diversity management practices in order to overcome barriers for diversity and reap the rewards of a diverse workforce. Kossek and Lobel (1996) summarize the three prevailing HR approaches to diversity management and offer an original approach of their own. The authors later expanded on the model and made the connection between human resource management practices, workforce diversity, and individual, group, and organizational outcomes (Kossek, Lobel & Brown, 2006). The four approaches are:
Diversity enlargement. This approach focuses on increasing the representation of individuals of different ethnic and cultural backgrounds in the organization. The goal is to change the organizational culture by changing the demographic composition of the workforce. The assumption is that the new employees will conform to existing practices and that no additional intervention will be needed. The mere presence of increasing numbers of employees from different backgrounds will result in a culture change that will bring the desired results. Often this approach is motivated by compliance to laws and public expectations of political correctness rather than a deep understanding of the business need for diversity (Kossek & Lobel, 1996).For example the reservation policy on caste lines in India.
Diversity sensitivity approach recognizes the potential difficulties introduced by bringing together individuals from diverse backgrounds and cultures in the workplace. It attempts to overcome these difficulties through diversity training that is aimed at sensitizing employees to stereotyping and discrimination while also promoting communication collaboration. The assumption embedded in this approach is that increased sensitivity to differences will improve performance. Although this is sometimes the case, in other instances, particularly when the training is not linked to corporate goals and initiatives and not supported by its long-term policies, it can create more harm than good. Emphasizing differences can backfire by reinforcing stereotypes and highlighting intergroup differences rather than improving communication through understanding and common interests (Kossek & Lobel, 1996).
Cultural audit approach aims at identifying the obstacles that limit the progress of employees from diverse backgrounds and that block collaboration among groups in the organization. The audit is usually performed by outside consultants who obtain data from surveys and focus groups and then identify areas in which employees who are different from the dominant group feel that they are blocked from performing to the best of their ability. Although this is a customized approach that is tailored to specific organizational cultures, the recommendations for change are typically based on the notion that the source of the problem is in the dominant cultural group (typically, in North America, white male) and that the change must come from within that group (Kossek & Lobel, 1996).An example of a cultural audit is company's global employee satisfaction survey with diversity as one of the dimensions, the results are used to assess commitment and performance in achieving a diverse workforce (Ford Motor Company, 2002).
Strategy for achieving organizational outcome proposed by Kossek and Lobel (1996) as a comprehensive framework for HR diversity management focuses on diversity management as a means for achieving organizational ends, not as an end in itself. Using this strategy, managers have to identify the link between diversity management objectives and desired individual and organizational outcomes. Organizational strategic choices are viewed in the context of environmental drivers such as the changing labor market composition, the global economy, the shift to a service economy, and the legal and governmental pressures. Analyzing environmental drivers can help the organization determine the specific benefits it expects to gain from its diversity management and how those are linked to its overall business strategy. For example, if innovation is a business strategy for the company, it is in its best interest to cultivate multicultural diverse teams because creativity and responsiveness to new markets, primarily in today's global economy, are more likely to be found in diverse work teams.
In a nut shell, all these diversity management initiatives may be viewed on a continuum, starting from equal employment opportunity (EEO) legislation which means that it is against the law to discriminate; to affirmative action programs which means that companies need to take positive steps to ensure equal opportunities; and finally to diversity management as proactive move aiming at promoting a diverse and heterogeneous workforce. The emphasis of the latter is on the business advantage that it can provide to organizations.
Policies & Practices
McKinsey (2014) has reported that companies in the top quartile for gender or racial and ethnic diversity are more likely to have financial returns above their national industry medians. Companies in the bottom quartile in these dimensions are statistically less likely to achieve above-average returns. Diversity is probably a competitive differentiator that shifts market share toward more diverse companies over time. (3) This clearly points towards the need for creating policies and practices which support diversity. It is a win -win situation for creating an inclusive culture and for maximizing profit. Organizations which are insensitive to the needs of minority may have employees who feel that they cannot be themselves at work. Therefore, such employees may not engage fully in the team or in assigned work. For example, an employee may fear that their sexual orientation or a hidden disability if revealed will face reprisals. This type of 'closed' environment can significantly impact an individual's involvement in the organization, potentially resulting in low staff morale, increased absenteeism, decreased productivity and retention difficulties. Open, effective communication, as well as clear channels for feedback optimizes the opportunity for discussion of issues related to inclusion and discrimination. (4) Similarly, employees with physical disabilities should be supported by rearranging the office layout room to accommodate wheelchairs, scooters, or other mobility aids. Behaviors which demonstrate respect and support for a safe and supportive working environment need to be incorporated in planning and work practices. Policies and procedures should be supportive with special focus on absence of workplace harassment, existence of workplace values, standards of behavior, equal employment opportunity (EEO) and diversity (5). Some other supportive policies are development of trust, providing opportunities for staff to interact in settings outside of work so that employees feel more comfortable and are creative, flexible and look for new ways of doing things, recognizing and acknowledging their special days and festivals.
Diversity Challenges in India
India is one of the beneficiaries of the globalization process. (Budhwar, 2003). Since more and more multinational companies (MNCs) have started their operations in India, they want to know the peculiarities and idiosyncrasies of the Indian workforce and how it could be motivated to contribute its best to the organizational goals. Currently, diversity management in India is at the stage of providing equal opportunity. The Indian organizations fall under plural organizations (Cox, 1994,2001) and the approach to handle diversity issues fall under diversity enlargement strategy (Kossek & Lobel, 1996). Here too, the gap between the legal promise and actual implementation is very wide. The Constitution safeguards the civil rights of the lower castes, scheduled castes (SCs) and scheduled tribes (STs) (6) and also provides for reservations of government jobs for them by way of quota. But a lot needs to be accomplished. The women experience various forms of unfavorable discrimination from society, employers and superiors. Along with women workforce, there are other factors adding to the complexity of diversity like the caste, tribes, religion and the challenges of the 'differently-abled.' The country has enactea some laws so as to protect civil rights of the vulnerable sections of society, but there is no law to proactively manage diversity at the workplace
However just as every cloud has a silver lining, so with the rise in literacy levels the position of women in many spheres is becoming better. For example, women are playing a significant role in the expansion of the Indian software industry, Business Process Outsourcing (BPO) industry and education. Multinational corporations have started forming diversity committees to drive home the philosophy of diversity management, and have set benchmarks towards achieving the stated objectives (Budhwar, Saini & Bhatnagar, 2004). At the same time it is also clear that organizations will not reap the benefit from diversity management till there is supportive environment within the organizations which is inclusive towards minority employees.
Who is a Minority?
According to the United Nations minorities' declaration (1992) article one, minorities are defined based on national or ethnic, cultural, religious and linguistic identity. (7) According to a definition offered by Francesco Capotorti (1977), a minority is 'a group numerically inferior to the rest of the population of a state, in a non-dominant position, whose members--being nationals of the state--possess ethnic, religious or linguistic characteristics differing from those of the rest of the population and show, if only implicitly, a sense of solidarity, directed towards preserving their culture, traditions, religion or language (8).
In line with the above definition in the Indian context all people belonging to religions other than Hinduism constitute religious minority. In most instances a minority group will be a numerical minority, but in others a numerical majority may also find itself in a minority-like or non-dominant position like for example the Blacks though were in majority in South Africa under the apartheid regime experienced non dominant position (9). Taking the above logic women in India also experience 'non-dominant' position in the workplace and therefore are also termed as minority. The non-dominant aspect of the definition is extended to also include persons with a particular sexual orientation or identity (lesbian, gay, bisexual, transgender or intersexual persons).
In the present study these three categories (women, non-Hindus and people with sexual orientation other than heterosexual) constituted the sample of minority under study.
Supportive Workplace Environment
The right not to be discriminated against is paramount in protecting the rights of persons belonging to minorities in all regions of the world. Minorities everywhere experience direct and indirect, de jure and de facto discrimination in their daily lives. Therefore the right not to be discriminated formed the basis of defining the supportive workplace environment in this study (10). It focused on (a) perception of fairness, (b) scope for growth and development, (c) mentorship and support, (d) communition tone and gestures, (e) experience of empowerment, (f) feedback mechanism.
It is argued that if the environment at workplace is perceived as supportive to all then there will be no difference in the perception of workplace environment by the majority and minority employees. On the contrary, if the perception is negative, the minority will find the workplace not supportive. Therefore the following hypotheses were formed.
* Minority employees will perceive the workplace environment less positive than the majority employees.
* H1: Employees who perceive workplace environment supportive will have higher performance scores than those who do not.
* H3: Supportive work environment will lead to higher performance appraisal scores
The study was carried out in three different organizations (a biotechnology firm, an information technology firm and a knowledge process outsourcing firm). Effort was also made to study supportive environment between them. Of the three organizations biotechnology is different from IT and KPO. Therefore, it was hypothesized that:
* H4: Perception of supportive work environment and performance in biotechnology firm will be different from IT and KPO.
A survey research design was used and responses were collected from the three organizations (a biotechnology firm, an information technology firm and a knowledge process outsourcing firm) in Maharashtra and Tamilnadu in 2014.
The independent variable was supportive work environment. It was defined as the initiatives taken by the organization to make the workplace employee friendly and the right not to be discriminated against. It was assessed by a self-designed seven item scale. The responses were collected on a five point scale ranging from 1 being strongly disagree to 5 being strongly agree.
The dependent variable was annual performance score captured in the performance management system. The respondents were asked to report their previous year's score on annual performance management. Since each organization may measure performance on different scales, it was decided to collect all the raw performance scores and convert them into scores ranging from 1-5, where one meant lowest score and five meant highest performance scores.
In the study the term 'minority workforce' referred to those categories of working employees who are generally less in number within organizations or who are in a non-dominant position in the workplace. Thus, the categories chosen were (a) women (in case of gender), (b) religious minority (all non-Hindus, that is Muslim, Christians Sikh and Jains clubbed together as one category), and (c) those who preferred not to reveal their sexual preferences (all others called themselves heterosexual in orientation). For capturing sexual preferences the respondents were given all the options (gay, lesbian, bisexual, heterosexual,' others' and also the option of 'preferred not to say'). Almost all respondents opted for 'heterosexual' and only some opted for 'prefer not to say' option perhaps because there is a stigma for revealing sexual identity other than heterosexual. Therefore the statistical analysis was carried out between 'heterosexual' and 'prefer not to say' category.
The data collected was cross sectional in nature. A total of 121 valid samples were collected through the survey method. 57 respondents were males and 64 were females.67 respondents were Hindus and 49 were religious minority (non-Hindus). 109 respondents claimed they were heterosexual and 12 respondents preferred not to say their sexual orientation. 80 respondents had care taking responsibility at home (wanted work life balance) while 41 did not have any caring responsibility at home.
Table 1 shows the following results:
There is a significant difference (t=4.81 ***) in the perception of supportive work environment among men (m=2.8822) and women (m=3.25).There is a significant difference in the performance appraisal scores (t=3.78) between men (m=2.25) and women (m=3.0). The perception of supportive work environment led to higher average performance scores among women than men. Women (in this study considered minority) found the environment more supportive.
There is a significant difference (t=-1.93*) in the perception of supportive work environment among Hindus (m=3.0171) and Non Hindus (m=3.18). There is no significant difference in the performance appraisal scores (t=0.43) among Hindus (m=2.69) and Non Hindus (m=2.60). The Non Hindus (in this study considered minority) felt the supportive work environment more.
There is a significant difference in the perception of supportive work environment (t= 1.97) among heterosexuals (m=3.10) and those who preferred not to say their orientation (m=2.83) (in this study considered minority). There is no significant difference in the performance appraisal scores (t=1.25) among heterosexuals (m=1.15) and those who preferred not to say their orientation (m= 1.14). However those who preferred not to tell their sexual orientation found the supportive work environment less conducive though its effect on the performance was not significant.
Work Life Balance (Care Taking Responsibilities at Home)
There is a significant difference in the perception of supportive work environment (t=4.55***) among those having care taking responsibility at home (m=3.20) and those who did not (m=2.83). There is a significant difference in the performance appraisal scores (t=2.63**) between those who had care taking responsibilities at home (m=2.84) and those who did not (m=2.27).Thus perception of supportive work environment led to higher average performance scores among those having care taking responsibility at home than those who did not.
The regression results show that 33% of the performance appraisal scores can be explained by supportive work environment in the organization. Under unstandardized beta coefficient, [beta] = 1.47, standard error=0.19, Under standardized coefficients beta [beta] =0.58, t value=7.67 *** The post hoc test (Scheffe test) in table 2 shows that supportive work environment policies were significantly different between Bio-tech ,KPO and IT firms (-.28 *) and the performance appraisal scores were significantly different between BioTech and KPO firms (-.89*). The regression results (Table 2) shows that 33% of the performance appraisal scores can be explained by supportive work environment in the organization.
The purpose of this study was to find out if diversity in demography of the organizations led to differences in the perception of supportive work environment practices. We also wanted to study if this difference in perception of supportive practices also influenced the performance scores of the employees.
The first hypothesis stating that minority employees will perceive the workplace environment less positively than the majority employees was rejected (Table 1). The results showed that women (minority) perceived the environment more supportive than men. Similarly those having care taking responsibility at home also perceived the organization policies more positively. Under the category of religion, the non-Hindus (minority) perceived the policies more positively than the Hindus. McKinsey (2014) has reported that companies in the top quartile for gender or racial and ethnic diversity have performed much better than those who do not have diversity policies. Lastly the heterosexuals perceived the organization policies more supportive than those who preferred not to reveal their orientation (minority). In India there is a social stigma around having sexual preferences other than heterosexual. Therefore it is not clear whether the category 'preferred not to say' comprised non-heterosexuals or a mix of all.
The second hypothesis stating that employees who perceive workplace environment supportive will have higher performance scores than those who do not is proved only in the case of gender differences and work life balance parameter. Table I also shows that in the categories of religion and sexual orientation though there is a similar trend but it is not statistically significant. One of the possible reasons for results not coming out significant is the small sample size.
Third hypothesis which stated that supportive work environment will lead to higher performance appraisal scores is also proved as shown in the regression results (Table 2). The Scheffe test (Table 3) shows that there are organization differences with reference to supportive work environment. Though further research is required to find out in what way the three organizations are different, it proves the fourth hypothesis that perception of supportive work environment and performance in biotechnology firm will be different from IT and KPO. This conclusion has strong implications for policy makers and the human resource department who need to design supportive practices unique to their sector/organization. All these studies clearly point out the important role played by diversity within the organization. Organizations should realize that if these differences have to be leveraged upon then it should invest in creating a supportive work environment for its employees.
The limitation of this study is the small sample size. For getting more conclusive findings, more data is required. The questionnaire can also be refined to include more dimensions measuring supportive work environment. The study was carried out in organizations where women are in significant numbers. Further research is required in organizations where either women are less or it is challenging for women to work, The study also brought to our notice that tabooed information (sexual preference in this case) is difficult to collect using the survey format. Therefore qualitative method should be utilized to get more in depth information on such sensitive issues. The study pointed out that the small category of respondents who preferred not to disclose their sexual orientation does not find the workplace supportive. Further research needs to be carried out to study factors which can make the workplace more inclusive for this category of employees. More work is needed to find out why there was difference between organizations in the perception of supportive work environment and performance outcome. More work is required to study why minority performed better than the rest. In the study only last one year's performance management score was considered (as dependant variable). In order to get more stable findings a time series data of last 3-5 years should be considered.
The study has good potential for future research in cross cultural comparison of minority's perception of supportive work environment and its impact on performance. It can also be used to create and improve employee policies to make the environment more inclusive. The study also supports the competitive advantage paradigm by enabling diversity to contribute to business which can be the subject for future research.
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Preeti S. Rawat (Email:Preetirawat@somaiya.edu) is Professor & Prema Basergekar (Email: prema@ somaiya.edu) is Associate Professor, K. J. Somaiya Institute of Management Studies and Research, Mumbai
Table 1 t Test for Various Demographic Characteristics N Supportive S.D. Work Environment (Mean value) Gender Male 57 2.88 0.41 Female 64 3.25 0.42 Worklife balance (caring Yes 80 3.20 0.41 responsibility at home) No 41 2.83 0.43 Religion Hindu 67 3.02 0.43 Non-Hindu 49 3.17 0.45 (minority) Sesual Orientation Heteros 109 3.10 0.45 exual Prefer not 12 2.83 0.36 to say t test level of Significance Gender Male -4.81 *** Female Worklife balance (caring Yes 4.55 *** responsibility at home) No Religion Hindu Non-Hindu -1.93 ? (minority) Sesual Orientation Heteros 1.97 * exual Prefer not to say Performance Appraisal Score (mean value) Gender Male 2.25 Female 3.00 Worklife balance (caring Yes 2.84 responsibility at home) No 2.27 Religion Hindu 2.69 Non-Hindu 2.59 (minority) Sesual Orientation Heteros 2.69 exual Prefer not 2.25 to say S.D. t test level of Signifi- cance Gender Male 1.06 -3.78 *** Female 1.13 Worklife balance (caring Yes 1.08 responsibility at home) No 1.20 2.63 ** Religion Hindu 1.14 0.43 not Non-Hindu 1.19 signif- (minority) cant Sesual Orientation Heteros 1.15 1.25 not exual signifi- Prefer not 1.14 cant to say *=p<0.05; **=p<0.01 : ***=p<0.001 N=121 Table 2 Regression Results Predictor Variable Criterion Variable Performance Apppraisal Score (mean value) Standard unstandardized Standardized error beta ([beta]) beta ([beta]) value value Supportive Work 0.19 1.47 0.58 Environment (Mean value) Predictor Variable Criterion Variable Performance Apppraisal Score (mean value) t value [R.sup.2] Supportive Work 7.67 *** 0.33 *** Environment (Mean value) * = p < 0.05: ** = p < 0.01; *** = p < 0.001 N = 121 Table 3 ANOVA & Scheffe Test N Mean S.D. F value Supportive 121 3.07 0.45 4.18 *** Work Environ- ment (Mean value) Performance 121 2.65 1.15 7.50 *** Apppraisal Score (mean value) Scheffe Analysis Mean Difference BioTech-IT BioTech-KPO K.PO-IT Supportive 0.28 * -0.13 -0.15 Work Environ- ment (Mean value) Performance -0.07 0.81 * -.82 * Apppraisal Score (mean value) * = p < 0.05: ** = p < 0.01; *** = p < 0.001 N = 121
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|Author:||Rawat, Preeti S.; Basergekar, Prema|
|Publication:||Indian Journal of Industrial Relations|
|Date:||Jan 1, 2016|
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