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EFFECT OF WORKFORCE DIVERSITY ON EMPLOYEE PERFORMANCE IN NIGERIAN BANKING INDUSTRY (A STUDY OF FIRSTBANK NIGERIA LTD., OTA BRANCH)
CHAPTER ONE
INTRODUCTION
1.0 Background to the Study
The world’s increasing globalization needs a lot of interaction among people from various backgrounds than ever before. This is so because, individuals no longer live and work in narrow surroundings; as they are currently a part of a worldwide economy competing in nearly all part of the world (Patel, 2016). On these grounds, organizations are aiming to become more diversified in order to gain competitive advantage by becoming more creative, innovative and open to useful change.
Today business workplace is changing at an increased speed and the change in the employees’ demographics, increase of jobs in the economy, continuing growth of the globalization and requirement for efficient and effective collaboration have surfaced as significant forces driving the importance of diversity in organizations. With the increase of globalization and competition, the workforce in all industrialized countries has become progressively heterogeneous. Advances in technology and the advent of a worldwide economy have brought the people of the world existing in the same place, nearer to each other. Griffin & Moorhead (2014) pointed out that having a diverse workforce requires managers to identify and manage the varied attribute that exist among the employees in the organization. Therefore, businesses, educational systems and other entities are investigating ways to better serve their constituents to attract and retain the finest and most qualified employees (Gupta, 2013). On these grounds, organizations are aiming to become more diversified in order to gain competitive advantage by becoming more creative, innovative and open to useful change.
Workforce diversity refers to those significant differences and similarities that are present among employees within an organization (Griffin & Moorhead, 2014). Nwinami (2014) said it represent those uniqueness which includes; an individuals personality, age, gender, ethnicity/race, religion, marital status, income, the work experience and all those views which supposes and sustains an organizations core values. It also means those organizations that are turning out to be more varied with respect to it workforce composition based on characteristics as age, ethnicity, expertise, etc. (Robbins & Judge, 2013).
Human resource is an important asset for any organization, and as such, having a diversified workforce is a primary concern for most organizations. Although, it has become necessary for organizations to employ a diversified workforce, at the same time, it has become quite challenging for organizations with increasing diversified workforce to reap the benefits of diversity while managing its potentially disruptive effects (Kreitz, 2008) (Kreitz, 2008; Saxena, 2014). Organizations have recognized the fact that it is through the collective effort of its diversified workforce that monetary resources are harnessed to achieve organizational goals. For organizations to reach its goals, the skills, knowledge, attitude and efforts of its workforce have to sharpened occasionally to optimize the effectiveness of its workforce and to enable them to meet greater challenges. Organizations are made up of individuals and without the workforce, organizations cannot achieve its goals (Mullins, 2010). For this reason, the management of its human resources is also a a crucial issue for organizational leaders (Saxena, 2014).
To be successful, it is imperative that organizational leaders understand just how the social work environment have an effect on the employees’ beliefs about work and they must have effective communication skills to be able to develop the self esteem and confidence in all its members (Griffin & Moorhead, 2014). Hence, to achieve and maintain competitive advantage over competitors, managers must be able to draw from the most valuable resources i.e. the competencies of its workers. Based on the growing richness of diversity in the world and in the workforce, managers have to spread out their outlook and use innovative approaches to achieve success.
1.1 Statement of the Problem
The work environment is becoming more complex due to globalization and competition which as a result has necessitated the need for a workforce that is made up of people with varying age, experience, knowledge and backgrounds to maximize competitive advantage (Ragins & Gonzalez, 2003). According to Childs (2005) organizations that wants to gain competitive advantage must widen its perspective about workforce diversity and diversity management, and the management must commit themselves to ensure that diversity management is a part of it daily operations.
Nigeria is known to be the giant of Africa with a population of over 180 million people and more than half the population consists of people of working age (Akinnusi, Sonubi, & Oyewunmi, 2017). Hence, there is a large pool of talent of which organizations draw from to achieve its goals. To manage the workforce, managers have created diversity policies that are in line with the a Labour Act and other laws that have in put in place to protect all kinds of employees from discrimination because of his/ her social categorization (Ugwuzor, 2011). However, Foma (2014) opined that some organizations in a bit escape lawsuit or other legal actions and to also put on a public show that makes them gain good corporate image, they pretend to embrace diversity rather than show a genuine desire for it by demonstrating true commitment to the principles of diversity and inclusion.
As Ugwuzor (2011) citing Mustapha (2005) pointed out, in Nigeria, there appear to still be cases of tribalism, regional identities, nepotism and discrimination both in the public and private organizations. Cases of ethnic bias and other forms of discrimination still take places in organizations during hiring, promotion and other employer-employee relation practices. Hence, managements are faced with the big challenge of managing its diverse workforce and the challenge of making sure that conflict of interest in policies and practice implementation are minimized (Akinnusi, Sonubi, & Oyewunmi, 2017). Though some organizations train their new intake upon hiring on job related issues yet, individuals still take decisions and showcase attitudes and bahaviour that go against diversity principles. One reason could be that with diversity practices, employees enter into an environment that compels everyone to work together with other workers that are dissimilar to them. This kind of forced inclusion can create an environment of conflict amongst employees, discrimination and other challenges of diversity.
Nwinami (2014) said so long as individuals with differences work in the same environment, diversity in the workplace will always be an issue. Though our individual differences can promote creativity and increase satisfaction at work nonetheless, it can be the root of conflict and frustration betweens groups (Mullins, 2010). Hence, some organizations leaders have failed to understand how the workforce interacts with one another as individuals and as groups, and how the behaviour of the workforce can affect both employee and organizational performance (Ugwuzor, 2011). Performance is affected when managers fail to understand diversity and are not skilled enough to manage issues of diversity (Assefa, 2014). Another problem is the issue of organizations still depending on the old programs that they have been using over the years to manage the present issues of workforce diversity, minimize bias and increase diversity and inclusion in the workplace. It is important for management to know that the diversity plan that works or is encouraged by one organization may not work in another as it may be challenged by the hierarchical structure that is present in such organization. For this reason, some organizational leaders lack the knowledge on how to effectively management diversity, create an inclusive environment and what strategies to employ to assist them in dealing with issues of diversity in the organization.
From the web search on workforce diversity, it was discovered that only very few researches on workforce diversity and its relative effect have been conducted in Africa precisely Nigeria. Some that exist, focused more on diversity effect on organizational performance or productivity, not so much have been done to inspect the relationship and effect of workforce diversity and employees’ performance which in turn improves the entire organizational performance. Few of such studies that exist, have failed to deliver detailed examination of what workforce diversity is. Nigeria just like most countries of the world is diverse in its population content (e.g. people) and the people are ethnically or culturally diverse. Not only ethnically diverse, it is also characterized by other aspects of diversity which are even evident in organizations (e.g. age, gender, educational background etc.) Therefore, this study seek to add to already existing literature on workforce diversity by examining empirically and theoretically concept of workforce diversity in terms of age, gender, ethnicity and educational background and its relationship with employee performance (effectiveness and efficiency).
1.2 Research Objectives
The general objective of this study was to examine the relationship between workforce diversity and employee performance in an organization. The specific objectives of this study are to:
- To examine the relationship between gender diversity and employee effectiveness in organization.
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To investigate the relationship between age diversity and employee effectiveness in organization.
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To examine the relationship between ethnic diversity and employee efficiency in organization.
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To inspect the relationship between educational background and employee efficiency in an organization.
1.3 Research Questions
- Is there any significant relationship between gender diversity and employee effectiveness?
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Is there any significant relationship between age diversity and employee effectiveness?
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Is there any significant relationship between ethnic diversity and employee efficiency?
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Is there any significant relationship between educational diversity and employee efficiency?
1.4 Research Hypotheses
Hypothesis 1: Ho: There is no significant relationship between gender diversity and employee effectiveness.
H1: There is a significant relationship between gender diversity and employee effectiveness
Hypothesis 2: Ho: there is no significant relationship between age diversity and employee effectiveness.
H1: there is a significant relationship between age diversity and employee effectiveness
Hypothesis 3: Ho: there is no significant relationship between ethnic diversity and employee efficiency.
H1: there is a significant relationship between ethnic diversity and employee efficiency.
Hypothesis 4: Ho: there is no significant relationship between educational diversity and employee efficiency.
H1: there is a significant relationship between educational diversity and employee efficiency.
1.5 Significance of the Study
The aim of this study was to examine the effect of workforce diversity on employee performance by investigating the correlation between workforce diversity and employee performance in an organization.
Workforce diversity is a significant topic for government, organizations and the society (Akinnusi, Sonubi, & Oyewunmi, 2017). First and foremost, the findings of this study will add to existing knowledge that will aid in understanding of the workforce diversity in general and its relevance to employee performance, which in turn leads to organizational performance and it will be essential to organizations that are equipped with diversified workforce.
To researchers and academicians, the study will serve as a reference to other researchers who intend to conduct similar or related studies on workforce diversity in the future as it will provide reliable insight that are useful for educational purposes. This study has also provided information that could form the basis for future research.
To employers and management of organizations, this study has provided in-depth knowledge explaining how workforce diversity has an effect on performance. The study provides key information in terms of recommendations and suggestions that will be useful in improving the general policies and practices of workforce diversity management in organizations. It provides information that will help organizational leaders to be able to make out solid strategies and best practices for hiring or recruiting, developing, retaining, engaging and motivating a high performing diversified workforce. This study is also beneficial to organizations striving to create a culture that is inclusive rather than exclusive. Also, multinational organizations will also understand the need for diversity management so as to manage its workforce across the globe and also understand the social structures (i.e. the religion, language, etc.) of the country where it is operating.
To Employees: This study will help the employees to accept and respect the unique diversity of follow colleagues who are not only similar to them but also those who are dissimilar. It will help them to realize that working together can help improve their performance.
To Government: Diversity management is a vital topic for a country like Nigeria that is so culturally diverse. This study will help the government in its quest to manage the diversity of its population across regions. It will awaken the government to look into the issue of diversity and ensure the laws that suppose diversity are obeyed by every organization. This study will help the government to fully embrace the richness of our diversity and harness the benefits that comes from it.
To Society: Nigeria as a country is rich in ethnic diversity. This study will be an eye opener to our society as it will help people to begin to see diversity as a blessing rather than a curse that needs to be avoided. It will help the society to see the need for having diversity. It will confirm that we as a society can work together because of our differences not despite our differences. The community will see the need to value the many cultural differences that makes up the nation Nigeria.
1.6 Research Methodology
In answering the research questions, the research made use of primary and secondary source of information.
Primary source made use of information gathered from First Bank of Nigeria through structured questionnaire prepared by the researcher. The questions concentrated on finding out the organization’s view on workforce diversity in characteristics like; age, gender, educational background and ethnicity and how they affect employees’ performance.
The secondary source of information was gathered from books, journals, conference papers and the internet regarding workforce diversity. The secondary data were collected by surfing the internet, reviewing books and other related academic materials to get hold of relatable information for the research.
1.7 Scope of the Study
The study was restricted to only First Bank Nigeria Plc. It examined the effect of workforce diversity on employees’ performance in First Bank. The study was also limited to few workforce diversity- age, gender, ethnicity and educational background diversity and also limited to employee performance. The population of the study was limited to employees of employees of First Bank Nigeria Plc., Ota (Main Branch and Ota II branch), Ogun State.