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Managing diversity at work is one of the primary roles of the human resources management department. Therefore, the HR manager must be tactful to ensure that none of the team members feels disenfranchised by what may seem to be favors granted to certain groups and denied to others. While diversity remains to be a real problem when not handled with care, managers who know the power of assortment use it to their advantage to promote team learning, team innovation and individual learning (Sun, The, Ho and Lin 2017). Therefore, diversity at work remains to be a dynamic phenomenon which is premised on the paradigms of age, gender, sex, marital status, ethnicity, nationality, physical fitness, among other parameters.
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Going further, globalization can be sad to be one of the most powerful factors that have contributed to the increased cases of workplace diversity. The ultimate effect of globalization is the shift in the scope of the concept of diversity incorporating race and cultural issues (Klarsfeld, Booysen, Ng, Roper and Tatli 2014). Consequently, globalization has increased the challenge of managing human resources given the stratified nature of diversity (Smith 2012). For instance, while issues of women and equality at work are of great importance today, racial differences also sneak in a new need of recognizing women of color.
Inequalities in Employment
Inequality at work, otherwise known as occupational inequality refers to the biased manner of treating people at work based on their gender, sexuality, physical appearance, race, ethnicity among other differences. These differences, though they define diversity are also a source of work-related disputes that point towards discrimination. Experts study workplace inequality by comparing various aspects of employment among contrasting groups. For instance, the link between gender and income, and the distribution of men and women in particular occupations has always been a common subject of investigations.
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In simple terms, discrimination implies treating people differentially with one group citing unfavorable treatment. Cases of discrimination at work may include:
- Paying women lesser wages,
- Denial of training opportunities, promotions, and other fringe benefits at work due to peculiar characteristic typical to the person discriminated against,
- Unfair dismissal,
- Being denied an employment opportunity in a particular company, among other issues.
Being a necessary evil in the case of affirmative action, many countries have gone ahead to legislate for the sake of ensuring that workplace discrimination is understood in cases where it is necessary and shunned where it is wrongly applied. For instance, the Equal Opportunity Act of 2010, which governs a section of US HR laws, outlines 18 issues that are personal to job seekers that incriminate discrimination. In the UK, the Employment Equality Law also stipulates a similar criterion. Therefore, workplace discrimination is a necessary evil, but only when guided by the law.
Embeddedness of Discrimination
Embeddedness is a term that was coined by Karl Polanyi, who is regarded as one of the most influential economic historian of his days. Polanyi defined embeddedness as the degree to which the normal functioning of the economy is limited by non-economic factors (Machado 2011). In his substantive reasoning, Polanyi categorically identified that there are no economic models that can work in non market economies. On the other hand, he termed affairs in a market economy as rationalized, and that economic activity is disembedded from non functioning particulars being able to follow its own logic (Machado 2011). For time now, the ideas postulated by Polanyi have been used in sociology to explain certain phenomena that economic models have failed to explain. The following two scholars were the first to explore the concept of embeddedness.
Karl Polanyi’s Theory and Substantivist Thinking
Polanyi’s theory is premised on two concepts. He argues that in a non-market economy, welfare is based on redistribution and reciprocity rather than exchange. In essence, reciprocity is the act of sharing among community members due to the relationship they have created over a long time. On the flipside, redistribution is a practice that is perpetuated by the center of the community such as kingship or chiefdom. Therefore, with redistribution, the members of society give their wealth to the king who redistributes it equally within the society. In such a system, economic decisions are guided by factors such as religious and political affiliation, ethnicity, relationships, and morality among other soft societal issues. Basically, a non market economy remains to be subsistence driven with no economic advancement.
In this model, the economy is embedded in social institutions where exchange is guided by laws that seek maximum social benefit for everyone. In such a system, even religious institutions play a vital role in determining resource allocation. In the light of this discovery, it becomes possible to assert that a substantivist view of economic systems depends on the analysis of institutions instead of the rational individual.
Mark Granovetter’s Neo-Substantivist Argument
In his view, Mark Granovetter refuted the claims made by Polanyi by stating that substantivists ignored any other factors that affect rationality preferring to atomize human behavior. Instead, Granovetter suggested that actors in an economic system do not just follow decisions made by their seniors slavishly. They sometimes raise important questions that require answers. However despite his radical view, Granovetter maintained that social relations are very essential in determining social welfare.
Application of Theory
There are numerous theories that explain embeddedness of discrimination as displayed at the workplace. From research, it is apparent that the neoclassical theory and the class-based theories explicitly explain embeddedness of discrimination as experienced in any workplace around the globe. The theories are highlighted below in light of how they infuse embeddedness of discrimination at work.
The general economic theory of free markets believes that market prices are determined by the interplay of supply and demand. Similarly, the labour supply and demand curves have a point of intersecting where wage rates are determined. Thus, orthodox economics does not accept there is a problem because ‘you are paid what you are worth’ in a competitive economy.
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However, critiques have challenged this theory by citing cases of discrimination in society. Those discriminated against include women and minority groups who are not paid an equitable wage. In some cases, the differences in wages are occasioned by levels of education and expertise. In such a case, then discriminating is ruled out on the fact that special talents, training and education are unconstrained choices that anyone can make and therefore attract a better price for his or her service.
While unconstrained choices remains to be a vaguely defined concept, its understanding gives the green light of extrapolating the current theories with the expectations of job seekers (Adnett 1996, p.175). Job pre-entry issues such as sex, education level and age are some of the influences that continue to propel discrimination at the workplace.
Assuming conditions of a perfectly competitive labour market, wages must reflect marginal productivity. That implies that workers are paid what they are worth. Furthermore, it means that women deserve lower pay because of their lower productivity/different initial endowments. The outcome of such a declaration is that discrimination is eliminated, with the employer opting to reward productivity and not persons. In some other cases, the argument shifts towards considering other personal characteristics such as age and race.
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Given the foregoing issues, embeddedness of discrimination can be discussed in the lens of the supply side and demand side extensions of the labor market. Two theories therefore also sprout from this argument. The first one is the Human capital theory which stipulates that if women anticipate less attachment to the workforce then it may be ‘optimal’ for them to invest less in education and training than men. However, such a lack of investment in training explains only part of the difference in pay; and still there will be ‘residual’ discrimination based on some other predetermined variables that are typical to women. The second model is Family specialisation theory developed by Becker (1991) (Peterson and Bush 2013: 215). Based on the theory, families divide their labour to reflect their respective strengths. Thus, men earn more, so logical for women to focus on domestic labour. Also, women expend less effort per hour at work than men and so have ‘taste’ (tendency) to choose less demanding jobs (Adnett 1996:172; Peterson and Bush, 2013: 215). Therefore, both the Human capital theory and the family socialization theory justify why women must be paid less since they are worth less.
On the demand side of the equation, race comes out as the dominant constraint that determines discrimination. Early studies acknowledge the existence of ‘taste’ for discrimination on part of employers. According to Backer (1957), an employee whose race is different from the majority is discriminated in that he has to forego some rights such as take up a lower wage in order to be associated with some other persons (Sawyer 1989:105). This explains why some employers may refuse to hire black or female workers in competitive markets, even where the value of their marginal product exceeds the marginal costs of hiring them (Adnett, 1996:176). “American studies indicate that once productivity characteristics have been adjusted for, the residual discrimination against black males is of the same dimensions as that against females” (Adnett, 1996:183). Conclusively, black workers and women receive lower wages because of their skin colour and gender respectively, both stereotypes which represent embeddedness in the workplace promoted by discrimination. Sawyer (1989:105) goes further to warn that “the key conclusion … is that the losers from discrimination are the capitalists of the group which undertakes the discrimination with gains being made by the labour of that group.” It therefore implies that employers with less ‘taste’ for discrimination would be able to expand and differences should be ‘competed away’ if industries are competitive.
While the neoclassical theory cannot stand on its own, its extensions embodied in the human capital theory and the family socialization theory clearly demonstrates why women and other minority groups receive lesser remuneration. The explanation is that ‘they are worth less.’ However, the neoclasiscall model has been criticized for being unrealistic and failing to take account of institutional factors such as power, history, social, custom and ‘realities of the labour market.
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There are four class based models that explain embeddedness of discrimination. According to Sawyer (1989), discrimination is located in wider class-based conflict/division and asymmetry of power. This implies that various forms of discrimination can be traced back historically to a point in the timeline of human civilization when they first occurred (Sawyer, 1989:111).
The first model is divide and rule, which employers use to separate employees by making one group superior over the other. The ‘divide and rule’, operates to the advantage of both employers and dominant groups who have the power to discriminate (Gordon, 1972; Edwards, Gordon and Reich, 1973). For instance, an employer in an African dominated locality can easily increase the allegiance of the dominant group by giving them privileges that the other people do not have. Such segregation can be done on the basis of tribe, seniority, education level or any social parameter that makes one group dominant over the other.
Accordingly, class-based theories are broader than discrimination because they see all workers as exploited on the basis that: (2) workers do not get paid the full value of their work since some of their earnings are retained as profit, therefore they are exploited to make money for others; (2) the employment relationship is one of unequal power, which facilitates such exploitation; and (3) exploitation is put into operation in the labour process- that is to mean that the organisation of work and attempts, by the employer, is intended to get least cost high performance from workers.
The second model is the segmented labour markets. Basically, segmented labour markets derive from the divide and rule strategy where employers create some form of antagonism between groups of workers, enabling employers to exercise greater control over the labour process. From its onset, divide and rule seeks to dominate the employee, by appearing to be good on the one side but lethal in the real sense. The result of divide and rule is discriminatory wages, which create and sustain ‘cheap labour’. Workers are the main losers rather than employers. Friedman in Sawyer (1989:111) states that “top managers do not create racism and sexism, but they do use these divisions among workers to their advantage.” Thus, segmentation of the labour market provides another fertile ground for the embeddedness of discrimination. For as long as workers seek a wage and it is the amount that one takes home that matters, individuals will continue to cooperate for as long as they seem to gain favours at the expense of their colleagues.
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The third model is what is referred to as the dual labour markets where analysis focused on internal labour markets and segmentation of labour (Sawyer 1989). In this model, markets are split into primary and secondary. Those in primary labour market have access to better jobs, training, career development, wages and other benefits. On the other hand, individuals in the secondary labour market have poor work conditions characterized by high turnover rates, poor remuneration and no improvement of human capital capacity in form of training and recreation
In recent years, with globalization becoming a real issue in international relations, the analyses of the primary and secondary labour markets has become complex. The primary labour market has a close resemblance to internal labour markets (ILMs) while the secondary LM has a close resemblance to external labour markets. Thus individuals that seek employment outside their own countries are expected to meet some constraints that do not favour them at all. Basically, disadvantaged groups find themselves stuck at the bottom of the ILM, relegated to low paid external labour markets. It is argued that the circular nature of pre-/post-entry discrimination will reinforce the disadvantage of low pay in external labour markets. What this concept stipulates is that it is not the form of discrimination that is important but the fact of it i.e. if one form is eliminated another will take its place (Sawyer, 1989:114). Therefore, even if discrimination is not desired in any workplace, it will still find itself in a different way.
The last class based model is Reserve Army of labor. Based on this theory, Marx argued that a continuous surplus of labour inevitably created under capitalism and essential to capital accumulation. The result is deliberate underemployment which creates a reserve pool of labour and reduces the power of workers to demand higher wages. In simpler terms, the reserve army theory takes us back to the neoclassical argument which reels on the understanding that supply and demand determine the price of labour and some people are likely to be underpaid since they are worth less. The feminist version of the same theory states that women constitute a specific section of the reserve army because they are uniquely disposable and flexible. An explanation of the feminist view shows that most women, though qualified to take on some job roles are preferred to be home keepers thereby building on the reserve army that can easily serve in times of shortage of personnel. It is therefore easy for women to go in and out of the labour market but not men. The argument of the reserve army simply insinuates that while employees have rights such as going on strike and demanding better working conditions, their services can easily be replaced by a cheaper reserve army of labour that is deliberately unemployed by the system.
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Basically, neoclassical theories and class-based models offer substantial evidence that confirms that embeddedness of discrimination in the workplace is a necessary evil that cannot be done away with. At least every employee is discriminated in relation to others.
Limits to Law and Equal Opportunities
Equal opportunities at work implies among other things having similar wworking patterns, recognition of family responsibilities and domestic labour, flexible working conditions, parental rights legislation at cetera (Coote and Campbell 1987). Once both men and women are granted equal chances at all the above issues and some others that are of importance to welfare then it can be said that equal opportunity has been provided.
The law provides particular guidelines that must be followed by employers when dealing with their employees from the time of recruitment to termination. This is in recognition of the fact that employees can also be discriminated in the manner in which they are hired, air even fired. The equal opportunities laws as enacted by various countries around the globe reflect the very basic principles of equitable treatment of individuals with the sole aim of ensuring that everyone is dignified and not discriminated (Hayes, and Novitz 2014). For instance, various statutes as adopted by different states around the globe highlight the manner in which individuals can go n strike picket and demand for their rights. The same statutes also give employers certain rights against very demanding employees who are backed by trade unions. Either way, employees and employers are provided by an environment that not only minimizes chances of discrimination, but also offers a conflict resolution mechanism that can be employed in times of crisis.
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- Adnett, N. (1996). European labour markets. London: Longman.
- Coote, A, and Campbell, B. (1987) Sweet Freedom (2nd edn), Blackwell Publishers, Oxford
- Firestone, S. (1970) The Dialectic of Sex, The Women’s Press, London.
- Hayes, and Novitz, T. (2014) Trade Unions and Economic Inequality, The Institute for Employment Rights, Liverpool
- Klarsfeld, A., Booysen, L., Ng, E., Roper, I., & Tatli, A. (2014). International handbook on diversity management at work (2nd ed.). Cheltenham: Edward Elgar.
- Machado, N. M. C. (2011). Karl Polanyi and the new economic sociology: Notes on the concept of (dis) embeddedness.
- Peterson, G., & Bush, K. (2013). Handbook of marriage and the family. New York: Springer.
- Smith, M. (2012) Social Regulation of the Gender Pay Gap in the EU. European Journal of Industrial Relations Vol. 18(4) pp. 365-380
- Sun, H., Teh, P.L., Ho, K. and Lin, B., 2017. Team Diversity, Learning, and Innovation: A Mediation Model. Journal of Computer Information Systems, 57(1), pp.22-30.
- The 2011 Workplace Employment Relations Study First Findings (2013)