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HRHeadStart #86: Diversity & Inclusion Impact; Contrast Principle
The Talent Agenda
There’s plenty of evidence that diverse and inclusive organizations outperform those who are not. They tend to make better, bolder decisions. They are better at anticipating shifting consumer needs and driving innovation. And they are able to build work environments where people thrive and feel a sense of connectedness. And all of these contribute to positive differentials in business results, as shown in this research by McKinsey.
The case for Diversity is so strong (and logical) that there are calls for stopping efforts to make a business case for it! After all, if companies don’t need to explain why they espouse innovation or integrity, then why should diversity be treated any differently.
While diversity can be looked at from different angles (e.g. gender, race/ethnicity, age, education, sexual orientation etc.), gender and ethnicity tend to be the most common lenses. When it comes to gender diversity, it is often observed that a company’s entry-level workforce is quite gender-balanced. However, the proportion of women goes down as you go higher up in the organization. How do we change this in a structured and systematic way? What kind of gender diversity targets we need to drive?
An interesting approach is to use the Gender Proportionality Principle:
The gender proportionality principle stipulates that a given level in an organization should aim to reflect the gender composition of the level immediately below it. Usually, women are represented in greater numbers at lower levels, so applying the gender proportionality principle would see women’s representation rise over time.
Take the example in the figure below. If women make up 38% of managers in an organization, but 50% of entry-level employees, the organization should set a goal to reach 50% women managers in a reasonable yet challenging timeframe. Similarly, the goal for the director level should be set at 38% women, as that’s where the feeder level (managers) is currently at. In this way, over time, the gender proportionality principle helps organizations grow their gender diversity throughout the entire hierarchy.
Now, when it comes to diversity metrics, the baseline approach is to report out “body count” i.e. the number of people across genders, race/ethnicity or other criteria. These are outcome metrics. To go a bit deeper, we need to look at process metrics. Process metrics help to pinpoint identify problems in the people management processes like hiring, appraisals, promotions etc. These could include the speed with which underrepresented groups go up the organizational ladder or the prevalence of underrepresented groups in the candidate pool. Dive deeper into how to approach diversity metrics here.
If you pick up a heavy box, followed immediately by a lighter one, it might feel that the second box is lighter than it actually is. The Contrast Principle is in play here - our brains tends to evaluate things based on the most immediate or accessible reference points, rather than correct or absolute reference points. In HR, we often make recommendations to the business on design of people processes, investments in people infrastructure etc., and often get caught in endless indecisiveness. A clever hack here might be to present your suboptimal recommendation (option B) first before you present the preferred recommendation (option A) - and clearly highlight the pros and cons. This helps in establishing reference points and effective facilitation of the decision. The contract principle can be helpful in framing choices, influencing your audience, winning sponsors for the work and avoiding decision paralysis.
"When making plans, think big. When making progress, think small." ~ James Clear