Referral-based hiring is a commonplace practice for modern organizations, which holds considerable benefits for employees hired based upon a referral, including greater chances for upward mobility within the company. A recent paper published in ILR Review entitled “Lasting Effects? Referrals and Career Mobility of Demographic Groups in Organizations,” further studies the benefits of referral based hiring, and finds that the positive impact does not effect different demographic groups equally. Rather, authors Jennifer Merluzzi and Adina Sterling find that referral-based hiring provides the biggest increase in promotional opportunities for racial minorities. The abstract for the paper:
While prior research has suggested that network-based hiring in the form of referrals can lead to better career outcomes, few studies have tested whether such career advantages differ across demographic groups. Using archival data from a single organization for nearly 16,000 employees over an 11-year period, the authors examine the effect of hiring by referrals on the number of promotions employees receive and the differences in this effect across demographic groups. Drawing on theories of referral-based hiring, inequality, and career mobility, they argue that referral-based hiring provides unique promotion advantages for minorities compared to those hired without a referral. Consistent with this argument, they find that referrals are positively associated with promotions for one minority group, blacks, even after controlling for individual and regional labor market differences. The authors explore the possible mechanism for this finding, with initial evidence pointing to referrals providing a signal of quality for black employees. These results suggest refinement to prior research that attests that referral-based hiring disadvantages racial minorities.
Do employers discriminate less when vacancies are difficult to fill? Theory says yes. Lower arrival rates of employees at vacancies increase the cost of discriminating because the foregone output when a minority worker is turned away is higher in that case. In this study, we are the first to test this theoretical relationship between hiring discrimination and labor market tightness in an empirical way. To this end, we sent out fictitious job applications of school-leavers, randomly assigned to individuals with a native- and a Turkish-sounding name, to vacancies for jobs requiring no work experience in Belgium. We found indeed that, compared to natives, candidates with a Turkish-sounding name are equally often invited to a job interview if they apply for occupations for which vacancies are difficult to fill; but, they have to send twice as many applications for occupations for which labor market tightness is low.
The abstract for the paper:
The authors empirically test the cross-sectional relationship between hiring discrimination and labor market tightness at the level of the occupation. To this end, they conduct a correspondence test in the youth labor market. In line with theoretical expectations, results show that, compared to natives, candidates with a foreign-sounding name are equally often invited to a job interview if they apply for occupations for which vacancies are difficult to fill; but, they have to send out twice as many applications for occupations for which labor market tightness is low. Findings are robust to various sensitivity checks.
Fifty years after the Equal Pay Act of 1963, U.S. women are still making 77 cents for every dollar a man takes home. This is largely due to the fact that women continue to occupy different, lower-paying jobs than men (an infographic at The Huffington Post shows how little the 10 leading occupations of women have shifted over the past half century). An article in the Review of Radical Political Economics digs deeper into the reasons why this occurs, and offers six potential solutions:
Unionizing women, comparable worth, pay secrecy legislation, affirmative action, stronger non-discrimination legislation, and family-friendly policies can improve the gender wage gap. But doing so means that instead of attempting to pass federal legislation, advocates should target states to pass legislation and undertake pro-active remedies that can improve women’s pay.
Individuals who feel as though they have been discriminated against in the workplace are less satisfied with their jobs, less likely to continue working for their current employer, and less likely to recommend their organization to others, as compared to individuals who do not believe they have been victims of employment discrimination.7 In addition, individuals who have been discriminated against are more likely to believe that their supervisors do not take a personal interest in them,8 feel burned out on the job, take less initiative, and care less about performing their tasks well.
Discrimination is also a large concern in workplaces because of the deteriorating effects it has on organizations. Not only are discrimination lawsuits costly, but accusations of discrimination damage employee morale and taints the reputation of the organization by making it unattractive to employees, customers, and partners.10 Alternatively, organizations that actively adopt diversity programs that aim to prevent workplace discrimination are more likely to have satisfied, loyal employees that speak positively about the organization with others.
Did you know that in the past 10 years, the percentage of Fortune 500 companies offering domestic partner benefits (DPB) to lesbian, gay, bisexual and transgender employees jumped from 34% to 60%? Not lost on them, surely, is the fact that there’s a legitimate business argument for offering equal rights to all employees, regardless of sexual orientation, and for fostering diverse workplaces. In the latest issue of Compensation & Benefits Review, Cynthia L. Cordes of the University of Miami educates us on “The Business Case forOffering Domestic Partner Benefits“:
The lesbian, gay, bisexual, transgender population represents a large, talented group of potential employees. The dilemma for many employers is how this population should be recognized or accommodated, if at all…
…Costs of offering DPB are offset by significant and meaningful tangible and intangible benefits. These encompass employer reputation and thus enhanced ability to compete effectively for talent and assorted individual and organizational outcomes attributable to these individuals.
What is the greatest challenge to achieving diversity in the workplace?
While measures to increase diversity are an integral part of management culture, achieving truly diverse and inclusive organizations is an ongoing struggle. This week, Management INK presents a 5-part series targeting specific diversity-related questions in order to foster discussion and research on best practices.
Part 1: What are some of the greatest barriers to achieving workplace diversity today?
Diversity management is a process intended to create and maintain a positive work environment where the similarities and differences of individuals are valued. The literature on diversity management has mostly emphasized on organization culture; its impact on diversity openness; human resource management practices; institutional environments and organizational contexts to diversity-related pressures, expectations, requirements, and incentives; perceived practices and organizational outcomes related to managing employee diversity; and several other issues. The current study examines the potential barriers to workplace diversity and suggests strategies to enhance workplace diversity and inclusiveness. It is based on a survey of 300 IT employees. The study concludes that successfully managing diversity can lead to more committed, better satisfied, better performing employees and potentially better financial performance for an organization.