Employees’ Perception and Workforce Diversity: A Study of the Banking Sector in India

 

Dr. Shilki Bhatia

Assistant Professor, Delhi Institute of Advanced Studies, GGSIP University, Delhi, India

 

ABSTRACT:

In the contemporary era, diversity management is perceived as an imperative factor for success. Managing Diversity is critical to utilize and hone skills of individuals efficiently and effectively. Excellence of any business absolutely and at times relatively depends on how creatively the diversity in workforce handled by the organization. Perceptions of employees hold a major significance in understanding diversity in organsiations. An attempt in the current study has been made to take an insight into employee perceptions around workforce diversity in the Banking Sector in India. These perceptions were assessed by serving a Questionnaire on Workplace Diversity to various bankers to determine the statistically significant differences in employee perceptions based on demographic variables (age, gender, and ethnicity and education qualifications) and workforce diversity. A descriptive study was conducted and the survey was served to a sample of 99 voluntary participants from the banking sector from the public, the private, cooperative as well as specialized banks. Factor analysis was conducted to find the factors, T-test and ANOVA were applied in order to find the perspective of employees towards workforce diversity in the sector under study. The finding suggests that there exists no statistically significant difference towards perspectives of workforce diversity in age, gender, education qualification, experience and ethnicity in the banking sector.

 

 

 

INTRODUCTION:

Workforce diversity is a valued asset for any business that strives for a competitive edge in the economy across the globe. Many companies conceit themselves on having a diverse workforce that is made up of individuals having a diverse experiences and characteristics. Some key parameters of workforce diversity include gender, age, religion, ethnicity, ability and educational qualifications.

 

Organisations which hold diversity as a source of innovation, progress and development, are more likely to witness communicative support and its application is aided with greater focus and effort (Emuze and James, 2013). Organisation shave agreed with the fact that workplace diversity has the likelihood to generate note worthypositive impact on recruitment, employee engagement and employee retention (Neault and Mondair, 2011) and is significant for their survival. Diversity, precisely workplace diversity, poses definite challenges which necessitate special attention. According to Aghazadeh (2004) Staff from various groups may feel threatened while working with each other. If diversity management is not suitably implemented and appraised regularly, it leads to dissatisfaction of employee and productivity loss (Van der Walt and Du Plessis, 2010).

 

Organisations perform activities which require diverse employees with diverse skills and expertise. This necessitates the formation of a divergent workforce, enabling the organizations to reach its productivity and achieve the set targets. Individuals and groups working with an organisation have varied and diverse interests, thinking, values, knowledge, experience and expertise, so they contributein a different way towards the achievement of goals and objectives. These differences need to be managed in a way to ensure cohesion amongst workers.

 

The business imperative for handling and embracing diversity lies in the improvement of relationships and result of the businesses. These outcomes could be attained through the improvement of the following: the attraction and retention of talent; the value of the relationships between varied groups of employees; efficacy of team; problem-solving, creativity and innovation; sales through enhanced customer diversity and service; competition in a worldwide market; cost saving and legislation that forces organisations to work towards a more representative staff. From the point of view of human resources management and labour relations, it is commonly accepted that the enhancement of the above facets relates directly to how effectually the interpersonal and intergroup relationships are managed in the organisational system. According to Cilliers (2007), these relationships become more complex when and where diversity proportions such as race, gender and experience are taken into account.

 

The study conducted is to find out if there is any significant difference in demographics and diversity perspectives.

 

LITERATURE REVIEW:

Amla (2017) sought out to study the impact of workforce diversity on performance particularly in the textile industry on a sample of 120 employees. The performance of the employees working in textiles companies is not affected by their age group, their gender, to which culture they belong. However, education qualification, does affect the performance of the workforce.

 

Otiende (2017) experimented Workforce diversity and its effects on employee performance considering in Kenya on 354 respondents to determine the effects of ethnicity diversity and education background on the employee performance. Pearson’s coefficient and regression analysis was done. The correlation between employee performance and ethnicity was found to be 0.342 and employee performance and education background was -0.107. The constructs for ethnicity was statistically significant at the 0.01 level but the correlation for teachers’ performance and education background had a negative correlation at -0.107. Therefore, it was interpreted that ethnicity has a positive influence on employee performance.

 

Zhuvao (2017) considered the education industry to study the interdependence of performance and workforce diversity by surveying sample size of 852. The findings showed that there existed an insignificant relationship between age diversity and employee performance whereas there existed a significant positive relationship between the other diversities like gender, ethnic, educational and employee performance.

 

Muhammad et al (2016) conducted a causal study on 203 respondents to find interdependence of diversity and performance in banking sector of Pakistan using SPSS version 21 and Pearson’s coefficient, ANOVA test and regression analysis. The results of the study located an immediate positive association between workforce heterogeneity and organizational effectiveness.

 

Algazho et al (2016) studied the relationship of age and gender of employee on performance. With a primary data consisting of 36 respondents he proved that organisation performance is affected by the age and gender of employees. He further added on that the organisations HRD should maintain and promote employee diversity in order to be locally and globally competitive.

 

Dixit (2015) used descriptive analysis on 150 respondents to evaluate diverse workforce management in a competitive environment, to analyse factors that contribute to increased level of diversity in workforce in the organization and to discover the means by which diversity can be managed effectively. It was concluded that there exist a positive and significant relation between employee insights of diversity climate and competitive advantage/performance of an organization.

 

Joseph et al (2015) studied that how work force diversity has an effect on employee performance in Singapore organisations by surveying 316 people. Regression analysis on SPSS was conducted. It was inferred that diversities like gender, ethnic, educational and employee performance have no significant impact on the performance of employees. Thus, it is concluded that the workers have revealed a neutral perception about workforce diversity.

 

Rao (2014) revealed that diversity management is related with drawing the broadest possible range of employees, considering the workforce as an asset, and making best use of their potential in order to maximize the organization capacity. To accept the organisational diversity, workers should identify the importance of diversity management programs and practices to be implemented in organizations. The study was sample size was 600 and exploratory and descriptive analysis was conducted with SPSS as a guiding software tool. It was researched that relationship between diversity management practices and acceptance are significantly related and have positive impact on acceptance of diversity.

 

Podsiadlowski (2013) examined management of a culturally diverse workforce and diversity perspectives in organizations. Pearson’s coefficient and regression analysis on a sample of 150 showed that the factor that affect the workforce diversity in employee performance are positively related about the employees culture and values, motivating the employee in completing the assigned work, encouraging the women employee for their career development and there is no discrimination in recruitment on gender basis.

 

Dike (2013) studied the impact of workplace diversity on organisations through an exploratory research conducted to study the effect; diversity management has on a healthy working environment. The research examined the different ways of dealing with work place diversity and to provide management with the essential guidelines for effective diversity management in small and big International companies to understand the manner to build effective workplace diversity by applying different diversity management tools.

 

Munjuri (2013) concentrated on the banking sector to understand the relationship between employee diversity and performance. The sample size was 120. The research that dealt with the effect of workforce diversity on compensation equity internally revealed that employee’s compensation was determined only by two workforce diversity variables: an employee’s education level and performance ability. However, the compensation system was perceived as fair and just by the employees.

 

RESEARCH METHODOLOGY:

The design used for research is Exploratory and Descriptive and the data was collected through primary and secondary sources. The questionnaire consisting of 6 demographic questions and 29 questions which were scaled on a 5 pointLikert Scale, with scales: Strongly disagree, Disagree, Neutral, Agree, Strongly agree and served to 130 banking employees and filled completely and appropriately by 99 employees.

OBJECTIVES OF THE STUDY:

1    To identify individual perspectives affecting workforce diversity in Banking Sector

2    To develop a relationship between workforce diversity and select demographic variables.          

 

The analysis was conducted by using SPSS version 21 which used the following tests:

·       Factor Analysis: was used to find out the various factors of the variable diversity.

·       T-test: is used here to see if gender and perspectives of diversity in the banking sector are varying significantly or not.

·       Analysis of Variance (ANOVA): is used to find if there are statistically varying differences among age, education qualifications, ethnicity and experience of employees in thebanking sector.

 

ANALYSIS AND INTERPRETATION:

The primary data collected through questionnaire was coded in SPSS and the following tests were conducted of which analysis is as follows:

 

Objective 1: 1. To identify individual perspectives affecting workforce diversity in Banking Sector

Exploratory Factor Analysis:

Exploratory factor analysis was applied to develop the measurement tool for measuring employee engagement. Principal component analysis varimax rotation was used. The correlations between factors and the different items expressed by means of the factorial loads were significant. The total variance explained is 64%.

 

Table1. KMO and Bartlett’s Test

KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.		.915
Bartlett's Test of Sphericity	Approx. Chi-Square	1636.699
	Df	325
	Sig.	.000

 

Interpretation

The Kaiser-Meyer-Olkin measure of sampling adequacy was .915 which shows that the items in the questionnaire were appropriate. The chi- square value of Bartlett’s Test of Sphericitywas found to be significant (chi sq=1636.699, p= .000), that ensures the possibility of conducting factor analysis.

 

Table 2. Rotated Component Matrix

		Component
		1	2	3	4
Employee Judgement	F26The difference in education background does not encourage conflict	.797
	F25 Opportunities for growth and advancement exist for employees who have lower qualification in education.	.782
	F28 The team leader includes all members at different education level in  problem solving and decision making	.743
	F27 At work, I experience lack of confidence due to my education background.	.704
	F24The organization provides paid study leave to employees who further  their education	.679
	F23 The recruitment plan of the organization is based on the education background of the employees.	.666
	F29 Theorganizationgivesequaltreatmentwhenitcomestothediverse  education background	.626
	F20 The ethnicity differences in education background do not encourage conflict.	.577
	F21 The team leader includes all members at different ethnicity in problem solving and decision making.	.561
	F22 I am positive about ethnicity diversity in this work place	.543
	F14 I am positive about age diversity in this workplace	.538
Organisation Attitude towards Gender	F2 The organization does a good job of attracting and hiring women.		.797
	F6 The organization’s training and development program is developed to meet the criteria/requirement of the male and female.		.776
	F4 Opportunities for growth and advancement exist for women in our  organization		.738
	F3 Fair treatment is given to all employees, whether they are male or female.		.735
	F5 A career development that includes women is encouraged within  organization		.702
	F7 Women are involved in the organization’s decision making as much as men.		.625
	F10 This organization provides me with equal opportunities for training and career development.		.599
Development opportunities	F15 The organization does a good job of attracting and hiring minorities.			.741
	F18 Different languages that are used to communicate do not create problem among employees.			.706
	F16 Opportunities for growth and advancement exist for minorities in organization.			.628
	F11 My team leaders include all members at different ages in problem solving and decision making			.592
Employee Beliefs	F13 At work, I experience lack of bonding with people of different age group.				.770
	F12 The age differences in work group might cause conflict.				.756
	F8 The performance criteria for success are expected to be higher for men than for women.				.577
	F19 At work, I developed low self-esteem due to my ethnicity.				.528

 

Table 3: T-test for Equality of Means

	Gender	N	Mean	Std. Deviation	Std. Error Mean
EmployeeJudgments	1	36	-.1506222	1.03813633	.17302272
	2	56	.1094548	.97301852	.13002507
OrganizationAttitude towards Gender	1	36	-.0281854	.94374978	.15729163
	2	56	.0528686	1.03209510	.13791951
Development opportunities	1	36	.0973543	.74533974	.12422329
	2	56	-.0023859	1.12038970	.14971837
Employee Beliefs	1	36	.1717930	1.08609720	.18101620
	2	56	-.0765495	.91229209	.12191016

 

Table 4: T-test for Independent Sample

		Levene's Test for Equality of Variances		t-test for Equality of Means
		F	Sig.	t	df	Sig. (2-tailed)
Employee Judgments	Equal variances assumed	.824	.366	-1.219	90	.226
	Equal variances not assumed			-1.202	71.236	.233
Organization Attitude towards Gender	Equal variances assumed	.117	.734	-.380	90	.705
	Equal variances not assumed			-.387	79.575	.699
Development opportunities	Equal variances assumed	5.219	.025	.471	90	.639
	Equal variances not assumed			.513	89.866	.609
Employee Beliefs	Equal variances assumed	2.371	.127	1.182	90	.240
	Equal variances not assumed			1.138	65.390	.259

Since p value here is >0.05 (for all the factors it is greater than 0.05) the null hypothesis is accepted and it is concluded that there is no statistically significant difference in perceptions of diversity based on gender

 

Objective 2: To develop a relationship between workforce diversity and select demographic variables.

 

a.     Workforce Diversity and Gender:

Most of the employees surveyed were men indicating that the banking sector like many other sectors is dominated by men (56.6%) over females (36.4%).

b.       Workforce Diversity and Age

Table 5. Age and diversity perspectives ANOVA table

		Sum of Squares	Df	Mean Square	F	Sig.
Employee Judgments	Between Groups	5.258	3	1.753	1.795	.153
	Within Groups	92.742	95	.976
	Total	98.000	98
Organization Attitude towards Gender	Between Groups	6.526	3	2.175	2.259	.087
	Within Groups	91.474	95	.963
	Total	98.000	98
Development opportunities	Between Groups	2.783	3	.928	.925	.432
	Within Groups	95.217	95	1.002
	Total	98.000	98
Employee Beliefs	Between Groups	2.511	3	.837	.833	.479
	Within Groups	95.489	95	1.005
	Total	98.000	98

Since significance is greater than 0.05 in all the factors the null hypothesis is accepted and concludedthat there is statistically no significant difference in perceptions of diversity based on age.

 

c.     Workforce Diversity and Ethnicity:

The banking sector shows majority of people working from general category (74.7%), Scheduled Caste Category (7.1%), Schedule Tribes Category (7.1%), OBC (11.1%)

 

 

Table 6. Ethnicity and diversity perspectives ANOVA table

		Sum of Squares	df	Mean Square	F	Sig.
Employee Judgments	Between Groups	7.502	3	2.501	2.625	.055
	Within Groups	90.498	95	.953
	Total	98.000	98
Organization Attitude towards Gender	Between Groups	3.117	3	1.039	1.040	.378
	Within Groups	94.883	95	.999
	Total	98.000	98
Development opportunities	Between Groups	.368	3	.123	.119	.948
	Within Groups	97.632	95	1.028
	Total	98.000	98
Employee Beliefs	Between Groups	6.640	3	2.213	2.302	.082
	Within Groups	91.360	95	.962
	Total	98.000	98

Since p value is greater than 0.05 for all the factors the null hypothesis is accepted and concludedthat there is statistically significant difference in perceptions of diversity based on category.

 

d.    Workforce Diversity and Educational Qualifications:

Most employees in the banking sector have minimum qualification of being post-graduates (54.5%). That is the banking sector prefers employing people who are well educated. 32.3% of employees were graduates, 7.1% employees were not even graduates. Around 6.1% of employees have held Doctorate degree.

 

 

 

Table 7. Educational Qualifications and diversity perspectives ANOVA table

		Sum of Squares	Df	Mean Square	F	Sig.
Employee Judgments	Between Groups	6.135	3	2.045	2.115	.103
	Within Groups	91.865	95	.967
	Total	98.000	98
Organization Attitude towards Gender	Between Groups	4.101	3	1.367	1.383	.253
	Within Groups	93.899	95	.988
	Total	98.000	98
Development opportunities	Between Groups	5.274	3	1.758	1.801	.152
	Within Groups	92.726	95	.976
	Total	98.000	98
Employee Beliefs	Between Groups	1.665	3	.555	.547	.651
	Within Groups	96.335	95	1.014
	Total	98.000	98

Since p value is greater than 0.05 for all factorsthe null hypothesis is accepted and concludedthat there is no statistically significant difference in perceptions of diversity based on education qualification.

 

e.     Workforce Diversity and Experience:

Employees from the banking sector have the youth getting attracted to such kind of working atmosphere as the maximum of the workforce comprises of people with experience of 5 years or less (26.3%). Employees with experience 6-10 years were 22.2%, with 11-15years of experience employees were 17.2%. 22.2% of employees had 16-20 years of experience and around 12.1% were with experience more than 20years.

 

Table 8. Experience and diversity perspectives ANOVA table

		Sum of Squares	Df	Mean Square	F	Sig.
Employee Judgments	Between Groups	7.522	4	1.881	1.954	.108
	Within Groups	90.478	94	.963
	Total	98.000	98
Organization Attitude towards Gender	Between Groups	8.694	4	2.174	2.288	.066
	Within Groups	89.306	94	.950
	Total	98.000	98
Development opportunities	Between Groups	2.721	4	.680	.671	.614
	Within Groups	95.279	94	1.014
	Total	98.000	98
Employee Beliefs	Between Groups	5.032	4	1.258	1.272	.287
	Within Groups	92.968	94	.989
	Total	98.000	98

Since p value is greater than 0.05 for all factors the null hypothesis is accepted and concludedthat there is statistically no significant difference in perceptions of diversity based on education qualification.

 

FINDINGS:

·       Individual perspectives that might affect the workforce diversity were identified and categorized into four categories: Employee Judgments, Organization Attitude towards Gender, Development Opportunities, Employee Beliefs

·       All the null hypothesis were not rejected and it was found that that there is statistically no significant difference in perceptions of diversity based on age, gender, experience, ethnicity and education qualification.

 

The results coincide with the results of Joseph Darwin (2015) who also proved that demographics do not play a significant role in diversity perspectives.

 

CONCLUSION:

The present study reveals that the diversity of the demographic profiles of the workforce - namely age, gender, education qualification, experience and ethnicity - does not have any statistically significant effect on perception towards workforce diversity. Thus it is concluded that the employees in the banking sector have shown a neutral perception about workforce diversity (Joseph Darwin, 2015). It is believed that organization culture, humanresource practices, work nature and business strategy of individual firms are different from each other and thedifferences are likely to mask the impact of variables on the employee perception in one firm with that observed inother firms. The possible reason for no variation in diversity based on demographics in banks could be the high transfer rate of employees which associates them to people of different age groups, ethnicity, experience etc. Moreover the high literacy rateamong bank employees can be another reason for their broad mindedness.

 

LIMITATIONS:

·       Research on orientation is an extensive area of study, therefore the researcher concentrated on a sample size of employees from banks which were accessible to her. Also due to time constraint and lack of other resources the researcher used a fairly limited sample size of 99.

·       There were challenges in the administration of questionnaire because respondentswere unwilling to respond to the questionnaire on time and some were biased.

 

REFERENCES:

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Received on 08.01.2019         Modified on 14.01.2019

Accepted on 04.02.2019      ©AandV Publications All right reserved