Why Corporates Must Address the Gender and Racial Pay Gap as Part of Diversity Efforts
February 12, 2025
The Business Case for Diversity The articles in this module so far have focused on how organizational diversity makes eminent sense from legal compliance and value based perspectives. The discussion so far was about how organizations must embrace diversity as a value based imperative and for furthering corporate social responsibility. This article examines the business […]
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We often hear the term “diversity” bandied about in our everyday usage. Usually, when we come across the term, it is in the context of having a mix of gender, race, ethnic, sexual orientation etc in a setting wherein there is no discrimination based on these traits.
In an organizational context, diversity refers to equality of opportunity and employment without any bias because of these traits. Indeed, it has become fashionable in the present scenario to have a diverse mix of employees drawn from all classes and proclivities so that the aura of correctness and humanitarianism can be actualized. However, this does not mean that organizational diversity has succeeded or it has become the norm in organizations.
Rather, there are many barriers to diversity even after strenuous efforts by activists and experts and these relate to societal mindsets and personal psychological discomfort with having people drawn from diverse backgrounds working alongside.
In the United States, the government encourages and mandates organizational diversity as a matter of law and even to the extent of ensuring that, corporates not only follow the letter of the law but also the spirit of the law. This is reflected in the equal opportunity employer law, which states that organizations cannot discriminate against potential job applicants on race, gender, ethnicity, nationality, and sexual orientation. As we shall discuss in subsequent articles, each of these characteristics sets apart people from each other and hence there needs to be a mindset change apart from brining in laws that would make acceptance of diversity that much easier.
In other parts of the world, diversity is not practiced in society and let alone organizations which make a feeble attempt to enforce the rules. The reason for this is the prevailing cultural attitudes against certain sections of society, which makes it impossible for corporates to embrace diversity since they risk the wrath of the dominant cultural and societal groups.
The point here is that when the entire society discriminates against say, homosexuals or lesbians, it is indeed difficult for even the best meaning of corporate leaders to buck this trend. Hence, it needs to be remembered that organizational diversity is not only about a certain organization’s policies but also reflects the broader societal consensus on this issue.
Of course, this is not to say since society discriminates against ethnic minorities, corporates can do so likewise. On the other hand, there is more responsibility on corporates to follow their heart and heed their conscience and ensure that their organizations reflect diversity.
The point here is that there is a symbiotic relationship between organizations and their environment and hence both must work in tandem to resolve cultural conflicts and biases. When either is unwilling for whatever reasons, leaders must step in and ensure that diversity is encouraged for humanity’s sake. This is the way shown by several business leaders like NR Narayana Murthy of Infosys and the late legendary Steve Jobs of Apple who put their personal reputations at stake to promote diversity.
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