Case Study - Workforce diversity

As recently as the 1980s, managers in some of the most productive organizations in the country used to pride themselves on treating all their employees equally. This typically meant holding the line on rules and regulations so that everyone conformed to the same set of guidelines. Moreover, when people were evaluated, they were typically assessed on the basis of their performance in the workplace. In recent years there has been a dramatic change in management's thinking. Instead of treating everyone the same, some organizations are now trying to meet the specific needs of employees. What is done for one individual employee may not be done for another. Additionally, instead of evaluating all employees on how well they work in the workplace, attention is being focused on how much "value added" people contribute, regardless of how many hours they are physically at the workplace.

This new philosophy is also spilling over into the way alternative work arrangements are being handled. An example is Aetna Life & Casualty, where workers are given the option of reducing their workweek or compressing the time into fewer days. Under this arrangement, a parent who wants to spend more time at home with the children can opt to cut working hours from 40 down to 30 per week or put in four 10-hour days and have a long weekend with the kids. In either case, these personal decisions do not negatively affect the employee's opportunities for promotion. Why is the company so willing to accommodate the personal desires of the workers? One of the main reasons is that Aetna was losing hundreds of talented people every year and felt that the cost to the company was too great. Something had to be done to keep these people on the payroll. As a result, today approximately 2,000 of Aetna's 44,000 employees work part-time, share a job, work at home, or are on a compressed workweek arrangement. The company estimates that it saves approximately $1 million annually by not having to train new workers.

Moreover, the company reported that in one recent year 88 percent of those employees who took family leave returned to work. An added benefit of this program is the fact that Aetna's reputation as a good place to work has been strengthened. The Families and Work Institute recently named Aetna one of the top four "family-friendly" companies. Duke Power & Light is another good example of how companies are changing their approach to managing employees. Realizing that child care is a growing need among many employees, because in most households both parents now work, the company joined forces with other employers to build a child care center. The firm has also changed its work schedule assignments. In the past, many employees reported that they hated working swing shifts: days one week, evenings the next, and then nights. So the firm created 22 work schedules and now lets employees bid on them annually, based on seniority. Some of these shifts are the traditional five-day week of eight-hour days. Others, however, are compressed workweek alternatives, including four 10-hour days and three 12-hour days. At the same time, the company has been turning more authority over to the personnel and has driven up its employee-to-manager ratio from 12 to 1 to 20 to 1. As a result, the company now has an attrition rate that is over three times lower than the industry average, and most of this attrition is a result of people's transferring to other jobs in the utility. As one manager put it, "We needed to recognize that people have lives." On the basis of results, it is obvious that the new arrangement is a win-win situation for both the workers and the firm.

1. How is the new management philosophy described in this case different from that of the old, traditional philosophy? Identify and describe the differences.

2. In what way are alternative work schedules proving helpful to managing diversity?

3. Do you think these new programs are likely to continue or will they taper off? Why?