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In this era of globalization, being diverse and open-minded is imperative to success. Diversity is defined as “The collective mixture of differences and similarities that include, for example, individual and organizational characteristics, values, beliefs, experiences, backgrounds, preferences, and behaviors.” (John Kostoulas, 2020) Furthermore, working in a company or organization requires teamwork. The relationship between the individuals in that set group must be compatible; this is a crucial characteristic for enhanced team performance. Team members working for a specific company must have the same, clear vision. (Ferdman et al. 2004), to fulfill their role suitably. Throughout this essay, I will analyze the conflicting objectives of whether diversity positively or negatively affects team performance. As in all cases, there are two sides to this argument regarding the statement, “Diversity can be good and bad for team performance”, and I will be analyzing the different viewpoints regarding relevant theories and current examples to argue my points.

One can argue that when an individual is placed in a team, no matter their age, race, or disability, they are part of a group. Teamwork gives them a sense of pride and self-esteem; necessarily an identity to live by (Tajfel, 1979). According to the Moral-Ethical perspective which, primarily focuses on the social inequity in organizations and looks for a more socially just situation in which the available functions and positions are spread more evenly over different groups. This viewpoint encourages organizations to act upon their own biases and essentially “turn a blind eye” to their initial instincts in the hiring process by actively seeking out and considering different perspectives to better the company. Some theories state that managers tend to hire people with similar backgrounds and skills to them, based on their traits. Unconsciously this will introduce some bias in the hiring process, often leading to reduced diversity within the workplace.

A current example of this is being implemented in the well-renowned Fortune 500 company Accenture. Their website states that “up to 40% of companies experience talent shortages impacting the ability to adapt and innovate”. (Accenture.com, 2020) Therefore, Accenture has employed a diverse workforce helping to bring unique perspectives and skills to the table. Ethnic and cultural diversity resulted in a 33% increase in performance, further emphasizing the argument that increased diversity can be good for team performance. The company has employed 492,000 workers from a variety of cultures, beliefs, and backgrounds to expand their creativity and business ideas. As people originate from and are educated in different environments, this leads to a broader range of skills, as each member will be able to specialize in a job becoming an expert in their field. Hiring a diverse group allows the company to gain a competitive advantage against other companies. Therefore, a diverse team is beneficial for team performance as it brings creativity and innovative suggestions which are essential characteristics in a successful company. Additionally, when each member of the team originates from a different background and or culture, the spread of techniques and skills can be transferred throughout the company allowing the spread of knowledge. Vijay Eswaran, Executive Chairman of QI Group of Companies wrote, “The food that we eat every day is a result of this blending of cultures”. (Eswaran, 2020) Therefore, it is the same mindset that cultural amalgamation is the way forward, especially within our companies, reinforcing that increased diversity is the stepping stone to good team performance.

Furthermore, in agreement with the previous argument; when employees feel included, this is more likely to result in higher employee engagement. Consequently, resulting in lower turnover rates suggests reduced recruitment and training costs for the company, already posing financial benefits. This could potentially result in firms allocating more money towards higher salaries, which would encourage employees even further. When employees are accepted, and valued they are happier and more motivated which translates to higher efficiency and productivity when carrying out a job. This will directly benefit sales as workers’ morals are boosted, therefore customer satisfaction will be high. Additionally, when hiring a diverse workforce, for example in the sales sector of a company will entice a wide range of customers to visit and relate to at least one member of the team, in an attempt to increase consumer loyalty, thus promoting the brand globally. However, regarding the organizational and economic perspective, it “focuses on the effects of diversity on work-related outcomes and gives arguments why organizations should focus on diversity”. (Rock and Grant, 2020) This statement argues that having a diverse workforce is more of a socially optimal outcome that would positively benefit society to prevent discrimination in the workplace, rather than being better for team performance. There are factors such as discomfort when surrounded by people of different backgrounds which makes working together as a team more difficult. Additionally, this may not only be an issue concerning race, even if diversity is implemented with gender this may cause problems due to the massive pay gap between male and female counterparts, especially if they perform the same job. This may severely affect the whole team’s morale and make for bad team performance.

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When people from different backgrounds, genders, and age groups engage with each other, a mirage of ideas can be discussed and debated, and this provides companies with the tools for innovation and diversification. A study in 2018 of 1,000 companies across 12 countries by McKinsey & Co, found that companies in the top quartile for gender diversity were 21% more likely to experience above-average profitability. (Rock and Grant, 2020) However, there is the overarching argument that individuals may not feel at ease working with people who are from completely different backgrounds, potentially due to language barriers and communication problems, posing issues regarding team performance. Additionally, various authors from a journal titled “What makes age diverse teams effective?” (Wegge and Liebermann, 2020) propose ceteris paribus – “age diversity in work groups will have negative effects on group performance”. (Wegge and Liebermann, 2020) The generational gap will provide conflicting objectives and dissimilar viewpoints causing upheaval and lower team effectiveness. Not only that, but a large age gap within a team may disrupt the motivation in the group and make working together an unhappy and aggressive environment which could affect the health of group members and could undoubtedly be bad for team performance. That being said, workforce diversity has been proven to improve innovation and financial performance, and “according to PricewaterhouseCoopers’ 2015 Annual Global CEO Survey, only 8% of CEOs surveyed included age inclusiveness in their company’s diversity strategy” (The Riveter, 2020) and a “diverse workforce also incorporates people of different generations.” (The Riveter, 2020) Diversity in terms of age will be beneficial towards team performance as a variety of ideas can be shared from a range of different viewpoints stemming from years of knowledge and experience.

When discussing diversity, the social categorization perspective and the cognitive theories of information processing both operate simultaneously, as justified by Wegge and van Knippenberg et al. The first argues that individuals compare themselves to other members of the group and classify themselves and their team as in-group or out-group. (Wegge and Liebermann, 2020) People tend to favor in-group members and there is often a stigma around out-group members. This causes a divide between the group and initiates conflict resulting in discrimination and emotional conflict within groups often disrupting team performance majorly. Additionally, statistics show that there is a “23% gap in hourly pay between black and white university graduates”. This may affect the minority group’s ability to perform in a team if their white counterpart receives higher pay, essentially lowering their self-esteem and effectiveness towards their contribution to the team. Thus, one can dispute that if everyone in the team had similar backgrounds, skills, and visual characteristics there would be no issues within the team, which could essentially make team performance significantly more effective as no comparisons would be made. However, the company will then have a lack of skills as everyone stems from similar backgrounds therefore there will be a lack of innovation and creativity which is one of the few ways a company can grow. The opposing argument is the cognitive theories of information processing, which argues that “more diverse groups hold a broader range of knowledge, skills and abilities” (Wegge and Liebermann, 2020) creating a plethora of opinions, experiences, and viewpoints. Thus, when a team is faced with complex decision-making, a diverse group may be the solution. Arguing the fact that diversity positively influences team performance.

Additionally, another example of diversity being good for team performance is empowering people with disabilities. It is stated that “team performance improves by 50% when everyone feels included”, (Accenture.com, 2020) undoubtedly this will have a positive impact on how the company performs and its economic targets. The company Accenture has identified 45 companies that stand out for having high disability employment rates and “on average, over the four years, these companies will have a 28% higher revenue”, (Accenture.com, 2020) showing that hiring people with disabilities enhances motivation and efficiency within teams, thus, benefitting team performance significantly. One particular case within the company is with Richard Goldsmith who is diagnosed with autism. Despite having an accounting degree, his employment opportunities have been limited. However, due to the welcoming and open nature of the other team members in the company Accenture, his successful career was made possible. He was able to get his foot in the door by joining an apprenticeship program leading to a full-time job. By engaging in teamwork, Goldsmith worked to encourage the rest of the team and, in essence, was an inspiration to his team members to fulfill their roles to the best of their capability and served as a positive influence. Additionally, by hiring people with disabilities the company gains a reputation of being inclusive and promotes a good and positive brand image which will generate significant profits. Statistics show that as a result of hiring people with disabilities, companies receive “30% higher economic profit margins”, (Accenture.com, 2020) which automatically boosts economic returns. This increased profit could translate to higher salaries for workers and bonuses which would boost team performance significantly.

To conclude, the statement “diversity can be good and bad for team performance” can be argued both ways. It is clear that both viewpoints are valid and majorly affect team performance. On one hand, diversity can benefit team performance by creating opportunities for development and diversification through creation and innovation. However, on the other hand, some workers may feel uncomfortable working in an environment with people dissimilar to them. This could provoke disruptive behavior and severely affect efficiency in team performance. I believe that sharing ideas and skills between a diverse group of people is beneficial for a company and proves to be good for team performance as diverse groups are said to be more creative. Ultimately gathering people from different paths of life results in a mixture of ideas and viewpoints which would widen people’s perspectives and create room for discussion which is a key characteristic in team performance.

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