The Business Case For Diversity Management

Topic(s): diversity, fairness, organizational performance
Publication: Human Resource Management
Article: The Impact Of Diversity And Equality Management On Firm Performance: Beyond High Performance Work Systems
Authors: C. Armstrong, P. C. Flood, J. P. Guthrie, W. Liu, S. Maccurtain, T. Mkamwa
Reviewed by: Kerrin George

Organizations may recognize the consequences of workplace discrimination, but when it comes to diversity management and training, organizations need more convincing that the benefits will outweigh the costs. 


High performance work systems (HPWS) are integrated recruitment, selection, performance management, training, and development practices. They have robust effects on organizational performance beyond individual human resource practices. However, effective diversity management is often considered a primary characteristic of high performing organizations. The researchers (Armstrong et al., 2010) investigated whether diversity and equality management systems (DEMS, would have additional benefits for organizational performance. Examples of DEMS include diversity training or ensuring equal pay and promotion across all groups. The researchers found that organizations using HPWS had increased firm performance; however, those organizations that used DEMS or a combination of both systems demonstrated additional gains, such as increased productivity and innovation, and less voluntary turnover.


The business case for diversity is evident here: diversity management can be a performance enhancing strategy that leads to financial and climate benefits for organizations. Practitioners should use this evidence to argue that investment in these practices is not a waste of resources. Instead, organizations will stand to succeed by effectively managing workforce diversity and tying diversity to the broader organization’s strategy. 


Armstrong, C., Flood, P.C., Guthrie, J.P., Liu, W., Maccurtain, S., & Mkamwa, T. (2010). The impact of diversity and equality management on firm performance: beyond high performance work systems. Human Resource Management, 49(6), 977-998.