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Tracking The Value Of Diversity Programs: Organizational Perspectives

Guest post by: Dr. Fathi El-Nadi

Article Overview: The shortage of documented financial or performance results for diversity programs makes it difficult to determine what works and what doesn’t. Are there any models for companies to follow? "Not yet, says Guillermo Hysaw, vice president of diversity for Toyota Motor Sales, USA. Hysaw, who is managing his company’s newly announced 10-year, $7.8 billion diversity initiative, freely admits that he’s not sure whom to benchmark against. "Nobody is doing an outstanding job in diversity," he says. Here’s a brief look at how five companies--all among the largest and most successful in their industries--structure and evaluate their diversity programs.

Tracking The Value Of Diversity Programs: Organizational Perspectives

Ryder System, Inc. Ryder, a logistics, supply-chain, and transportation giant, runs an extensive diversity program for its 30,000 employees. Ryder measures the return on its program by tracking litigation costs and the number of women and members of minority groups hired and promoted in key jobs throughout the company. "Since the initiation of these programs, litigation costs have dropped dramatically," says Gerri Rocker, director of corporate diversity for the Miami-based company. The company uses a scorecard for each business unit that includes a diversity component, with specific targets for hiring and promoting women and people of color. Senior leadership bonuses are tied to meeting these targets.Ryder requires diversity training for all employees that "focuses on respecting and valuing all aspects of employees’ beliefs and backgrounds, not only differences of race, gender, ethnicity, and sexual orientation, but also individual talents, ideas, and experiences," says Rocker. "Differences are seen as working assets, which enhance Ryder’s credibility, business operations, and customer service." An additional round of training for all managers and supervisors promotes skills for managing differences within heterogeneous groups and pushing employees toward quality performance. The program also teaches litigation avoidance by describing scenarios and behaviors that put the company at risk of lawsuits and advising how to prevent them.
Goldman Sachs Group. "Our senior executives have said that diversity is a strategic imperative," says Laura Liswood, senior adviser for diversity at the New York-based investment banking firm. "At Goldman, it’s assumed that diversity is a good business practice, and we put a lot of resources into it." Goldman Sachs’ diversity program includes a centralized staff of half a dozen people, plus senior leaders within each division. The company relies on its in-house staff and rarely calls in consultants. "It takes a lot of looking within an organization’s diversity program to find the challenges, and most consultants can’t get under the skin of an organization to that level," Liswood says. "It has to be a largely internal process." Goldman includes a diversity component in performance evaluations and assessments of corporate leaders, with results reflected in their compensation.
Price, Waterhouse, Coopers. The world’s largest accounting firm, with headquarters in New York City and 125,000 employees, sees diversity as a marketing imperative. "We find that more and more of our clients are demanding that our partners and staff--involved in securing new business as well as delivering the work--reflect the diversity within their organizations," says Toni Riccardi, chief diversity officer. "It is as much a part of the price of admission for winning and sustaining new business as other core differentiating factors. We measure our return on investment against very specific metrics focused on recruiting, retention of our top performers, and employee satisfaction."
New York Life Insurance. New York Life, the largest mutual life insurance company in the United States, runs an extensive diversity program focused on recruitment and retention of minority candidates. "The human resources department establishes annual diversity goals in each department and, with the help of diversity officers in each unit, monitors a department’s hiring and promotional activity," says Angela Coleman, vice president of human resources. An executive management committee tracks diversity objectives by reviewing monthly and quarterly reports for each unit. Diversity is one of 15 components in performance evaluations for managers. "It’s hard to quantify financial results," Coleman says. "We don’t approach diversity in terms of a dollar return on investment."
Cendant Corporation. Cendant, a vast real estate services company, launched its diversity program as part of a broader "employer of choice" initiative. The company appointed a diversity committee commissioned by the CEO, and then named a vice president for diversity in 2002. "Each of our business units has at least one representative who is responsible for diversity initiatives," says Kathy Andreasen, vice president of human resources for the New York City-based company. "The return on the resources dedicated to this effort is measured in number of hires, the volume of our services that are provided by minority suppliers, the volume of business generated by our multicultural marketing initiatives, the number of minority franchisees, and other measures."

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