By Bobby Siu

 
Successful companies are always looking for ways to increase their market share, revenue, profit, brand loyalty, productivity, and reputation. Accordingly, they focus on results which show improvements in these factors. It seems inconceivable that diversity management can escape from this type of performance review.
Here are four steps in measuring the results of diversity management to make it more accountable :

1. Define objectives clearly. This is crucial because results are tied in with objectives - the extent to which objectives of diversity management are achieved. Without a clearly defined set of objectives, no measurements on results can be done. Defining objectives requires us to resolve two key issues:

• How are employment equity and diversity management related to the overall human resources development objectives?
• How are diversity management objectives related to the broader corporate objectives? These two issues force us to sort out, in specific terms, the linkages of objectives internally within the human resources department and externally with the overall corporate objectives. For example, if the diversity management objective is creating a diverse workplace and the corporate objective is increasing market share, it is clear that these two objectives have to be linked. The implication is that "diverse workforce", "market share" and their "linkages" have to be measured. If more objectives are stated, more linkages have to be made. Obviously, what are not stated as objectives need not be measured.

2. Select valid indicators. Once the objectives are clearly defined, the next step is to find indicators which can appropriately measure these objectives so as to demonstrate the extent to which they are achieved. In order to do this, we need two sets of indicators: structural indicators which measure changes in the organization and psychological indicators which measure changes among people in the organization.
Using the same examples, "diverse workplace" may include indicators such as representation of diverse groups. "Market share" may include revenues generated through the sale of similar product/service types compared with the total sale value in the market. "Linkages" may include employees' acceptance level towards diverse customers and their level of customer relations and diversity marketing skills.
To do a good job in measurement, it is important to select indicators which measure the right things ("valid") from different angles ("multiple") and with strong and direct connection with the entity we wish to measure ("powerful").

3. Use appropriate measurement tools. The third step is to use appropriate research tools to measure the results of diversity management based on selected indicators.

• Just as there are many indicators for measuring the achievement of an objective, there are also a variety of measurement tools for each indicator. Using the examples above:
• Data on "representation" of diverse groups are best collected through systematic registration as employees move through stages of employment (such as hiring, promotion, and termination) as opposed to random surveys.
• Information on "employees' acceptance level towards diverse customers" may best be done through a combination of surveys and focus groups as opposed to telephone interviews.
• Data on market share data may best be compiled by comparing corporate data with national/international data.
• Decisions on which tools should be used depend on balancing the vigorousness of measurement and availability of resources (money & people).

4. Interpret results properly. After collecting relevant data, the final step is to make some sense out of them. This is usually not as easy as one would like. Data from structural and psychological indicators should be interpreted jointly.
To demonstrate the impact of diversity management on the bottom line of a company is not easy because there are many intervening variables to be controlled. For example, a narrow range of diverse groups may not signify poor diversity management. Intervening factors such as downsizing and seniority rights must be taken into consideration. Similarly, reduction in market share does not necessarily mean poor diversity management; it may mean poor marketing strategy or pricing problems. These factors must be reckoned with in the methodological design stage or through time, as measurements are refined.

Dr. Bobby Siu is president of Infoworth Consulting Inc. (1-416-967-5292), a Toronto based firm which specializes in research, management and international business.

Guiding Principles in Measurement
Professionalism: Quality of measurement depends on having a sound methodology, valid indicators, reliable measurement tools and proper interpretation of data.
Cost Effectiveness: Priority should be established to ensure resources are used wisely to measure specific core (not secondary) elements in diversity management.
Consistency: Results are comparable through time and/or across organizations only when methodology and research processes are standardized and consistently applied.
Accountability: Results are useful only to the extent that they are valid, have strategic policy and program implications, and are relevant to the overall organizational goals.