PS3

Statement of the Problem

Gender diversity and inclusion of women in top executive management and boards of directors add value to an organization. For example, gender diversity can add value to problem solving, resulting in better performance of the company (Joshi, 2017). Including more gender diversity in a firm may also increase the effectiveness of the firm because of a better understanding of the needs of stakeholders, better risk management and business practices. It also enhances decision making by adding new ideas and perspectives. The banking sector is one sector that can enjoy and benefit gender diversity.

The banking sector faces many challenges from increased competition, a high rate of technological growth and increased regulations by the government. This has led banks to compete for the best employees. Workforce diversity is achieved through gender diversity, age diversity and ethnicity diversity. Research show that proper management of workforce diversity has a positive outcome in any organization (Rizwan et al. 2016). Studies have shown that organizations with a high level of workforce diversity management are effective in producing corporate cultures that pioneer capabilities and fresh idea for survival.

There has been an increase in workforce gender diversity in firms and organizations. However, few studies have focused on examining the relationship between gender diversity and job performance for over three decades. Also, these studies provide conflicting results on diversity. Empirical research found that gender diversity is either good or bad for an organization (Ali et al. 2009). For example, Svyantek and Bott (2004) did a review on nine diversity studies investigating this relationship and they found inconsistent results. The studies showed positive effect, negative effect, zero effect and nonlinear effects. If business turned to this body of literature for hiring practices insights, they would find conclusive evidence on what to do.

One study indicates that fostering gender diversity improves the outcomes of the firm while others claim the opposite. Another body of study claims that gender diversity and organizational performance are not connected (Joshi, 2017). This leaves private sectors including the banking sector to rely on past evidence, anecdotal assertions and stereotypes. Consequently, this creates a problem.

Despite efforts by the government to foster gender diversity at the workplace through policies and practices, gender diversity has fallen short in the sector. This is partly because of the resistance by the banking industry because of lack of rigorous evidence on how gender diversity shapes their outcomes. The existing literature only examines gender diversity in senior management and corporate rooms, but reaching these positions depends on the resources and opportunities women are afforded during the early years of their careers (Campbell & MÃnguez-Vera, 2008). For example, if women are missing in the traditional banking career, they will be absent in boardrooms and senior management. The research is lacking here. Limitation of data available has confined researchers to examine gender diversity in terms of men and women in senior management position and corporate boardroom (Joshi, 2017). However, gender diversity is not about numbers, but rather the opportunities women can access and challenges they face across all ranks and stages of their professional advancement.

To understand how gender diversity affects job performance depends on the context in which the relationship is being examined. Thus, there is a need to do both qualitative and quantitative data collection and analysis to capture the complex reality, instead of relying on an incomplete understanding of what gender diversity means (Joshi, 2017). This means the question that firms should ask is whether or not the banking sector is fostering an inclusive environment that leverages the benefits of gender diversity for better performance of the sector?

References

Ali, M., Kulik, C. T., & Metz, I. (2009, August). The Impact of Gender Diversity on Performance in Services and Manufacturing Organizations. In Academy of management proceedings (Vol. 2009, No. 1, pp. 1-6). Briarcliff Manor, NY 10510: Academy of Management.

Campbell, K., & MÃnguez-Vera, A. 2008. Gender diversity in the boardroom and firm financial performance. Journal of Business Ethics, 83: 435-451.