WORK FORCE DIVERSITY MANAGEMENT
OVERCOMING DIVERSITY IN THE WORKFORCE
Women and minorities still report several obstacles to feeling appreciated
and progressing in their jobs, even in spite of the efforts of many firms to
promote diversity. According to a Society for Human Resource
Management study, obstacles include workplace culture, exclusion from
unofficial networks, stereotypes and assumptions, and a lack of mentors
and role models. In other words, someone who is seen as "different" is
probably not going to be able to contribute to the objectives of the firm or
flourish personally.
Describe Diversity. Why Does It Matter?
Diversity is any characteristic that makes a person different from another.
Diversity, for instance, at Verizon implies accepting variation and
variances in terms of age, gender, color, sexual orientation, education,
and more. Diversity training aims to: (1) remove attitudes,
preconceptions, and management styles that impede staff members'
personal growth; and (2) enable staff members to contribute to company
objectives irrespective of their ethnicity, age, physical state, sexual
orientation, gender, family status, religion, or cultural background.
Companies are required by the Equal Opportunity Employment Law to
make sure that women and minorities are fairly represented in their
workforce. In other words, businesses prioritize making sure everyone has
access to work. Additionally, there has been a greater focus on how
culture affects training and growth in the workplace. Companies must take
into account a variety of cultural factors, such as the 9/11 terrorist
attacks, employees' reluctance to talk about cultural differences, the rise
in the number of projects involving teams with members from diverse
backgrounds, the recognition that multicultural customers make up a
sizable portion of the labor market, and, particularly in the case of
professional and technical positions, the scarcity of highly skilled workers,
which has led to a demand for workers from abroad. To help them
comprehend aspects of American culture like the fixation with time,
individualistic attitudes, and capitalistic concepts, these recent
immigrants require diversity training.
Managing diversity entails establishing a work environment where all staff
members may contribute to company objectives and develop personally.
Access to work is part of this ecosystem as well as treating each employee
fairly and warmly. It is important for the organization to cultivate workers
who feel at ease interacting with individuals from diverse ethnic, racial,
and religious backgrounds. Changing the corporate culture may be
necessary to manage diversity. It covers the organization's expectations
for employee behavior, including risk-taking, creativity, competition, and
results-orientedness. The corporate culture is the foundation for the
importance put on diversity.
Handling Diversity via Compliance with Law
Using human resource procedures and affirmative action policies that
adhere to equal employment opportunity legal requirements is one
strategy for managing diversity. Employee values, preconceptions, and
habits are seldom altered by this strategy, which might impede output
and personal growth. The corporation hires more women and minorities in
order to allay these worries. Since the employment rates of women and
minorities reflect their availability in the labor market, managers do not
believe that further action is necessary. But when minorities and women
work for the firm longer, they probably become irritated. Coworkers and
managers who are uncomfortable engaging with people of other genders,
races, or ethnicities may refrain from offering coaching or performance
reviews to women and minorities. Colleagues may voice the opinion that
recruiting practices, such as lowering standards, are the sole reasons
minorities and women are hired. Women and minorities may create
support groups in order to express their dissatisfaction to management.
Minorities and women may not be able to fully use their abilities at work
and may even quit the organization as a result of the work environment.
Using Diversity Training Programs to Manage Diversity
The conversation that came before it does not imply that businesses
should be hesitant to implement equal opportunity employment policies
or participate in affirmative action. Affirmative action alone, meanwhile,
does not address the problems of minorities' and women's assimilation
into the workforce. In order to effectively oversee a diverse workforce,
businesses must make sure that
• Workers are aware of how preconceptions and beliefs affect how they
act toward others who are different from them in terms of gender, race,
religion, or ethnicity.
• Workers learn to respect one another's cultural differences.
• Actions that frighten or isolate members of minority groups become
better. Programs for diversity training may help achieve these objectives.
Diversity training is defined as instruction intended to modify the attitudes
of workers toward diversity and/or to assist them in acquiring the
competencies required to collaborate with a varied workforce.
Programs for diversity training vary in their emphasis on changing
behavior or attitudes. According to some study, past experience with
diversity training and the makeup of the training group may have an
impact on behavior and attitude changes. Diversity training programs that
are created or bought off the market without considering the needs,
culture, and history of the organization are likely to fail.
Programs for Attitude Awareness and Change
Programs aimed at raising employee knowledge of physical traits (such as
impairments), cultural and ethnic origins, and personal traits that impact
conduct toward others are the main focus of attitude awareness and
change initiatives. In awareness training, topics such "What is diversity?"
are covered. Me? Who am I? as well as prejudices, presumptions, and
preconceptions about other ethnic groups. These programs are predicated
on the idea that by raising employees' knowledge of stereotypes and
beliefs, they would be better equipped to steer clear of harmful
preconceptions while engaging with coworkers from diverse backgrounds.
The workshops assist staff members in reflecting on the similarities and
differences across cultural groups, assessing their views about affirmative
action, and examining their theories regarding the reasons behind the
success or failure of minority workers in the workplace. To raise employee
understanding of the detrimental emotional and performance
consequences that stereotypes, attitudes, and behaviors have on
members of minority groups, many of these programs incorporate
videotapes and hands-on activities.
Behavior-Based Programs: The goal of behavior-based programs is to
modify individual and organizational habits that impede staff members'
capacity for productivity and personal development.
One strategy used by these programs is to pinpoint instances that inhibit
workers from achieving their full potential. Employee groups are invited to
name certain sponsorships, training programs, chances for promotions, or
performance management procedures that they feel were handled
unjustly. The program can gather opinions from workers on how effectively
management procedures and the workplace respect individual differences
and provide equitable opportunities. It could be possible to create
specialized training courses to address the problems raised in the focus
groups.
Teaching managers and staff the fundamentals of appropriate conduct in
the workplace is an additional strategy. These lectures include how to
behave with coworkers, superiors, and clients. Managers and staff
members have to be taught, for instance, that it is improper to use
language or exhibit actions that have offensive connotations related to
race, sexuality, or culture. Employers that have concentrated on teaching
norms and behavior have discovered that workers respond less adversely
to this kind of training than to other methods of diversity education. The
New York-based store Saks Fifth Avenue offers diversity training to all
11,000 of its staff, with an emphasis on customer care to a varied
clientele. The video-based training program features real staff members
engaging with clients in a variety of settings. According to Saks Fifth
Avenue, each client encounter is estimated to be worth around $250,
therefore mistreating consumers may have a significant financial impact
on the business.
Immersion in another culture is a third method. Sending workers straight
into communities where they must engage with people of various racial,
cultural, and/or national backgrounds is known as cultural immersion. The
level of engagement varies, but it might include engaging in conversation
with neighbors, volunteering in neighborhood groups, or studying
noteworthy religious, cultural, or historical events.
Features of Effective Diversity Efforts
Which kind of program—behavior-based or attitude awareness and change
—is more successful? There's growing evidence that attitude awareness
initiatives don't work and that one-time diversity Programs for training are
unlikely to be successful. A company's overall strategy to manage
diversity and make capitalizing on it a commercial objective includes
effective diversity training programs.
As an example, R. In response to a racial discrimination complaint, R.
Donnelley and Sons discontinued their diversity awareness training
program, despite having spent over $3 million on it. At different R.
Participants in R. Donnelley training sessions were urged to express any
issues. Many said that harassment and abuse were making it impossible
for them to work efficiently. Those worries were refuted by the
management present during the session. Additionally, after the training, a
worker submitted an application for a vacant job but was turned down on
the grounds that she had been too forthright in sharing her worries during
the diversity training. Not much progress was achieved in raising the
hiring and promotion rates of women and minorities, despite the fact that
R. R. Donnelley conducted a lot of diversity training sessions. Many black
workers were requested to attend repeated training sessions to guarantee
diverse groupings, which they found annoying because of the low ratio of
black employees to white employees. The business refused to give
information on the representation of women and minorities in employment
across the board to the Equal Employment Opportunity Commission or to
shareholders. The corporation also disregarded the advice given by
"diversity councils" of employees that were authorized by the business.
In general, analyses of initiatives for diversity training have shown that
• The prevalence of prejudices, presumptions, and preconceptions is the
most typical topic diversity attempts to address.
• Less than one-third of the businesses do any form of follow-up or long-
term review. Reduction in litigation and complaints, diversity in recruiting
and promotions, self-awareness of prejudices, and greater interaction with
HR professionals on diversity-related matters are the most prevalent
measures of success.
• The majority of programs are just one day long.
• According to three-fourths of study participants, the average employee
exits diversity training with a good attitude toward diversity. On the other
hand, more than half believe that the programs have little lasting impact.
• Of those surveyed, 29% say that no resources are offered to support
diversity training, and 22% say that no problems pertaining to progress or
development are addressed.
The traits linked to diversity initiatives' long-term performance are shown
in Table 3.1. It is essential that the diversity program be connected to
organizational goals. Cultural variations, for instance, influence the kind of
skin cream people think they require or could find appealing in terms of
smell. Part of knowing the consumer—which is essential to the success of
businesses like Avon—is knowing cultural differences. By putting in place a
framework to aid the endeavor, top management support may be shown.
For instance, according to the CEO of Pepsi, diversity won't reach its full
potential until workers are eager to discuss challenging topics at work and
are "comfortable being uncomfortable." Consequently, some employee
groups have designated senior management team members as sponsors,
such as African Americans, Latinos, Asians, women, women of color, white
males, persons with disabilities, and those who are transgender, lesbian,
and gay. It is required of the managers to recognize potential, comprehend
the requirements of the people in their group, and provide at least three
workers with mentorship. Additionally, they are supposed to provide the
president progress reports.
The fact that managers get recognition for making progress toward
achieving diversity objectives is another crucial aspect of diversity
initiatives. Four times a year, Allstate Insurance Company polls all fifty
thousand of its workers. Employees are asked to rate how effectively the
business is meeting the needs of both consumers and staff in the survey.
Workers are questioned about the degree to which supervisors' gender or
race prejudices impact customer service, growth opportunities, and
promotions. These questions are utilized as a "diversity index." A
manager's performance on the diversity index determines 25% of their
annual bonus as assessed by their staff.
Take Sodexo's diversity initiative. In the United States, Sodexo is the top
facility and food management company. Each day, 10 million clients are
served by Canada and Mexico. Diversity is considered essential to the
company's ability to reach its goals for corporate success. Therefore,
inclusion and diversity are key to Sodexo's business plan. The company's
efforts to manage diversity include goals that pertain to the community,
shareholders, workers, and business. Developing and fostering a diverse
work environment by developing management practices that drive hiring,
promotion, and retention of talent are just a few of the company's goals.
Other goals include understanding and living the business case for
diversity and inclusion, raising awareness of how diversity relates to
business challenges, using relationship management and customer
service to attract and retain diverse clients and customers, and
collaborating with women's and minority-owned businesses to deliver food
and facility management services.
Diversity education is kept apart from equal employment opportunity
(EEO) and legal compliance training by Sodexo. Employees must complete
affirmative action and EEO refresher training every three years. Involved
with and dedicated to managing diversity is top management. The senior
executives' program consists of continuing education in the classroom
supplemented by community service, employee group sponsorship, and
mentorship of various staff members. Executives are responsible for the
company's diversity strategy and actively involved in understanding the
commercial case for diversity. Spirit of Diversity is an eight-hour
introduction course that every manager must complete. There are more
educational options as well, such as three- to four-hour learning
laboratories covering subjects including gender in the workplace, sexual
orientation in the workplace, generations in the workplace, and cross-
cultural communication. The company's learning and development
division creates tailored learning programs for various departments and
teams. For example, a cross-cultural communications program was made
available for recruiters, and a course on selling to a broad clientele was
created and made available to the sales staff.
Apart from conducting diversity training programs, Sodexo maintains six
employee network groups, including the African American Leadership
Forum and People Respecting Individuality, Diversity, and Equality. These
groups offer a platform for professional growth and idea exchange among
staff members to bolster the organization's diversity initiatives. Employees
who promote diversity and inclusion are recognized and awarded via
Sodexo's "Champions of Diversity" program.
To underscore the significance of diversity for the organization, every
manager at Sodexo is equipped with a diversity scorecard that assesses
their performance in terms of hiring, retaining, promoting, and developing
all staff members. The scorecard evaluates certain actions, such taking
part in community outreach, mentoring, and training, in addition to
providing quantifiable targets. Performance in these categories
determines a share of managers' incentives.
Sodexo has discovered that the business outcomes are positively
impacted by its diversity management initiatives and diversity training.
Women and people of color have been more productive, engaged, and
retained as a result of its mentorship program. An estimated return on
investment has been made of
$19 for each $1 invested in the initiative. Due to its efforts in managing
diversity, Sodexo has also been granted many new commercial contracts
and has retained a number of existing customers.
The most successful diversity management initiatives, like Sodexo's
diversity program, include the essential elements listed in Table 3.2. Some
businesses have implemented diversity programs with some of the same
components as Sodexo's, including Denny's (in reaction to a lawsuit) and
Weyerhaeuser (in response to a retiring workforce and survey findings
that highlighted the need for a more welcoming workplace). This
conversation should have made it clear that successful diversity initiatives
include more than simply a strong training curriculum. They necessitate a
continuous process of cultural transformation that involves the backing of
upper management, diversity policies and practices concerning hiring and
recruitment, training and development, administrative structures,
including the administration of diversity surveys and the assessment of
managers' compliance with diversity objectives, and enhanced
connections with minority vendors, suppliers, and customers.
Flexibility With the increasing diversity of companies, the expense of a
subpar integration effort
will rise. Thus, companies that effectively manage integration will
generate cost benefits over their counterparts.
Businesses gain a reputation for being attractive employers for women
and people of color. The race for the top employees will be won by those
who have the greatest reputations for handling diversity. The advantage
will be more and more crucial as the labor pool becomes smaller and less
diverse.
Multinational corporations can benefit greatly from the cultural sensitivity
and knowledge that people with foreign backgrounds offer to their
marketing campaigns. Marketing targeting subpopulations inside domestic
operations follows the same logic.
Increased creativity should result from a range of viewpoints and a
contemporary approach to managing diversity that places less focus on
conforming to outdated standards.
Decision-making groups with heterogeneity may be able to make better
choices by including a greater variety of viewpoints and doing more in-
depth critical analyses of the problems.
Businesses with a wider range of backgrounds will be better equipped to
adjust to a market that is changing quickly.
• Senior leadership contributes resources, steps in personally, and openly
supports diversity.
• The curriculum is organized.
• One definition of a corporate purpose is to capitalize on a diversified
workforce.
• Making the most of a varied workforce is seen to be essential to making
sales and profits.
Evaluation criteria including sales, retention, and promotion rates are used
to assess the program.
• Manager participation is required.
• The initiative is seen as a cultural shift rather than a one-time project.
• Problems are not assigned to managers or specific demographic groups.
• The abilities and behaviors required to communicate with others
effectively are taught.
• Managers get rewards based on how well they accomplish diversity
objectives.
• The management solicits and acts upon employee input.
• The organization promotes a welcoming and safe work environment
where all staff members feel welcome and may learn to value the unique
qualities and advantages of diversity.
Important elements of successful diversity management programs
Support from Upper Management
• Present the diversity's business case.
• Incorporate diversity into the company objectives and business plan.
• Take part in diversity initiatives and urge management to do the same.
• Assemble an executive management group that reflects the variety of
employees.
Hiring and Recruiting
• Request that search companies find a broader range of applicants.
• Improve managers' hiring, selection, and interviewing abilities.
• Increase the number of students applying to historically minority
universities.
Finding and Nurturing Talent
• Establish a collaboration with INROADS, a national internship initiative
aimed at preparing minority students for jobs in management.
• Create a mentorship program.
• Streamline the global succession planning system of the business to
better identify talent.
Enhance the process of choosing and training managers and other leaders
to assist make sure they can maximize team performance.
• Guarantee that all workers, particularly women and minorities, have
access to leadership and management development initiatives.
Workers' Assistance
• Create resource groups or employee networks with workers who share
interests (such as Asian Pacific workers, women, gay workers, Native
American workers, veterans, and Hispanic workers) and use them to assist
the business in setting objectives and comprehending the problems they
face.
• Honor cultural customs, festivals, and occasions.
• Provide all workers with access to work/life balance programs including
eldercare, telecommuting, and flextime.
Providing Equitable Treatment
• Carry out in-depth diversity education.
• Establish a procedure for alternative dispute resolution.
• Represent minorities and women on all human resource committees
inside the organization.
Keeping Managers Responsible
• Tie managers' pay to their accomplishment of achieving diversity
objectives and fostering inclusiveness and transparency in the workplace.
• Track employee views on inclusivity, justice, opportunity for growth,
work/life balance, and opinions about the company's culture by using
employee attitude or engagement surveys.
3.3 Strengthening Bonds with Outside Parties
• Expand outreach to a wider range of populations.
• Speak with customers in several languages.
• Increase the number of women- and minority-owned companies that the
firm works with as suppliers and vendors.
• Offer grants for education and housing, as well as scholarships, to
people of various groups.
Transition from School to Work
Education and industry professionals agree that a system of training is
required for kids who do not immediately enroll in college after high
school. Programs called "school-to-work transitions" aim to prepare recent
high school graduates for careers by fusing classroom and workplace
experiences. In order to include more job experience into the typical
classroom-based educational experience, several school systems have
modified their curricula. The federal government has assisted in funding
local government initiatives after seeing the necessity for this kind of
program.
Work-to-Welfare
To address labor demands and provide difficult-to-employ individuals a
second opportunity, businesses are looking to recruit individuals from
unusual sources including welfare positions and jails. Additionally, the
Personal Responsibility and Work Opportunity Act, a welfare reform law
approved by Congress in 1996, put more pressure on assistance claimants
to pursue work via alternative channels or through public employment
agencies. Most persons are required by law to obtain employment within
two years of receiving assistance, with a five-year maximum. Additionally,
the legislation provides tax credits to companies for each welfare recipient
they hire. An essential factor in assisting these workers in succeeding at
work is training.
EXPATRIATE USE IN CONTRAST WITH LOCALIZATION
In the past, the majority of multinational corporations used an
ethnocentric hiring strategy. Employing foreign nationals from the home
nation allowed the parent organization to maintain control. These days, a
lot of companies are working to take a more international perspective and
maximize their worldwide human resources. This begs the issue of
whether hiring foreigners is still a morally and financially sound use of
corporate resources, or whether hiring locals for high positions would be a
better course of action.
From this angle, it is necessary to consider the continued usage of
expatriates. It is believed that hiring an expatriate costs three to four
times as much as hiring the same person at home. Organizations are
aware of the expenses associated with these assignments, but they are
unsure of how to quantify the advantages. The financial consequences of
errors made by expatriates are another. However, there are also
opportunity costs associated with not nurturing local management talent,
not elevating employees who are aware of the political and commercial
landscapes, who can function well in the local cultural context, who can
cultivate enduring relationships with local suppliers and customers, and
who can establish a network of local contacts. Choosing between hiring
locals and expatriates must be done as part of a planned IHRM strategy.
Important Concerns Regarding Expatriate Management
A comprehensive approach to the whole expatriate cycle is necessary for
firms to guarantee efficient expatriate management. The planning phase
is when the cycle begins. The following factors have historically led to the
sending of expatriates overseas:
• Management and synchronization of activities
• Knowledge and skill transfer.
• Development of managers
Organizations must establish a stronger connection between overseas
assignments and the strategic operational needs in order to function
strategically. This necessitates carefully evaluating if hiring an expat is the
best option when it comes to global sourcing. It also suggests that the
cost-effectiveness of expatriation must be evaluated.
An example of an issue with inadequate strategic planning for expatriate
assignments is a well-known multinational corporation that decided at the
board level to minimize expenses by employing 25% less costly expats
worldwide. The worldwide HRM manager was required to put the main
board's decision into action. All we could do, he added, was "localize" a
few of the tasks since no company manager was willing to admit to me
that he was managing a losing operation. The corporation realized that
although some local replacements had clearly been effective, others of
the changes had been as blatantly destructive within the two years it took
him to reach his goal. The corporation started to hire more foreign workers
throughout the next years. Naturally, the IHRM manager said, "We
shouldn't have begun with a choice on numbers; instead, we should have
established a means to determine which occupations required foreign
labor and which didn't. Our primary method has often been intuition.
Corporate managers may choose whether a local or an expatriate should
fill an overseas assignment by using the "Expatriate Portfolio" concept
created at Cranfield School of Management. The framework lists four
different assignment types and suggests the best kind of appointment for
each situation depending on how important the assignment is to the
parent organization. Managers may make more logical and practical
sourcing selections by charting their assignment against the Portfolio.
The Portfolio
The selection procedure begins as soon as it is decided strategically to
utilize an expatriate in an overseas assignment. Research on the qualities
of successful multinational managers has repeatedly emphasized the
significance of "soft" talents including emotional stability, self-awareness,
adaptability, and intercultural sensitivity. However, assessments of
international selection practices conducted inside firms reveal that the
majority base eligibility for overseas assignments primarily on technical
ability. Only 8% of foreign companies conduct psychological testing of any
kind in the selection process, according to ORC's 1997 study on
international assignment practice.
The second portion of the cycle is called pre-departure training. A well-
thought-out plan may significantly reduce the effects of culture shock and
facilitate a quicker and more seamless transition for the expatriate and
their family into their new surroundings. Members of Crème have
established a framework that enables foreign HR managers to tailor
training to the specific requirements of the expatriate and the assignment,
maximizing the value for the expatriate and spouse/family members.
Managers may evaluate the kind and level of pre-departure preparation
needed for each person by using the framework's checklist. For example,
in the event that a
manager from a big international company traveling to set up shop in
Vietnam would need to focus on cross-cultural, language, and local
business briefing, with significant assistance from the expatriate
administration department at headquarters in setting up lodging and
practical local living details.
Understanding the factors that affect an expatriate's success or failure in
a foreign assignment is necessary for tracking performance while on an
assignment. Three crucial factors are the work needs, the individual's
personality traits, and the surroundings (such as culture). Businesses must
exercise caution when attempting to strike a balance between the local
needs of its subsidiaries and the goal of having a worldwide uniform
performance assessment system.
Repatriation is the last phase of the expatriate cycle. This continues to be
a major issue for the majority of businesses and people. According to 57%
of the firms surveyed by ORC, the degree of employment at which
expatriates are often repatriated is solely determined by the positions that
are available at the moment. It is expected of expatriates to be
significantly more proactive while they are overseas and to network to
make sure a job is available when they return. The effects of "re entry"
shock may sometimes be much more traumatizing for expatriates than
the original culture shock experienced at the beginning of the job. the
task.
There are two main reasons why organizations should be very cautious
about how they manage repatriation. First of all, there is a substantial
financial and human capital expenditure involved in losing an employee
who is unhappy with their job upon return. Secondly, and maybe more
significantly, expatriate assignments are seen as essential instruments in
the endeavor to instill a multinational perspective inside the company. A
glaring roadblock to the objective of turning the company into a genuinely
global operation is the unwillingness to share with other members of the
business the personal insights obtained from an overseas assignment.
INTERNATIONAL HRM STRATEGY BEYOND EXPATRIATION
Thus, it is evident that managing expatriates continues to be a crucial
aspect of global HRM. Though they only make up a tiny percentage of the
workforce worldwide, expatriates are nevertheless important, thus the IHR
director must collaborate with them to establish an integrated IHR plan
that advances the global company strategy.
The influence of various country cultures on opinions on proper
management techniques and organizational procedures is a crucial
component in this situation. Cross-cultural research has provided evidence
of notable differences in viewpoints across managers from various nations
(see Hofstede 1991 and Trompenaars 1993).
For instance, Andre Laurent (1986) conducted a thorough study of upper
middle managers enrolled in the executive programs offered by INSEAD.
His findings demonstrated remarkably disparate views about power based
on the managers' country origins. According to his research, the majority
of Swedish and American managers disagreed with the statement that "it
is important for a manager to have at hand precise answers to most of the
questions that his subordinates may raise about their work." However, the
majority of French, Italian, and Japanese managers—roughly 78% of them
—agreed. The ramifications are evident when considering viewpoints on
suitable management approaches. Similarly, while choosing HR solutions,
cultural variations must be taken into consideration.
Is it possible to apply an evaluation system like to the one found in the
West globally? What is the cultural perspective on reward?
While determining global HR policy, the IHR professional must consider
the effects of cultural diversity.
RISK DISCLOSURE
EXPOSURE TO RISK
The challenge with having several potential dangers is that it might be
hard to choose which ones to take action on. Risk exposure is a
straightforward computation that assigns a numerical number to a risk,
allowing for the comparison of various hazards.
Each danger's risk exposure is equal to its probability of happening plus its
total loss if it does.
This calculation's drawback is that it will assign equal scores to low-
probability/high loss and high-probability/low loss hazards. A risk matrix
could be a better method of risk assessment if these variations worry you.
Explanation
The measured possibility of loss resulting from a certain action. Risk
exposure analysis for a firm often looks at things like product demand
changes, liability difficulties, and property loss or damage. Risks are
ranked based on likelihood of occurrence multiplied by possible loss.
BUSINESS RISK EXPOSURE (BRE)
Part of a larger Strategic Asset Management initiative, the Business Risk
Exposure (BRE) Tool was created by WERF in collaboration with the Global
Water Research Coalition (GWRC), United Kingdom Water Industry
Research (UKWIR), and the Water Research Foundation. The web-based
tool was created to help asset managers make decisions by doing a
methodical evaluation of the degree of business risk exposure that a
utility has in the event that its water and/or wastewater assets fail.
Exposure to Business Risk
The process of determining (scoring) the kind and extent of exposure that
an organization would face in the event that a particular asset or
collection of related assets fail is known as Business Risk Exposure (BRE).
The assessment of both the likelihood of failure (i.e., the probability that a
predicted failure may actually occur) and the consequence of failure
attributable to an asset in the event of its failure (i.e., the implications or
cost to the community and utility if an asset fails) yields the business risk
exposure.
In mathematical terms, BRE is the product of the likelihood and
consequence of a potential failure, modified for both existing and potential
risk mitigation strategies. The actions taken on an individual basis with an
asset to lessen the chance of failure or the impact of failure are known as
risk mitigation strategies.
Likelihood of Failure: This term refers to the projected likelihood of an
asset failing based on its past performance or known characteristics.
Consequence of Failure: Is there a loss, harm, or disadvantage resulting
from an asset failure from a social, economic, environmental, or regulatory
perspective, and can this consequence be described qualitatively or
quantitatively?
The Consequence of Failure for BRE calculations takes into account the
failure event's direct effects (such the asset's repair cost) as well as its
indirect and intangible effects (like the possible loss of services or
evaluated environmental harm). above provides a list of examples of the
variables to take into account for water and wastewater assets when
calculating Consequence of Failure.
Depending on the level at which the BRE analysis is done, a score is
awarded as either an ordinal number (e.g., 1-10) or an estimated dollar
value for each aspect contributing to the overall consequences of failure.
The total of the score and weighting for all the variables pertinent to the
analysis is the Consequence of Failure score overall. A given factor's
relevance may vary depending on how it affects a certain organization.
Using the Tool, the analyst may create relative weightings for each of the
component criteria to enable this.
The term "core risk" refers to the sum of the Consequence of Failure (CoF)
and the Likelihood of Failure (LoF), multiplied by the present risk
mitigation strategies applied to the asset or system. By altering the
probability of failure and its consequences, mitigation strategies lessen
the impact of the failure occurrence. Treatments for mitigation might
include, for example:
• Extra redundancies
• Reorienting operations and maintenance (O&M) to be more proactive
(e.g., by hiring stand-by garbage trucks, arranging mobile generators
throughout the service area, and keeping essential supplies on site).
• Restoration or substitution
• Handling the effects that follow a failure (building containment berms,
setting up offline reservoirs for waste storage, organizing citizen clean-up
teams, etc.)
• Coverage
• Changing client expectations (e.g., by creating a "hotspot" website for
status updates on issue areas,
The overall BRE score will be affected differently by various
mitigating techniques.
The development and cost-effectiveness analysis of suitable (extra) risk
mitigation techniques may begin as soon as the core risk is provided as a
baseline measurement. For instance, in subterranean water pipelines, the
ability to promptly implement bypass pumping for certain high-risk assets
may help to considerably decrease the Consequence of Failure.
Risk mitigation factor: The BRE Tool calculates the BRE by multiplying the
product of the likelihood and consequence of failure by a risk mitigation
factor. The BRE Tool employs a Risk Mitigation Factor that has a value
between 0% and 100%. Strategies for mitigating risk that were in place at
the time of the analysis should be included in Core Risk. The purpose of
the Risk Mitigation Factor is to help the Asset Manager and/or Asset
Management Team find more measures that may be implemented,
comprehend the relative effects of each strategy on BRE, and evaluate the
relative cost-effectiveness of each.
The user determines the values of the reduction factors for each
mitigation technique. A factor value determined for one asset in one
environment for a given strategy may differ in value for the same type of
asset and strategy in a different operating environment and setting.
Mitigation factor values should be based on sound professional judgment
and should be asset specific in its operating environment.
When used in conjunction with suggested mitigation techniques, the BRE
Tool may be used to identify assets with a high potential for risk exposure
and, in more sophisticated applications, to evaluate the relative risks of an
unintended failure occurrence. Relative risk information helps an asset
manager make better business choices.
The BRE Tool Structure and Steps
The following stages are applied as part of the BRE methodology:
• Recognize probable danger or malfunction instances
• Determine BRE scores.
• Determine which high-risk failure occurrences to prioritize.
• Create management plans for the failure occurrences that are
prioritized.
To create a company risk exposure profile, users of the tool should adhere
to the sequential procedures shown in the flow chart. The user has access
to information pertinent to each phase at any time. The Tool's steps are as
follows:
• Step 1: Provide Project Information
• Step 2: Ascertain the Primary Failure Mode That Is Most Imminent
Step 3A: Determine the Consequences of Failure (CoF) from a Social and
Community Aspect
• Step 3B: Determine the Economic and Financial Consequences of Failure
(CoF)
Step 3C: Determine the Consequences of Failure (CoF) from an
Environmental Point of View
Establish the Likelihood of Failure (LoF) in Step 4.
Step 5: Take into Account Risk Mitigation Techniques
• Step 6: Create a risk map and determine the BRE score
• Step 7: Evaluate and Complete Risk Profile
The BRE Tool's layout makes it possible for users to go through the risk
assessment procedure step-by-step. Keep in mind that the tool is
"progressive," meaning that the best way to determine cell/column values
is to construct the spreadsheet from left to right, column by column, with
the columns that come before providing context for the columns that
follow. Unless significant effort is taken to maintain consistency in grading
throughout the columns, we do not recommend bouncing about the
columns.
It is critical that scoring remain consistent across time and among risk
scoring teams. The best way to do this is by:
• Written grading guidelines (use this tool's content to support
development when appropriate);
• An Asset Management Task team's impartial review of each risk score;
and
• The asset manager's audit evaluation, which is based on periodic
sampling.
ADDITIONAL OUTSIDE VISUAL
All of us use the services that transportation firms provide. For instance,
it's likely that you took the bus into town, rode the school bus, or taken
the train between cities. Some of you may have taken use of the Park &
Ride bus service or traveled on an ultra-green, energy-efficient tram.
The biggest surface transportation firm in the UK is FirstGroup plc,
sometimes referred to as First. Its annual sales exceeds £5 billion. It
transports over 2.5 billion people annually and has over 137,000
employees spread throughout the UK and North America.
• The biggest train operator in the UK, which transports about 275 million
people annually, comes in first. This represents 25% of the whole
passenger network. Regional, intercity, and commuter train passenger
services such as First Great Western, First TransPennine Express, First
Capital Connect, First ScotRail, and Hull/Trains are operated by First.
• First, operating more than one in five local bus routes, is the biggest bus
operator in Britain. Three million people are transported daily by a fleet of
around 9,000 buses in more than 40 major cities and towns, including
Manchester, Leeds, and Glasgow.
• The firm also runs the Croydon Tramlink network, which transports
around 26 million people annually, and First GBRf, a rail freight company.
• First is the biggest student transportation company in North America,
transporting around 4 million students each day.
The pioneer in dependable, secure, creative, and environmentally friendly
transportation services comes in first. First strives to remain local in its
approach even if it is a worldwide company. This indicates that those who
mostly reside and work in that area handle local concerns. This
guarantees a quicker reaction and a better grasp of what must occur.
Outside factors
If the directors and management had to worry about solely internal
business matters, running a firm would be easy. They may focus on
making internal choices about bus operations, schedules, and routes.
Nonetheless, business planners also need to be aware of external events.
By doing a PESTEL study, businesses may find external developments that
might have an impact on them. This tool for business uses the PESTEL
acronym, where each letter denotes a different kind of change occurring
in the external business environment.
Many of these external changes—like new government regulations, for
instance—might not be within the company's control. Certain alterations
might endanger the company, such a rival employing fresh or enhanced
technological innovations.
OVERCOMING DIVERSITY IN THE WORKFORCE
Women and minorities still report several obstacles to feeling appreciated
and progressing in their jobs, even in spite of the efforts of many firms to
promote diversity. According to a Society for Human Resource
Management study, obstacles include workplace culture, exclusion from
unofficial networks, stereotypes and assumptions, and a lack of mentors
and role models. In other words, someone who is seen as "different" is
probably not going to be able to contribute to the objectives of the firm or
flourish personally.
Describe Diversity. Why Does It Matter?
Diversity is any characteristic that makes a person different from another.
Diversity, for instance, at Verizon implies accepting variation and
variances in terms of age, gender, color, sexual orientation, education,
and more. Diversity training aims to: (1) remove attitudes,
preconceptions, and management styles that impede staff members'
personal growth; and (2) enable staff members to contribute to company
objectives irrespective of their ethnicity, age, physical state, sexual
orientation, gender, family status, religion, or cultural background.
Companies are required by the Equal Opportunity Employment Law to
make sure that women and minorities are fairly represented in their
workforce. In other words, businesses prioritize making sure everyone has
access to work. Additionally, there has been a greater focus on how
culture affects training and growth in the workplace. Companies must take
into account a variety of cultural factors, such as the 9/11 terrorist
attacks, employees' reluctance to talk about cultural differences, the rise
in the number of projects involving teams with members from diverse
backgrounds, the recognition that multicultural customers make up a
sizable portion of the labor market, and, particularly in the case of
professional and technical positions, the scarcity of highly skilled workers,
which has led to a demand for workers from abroad. To help them
comprehend aspects of American culture like the fixation with time,
individualistic attitudes, and capitalistic concepts, these recent
immigrants require diversity training.
Managing diversity entails establishing a work environment where all staff
members may contribute to company objectives and develop personally.
Access to work is part of this ecosystem as well as treating each employee
fairly and warmly. It is important for the organization to cultivate workers
who feel at ease interacting with individuals from diverse ethnic, racial,
and religious backgrounds. Changing the corporate culture may be
necessary to manage diversity. It covers the organization's expectations
for employee behavior, including risk-taking, creativity, competition, and
results-orientedness. The corporate culture is the foundation for the
importance put on diversity.
Handling Diversity via Compliance with Law
Using human resource procedures and affirmative action policies that
adhere to equal employment opportunity legal requirements is one
strategy for managing diversity. Employee values, preconceptions, and
habits are seldom altered by this strategy, which might impede output
and personal growth. The corporation hires more women and minorities in
order to allay these worries. Since the employment rates of women and
minorities reflect their availability in the labor market, managers do not
believe that further action is necessary. But when minorities and women
work for the firm longer, they probably become irritated. Coworkers and
managers who are uncomfortable engaging with people of other genders,
races, or ethnicities may refrain from offering coaching or performance
reviews to women and minorities. Colleagues may voice the opinion that
recruiting practices, such as lowering standards, are the sole reasons
minorities and women are hired. Women and minorities may create
support groups in order to express their dissatisfaction to management.
Minorities and women may not be able to fully use their abilities at work
and may even quit the organization as a result of the work environment.
Using Diversity Training Programs to Manage Diversity
The conversation that came before it does not imply that businesses
should be hesitant to implement equal opportunity employment policies
or participate in affirmative action. Affirmative action alone, meanwhile,
does not address the problems of minorities' and women's assimilation
into the workforce. In order to effectively oversee a diverse workforce,
businesses must make sure that
• Workers are aware of how preconceptions and beliefs affect how they
act toward others who are different from them in terms of gender, race,
religion, or ethnicity.
• Workers learn to respect one another's cultural differences.
• Actions that frighten or isolate members of minority groups become
better. Programs for diversity training may help achieve these objectives.
Diversity training is defined as instruction intended to modify the attitudes
of workers toward diversity and/or to assist them in acquiring the
competencies required to collaborate with a varied workforce.
Programs for diversity training vary in their emphasis on changing
behavior or attitudes. According to some study, past experience with
diversity training and the makeup of the training group may have an
impact on behavior and attitude changes. Diversity training programs that
are created or bought off the market without considering the needs,
culture, and history of the organization are likely to fail.
Programs for Attitude Awareness and Change
Programs aimed at raising employee knowledge of physical traits (such as
impairments), cultural and ethnic origins, and personal traits that impact
conduct toward others are the main focus of attitude awareness and
change initiatives. In awareness training, topics such "What is diversity?"
are covered. Me? Who am I? as well as prejudices, presumptions, and
preconceptions about other ethnic groups. These programs are predicated
on the idea that by raising employees' knowledge of stereotypes and
beliefs, they would be better equipped to steer clear of harmful
preconceptions while engaging with coworkers from diverse backgrounds.
The workshops assist staff members in reflecting on the similarities and
differences across cultural groups, assessing their views about affirmative
action, and examining their theories regarding the reasons behind the
success or failure of minority workers in the workplace. To raise employee
understanding of the detrimental emotional and performance
consequences that stereotypes, attitudes, and behaviors have on
members of minority groups, many of these programs incorporate
videotapes and hands-on activities.
Behavior-Based Programs: The goal of behavior-based programs is to
modify individual and organizational habits that impede staff members'
capacity for productivity and personal development.
One strategy used by these programs is to pinpoint instances that inhibit
workers from achieving their full potential. Employee groups are invited to
name certain sponsorships, training programs, chances for promotions, or
performance management procedures that they feel were handled
unjustly. The program can gather opinions from workers on how effectively
management procedures and the workplace respect individual differences
and provide equitable opportunities. It could be possible to create
specialized training courses to address the problems raised in the focus
groups.
Teaching managers and staff the fundamentals of appropriate conduct in
the workplace is an additional strategy. These lectures include how to
behave with coworkers, superiors, and clients. Managers and staff
members have to be taught, for instance, that it is improper to use
language or exhibit actions that have offensive connotations related to
race, sexuality, or culture. Employers that have concentrated on teaching
norms and behavior have discovered that workers respond less adversely
to this kind of training than to other methods of diversity education. The
New York-based store Saks Fifth Avenue offers diversity training to all
11,000 of its staff, with an emphasis on customer care to a varied
clientele. The video-based training program features real staff members
engaging with clients in a variety of settings. According to Saks Fifth
Avenue, each client encounter is estimated to be worth around $250,
therefore mistreating consumers may have a significant financial impact
on the business.
Immersion in another culture is a third method. Sending workers straight
into communities where they must engage with people of various racial,
cultural, and/or national backgrounds is known as cultural immersion. The
level of engagement varies, but it might include engaging in conversation
with neighbors, volunteering in neighborhood groups, or studying
noteworthy religious, cultural, or historical events.
Features of Effective Diversity Efforts
Which kind of program—behavior-based or attitude awareness and change
—is more successful? There's growing evidence that attitude awareness
initiatives don't work and that one-time diversity Programs for training are
unlikely to be successful. A company's overall strategy to manage
diversity and make capitalizing on it a commercial objective includes
effective diversity training programs.
As an example, R. In response to a racial discrimination complaint, R.
Donnelley and Sons discontinued their diversity awareness training
program, despite having spent over $3 million on it. At different R.
Participants in R. Donnelley training sessions were urged to express any
issues. Many said that harassment and abuse were making it impossible
for them to work efficiently. Those worries were refuted by the
management present during the session. Additionally, after the training, a
worker submitted an application for a vacant job but was turned down on
the grounds that she had been too forthright in sharing her worries during
the diversity training. Not much progress was achieved in raising the
hiring and promotion rates of women and minorities, despite the fact that
R. R. Donnelley conducted a lot of diversity training sessions. Many black
workers were requested to attend repeated training sessions to guarantee
diverse groupings, which they found annoying because of the low ratio of
black employees to white employees. The business refused to give
information on the representation of women and minorities in employment
across the board to the Equal Employment Opportunity Commission or to
shareholders. The corporation also disregarded the advice given by
"diversity councils" of employees that were authorized by the business.
In general, analyses of initiatives for diversity training have shown that
• The prevalence of prejudices, presumptions, and preconceptions is the
most typical topic diversity attempts to address.
• Less than one-third of the businesses do any form of follow-up or long-
term review. Reduction in litigation and complaints, diversity in recruiting
and promotions, self-awareness of prejudices, and greater interaction with
HR professionals on diversity-related matters are the most prevalent
measures of success.
• The majority of programs are just one day long.
• According to three-fourths of study participants, the average employee
exits diversity training with a good attitude toward diversity. On the other
hand, more than half believe that the programs have little lasting impact.
• Of those surveyed, 29% say that no resources are offered to support
diversity training, and 22% say that no problems pertaining to progress or
development are addressed.
The traits linked to diversity initiatives' long-term performance are shown
in Table 3.1. It is essential that the diversity program be connected to
organizational goals. Cultural variations, for instance, influence the kind of
skin cream people think they require or could find appealing in terms of
smell. Part of knowing the consumer—which is essential to the success of
businesses like Avon—is knowing cultural differences. By putting in place a
framework to aid the endeavor, top management support may be shown.
For instance, according to the CEO of Pepsi, diversity won't reach its full
potential until workers are eager to discuss challenging topics at work and
are "comfortable being uncomfortable." Consequently, some employee
groups have designated senior management team members as sponsors,
such as African Americans, Latinos, Asians, women, women of color, white
males, persons with disabilities, and those who are transgender, lesbian,
and gay. It is required of the managers to recognize potential, comprehend
the requirements of the people in their group, and provide at least three
workers with mentorship. Additionally, they are supposed to provide the
president progress reports.
The fact that managers get recognition for making progress toward
achieving diversity objectives is another crucial aspect of diversity
initiatives. Four times a year, Allstate Insurance Company polls all fifty
thousand of its workers. Employees are asked to rate how effectively the
business is meeting the needs of both consumers and staff in the survey.
Workers are questioned about the degree to which supervisors' gender or
race prejudices impact customer service, growth opportunities, and
promotions. These questions are utilized as a "diversity index." A
manager's performance on the diversity index determines 25% of their
annual bonus as assessed by their staff.
Take Sodexo's diversity initiative. In the United States, Sodexo is the top
facility and food management company. Each day, 10 million clients are
served by Canada and Mexico. Diversity is considered essential to the
company's ability to reach its goals for corporate success. Therefore,
inclusion and diversity are key to Sodexo's business plan. The company's
efforts to manage diversity include goals that pertain to the community,
shareholders, workers, and business. Developing and fostering a diverse
work environment by developing management practices that drive hiring,
promotion, and retention of talent are just a few of the company's goals.
Other goals include understanding and living the business case for
diversity and inclusion, raising awareness of how diversity relates to
business challenges, using relationship management and customer
service to attract and retain diverse clients and customers, and
collaborating with women's and minority-owned businesses to deliver food
and facility management services.
Diversity education is kept apart from equal employment opportunity
(EEO) and legal compliance training by Sodexo. Employees must complete
affirmative action and EEO refresher training every three years. Involved
with and dedicated to managing diversity is top management. The senior
executives' program consists of continuing education in the classroom
supplemented by community service, employee group sponsorship, and
mentorship of various staff members. Executives are responsible for the
company's diversity strategy and actively involved in understanding the
commercial case for diversity. Spirit of Diversity is an eight-hour
introduction course that every manager must complete. There are more
educational options as well, such as three- to four-hour learning
laboratories covering subjects including gender in the workplace, sexual
orientation in the workplace, generations in the workplace, and cross-
cultural communication. The company's learning and development
division creates tailored learning programs for various departments and
teams. For example, a cross-cultural communications program was made
available for recruiters, and a course on selling to a broad clientele was
created and made available to the sales staff.
Apart from conducting diversity training programs, Sodexo maintains six
employee network groups, including the African American Leadership
Forum and People Respecting Individuality, Diversity, and Equality. These
groups offer a platform for professional growth and idea exchange among
staff members to bolster the organization's diversity initiatives. Employees
who promote diversity and inclusion are recognized and awarded via
Sodexo's "Champions of Diversity" program.
To underscore the significance of diversity for the organization, every
manager at Sodexo is equipped with a diversity scorecard that assesses
their performance in terms of hiring, retaining, promoting, and developing
all staff members. The scorecard evaluates certain actions, such taking
part in community outreach, mentoring, and training, in addition to
providing quantifiable targets. Performance in these categories
determines a share of managers' incentives.
Sodexo has discovered that the business outcomes are positively
impacted by its diversity management initiatives and diversity training.
Women and people of color have been more productive, engaged, and
retained as a result of its mentorship program. An estimated return on
investment has been made of
$19 for each $1 invested in the initiative. Due to its efforts in managing
diversity, Sodexo has also been granted many new commercial contracts
and has retained a number of existing customers.
The most successful diversity management initiatives, like Sodexo's
diversity program, include the essential elements listed in Table 3.2. Some
businesses have implemented diversity programs with some of the same
components as Sodexo's, including Denny's (in reaction to a lawsuit) and
Weyerhaeuser (in response to a retiring workforce and survey findings
that highlighted the need for a more welcoming workplace). This
conversation should have made it clear that successful diversity initiatives
include more than simply a strong training curriculum. They necessitate a
continuous process of cultural transformation that involves the backing of
upper management, diversity policies and practices concerning hiring and
recruitment, training and development, administrative structures,
including the administration of diversity surveys and the assessment of
managers' compliance with diversity objectives, and enhanced
connections with minority vendors, suppliers, and customers.
Flexibility With the increasing diversity of companies, the expense of a
subpar integration effort
will rise. Thus, companies that effectively manage integration will
generate cost benefits over their counterparts.
Businesses gain a reputation for being attractive employers for women
and people of color. The race for the top employees will be won by those
who have the greatest reputations for handling diversity. The advantage
will be more and more crucial as the labor pool becomes smaller and less
diverse.
Multinational corporations can benefit greatly from the cultural sensitivity
and knowledge that people with foreign backgrounds offer to their
marketing campaigns. Marketing targeting subpopulations inside domestic
operations follows the same logic.
Increased creativity should result from a range of viewpoints and a
contemporary approach to managing diversity that places less focus on
conforming to outdated standards.
Decision-making groups with heterogeneity may be able to make better
choices by including a greater variety of viewpoints and doing more in-
depth critical analyses of the problems.
Businesses with a wider range of backgrounds will be better equipped to
adjust to a market that is changing quickly.
• Senior leadership contributes resources, steps in personally, and openly
supports diversity.
• The curriculum is organized.
• One definition of a corporate purpose is to capitalize on a diversified
workforce.
• Making the most of a varied workforce is seen to be essential to making
sales and profits.
Evaluation criteria including sales, retention, and promotion rates are used
to assess the program.
• Manager participation is required.
• The initiative is seen as a cultural shift rather than a one-time project.
• Problems are not assigned to managers or specific demographic groups.
• The abilities and behaviors required to communicate with others
effectively are taught.
• Managers get rewards based on how well they accomplish diversity
objectives.
• The management solicits and acts upon employee input.
• The organization promotes a welcoming and safe work environment
where all staff members feel welcome and may learn to value the unique
qualities and advantages of diversity.
Important elements of successful diversity management programs
Support from Upper Management
• Present the diversity's business case.
• Incorporate diversity into the company objectives and business plan.
• Take part in diversity initiatives and urge management to do the same.
• Assemble an executive management group that reflects the variety of
employees.
Hiring and Recruiting
• Request that search companies find a broader range of applicants.
• Improve managers' hiring, selection, and interviewing abilities.
• Increase the number of students applying to historically minority
universities.
Finding and Nurturing Talent
• Establish a collaboration with INROADS, a national internship initiative
aimed at preparing minority students for jobs in management.
• Create a mentorship program.
• Streamline the global succession planning system of the business to
better identify talent.
Enhance the process of choosing and training managers and other leaders
to assist make sure they can maximize team performance.
• Guarantee that all workers, particularly women and minorities, have
access to leadership and management development initiatives.
Workers' Assistance
• Create resource groups or employee networks with workers who share
interests (such as Asian Pacific workers, women, gay workers, Native
American workers, veterans, and Hispanic workers) and use them to assist
the business in setting objectives and comprehending the problems they
face.
• Honor cultural customs, festivals, and occasions.
• Provide all workers with access to work/life balance programs including
eldercare, telecommuting, and flextime.
Providing Equitable Treatment
• Carry out in-depth diversity education.
• Establish a procedure for alternative dispute resolution.
• Represent minorities and women on all human resource committees
inside the organization.
Keeping Managers Responsible
• Tie managers' pay to their accomplishment of achieving diversity
objectives and fostering inclusiveness and transparency in the workplace.
• Track employee views on inclusivity, justice, opportunity for growth,
work/life balance, and opinions about the company's culture by using
employee attitude or engagement surveys.
3.3 Strengthening Bonds with Outside Parties
• Expand outreach to a wider range of populations.
• Speak with customers in several languages.
• Increase the number of women- and minority-owned companies that the
firm works with as suppliers and vendors.
• Offer grants for education and housing, as well as scholarships, to
people of various groups.
Transition from School to Work
Education and industry professionals agree that a system of training is
required for kids who do not immediately enroll in college after high
school. Programs called "school-to-work transitions" aim to prepare recent
high school graduates for careers by fusing classroom and workplace
experiences. In order to include more job experience into the typical
classroom-based educational experience, several school systems have
modified their curricula. The federal government has assisted in funding
local government initiatives after seeing the necessity for this kind of
program.
Work-to-Welfare
To address labor demands and provide difficult-to-employ individuals a
second opportunity, businesses are looking to recruit individuals from
unusual sources including welfare positions and jails. Additionally, the
Personal Responsibility and Work Opportunity Act, a welfare reform law
approved by Congress in 1996, put more pressure on assistance claimants
to pursue work via alternative channels or through public employment
agencies. Most persons are required by law to obtain employment within
two years of receiving assistance, with a five-year maximum. Additionally,
the legislation provides tax credits to companies for each welfare recipient
they hire. An essential factor in assisting these workers in succeeding at
work is training.
EXPATRIATE USE IN CONTRAST WITH LOCALIZATION
In the past, the majority of multinational corporations used an
ethnocentric hiring strategy. Employing foreign nationals from the home
nation allowed the parent organization to maintain control. These days, a
lot of companies are working to take a more international perspective and
maximize their worldwide human resources. This begs the issue of
whether hiring foreigners is still a morally and financially sound use of
corporate resources, or whether hiring locals for high positions would be a
better course of action.
From this angle, it is necessary to consider the continued usage of
expatriates. It is believed that hiring an expatriate costs three to four
times as much as hiring the same person at home. Organizations are
aware of the expenses associated with these assignments, but they are
unsure of how to quantify the advantages. The financial consequences of
errors made by expatriates are another. However, there are also
opportunity costs associated with not nurturing local management talent,
not elevating employees who are aware of the political and commercial
landscapes, who can function well in the local cultural context, who can
cultivate enduring relationships with local suppliers and customers, and
who can establish a network of local contacts. Choosing between hiring
locals and expatriates must be done as part of a planned IHRM strategy.
Important Concerns Regarding Expatriate Management
A comprehensive approach to the whole expatriate cycle is necessary for
firms to guarantee efficient expatriate management. The planning phase
is when the cycle begins. The following factors have historically led to the
sending of expatriates overseas:
• Management and synchronization of activities
• Knowledge and skill transfer.
• Development of managers
Organizations must establish a stronger connection between overseas
assignments and the strategic operational needs in order to function
strategically. This necessitates carefully evaluating if hiring an expat is the
best option when it comes to global sourcing. It also suggests that the
cost-effectiveness of expatriation must be evaluated.
An example of an issue with inadequate strategic planning for expatriate
assignments is a well-known multinational corporation that decided at the
board level to minimize expenses by employing 25% less costly expats
worldwide. The worldwide HRM manager was required to put the main
board's decision into action. All we could do, he added, was "localize" a
few of the tasks since no company manager was willing to admit to me
that he was managing a losing operation. The corporation realized that
although some local replacements had clearly been effective, others of
the changes had been as blatantly destructive within the two years it took
him to reach his goal. The corporation started to hire more foreign workers
throughout the next years. Naturally, the IHRM manager said, "We
shouldn't have begun with a choice on numbers; instead, we should have
established a means to determine which occupations required foreign
labor and which didn't. Our primary method has often been intuition.
Corporate managers may choose whether a local or an expatriate should
fill an overseas assignment by using the "Expatriate Portfolio" concept
created at Cranfield School of Management. The framework lists four
different assignment types and suggests the best kind of appointment for
each situation depending on how important the assignment is to the
parent organization. Managers may make more logical and practical
sourcing selections by charting their assignment against the Portfolio.
The Portfolio
The selection procedure begins as soon as it is decided strategically to
utilize an expatriate in an overseas assignment. Research on the qualities
of successful multinational managers has repeatedly emphasized the
significance of "soft" talents including emotional stability, self-awareness,
adaptability, and intercultural sensitivity. However, assessments of
international selection practices conducted inside firms reveal that the
majority base eligibility for overseas assignments primarily on technical
ability. Only 8% of foreign companies conduct psychological testing of any
kind in the selection process, according to ORC's 1997 study on
international assignment practice.
The second portion of the cycle is called pre-departure training. A well-
thought-out plan may significantly reduce the effects of culture shock and
facilitate a quicker and more seamless transition for the expatriate and
their family into their new surroundings. Members of Crème have
established a framework that enables foreign HR managers to tailor
training to the specific requirements of the expatriate and the assignment,
maximizing the value for the expatriate and spouse/family members.
Managers may evaluate the kind and level of pre-departure preparation
needed for each person by using the framework's checklist. For example,
in the event that a
manager from a big international company traveling to set up shop in
Vietnam would need to focus on cross-cultural, language, and local
business briefing, with significant assistance from the expatriate
administration department at headquarters in setting up lodging and
practical local living details.
Understanding the factors that affect an expatriate's success or failure in
a foreign assignment is necessary for tracking performance while on an
assignment. Three crucial factors are the work needs, the individual's
personality traits, and the surroundings (such as culture). Businesses must
exercise caution when attempting to strike a balance between the local
needs of its subsidiaries and the goal of having a worldwide uniform
performance assessment system.
Repatriation is the last phase of the expatriate cycle. This continues to be
a major issue for the majority of businesses and people. According to 57%
of the firms surveyed by ORC, the degree of employment at which
expatriates are often repatriated is solely determined by the positions that
are available at the moment. It is expected of expatriates to be
significantly more proactive while they are overseas and to network to
make sure a job is available when they return. The effects of "re entry"
shock may sometimes be much more traumatizing for expatriates than
the original culture shock experienced at the beginning of the job. the
task.
There are two main reasons why organizations should be very cautious
about how they manage repatriation. First of all, there is a substantial
financial and human capital expenditure involved in losing an employee
who is unhappy with their job upon return. Secondly, and maybe more
significantly, expatriate assignments are seen as essential instruments in
the endeavor to instill a multinational perspective inside the company. A
glaring roadblock to the objective of turning the company into a genuinely
global operation is the unwillingness to share with other members of the
business the personal insights obtained from an overseas assignment.
INTERNATIONAL HRM STRATEGY BEYOND EXPATRIATION
Thus, it is evident that managing expatriates continues to be a crucial
aspect of global HRM. Though they only make up a tiny percentage of the
workforce worldwide, expatriates are nevertheless important, thus the IHR
director must collaborate with them to establish an integrated IHR plan
that advances the global company strategy.
The influence of various country cultures on opinions on proper
management techniques and organizational procedures is a crucial
component in this situation. Cross-cultural research has provided evidence
of notable differences in viewpoints across managers from various nations
(see Hofstede 1991 and Trompenaars 1993).
For instance, Andre Laurent (1986) conducted a thorough study of upper
middle managers enrolled in the executive programs offered by INSEAD.
His findings demonstrated remarkably disparate views about power based
on the managers' country origins. According to his research, the majority
of Swedish and American managers disagreed with the statement that "it
is important for a manager to have at hand precise answers to most of the
questions that his subordinates may raise about their work." However, the
majority of French, Italian, and Japanese managers—roughly 78% of them
—agreed. The ramifications are evident when considering viewpoints on
suitable management approaches. Similarly, while choosing HR solutions,
cultural variations must be taken into consideration.
Is it possible to apply an evaluation system like to the one found in the
West globally? What is the cultural perspective on reward?
While determining global HR policy, the IHR professional must consider
the effects of cultural diversity.
RISK DISCLOSURE
EXPOSURE TO RISK
The challenge with having several potential dangers is that it might be
hard to choose which ones to take action on. Risk exposure is a
straightforward computation that assigns a numerical number to a risk,
allowing for the comparison of various hazards.
Each danger's risk exposure is equal to its probability of happening plus its
total loss if it does.
This calculation's drawback is that it will assign equal scores to low-
probability/high loss and high-probability/low loss hazards. A risk matrix
could be a better method of risk assessment if these variations worry you.
Explanation
The measured possibility of loss resulting from a certain action. Risk
exposure analysis for a firm often looks at things like product demand
changes, liability difficulties, and property loss or damage. Risks are
ranked based on likelihood of occurrence multiplied by possible loss.
BUSINESS RISK EXPOSURE (BRE)
Part of a larger Strategic Asset Management initiative, the Business Risk
Exposure (BRE) Tool was created by WERF in collaboration with the Global
Water Research Coalition (GWRC), United Kingdom Water Industry
Research (UKWIR), and the Water Research Foundation. The web-based
tool was created to help asset managers make decisions by doing a
methodical evaluation of the degree of business risk exposure that a
utility has in the event that its water and/or wastewater assets fail.
Exposure to Business Risk
The process of determining (scoring) the kind and extent of exposure that
an organization would face in the event that a particular asset or
collection of related assets fail is known as Business Risk Exposure (BRE).
The assessment of both the likelihood of failure (i.e., the probability that a
predicted failure may actually occur) and the consequence of failure
attributable to an asset in the event of its failure (i.e., the implications or
cost to the community and utility if an asset fails) yields the business risk
exposure.
In mathematical terms, BRE is the product of the likelihood and
consequence of a potential failure, modified for both existing and potential
risk mitigation strategies. The actions taken on an individual basis with an
asset to lessen the chance of failure or the impact of failure are known as
risk mitigation strategies.
Likelihood of Failure: This term refers to the projected likelihood of an
asset failing based on its past performance or known characteristics.
Consequence of Failure: Is there a loss, harm, or disadvantage resulting
from an asset failure from a social, economic, environmental, or regulatory
perspective, and can this consequence be described qualitatively or
quantitatively?
The Consequence of Failure for BRE calculations takes into account the
failure event's direct effects (such the asset's repair cost) as well as its
indirect and intangible effects (like the possible loss of services or
evaluated environmental harm). above provides a list of examples of the
variables to take into account for water and wastewater assets when
calculating Consequence of Failure.
Depending on the level at which the BRE analysis is done, a score is
awarded as either an ordinal number (e.g., 1-10) or an estimated dollar
value for each aspect contributing to the overall consequences of failure.
The total of the score and weighting for all the variables pertinent to the
analysis is the Consequence of Failure score overall. A given factor's
relevance may vary depending on how it affects a certain organization.
Using the Tool, the analyst may create relative weightings for each of the
component criteria to enable this.
The term "core risk" refers to the sum of the Consequence of Failure (CoF)
and the Likelihood of Failure (LoF), multiplied by the present risk
mitigation strategies applied to the asset or system. By altering the
probability of failure and its consequences, mitigation strategies lessen
the impact of the failure occurrence. Treatments for mitigation might
include, for example:
• Extra redundancies
• Reorienting operations and maintenance (O&M) to be more proactive
(e.g., by hiring stand-by garbage trucks, arranging mobile generators
throughout the service area, and keeping essential supplies on site).
• Restoration or substitution
• Handling the effects that follow a failure (building containment berms,
setting up offline reservoirs for waste storage, organizing citizen clean-up
teams, etc.)
• Coverage
• Changing client expectations (e.g., by creating a "hotspot" website for
status updates on issue areas,
The overall BRE score will be affected differently by various
mitigating techniques.
The development and cost-effectiveness analysis of suitable (extra) risk
mitigation techniques may begin as soon as the core risk is provided as a
baseline measurement. For instance, in subterranean water pipelines, the
ability to promptly implement bypass pumping for certain high-risk assets
may help to considerably decrease the Consequence of Failure.
Risk mitigation factor: The BRE Tool calculates the BRE by multiplying the
product of the likelihood and consequence of failure by a risk mitigation
factor. The BRE Tool employs a Risk Mitigation Factor that has a value
between 0% and 100%. Strategies for mitigating risk that were in place at
the time of the analysis should be included in Core Risk. The purpose of
the Risk Mitigation Factor is to help the Asset Manager and/or Asset
Management Team find more measures that may be implemented,
comprehend the relative effects of each strategy on BRE, and evaluate the
relative cost-effectiveness of each.
The user determines the values of the reduction factors for each
mitigation technique. A factor value determined for one asset in one
environment for a given strategy may differ in value for the same type of
asset and strategy in a different operating environment and setting.
Mitigation factor values should be based on sound professional judgment
and should be asset specific in its operating environment.
When used in conjunction with suggested mitigation techniques, the BRE
Tool may be used to identify assets with a high potential for risk exposure
and, in more sophisticated applications, to evaluate the relative risks of an
unintended failure occurrence. Relative risk information helps an asset
manager make better business choices.
The BRE Tool Structure and Steps
The following stages are applied as part of the BRE methodology:
• Recognize probable danger or malfunction instances
• Determine BRE scores.
• Determine which high-risk failure occurrences to prioritize.
• Create management plans for the failure occurrences that are
prioritized.
To create a company risk exposure profile, users of the tool should adhere
to the sequential procedures shown in the flow chart. The user has access
to information pertinent to each phase at any time. The Tool's steps are as
follows:
• Step 1: Provide Project Information
• Step 2: Ascertain the Primary Failure Mode That Is Most Imminent
Step 3A: Determine the Consequences of Failure (CoF) from a Social and
Community Aspect
• Step 3B: Determine the Economic and Financial Consequences of Failure
(CoF)
Step 3C: Determine the Consequences of Failure (CoF) from an
Environmental Point of View
Establish the Likelihood of Failure (LoF) in Step 4.
Step 5: Take into Account Risk Mitigation Techniques
• Step 6: Create a risk map and determine the BRE score
• Step 7: Evaluate and Complete Risk Profile
The BRE Tool's layout makes it possible for users to go through the risk
assessment procedure step-by-step. Keep in mind that the tool is
"progressive," meaning that the best way to determine cell/column values
is to construct the spreadsheet from left to right, column by column, with
the columns that come before providing context for the columns that
follow. Unless significant effort is taken to maintain consistency in grading
throughout the columns, we do not recommend bouncing about the
columns.
It is critical that scoring remain consistent across time and among risk
scoring teams. The best way to do this is by:
• Written grading guidelines (use this tool's content to support
development when appropriate);
• An Asset Management Task team's impartial review of each risk score;
and
• The asset manager's audit evaluation, which is based on periodic
sampling.
ADDITIONAL OUTSIDE VISUAL
All of us use the services that transportation firms provide. For instance,
it's likely that you took the bus into town, rode the school bus, or taken
the train between cities. Some of you may have taken use of the Park &
Ride bus service or traveled on an ultra-green, energy-efficient tram.
The biggest surface transportation firm in the UK is FirstGroup plc,
sometimes referred to as First. Its annual sales exceeds £5 billion. It
transports over 2.5 billion people annually and has over 137,000
employees spread throughout the UK and North America.
• The biggest train operator in the UK, which transports about 275 million
people annually, comes in first. This represents 25% of the whole
passenger network. Regional, intercity, and commuter train passenger
services such as First Great Western, First TransPennine Express, First
Capital Connect, First ScotRail, and Hull/Trains are operated by First.
• First, operating more than one in five local bus routes, is the biggest bus
operator in Britain. Three million people are transported daily by a fleet of
around 9,000 buses in more than 40 major cities and towns, including
Manchester, Leeds, and Glasgow.
• The firm also runs the Croydon Tramlink network, which transports
around 26 million people annually, and First GBRf, a rail freight company.
• First is the biggest student transportation company in North America,
transporting around 4 million students each day.
The pioneer in dependable, secure, creative, and environmentally friendly
transportation services comes in first. First strives to remain local in its
approach even if it is a worldwide company. This indicates that those who
mostly reside and work in that area handle local concerns. This
guarantees a quicker reaction and a better grasp of what must occur.
Outside factors
If the directors and management had to worry about solely internal
business matters, running a firm would be easy. They may focus on
making internal choices about bus operations, schedules, and routes.
Nonetheless, business planners also need to be aware of external events.
By doing a PESTEL study, businesses may find external developments that
might have an impact on them. This tool for business uses the PESTEL
acronym, where each letter denotes a different kind of change occurring
in the external business environment.
Many of these external changes—like new government regulations, for
instance—might not be within the company's control. Certain alterations
might endanger the company, such a rival employing fresh or enhanced
technological innovations.
OVERCOMING DIVERSITY IN THE WORKFORCE
Women and minorities still report several obstacles to feeling appreciated
and progressing in their jobs, even in spite of the efforts of many firms to
promote diversity. According to a Society for Human Resource
Management study, obstacles include workplace culture, exclusion from
unofficial networks, stereotypes and assumptions, and a lack of mentors
and role models. In other words, someone who is seen as "different" is
probably not going to be able to contribute to the objectives of the firm or
flourish personally.
Describe Diversity. Why Does It Matter?
Diversity is any characteristic that makes a person different from another.
Diversity, for instance, at Verizon implies accepting variation and
variances in terms of age, gender, color, sexual orientation, education,
and more. Diversity training aims to: (1) remove attitudes,
preconceptions, and management styles that impede staff members'
personal growth; and (2) enable staff members to contribute to company
objectives irrespective of their ethnicity, age, physical state, sexual
orientation, gender, family status, religion, or cultural background.
Companies are required by the Equal Opportunity Employment Law to
make sure that women and minorities are fairly represented in their
workforce. In other words, businesses prioritize making sure everyone has
access to work. Additionally, there has been a greater focus on how
culture affects training and growth in the workplace. Companies must take
into account a variety of cultural factors, such as the 9/11 terrorist
attacks, employees' reluctance to talk about cultural differences, the rise
in the number of projects involving teams with members from diverse
backgrounds, the recognition that multicultural customers make up a
sizable portion of the labor market, and, particularly in the case of
professional and technical positions, the scarcity of highly skilled workers,
which has led to a demand for workers from abroad. To help them
comprehend aspects of American culture like the fixation with time,
individualistic attitudes, and capitalistic concepts, these recent
immigrants require diversity training.
Managing diversity entails establishing a work environment where all staff
members may contribute to company objectives and develop personally.
Access to work is part of this ecosystem as well as treating each employee
fairly and warmly. It is important for the organization to cultivate workers
who feel at ease interacting with individuals from diverse ethnic, racial,
and religious backgrounds. Changing the corporate culture may be
necessary to manage diversity. It covers the organization's expectations
for employee behavior, including risk-taking, creativity, competition, and
results-orientedness. The corporate culture is the foundation for the
importance put on diversity.
Handling Diversity via Compliance with Law
Using human resource procedures and affirmative action policies that
adhere to equal employment opportunity legal requirements is one
strategy for managing diversity. Employee values, preconceptions, and
habits are seldom altered by this strategy, which might impede output
and personal growth. The corporation hires more women and minorities in
order to allay these worries. Since the employment rates of women and
minorities reflect their availability in the labor market, managers do not
believe that further action is necessary. But when minorities and women
work for the firm longer, they probably become irritated. Coworkers and
managers who are uncomfortable engaging with people of other genders,
races, or ethnicities may refrain from offering coaching or performance
reviews to women and minorities. Colleagues may voice the opinion that
recruiting practices, such as lowering standards, are the sole reasons
minorities and women are hired. Women and minorities may create
support groups in order to express their dissatisfaction to management.
Minorities and women may not be able to fully use their abilities at work
and may even quit the organization as a result of the work environment.
Using Diversity Training Programs to Manage Diversity
The conversation that came before it does not imply that businesses
should be hesitant to implement equal opportunity employment policies
or participate in affirmative action. Affirmative action alone, meanwhile,
does not address the problems of minorities' and women's assimilation
into the workforce. In order to effectively oversee a diverse workforce,
businesses must make sure that
• Workers are aware of how preconceptions and beliefs affect how they
act toward others who are different from them in terms of gender, race,
religion, or ethnicity.
• Workers learn to respect one another's cultural differences.
• Actions that frighten or isolate members of minority groups become
better. Programs for diversity training may help achieve these objectives.
Diversity training is defined as instruction intended to modify the attitudes
of workers toward diversity and/or to assist them in acquiring the
competencies required to collaborate with a varied workforce.
Programs for diversity training vary in their emphasis on changing
behavior or attitudes. According to some study, past experience with
diversity training and the makeup of the training group may have an
impact on behavior and attitude changes. Diversity training programs that
are created or bought off the market without considering the needs,
culture, and history of the organization are likely to fail.
Programs for Attitude Awareness and Change
Programs aimed at raising employee knowledge of physical traits (such as
impairments), cultural and ethnic origins, and personal traits that impact
conduct toward others are the main focus of attitude awareness and
change initiatives. In awareness training, topics such "What is diversity?"
are covered. Me? Who am I? as well as prejudices, presumptions, and
preconceptions about other ethnic groups. These programs are predicated
on the idea that by raising employees' knowledge of stereotypes and
beliefs, they would be better equipped to steer clear of harmful
preconceptions while engaging with coworkers from diverse backgrounds.
The workshops assist staff members in reflecting on the similarities and
differences across cultural groups, assessing their views about affirmative
action, and examining their theories regarding the reasons behind the
success or failure of minority workers in the workplace. To raise employee
understanding of the detrimental emotional and performance
consequences that stereotypes, attitudes, and behaviors have on
members of minority groups, many of these programs incorporate
videotapes and hands-on activities.
Behavior-Based Programs: The goal of behavior-based programs is to
modify individual and organizational habits that impede staff members'
capacity for productivity and personal development.
One strategy used by these programs is to pinpoint instances that inhibit
workers from achieving their full potential. Employee groups are invited to
name certain sponsorships, training programs, chances for promotions, or
performance management procedures that they feel were handled
unjustly. The program can gather opinions from workers on how effectively
management procedures and the workplace respect individual differences
and provide equitable opportunities. It could be possible to create
specialized training courses to address the problems raised in the focus
groups.
Teaching managers and staff the fundamentals of appropriate conduct in
the workplace is an additional strategy. These lectures include how to
behave with coworkers, superiors, and clients. Managers and staff
members have to be taught, for instance, that it is improper to use
language or exhibit actions that have offensive connotations related to
race, sexuality, or culture. Employers that have concentrated on teaching
norms and behavior have discovered that workers respond less adversely
to this kind of training than to other methods of diversity education. The
New York-based store Saks Fifth Avenue offers diversity training to all
11,000 of its staff, with an emphasis on customer care to a varied
clientele. The video-based training program features real staff members
engaging with clients in a variety of settings. According to Saks Fifth
Avenue, each client encounter is estimated to be worth around $250,
therefore mistreating consumers may have a significant financial impact
on the business.
Immersion in another culture is a third method. Sending workers straight
into communities where they must engage with people of various racial,
cultural, and/or national backgrounds is known as cultural immersion. The
level of engagement varies, but it might include engaging in conversation
with neighbors, volunteering in neighborhood groups, or studying
noteworthy religious, cultural, or historical events.
Features of Effective Diversity Efforts
Which kind of program—behavior-based or attitude awareness and change
—is more successful? There's growing evidence that attitude awareness
initiatives don't work and that one-time diversity Programs for training are
unlikely to be successful. A company's overall strategy to manage
diversity and make capitalizing on it a commercial objective includes
effective diversity training programs.
As an example, R. In response to a racial discrimination complaint, R.
Donnelley and Sons discontinued their diversity awareness training
program, despite having spent over $3 million on it. At different R.
Participants in R. Donnelley training sessions were urged to express any
issues. Many said that harassment and abuse were making it impossible
for them to work efficiently. Those worries were refuted by the
management present during the session. Additionally, after the training, a
worker submitted an application for a vacant job but was turned down on
the grounds that she had been too forthright in sharing her worries during
the diversity training. Not much progress was achieved in raising the
hiring and promotion rates of women and minorities, despite the fact that
R. R. Donnelley conducted a lot of diversity training sessions. Many black
workers were requested to attend repeated training sessions to guarantee
diverse groupings, which they found annoying because of the low ratio of
black employees to white employees. The business refused to give
information on the representation of women and minorities in employment
across the board to the Equal Employment Opportunity Commission or to
shareholders. The corporation also disregarded the advice given by
"diversity councils" of employees that were authorized by the business.
In general, analyses of initiatives for diversity training have shown that
• The prevalence of prejudices, presumptions, and preconceptions is the
most typical topic diversity attempts to address.
• Less than one-third of the businesses do any form of follow-up or long-
term review. Reduction in litigation and complaints, diversity in recruiting
and promotions, self-awareness of prejudices, and greater interaction with
HR professionals on diversity-related matters are the most prevalent
measures of success.
• The majority of programs are just one day long.
• According to three-fourths of study participants, the average employee
exits diversity training with a good attitude toward diversity. On the other
hand, more than half believe that the programs have little lasting impact.
• Of those surveyed, 29% say that no resources are offered to support
diversity training, and 22% say that no problems pertaining to progress or
development are addressed.
The traits linked to diversity initiatives' long-term performance are shown
in Table 3.1. It is essential that the diversity program be connected to
organizational goals. Cultural variations, for instance, influence the kind of
skin cream people think they require or could find appealing in terms of
smell. Part of knowing the consumer—which is essential to the success of
businesses like Avon—is knowing cultural differences. By putting in place a
framework to aid the endeavor, top management support may be shown.
For instance, according to the CEO of Pepsi, diversity won't reach its full
potential until workers are eager to discuss challenging topics at work and
are "comfortable being uncomfortable." Consequently, some employee
groups have designated senior management team members as sponsors,
such as African Americans, Latinos, Asians, women, women of color, white
males, persons with disabilities, and those who are transgender, lesbian,
and gay. It is required of the managers to recognize potential, comprehend
the requirements of the people in their group, and provide at least three
workers with mentorship. Additionally, they are supposed to provide the
president progress reports.
The fact that managers get recognition for making progress toward
achieving diversity objectives is another crucial aspect of diversity
initiatives. Four times a year, Allstate Insurance Company polls all fifty
thousand of its workers. Employees are asked to rate how effectively the
business is meeting the needs of both consumers and staff in the survey.
Workers are questioned about the degree to which supervisors' gender or
race prejudices impact customer service, growth opportunities, and
promotions. These questions are utilized as a "diversity index." A
manager's performance on the diversity index determines 25% of their
annual bonus as assessed by their staff.
Take Sodexo's diversity initiative. In the United States, Sodexo is the top
facility and food management company. Each day, 10 million clients are
served by Canada and Mexico. Diversity is considered essential to the
company's ability to reach its goals for corporate success. Therefore,
inclusion and diversity are key to Sodexo's business plan. The company's
efforts to manage diversity include goals that pertain to the community,
shareholders, workers, and business. Developing and fostering a diverse
work environment by developing management practices that drive hiring,
promotion, and retention of talent are just a few of the company's goals.
Other goals include understanding and living the business case for
diversity and inclusion, raising awareness of how diversity relates to
business challenges, using relationship management and customer
service to attract and retain diverse clients and customers, and
collaborating with women's and minority-owned businesses to deliver food
and facility management services.
Diversity education is kept apart from equal employment opportunity
(EEO) and legal compliance training by Sodexo. Employees must complete
affirmative action and EEO refresher training every three years. Involved
with and dedicated to managing diversity is top management. The senior
executives' program consists of continuing education in the classroom
supplemented by community service, employee group sponsorship, and
mentorship of various staff members. Executives are responsible for the
company's diversity strategy and actively involved in understanding the
commercial case for diversity. Spirit of Diversity is an eight-hour
introduction course that every manager must complete. There are more
educational options as well, such as three- to four-hour learning
laboratories covering subjects including gender in the workplace, sexual
orientation in the workplace, generations in the workplace, and cross-
cultural communication. The company's learning and development
division creates tailored learning programs for various departments and
teams. For example, a cross-cultural communications program was made
available for recruiters, and a course on selling to a broad clientele was
created and made available to the sales staff.
Apart from conducting diversity training programs, Sodexo maintains six
employee network groups, including the African American Leadership
Forum and People Respecting Individuality, Diversity, and Equality. These
groups offer a platform for professional growth and idea exchange among
staff members to bolster the organization's diversity initiatives. Employees
who promote diversity and inclusion are recognized and awarded via
Sodexo's "Champions of Diversity" program.
To underscore the significance of diversity for the organization, every
manager at Sodexo is equipped with a diversity scorecard that assesses
their performance in terms of hiring, retaining, promoting, and developing
all staff members. The scorecard evaluates certain actions, such taking
part in community outreach, mentoring, and training, in addition to
providing quantifiable targets. Performance in these categories
determines a share of managers' incentives.
Sodexo has discovered that the business outcomes are positively
impacted by its diversity management initiatives and diversity training.
Women and people of color have been more productive, engaged, and
retained as a result of its mentorship program. An estimated return on
investment has been made of
$19 for each $1 invested in the initiative. Due to its efforts in managing
diversity, Sodexo has also been granted many new commercial contracts
and has retained a number of existing customers.
The most successful diversity management initiatives, like Sodexo's
diversity program, include the essential elements listed in Table 3.2. Some
businesses have implemented diversity programs with some of the same
components as Sodexo's, including Denny's (in reaction to a lawsuit) and
Weyerhaeuser (in response to a retiring workforce and survey findings
that highlighted the need for a more welcoming workplace). This
conversation should have made it clear that successful diversity initiatives
include more than simply a strong training curriculum. They necessitate a
continuous process of cultural transformation that involves the backing of
upper management, diversity policies and practices concerning hiring and
recruitment, training and development, administrative structures,
including the administration of diversity surveys and the assessment of
managers' compliance with diversity objectives, and enhanced
connections with minority vendors, suppliers, and customers.
Flexibility With the increasing diversity of companies, the expense of a
subpar integration effort
will rise. Thus, companies that effectively manage integration will
generate cost benefits over their counterparts.
Businesses gain a reputation for being attractive employers for women
and people of color. The race for the top employees will be won by those
who have the greatest reputations for handling diversity. The advantage
will be more and more crucial as the labor pool becomes smaller and less
diverse.
Multinational corporations can benefit greatly from the cultural sensitivity
and knowledge that people with foreign backgrounds offer to their
marketing campaigns. Marketing targeting subpopulations inside domestic
operations follows the same logic.
Increased creativity should result from a range of viewpoints and a
contemporary approach to managing diversity that places less focus on
conforming to outdated standards.
Decision-making groups with heterogeneity may be able to make better
choices by including a greater variety of viewpoints and doing more in-
depth critical analyses of the problems.
Businesses with a wider range of backgrounds will be better equipped to
adjust to a market that is changing quickly.
• Senior leadership contributes resources, steps in personally, and openly
supports diversity.
• The curriculum is organized.
• One definition of a corporate purpose is to capitalize on a diversified
workforce.
• Making the most of a varied workforce is seen to be essential to making
sales and profits.
Evaluation criteria including sales, retention, and promotion rates are used
to assess the program.
• Manager participation is required.
• The initiative is seen as a cultural shift rather than a one-time project.
• Problems are not assigned to managers or specific demographic groups.
• The abilities and behaviors required to communicate with others
effectively are taught.
• Managers get rewards based on how well they accomplish diversity
objectives.
• The management solicits and acts upon employee input.
• The organization promotes a welcoming and safe work environment
where all staff members feel welcome and may learn to value the unique
qualities and advantages of diversity.
Important elements of successful diversity management programs
Support from Upper Management
• Present the diversity's business case.
• Incorporate diversity into the company objectives and business plan.
• Take part in diversity initiatives and urge management to do the same.
• Assemble an executive management group that reflects the variety of
employees.
Hiring and Recruiting
• Request that search companies find a broader range of applicants.
• Improve managers' hiring, selection, and interviewing abilities.
• Increase the number of students applying to historically minority
universities.
Finding and Nurturing Talent
• Establish a collaboration with INROADS, a national internship initiative
aimed at preparing minority students for jobs in management.
• Create a mentorship program.
• Streamline the global succession planning system of the business to
better identify talent.
Enhance the process of choosing and training managers and other leaders
to assist make sure they can maximize team performance.
• Guarantee that all workers, particularly women and minorities, have
access to leadership and management development initiatives.
Workers' Assistance
• Create resource groups or employee networks with workers who share
interests (such as Asian Pacific workers, women, gay workers, Native
American workers, veterans, and Hispanic workers) and use them to assist
the business in setting objectives and comprehending the problems they
face.
• Honor cultural customs, festivals, and occasions.
• Provide all workers with access to work/life balance programs including
eldercare, telecommuting, and flextime.
Providing Equitable Treatment
• Carry out in-depth diversity education.
• Establish a procedure for alternative dispute resolution.
• Represent minorities and women on all human resource committees
inside the organization.
Keeping Managers Responsible
• Tie managers' pay to their accomplishment of achieving diversity
objectives and fostering inclusiveness and transparency in the workplace.
• Track employee views on inclusivity, justice, opportunity for growth,
work/life balance, and opinions about the company's culture by using
employee attitude or engagement surveys.
3.3 Strengthening Bonds with Outside Parties
• Expand outreach to a wider range of populations.
• Speak with customers in several languages.
• Increase the number of women- and minority-owned companies that the
firm works with as suppliers and vendors.
• Offer grants for education and housing, as well as scholarships, to
people of various groups.
Transition from School to Work
Education and industry professionals agree that a system of training is
required for kids who do not immediately enroll in college after high
school. Programs called "school-to-work transitions" aim to prepare recent
high school graduates for careers by fusing classroom and workplace
experiences. In order to include more job experience into the typical
classroom-based educational experience, several school systems have
modified their curricula. The federal government has assisted in funding
local government initiatives after seeing the necessity for this kind of
program.
Work-to-Welfare
To address labor demands and provide difficult-to-employ individuals a
second opportunity, businesses are looking to recruit individuals from
unusual sources including welfare positions and jails. Additionally, the
Personal Responsibility and Work Opportunity Act, a welfare reform law
approved by Congress in 1996, put more pressure on assistance claimants
to pursue work via alternative channels or through public employment
agencies. Most persons are required by law to obtain employment within
two years of receiving assistance, with a five-year maximum. Additionally,
the legislation provides tax credits to companies for each welfare recipient
they hire. An essential factor in assisting these workers in succeeding at
work is training.
EXPATRIATE USE IN CONTRAST WITH LOCALIZATION
In the past, the majority of multinational corporations used an
ethnocentric hiring strategy. Employing foreign nationals from the home
nation allowed the parent organization to maintain control. These days, a
lot of companies are working to take a more international perspective and
maximize their worldwide human resources. This begs the issue of
whether hiring foreigners is still a morally and financially sound use of
corporate resources, or whether hiring locals for high positions would be a
better course of action.
From this angle, it is necessary to consider the continued usage of
expatriates. It is believed that hiring an expatriate costs three to four
times as much as hiring the same person at home. Organizations are
aware of the expenses associated with these assignments, but they are
unsure of how to quantify the advantages. The financial consequences of
errors made by expatriates are another. However, there are also
opportunity costs associated with not nurturing local management talent,
not elevating employees who are aware of the political and commercial
landscapes, who can function well in the local cultural context, who can
cultivate enduring relationships with local suppliers and customers, and
who can establish a network of local contacts. Choosing between hiring
locals and expatriates must be done as part of a planned IHRM strategy.
Important Concerns Regarding Expatriate Management
A comprehensive approach to the whole expatriate cycle is necessary for
firms to guarantee efficient expatriate management. The planning phase
is when the cycle begins. The following factors have historically led to the
sending of expatriates overseas:
• Management and synchronization of activities
• Knowledge and skill transfer.
• Development of managers
Organizations must establish a stronger connection between overseas
assignments and the strategic operational needs in order to function
strategically. This necessitates carefully evaluating if hiring an expat is the
best option when it comes to global sourcing. It also suggests that the
cost-effectiveness of expatriation must be evaluated.
An example of an issue with inadequate strategic planning for expatriate
assignments is a well-known multinational corporation that decided at the
board level to minimize expenses by employing 25% less costly expats
worldwide. The worldwide HRM manager was required to put the main
board's decision into action. All we could do, he added, was "localize" a
few of the tasks since no company manager was willing to admit to me
that he was managing a losing operation. The corporation realized that
although some local replacements had clearly been effective, others of
the changes had been as blatantly destructive within the two years it took
him to reach his goal. The corporation started to hire more foreign workers
throughout the next years. Naturally, the IHRM manager said, "We
shouldn't have begun with a choice on numbers; instead, we should have
established a means to determine which occupations required foreign
labor and which didn't. Our primary method has often been intuition.
Corporate managers may choose whether a local or an expatriate should
fill an overseas assignment by using the "Expatriate Portfolio" concept
created at Cranfield School of Management. The framework lists four
different assignment types and suggests the best kind of appointment for
each situation depending on how important the assignment is to the
parent organization. Managers may make more logical and practical
sourcing selections by charting their assignment against the Portfolio.
The Portfolio
The selection procedure begins as soon as it is decided strategically to
utilize an expatriate in an overseas assignment. Research on the qualities
of successful multinational managers has repeatedly emphasized the
significance of "soft" talents including emotional stability, self-awareness,
adaptability, and intercultural sensitivity. However, assessments of
international selection practices conducted inside firms reveal that the
majority base eligibility for overseas assignments primarily on technical
ability. Only 8% of foreign companies conduct psychological testing of any
kind in the selection process, according to ORC's 1997 study on
international assignment practice.
The second portion of the cycle is called pre-departure training. A well-
thought-out plan may significantly reduce the effects of culture shock and
facilitate a quicker and more seamless transition for the expatriate and
their family into their new surroundings. Members of Crème have
established a framework that enables foreign HR managers to tailor
training to the specific requirements of the expatriate and the assignment,
maximizing the value for the expatriate and spouse/family members.
Managers may evaluate the kind and level of pre-departure preparation
needed for each person by using the framework's checklist. For example,
in the event that a
manager from a big international company traveling to set up shop in
Vietnam would need to focus on cross-cultural, language, and local
business briefing, with significant assistance from the expatriate
administration department at headquarters in setting up lodging and
practical local living details.
Understanding the factors that affect an expatriate's success or failure in
a foreign assignment is necessary for tracking performance while on an
assignment. Three crucial factors are the work needs, the individual's
personality traits, and the surroundings (such as culture). Businesses must
exercise caution when attempting to strike a balance between the local
needs of its subsidiaries and the goal of having a worldwide uniform
performance assessment system.
Repatriation is the last phase of the expatriate cycle. This continues to be
a major issue for the majority of businesses and people. According to 57%
of the firms surveyed by ORC, the degree of employment at which
expatriates are often repatriated is solely determined by the positions that
are available at the moment. It is expected of expatriates to be
significantly more proactive while they are overseas and to network to
make sure a job is available when they return. The effects of "re entry"
shock may sometimes be much more traumatizing for expatriates than
the original culture shock experienced at the beginning of the job. the
task.
There are two main reasons why organizations should be very cautious
about how they manage repatriation. First of all, there is a substantial
financial and human capital expenditure involved in losing an employee
who is unhappy with their job upon return. Secondly, and maybe more
significantly, expatriate assignments are seen as essential instruments in
the endeavor to instill a multinational perspective inside the company. A
glaring roadblock to the objective of turning the company into a genuinely
global operation is the unwillingness to share with other members of the
business the personal insights obtained from an overseas assignment.
INTERNATIONAL HRM STRATEGY BEYOND EXPATRIATION
Thus, it is evident that managing expatriates continues to be a crucial
aspect of global HRM. Though they only make up a tiny percentage of the
workforce worldwide, expatriates are nevertheless important, thus the IHR
director must collaborate with them to establish an integrated IHR plan
that advances the global company strategy.
The influence of various country cultures on opinions on proper
management techniques and organizational procedures is a crucial
component in this situation. Cross-cultural research has provided evidence
of notable differences in viewpoints across managers from various nations
(see Hofstede 1991 and Trompenaars 1993).
For instance, Andre Laurent (1986) conducted a thorough study of upper
middle managers enrolled in the executive programs offered by INSEAD.
His findings demonstrated remarkably disparate views about power based
on the managers' country origins. According to his research, the majority
of Swedish and American managers disagreed with the statement that "it
is important for a manager to have at hand precise answers to most of the
questions that his subordinates may raise about their work." However, the
majority of French, Italian, and Japanese managers—roughly 78% of them
—agreed. The ramifications are evident when considering viewpoints on
suitable management approaches. Similarly, while choosing HR solutions,
cultural variations must be taken into consideration.
Is it possible to apply an evaluation system like to the one found in the
West globally? What is the cultural perspective on reward?
While determining global HR policy, the IHR professional must consider
the effects of cultural diversity.
RISK DISCLOSURE
EXPOSURE TO RISK
The challenge with having several potential dangers is that it might be
hard to choose which ones to take action on. Risk exposure is a
straightforward computation that assigns a numerical number to a risk,
allowing for the comparison of various hazards.
Each danger's risk exposure is equal to its probability of happening plus its
total loss if it does.
This calculation's drawback is that it will assign equal scores to low-
probability/high loss and high-probability/low loss hazards. A risk matrix
could be a better method of risk assessment if these variations worry you.
Explanation
The measured possibility of loss resulting from a certain action. Risk
exposure analysis for a firm often looks at things like product demand
changes, liability difficulties, and property loss or damage. Risks are
ranked based on likelihood of occurrence multiplied by possible loss.
BUSINESS RISK EXPOSURE (BRE)
Part of a larger Strategic Asset Management initiative, the Business Risk
Exposure (BRE) Tool was created by WERF in collaboration with the Global
Water Research Coalition (GWRC), United Kingdom Water Industry
Research (UKWIR), and the Water Research Foundation. The web-based
tool was created to help asset managers make decisions by doing a
methodical evaluation of the degree of business risk exposure that a
utility has in the event that its water and/or wastewater assets fail.
Exposure to Business Risk
The process of determining (scoring) the kind and extent of exposure that
an organization would face in the event that a particular asset or
collection of related assets fail is known as Business Risk Exposure (BRE).
The assessment of both the likelihood of failure (i.e., the probability that a
predicted failure may actually occur) and the consequence of failure
attributable to an asset in the event of its failure (i.e., the implications or
cost to the community and utility if an asset fails) yields the business risk
exposure.
In mathematical terms, BRE is the product of the likelihood and
consequence of a potential failure, modified for both existing and potential
risk mitigation strategies. The actions taken on an individual basis with an
asset to lessen the chance of failure or the impact of failure are known as
risk mitigation strategies.
Likelihood of Failure: This term refers to the projected likelihood of an
asset failing based on its past performance or known characteristics.
Consequence of Failure: Is there a loss, harm, or disadvantage resulting
from an asset failure from a social, economic, environmental, or regulatory
perspective, and can this consequence be described qualitatively or
quantitatively?
The Consequence of Failure for BRE calculations takes into account the
failure event's direct effects (such the asset's repair cost) as well as its
indirect and intangible effects (like the possible loss of services or
evaluated environmental harm). above provides a list of examples of the
variables to take into account for water and wastewater assets when
calculating Consequence of Failure.
Depending on the level at which the BRE analysis is done, a score is
awarded as either an ordinal number (e.g., 1-10) or an estimated dollar
value for each aspect contributing to the overall consequences of failure.
The total of the score and weighting for all the variables pertinent to the
analysis is the Consequence of Failure score overall. A given factor's
relevance may vary depending on how it affects a certain organization.
Using the Tool, the analyst may create relative weightings for each of the
component criteria to enable this.
The term "core risk" refers to the sum of the Consequence of Failure (CoF)
and the Likelihood of Failure (LoF), multiplied by the present risk
mitigation strategies applied to the asset or system. By altering the
probability of failure and its consequences, mitigation strategies lessen
the impact of the failure occurrence. Treatments for mitigation might
include, for example:
• Extra redundancies
• Reorienting operations and maintenance (O&M) to be more proactive
(e.g., by hiring stand-by garbage trucks, arranging mobile generators
throughout the service area, and keeping essential supplies on site).
• Restoration or substitution
• Handling the effects that follow a failure (building containment berms,
setting up offline reservoirs for waste storage, organizing citizen clean-up
teams, etc.)
• Coverage
• Changing client expectations (e.g., by creating a "hotspot" website for
status updates on issue areas,
The overall BRE score will be affected differently by various
mitigating techniques.
The development and cost-effectiveness analysis of suitable (extra) risk
mitigation techniques may begin as soon as the core risk is provided as a
baseline measurement. For instance, in subterranean water pipelines, the
ability to promptly implement bypass pumping for certain high-risk assets
may help to considerably decrease the Consequence of Failure.
Risk mitigation factor: The BRE Tool calculates the BRE by multiplying the
product of the likelihood and consequence of failure by a risk mitigation
factor. The BRE Tool employs a Risk Mitigation Factor that has a value
between 0% and 100%. Strategies for mitigating risk that were in place at
the time of the analysis should be included in Core Risk. The purpose of
the Risk Mitigation Factor is to help the Asset Manager and/or Asset
Management Team find more measures that may be implemented,
comprehend the relative effects of each strategy on BRE, and evaluate the
relative cost-effectiveness of each.
The user determines the values of the reduction factors for each
mitigation technique. A factor value determined for one asset in one
environment for a given strategy may differ in value for the same type of
asset and strategy in a different operating environment and setting.
Mitigation factor values should be based on sound professional judgment
and should be asset specific in its operating environment.
When used in conjunction with suggested mitigation techniques, the BRE
Tool may be used to identify assets with a high potential for risk exposure
and, in more sophisticated applications, to evaluate the relative risks of an
unintended failure occurrence. Relative risk information helps an asset
manager make better business choices.
The BRE Tool Structure and Steps
The following stages are applied as part of the BRE methodology:
• Recognize probable danger or malfunction instances
• Determine BRE scores.
• Determine which high-risk failure occurrences to prioritize.
• Create management plans for the failure occurrences that are
prioritized.
To create a company risk exposure profile, users of the tool should adhere
to the sequential procedures shown in the flow chart. The user has access
to information pertinent to each phase at any time. The Tool's steps are as
follows:
• Step 1: Provide Project Information
• Step 2: Ascertain the Primary Failure Mode That Is Most Imminent
Step 3A: Determine the Consequences of Failure (CoF) from a Social and
Community Aspect
• Step 3B: Determine the Economic and Financial Consequences of Failure
(CoF)
Step 3C: Determine the Consequences of Failure (CoF) from an
Environmental Point of View
Establish the Likelihood of Failure (LoF) in Step 4.
Step 5: Take into Account Risk Mitigation Techniques
• Step 6: Create a risk map and determine the BRE score
• Step 7: Evaluate and Complete Risk Profile
The BRE Tool's layout makes it possible for users to go through the risk
assessment procedure step-by-step. Keep in mind that the tool is
"progressive," meaning that the best way to determine cell/column values
is to construct the spreadsheet from left to right, column by column, with
the columns that come before providing context for the columns that
follow. Unless significant effort is taken to maintain consistency in grading
throughout the columns, we do not recommend bouncing about the
columns.
It is critical that scoring remain consistent across time and among risk
scoring teams. The best way to do this is by:
• Written grading guidelines (use this tool's content to support
development when appropriate);
• An Asset Management Task team's impartial review of each risk score;
and
• The asset manager's audit evaluation, which is based on periodic
sampling.
ADDITIONAL OUTSIDE VISUAL
All of us use the services that transportation firms provide. For instance,
it's likely that you took the bus into town, rode the school bus, or taken
the train between cities. Some of you may have taken use of the Park &
Ride bus service or traveled on an ultra-green, energy-efficient tram.
The biggest surface transportation firm in the UK is FirstGroup plc,
sometimes referred to as First. Its annual sales exceeds £5 billion. It
transports over 2.5 billion people annually and has over 137,000
employees spread throughout the UK and North America.
• The biggest train operator in the UK, which transports about 275 million
people annually, comes in first. This represents 25% of the whole
passenger network. Regional, intercity, and commuter train passenger
services such as First Great Western, First TransPennine Express, First
Capital Connect, First ScotRail, and Hull/Trains are operated by First.
• First, operating more than one in five local bus routes, is the biggest bus
operator in Britain. Three million people are transported daily by a fleet of
around 9,000 buses in more than 40 major cities and towns, including
Manchester, Leeds, and Glasgow.
• The firm also runs the Croydon Tramlink network, which transports
around 26 million people annually, and First GBRf, a rail freight company.
• First is the biggest student transportation company in North America,
transporting around 4 million students each day.
The pioneer in dependable, secure, creative, and environmentally friendly
transportation services comes in first. First strives to remain local in its
approach even if it is a worldwide company. This indicates that those who
mostly reside and work in that area handle local concerns. This
guarantees a quicker reaction and a better grasp of what must occur.
Outside factors
If the directors and management had to worry about solely internal
business matters, running a firm would be easy. They may focus on
making internal choices about bus operations, schedules, and routes.
Nonetheless, business planners also need to be aware of external events.
By doing a PESTEL study, businesses may find external developments that
might have an impact on them. This tool for business uses the PESTEL
acronym, where each letter denotes a different kind of change occurring
in the external business environment.
Many of these external changes—like new government regulations, for
instance—might not be within the company's control. Certain alterations
might endanger the company, such a rival employing fresh or enhanced
technological innovations.
OVERCOMING DIVERSITY IN THE WORKFORCE
Women and minorities still report several obstacles to feeling appreciated
and progressing in their jobs, even in spite of the efforts of many firms to
promote diversity. According to a Society for Human Resource
Management study, obstacles include workplace culture, exclusion from
unofficial networks, stereotypes and assumptions, and a lack of mentors
and role models. In other words, someone who is seen as "different" is
probably not going to be able to contribute to the objectives of the firm or
flourish personally.
Describe Diversity. Why Does It Matter?
Diversity is any characteristic that makes a person different from another.
Diversity, for instance, at Verizon implies accepting variation and
variances in terms of age, gender, color, sexual orientation, education,
and more. Diversity training aims to: (1) remove attitudes,
preconceptions, and management styles that impede staff members'
personal growth; and (2) enable staff members to contribute to company
objectives irrespective of their ethnicity, age, physical state, sexual
orientation, gender, family status, religion, or cultural background.
Companies are required by the Equal Opportunity Employment Law to
make sure that women and minorities are fairly represented in their
workforce. In other words, businesses prioritize making sure everyone has
access to work. Additionally, there has been a greater focus on how
culture affects training and growth in the workplace. Companies must take
into account a variety of cultural factors, such as the 9/11 terrorist
attacks, employees' reluctance to talk about cultural differences, the rise
in the number of projects involving teams with members from diverse
backgrounds, the recognition that multicultural customers make up a
sizable portion of the labor market, and, particularly in the case of
professional and technical positions, the scarcity of highly skilled workers,
which has led to a demand for workers from abroad. To help them
comprehend aspects of American culture like the fixation with time,
individualistic attitudes, and capitalistic concepts, these recent
immigrants require diversity training.
Managing diversity entails establishing a work environment where all staff
members may contribute to company objectives and develop personally.
Access to work is part of this ecosystem as well as treating each employee
fairly and warmly. It is important for the organization to cultivate workers
who feel at ease interacting with individuals from diverse ethnic, racial,
and religious backgrounds. Changing the corporate culture may be
necessary to manage diversity. It covers the organization's expectations
for employee behavior, including risk-taking, creativity, competition, and
results-orientedness. The corporate culture is the foundation for the
importance put on diversity.
Handling Diversity via Compliance with Law
Using human resource procedures and affirmative action policies that
adhere to equal employment opportunity legal requirements is one
strategy for managing diversity. Employee values, preconceptions, and
habits are seldom altered by this strategy, which might impede output
and personal growth. The corporation hires more women and minorities in
order to allay these worries. Since the employment rates of women and
minorities reflect their availability in the labor market, managers do not
believe that further action is necessary. But when minorities and women
work for the firm longer, they probably become irritated. Coworkers and
managers who are uncomfortable engaging with people of other genders,
races, or ethnicities may refrain from offering coaching or performance
reviews to women and minorities. Colleagues may voice the opinion that
recruiting practices, such as lowering standards, are the sole reasons
minorities and women are hired. Women and minorities may create
support groups in order to express their dissatisfaction to management.
Minorities and women may not be able to fully use their abilities at work
and may even quit the organization as a result of the work environment.
Using Diversity Training Programs to Manage Diversity
The conversation that came before it does not imply that businesses
should be hesitant to implement equal opportunity employment policies
or participate in affirmative action. Affirmative action alone, meanwhile,
does not address the problems of minorities' and women's assimilation
into the workforce. In order to effectively oversee a diverse workforce,
businesses must make sure that
• Workers are aware of how preconceptions and beliefs affect how they
act toward others who are different from them in terms of gender, race,
religion, or ethnicity.
• Workers learn to respect one another's cultural differences.
• Actions that frighten or isolate members of minority groups become
better. Programs for diversity training may help achieve these objectives.
Diversity training is defined as instruction intended to modify the attitudes
of workers toward diversity and/or to assist them in acquiring the
competencies required to collaborate with a varied workforce.
Programs for diversity training vary in their emphasis on changing
behavior or attitudes. According to some study, past experience with
diversity training and the makeup of the training group may have an
impact on behavior and attitude changes. Diversity training programs that
are created or bought off the market without considering the needs,
culture, and history of the organization are likely to fail.
Programs for Attitude Awareness and Change
Programs aimed at raising employee knowledge of physical traits (such as
impairments), cultural and ethnic origins, and personal traits that impact
conduct toward others are the main focus of attitude awareness and
change initiatives. In awareness training, topics such "What is diversity?"
are covered. Me? Who am I? as well as prejudices, presumptions, and
preconceptions about other ethnic groups. These programs are predicated
on the idea that by raising employees' knowledge of stereotypes and
beliefs, they would be better equipped to steer clear of harmful
preconceptions while engaging with coworkers from diverse backgrounds.
The workshops assist staff members in reflecting on the similarities and
differences across cultural groups, assessing their views about affirmative
action, and examining their theories regarding the reasons behind the
success or failure of minority workers in the workplace. To raise employee
understanding of the detrimental emotional and performance
consequences that stereotypes, attitudes, and behaviors have on
members of minority groups, many of these programs incorporate
videotapes and hands-on activities.
Behavior-Based Programs: The goal of behavior-based programs is to
modify individual and organizational habits that impede staff members'
capacity for productivity and personal development.
One strategy used by these programs is to pinpoint instances that inhibit
workers from achieving their full potential. Employee groups are invited to
name certain sponsorships, training programs, chances for promotions, or
performance management procedures that they feel were handled
unjustly. The program can gather opinions from workers on how effectively
management procedures and the workplace respect individual differences
and provide equitable opportunities. It could be possible to create
specialized training courses to address the problems raised in the focus
groups.
Teaching managers and staff the fundamentals of appropriate conduct in
the workplace is an additional strategy. These lectures include how to
behave with coworkers, superiors, and clients. Managers and staff
members have to be taught, for instance, that it is improper to use
language or exhibit actions that have offensive connotations related to
race, sexuality, or culture. Employers that have concentrated on teaching
norms and behavior have discovered that workers respond less adversely
to this kind of training than to other methods of diversity education. The
New York-based store Saks Fifth Avenue offers diversity training to all
11,000 of its staff, with an emphasis on customer care to a varied
clientele. The video-based training program features real staff members
engaging with clients in a variety of settings. According to Saks Fifth
Avenue, each client encounter is estimated to be worth around $250,
therefore mistreating consumers may have a significant financial impact
on the business.
Immersion in another culture is a third method. Sending workers straight
into communities where they must engage with people of various racial,
cultural, and/or national backgrounds is known as cultural immersion. The
level of engagement varies, but it might include engaging in conversation
with neighbors, volunteering in neighborhood groups, or studying
noteworthy religious, cultural, or historical events.
Features of Effective Diversity Efforts
Which kind of program—behavior-based or attitude awareness and change
—is more successful? There's growing evidence that attitude awareness
initiatives don't work and that one-time diversity Programs for training are
unlikely to be successful. A company's overall strategy to manage
diversity and make capitalizing on it a commercial objective includes
effective diversity training programs.
As an example, R. In response to a racial discrimination complaint, R.
Donnelley and Sons discontinued their diversity awareness training
program, despite having spent over $3 million on it. At different R.
Participants in R. Donnelley training sessions were urged to express any
issues. Many said that harassment and abuse were making it impossible
for them to work efficiently. Those worries were refuted by the
management present during the session. Additionally, after the training, a
worker submitted an application for a vacant job but was turned down on
the grounds that she had been too forthright in sharing her worries during
the diversity training. Not much progress was achieved in raising the
hiring and promotion rates of women and minorities, despite the fact that
R. R. Donnelley conducted a lot of diversity training sessions. Many black
workers were requested to attend repeated training sessions to guarantee
diverse groupings, which they found annoying because of the low ratio of
black employees to white employees. The business refused to give
information on the representation of women and minorities in employment
across the board to the Equal Employment Opportunity Commission or to
shareholders. The corporation also disregarded the advice given by
"diversity councils" of employees that were authorized by the business.
In general, analyses of initiatives for diversity training have shown that
• The prevalence of prejudices, presumptions, and preconceptions is the
most typical topic diversity attempts to address.
• Less than one-third of the businesses do any form of follow-up or long-
term review. Reduction in litigation and complaints, diversity in recruiting
and promotions, self-awareness of prejudices, and greater interaction with
HR professionals on diversity-related matters are the most prevalent
measures of success.
• The majority of programs are just one day long.
• According to three-fourths of study participants, the average employee
exits diversity training with a good attitude toward diversity. On the other
hand, more than half believe that the programs have little lasting impact.
• Of those surveyed, 29% say that no resources are offered to support
diversity training, and 22% say that no problems pertaining to progress or
development are addressed.
The traits linked to diversity initiatives' long-term performance are shown
in Table 3.1. It is essential that the diversity program be connected to
organizational goals. Cultural variations, for instance, influence the kind of
skin cream people think they require or could find appealing in terms of
smell. Part of knowing the consumer—which is essential to the success of
businesses like Avon—is knowing cultural differences. By putting in place a
framework to aid the endeavor, top management support may be shown.
For instance, according to the CEO of Pepsi, diversity won't reach its full
potential until workers are eager to discuss challenging topics at work and
are "comfortable being uncomfortable." Consequently, some employee
groups have designated senior management team members as sponsors,
such as African Americans, Latinos, Asians, women, women of color, white
males, persons with disabilities, and those who are transgender, lesbian,
and gay. It is required of the managers to recognize potential, comprehend
the requirements of the people in their group, and provide at least three
workers with mentorship. Additionally, they are supposed to provide the
president progress reports.
The fact that managers get recognition for making progress toward
achieving diversity objectives is another crucial aspect of diversity
initiatives. Four times a year, Allstate Insurance Company polls all fifty
thousand of its workers. Employees are asked to rate how effectively the
business is meeting the needs of both consumers and staff in the survey.
Workers are questioned about the degree to which supervisors' gender or
race prejudices impact customer service, growth opportunities, and
promotions. These questions are utilized as a "diversity index." A
manager's performance on the diversity index determines 25% of their
annual bonus as assessed by their staff.
Take Sodexo's diversity initiative. In the United States, Sodexo is the top
facility and food management company. Each day, 10 million clients are
served by Canada and Mexico. Diversity is considered essential to the
company's ability to reach its goals for corporate success. Therefore,
inclusion and diversity are key to Sodexo's business plan. The company's
efforts to manage diversity include goals that pertain to the community,
shareholders, workers, and business. Developing and fostering a diverse
work environment by developing management practices that drive hiring,
promotion, and retention of talent are just a few of the company's goals.
Other goals include understanding and living the business case for
diversity and inclusion, raising awareness of how diversity relates to
business challenges, using relationship management and customer
service to attract and retain diverse clients and customers, and
collaborating with women's and minority-owned businesses to deliver food
and facility management services.
Diversity education is kept apart from equal employment opportunity
(EEO) and legal compliance training by Sodexo. Employees must complete
affirmative action and EEO refresher training every three years. Involved
with and dedicated to managing diversity is top management. The senior
executives' program consists of continuing education in the classroom
supplemented by community service, employee group sponsorship, and
mentorship of various staff members. Executives are responsible for the
company's diversity strategy and actively involved in understanding the
commercial case for diversity. Spirit of Diversity is an eight-hour
introduction course that every manager must complete. There are more
educational options as well, such as three- to four-hour learning
laboratories covering subjects including gender in the workplace, sexual
orientation in the workplace, generations in the workplace, and cross-
cultural communication. The company's learning and development
division creates tailored learning programs for various departments and
teams. For example, a cross-cultural communications program was made
available for recruiters, and a course on selling to a broad clientele was
created and made available to the sales staff.
Apart from conducting diversity training programs, Sodexo maintains six
employee network groups, including the African American Leadership
Forum and People Respecting Individuality, Diversity, and Equality. These
groups offer a platform for professional growth and idea exchange among
staff members to bolster the organization's diversity initiatives. Employees
who promote diversity and inclusion are recognized and awarded via
Sodexo's "Champions of Diversity" program.
To underscore the significance of diversity for the organization, every
manager at Sodexo is equipped with a diversity scorecard that assesses
their performance in terms of hiring, retaining, promoting, and developing
all staff members. The scorecard evaluates certain actions, such taking
part in community outreach, mentoring, and training, in addition to
providing quantifiable targets. Performance in these categories
determines a share of managers' incentives.
Sodexo has discovered that the business outcomes are positively
impacted by its diversity management initiatives and diversity training.
Women and people of color have been more productive, engaged, and
retained as a result of its mentorship program. An estimated return on
investment has been made of
$19 for each $1 invested in the initiative. Due to its efforts in managing
diversity, Sodexo has also been granted many new commercial contracts
and has retained a number of existing customers.
The most successful diversity management initiatives, like Sodexo's
diversity program, include the essential elements listed in Table 3.2. Some
businesses have implemented diversity programs with some of the same
components as Sodexo's, including Denny's (in reaction to a lawsuit) and
Weyerhaeuser (in response to a retiring workforce and survey findings
that highlighted the need for a more welcoming workplace). This
conversation should have made it clear that successful diversity initiatives
include more than simply a strong training curriculum. They necessitate a
continuous process of cultural transformation that involves the backing of
upper management, diversity policies and practices concerning hiring and
recruitment, training and development, administrative structures,
including the administration of diversity surveys and the assessment of
managers' compliance with diversity objectives, and enhanced
connections with minority vendors, suppliers, and customers.
Flexibility With the increasing diversity of companies, the expense of a
subpar integration effort
will rise. Thus, companies that effectively manage integration will
generate cost benefits over their counterparts.
Businesses gain a reputation for being attractive employers for women
and people of color. The race for the top employees will be won by those
who have the greatest reputations for handling diversity. The advantage
will be more and more crucial as the labor pool becomes smaller and less
diverse.
Multinational corporations can benefit greatly from the cultural sensitivity
and knowledge that people with foreign backgrounds offer to their
marketing campaigns. Marketing targeting subpopulations inside domestic
operations follows the same logic.
Increased creativity should result from a range of viewpoints and a
contemporary approach to managing diversity that places less focus on
conforming to outdated standards.
Decision-making groups with heterogeneity may be able to make better
choices by including a greater variety of viewpoints and doing more in-
depth critical analyses of the problems.
Businesses with a wider range of backgrounds will be better equipped to
adjust to a market that is changing quickly.
• Senior leadership contributes resources, steps in personally, and openly
supports diversity.
• The curriculum is organized.
• One definition of a corporate purpose is to capitalize on a diversified
workforce.
• Making the most of a varied workforce is seen to be essential to making
sales and profits.
Evaluation criteria including sales, retention, and promotion rates are used
to assess the program.
• Manager participation is required.
• The initiative is seen as a cultural shift rather than a one-time project.
• Problems are not assigned to managers or specific demographic groups.
• The abilities and behaviors required to communicate with others
effectively are taught.
• Managers get rewards based on how well they accomplish diversity
objectives.
• The management solicits and acts upon employee input.
• The organization promotes a welcoming and safe work environment
where all staff members feel welcome and may learn to value the unique
qualities and advantages of diversity.
Important elements of successful diversity management programs
Support from Upper Management
• Present the diversity's business case.
• Incorporate diversity into the company objectives and business plan.
• Take part in diversity initiatives and urge management to do the same.
• Assemble an executive management group that reflects the variety of
employees.
Hiring and Recruiting
• Request that search companies find a broader range of applicants.
• Improve managers' hiring, selection, and interviewing abilities.
• Increase the number of students applying to historically minority
universities.
Finding and Nurturing Talent
• Establish a collaboration with INROADS, a national internship initiative
aimed at preparing minority students for jobs in management.
• Create a mentorship program.
• Streamline the global succession planning system of the business to
better identify talent.
Enhance the process of choosing and training managers and other leaders
to assist make sure they can maximize team performance.
• Guarantee that all workers, particularly women and minorities, have
access to leadership and management development initiatives.
Workers' Assistance
• Create resource groups or employee networks with workers who share
interests (such as Asian Pacific workers, women, gay workers, Native
American workers, veterans, and Hispanic workers) and use them to assist
the business in setting objectives and comprehending the problems they
face.
• Honor cultural customs, festivals, and occasions.
• Provide all workers with access to work/life balance programs including
eldercare, telecommuting, and flextime.
Providing Equitable Treatment
• Carry out in-depth diversity education.
• Establish a procedure for alternative dispute resolution.
• Represent minorities and women on all human resource committees
inside the organization.
Keeping Managers Responsible
• Tie managers' pay to their accomplishment of achieving diversity
objectives and fostering inclusiveness and transparency in the workplace.
• Track employee views on inclusivity, justice, opportunity for growth,
work/life balance, and opinions about the company's culture by using
employee attitude or engagement surveys.
3.3 Strengthening Bonds with Outside Parties
• Expand outreach to a wider range of populations.
• Speak with customers in several languages.
• Increase the number of women- and minority-owned companies that the
firm works with as suppliers and vendors.
• Offer grants for education and housing, as well as scholarships, to
people of various groups.
Transition from School to Work
Education and industry professionals agree that a system of training is
required for kids who do not immediately enroll in college after high
school. Programs called "school-to-work transitions" aim to prepare recent
high school graduates for careers by fusing classroom and workplace
experiences. In order to include more job experience into the typical
classroom-based educational experience, several school systems have
modified their curricula. The federal government has assisted in funding
local government initiatives after seeing the necessity for this kind of
program.
Work-to-Welfare
To address labor demands and provide difficult-to-employ individuals a
second opportunity, businesses are looking to recruit individuals from
unusual sources including welfare positions and jails. Additionally, the
Personal Responsibility and Work Opportunity Act, a welfare reform law
approved by Congress in 1996, put more pressure on assistance claimants
to pursue work via alternative channels or through public employment
agencies. Most persons are required by law to obtain employment within
two years of receiving assistance, with a five-year maximum. Additionally,
the legislation provides tax credits to companies for each welfare recipient
they hire. An essential factor in assisting these workers in succeeding at
work is training.
EXPATRIATE USE IN CONTRAST WITH LOCALIZATION
In the past, the majority of multinational corporations used an
ethnocentric hiring strategy. Employing foreign nationals from the home
nation allowed the parent organization to maintain control. These days, a
lot of companies are working to take a more international perspective and
maximize their worldwide human resources. This begs the issue of
whether hiring foreigners is still a morally and financially sound use of
corporate resources, or whether hiring locals for high positions would be a
better course of action.
From this angle, it is necessary to consider the continued usage of
expatriates. It is believed that hiring an expatriate costs three to four
times as much as hiring the same person at home. Organizations are
aware of the expenses associated with these assignments, but they are
unsure of how to quantify the advantages. The financial consequences of
errors made by expatriates are another. However, there are also
opportunity costs associated with not nurturing local management talent,
not elevating employees who are aware of the political and commercial
landscapes, who can function well in the local cultural context, who can
cultivate enduring relationships with local suppliers and customers, and
who can establish a network of local contacts. Choosing between hiring
locals and expatriates must be done as part of a planned IHRM strategy.
Important Concerns Regarding Expatriate Management
A comprehensive approach to the whole expatriate cycle is necessary for
firms to guarantee efficient expatriate management. The planning phase
is when the cycle begins. The following factors have historically led to the
sending of expatriates overseas:
• Management and synchronization of activities
• Knowledge and skill transfer.
• Development of managers
Organizations must establish a stronger connection between overseas
assignments and the strategic operational needs in order to function
strategically. This necessitates carefully evaluating if hiring an expat is the
best option when it comes to global sourcing. It also suggests that the
cost-effectiveness of expatriation must be evaluated.
An example of an issue with inadequate strategic planning for expatriate
assignments is a well-known multinational corporation that decided at the
board level to minimize expenses by employing 25% less costly expats
worldwide. The worldwide HRM manager was required to put the main
board's decision into action. All we could do, he added, was "localize" a
few of the tasks since no company manager was willing to admit to me
that he was managing a losing operation. The corporation realized that
although some local replacements had clearly been effective, others of
the changes had been as blatantly destructive within the two years it took
him to reach his goal. The corporation started to hire more foreign workers
throughout the next years. Naturally, the IHRM manager said, "We
shouldn't have begun with a choice on numbers; instead, we should have
established a means to determine which occupations required foreign
labor and which didn't. Our primary method has often been intuition.
Corporate managers may choose whether a local or an expatriate should
fill an overseas assignment by using the "Expatriate Portfolio" concept
created at Cranfield School of Management. The framework lists four
different assignment types and suggests the best kind of appointment for
each situation depending on how important the assignment is to the
parent organization. Managers may make more logical and practical
sourcing selections by charting their assignment against the Portfolio.
The Portfolio
The selection procedure begins as soon as it is decided strategically to
utilize an expatriate in an overseas assignment. Research on the qualities
of successful multinational managers has repeatedly emphasized the
significance of "soft" talents including emotional stability, self-awareness,
adaptability, and intercultural sensitivity. However, assessments of
international selection practices conducted inside firms reveal that the
majority base eligibility for overseas assignments primarily on technical
ability. Only 8% of foreign companies conduct psychological testing of any
kind in the selection process, according to ORC's 1997 study on
international assignment practice.
The second portion of the cycle is called pre-departure training. A well-
thought-out plan may significantly reduce the effects of culture shock and
facilitate a quicker and more seamless transition for the expatriate and
their family into their new surroundings. Members of Crème have
established a framework that enables foreign HR managers to tailor
training to the specific requirements of the expatriate and the assignment,
maximizing the value for the expatriate and spouse/family members.
Managers may evaluate the kind and level of pre-departure preparation
needed for each person by using the framework's checklist. For example,
in the event that a
manager from a big international company traveling to set up shop in
Vietnam would need to focus on cross-cultural, language, and local
business briefing, with significant assistance from the expatriate
administration department at headquarters in setting up lodging and
practical local living details.
Understanding the factors that affect an expatriate's success or failure in
a foreign assignment is necessary for tracking performance while on an
assignment. Three crucial factors are the work needs, the individual's
personality traits, and the surroundings (such as culture). Businesses must
exercise caution when attempting to strike a balance between the local
needs of its subsidiaries and the goal of having a worldwide uniform
performance assessment system.
Repatriation is the last phase of the expatriate cycle. This continues to be
a major issue for the majority of businesses and people. According to 57%
of the firms surveyed by ORC, the degree of employment at which
expatriates are often repatriated is solely determined by the positions that
are available at the moment. It is expected of expatriates to be
significantly more proactive while they are overseas and to network to
make sure a job is available when they return. The effects of "re entry"
shock may sometimes be much more traumatizing for expatriates than
the original culture shock experienced at the beginning of the job. the
task.
There are two main reasons why organizations should be very cautious
about how they manage repatriation. First of all, there is a substantial
financial and human capital expenditure involved in losing an employee
who is unhappy with their job upon return. Secondly, and maybe more
significantly, expatriate assignments are seen as essential instruments in
the endeavor to instill a multinational perspective inside the company. A
glaring roadblock to the objective of turning the company into a genuinely
global operation is the unwillingness to share with other members of the
business the personal insights obtained from an overseas assignment.
INTERNATIONAL HRM STRATEGY BEYOND EXPATRIATION
Thus, it is evident that managing expatriates continues to be a crucial
aspect of global HRM. Though they only make up a tiny percentage of the
workforce worldwide, expatriates are nevertheless important, thus the IHR
director must collaborate with them to establish an integrated IHR plan
that advances the global company strategy.
The influence of various country cultures on opinions on proper
management techniques and organizational procedures is a crucial
component in this situation. Cross-cultural research has provided evidence
of notable differences in viewpoints across managers from various nations
(see Hofstede 1991 and Trompenaars 1993).
For instance, Andre Laurent (1986) conducted a thorough study of upper
middle managers enrolled in the executive programs offered by INSEAD.
His findings demonstrated remarkably disparate views about power based
on the managers' country origins. According to his research, the majority
of Swedish and American managers disagreed with the statement that "it
is important for a manager to have at hand precise answers to most of the
questions that his subordinates may raise about their work." However, the
majority of French, Italian, and Japanese managers—roughly 78% of them
—agreed. The ramifications are evident when considering viewpoints on
suitable management approaches. Similarly, while choosing HR solutions,
cultural variations must be taken into consideration.
Is it possible to apply an evaluation system like to the one found in the
West globally? What is the cultural perspective on reward?
While determining global HR policy, the IHR professional must consider
the effects of cultural diversity.
RISK DISCLOSURE
EXPOSURE TO RISK
The challenge with having several potential dangers is that it might be
hard to choose which ones to take action on. Risk exposure is a
straightforward computation that assigns a numerical number to a risk,
allowing for the comparison of various hazards.
Each danger's risk exposure is equal to its probability of happening plus its
total loss if it does.
This calculation's drawback is that it will assign equal scores to low-
probability/high loss and high-probability/low loss hazards. A risk matrix
could be a better method of risk assessment if these variations worry you.
Explanation
The measured possibility of loss resulting from a certain action. Risk
exposure analysis for a firm often looks at things like product demand
changes, liability difficulties, and property loss or damage. Risks are
ranked based on likelihood of occurrence multiplied by possible loss.
BUSINESS RISK EXPOSURE (BRE)
Part of a larger Strategic Asset Management initiative, the Business Risk
Exposure (BRE) Tool was created by WERF in collaboration with the Global
Water Research Coalition (GWRC), United Kingdom Water Industry
Research (UKWIR), and the Water Research Foundation. The web-based
tool was created to help asset managers make decisions by doing a
methodical evaluation of the degree of business risk exposure that a
utility has in the event that its water and/or wastewater assets fail.
Exposure to Business Risk
The process of determining (scoring) the kind and extent of exposure that
an organization would face in the event that a particular asset or
collection of related assets fail is known as Business Risk Exposure (BRE).
The assessment of both the likelihood of failure (i.e., the probability that a
predicted failure may actually occur) and the consequence of failure
attributable to an asset in the event of its failure (i.e., the implications or
cost to the community and utility if an asset fails) yields the business risk
exposure.
In mathematical terms, BRE is the product of the likelihood and
consequence of a potential failure, modified for both existing and potential
risk mitigation strategies. The actions taken on an individual basis with an
asset to lessen the chance of failure or the impact of failure are known as
risk mitigation strategies.
Likelihood of Failure: This term refers to the projected likelihood of an
asset failing based on its past performance or known characteristics.
Consequence of Failure: Is there a loss, harm, or disadvantage resulting
from an asset failure from a social, economic, environmental, or regulatory
perspective, and can this consequence be described qualitatively or
quantitatively?
The Consequence of Failure for BRE calculations takes into account the
failure event's direct effects (such the asset's repair cost) as well as its
indirect and intangible effects (like the possible loss of services or
evaluated environmental harm). above provides a list of examples of the
variables to take into account for water and wastewater assets when
calculating Consequence of Failure.
Depending on the level at which the BRE analysis is done, a score is
awarded as either an ordinal number (e.g., 1-10) or an estimated dollar
value for each aspect contributing to the overall consequences of failure.
The total of the score and weighting for all the variables pertinent to the
analysis is the Consequence of Failure score overall. A given factor's
relevance may vary depending on how it affects a certain organization.
Using the Tool, the analyst may create relative weightings for each of the
component criteria to enable this.
The term "core risk" refers to the sum of the Consequence of Failure (CoF)
and the Likelihood of Failure (LoF), multiplied by the present risk
mitigation strategies applied to the asset or system. By altering the
probability of failure and its consequences, mitigation strategies lessen
the impact of the failure occurrence. Treatments for mitigation might
include, for example:
• Extra redundancies
• Reorienting operations and maintenance (O&M) to be more proactive
(e.g., by hiring stand-by garbage trucks, arranging mobile generators
throughout the service area, and keeping essential supplies on site).
• Restoration or substitution
• Handling the effects that follow a failure (building containment berms,
setting up offline reservoirs for waste storage, organizing citizen clean-up
teams, etc.)
• Coverage
• Changing client expectations (e.g., by creating a "hotspot" website for
status updates on issue areas,
The overall BRE score will be affected differently by various
mitigating techniques.
The development and cost-effectiveness analysis of suitable (extra) risk
mitigation techniques may begin as soon as the core risk is provided as a
baseline measurement. For instance, in subterranean water pipelines, the
ability to promptly implement bypass pumping for certain high-risk assets
may help to considerably decrease the Consequence of Failure.
Risk mitigation factor: The BRE Tool calculates the BRE by multiplying the
product of the likelihood and consequence of failure by a risk mitigation
factor. The BRE Tool employs a Risk Mitigation Factor that has a value
between 0% and 100%. Strategies for mitigating risk that were in place at
the time of the analysis should be included in Core Risk. The purpose of
the Risk Mitigation Factor is to help the Asset Manager and/or Asset
Management Team find more measures that may be implemented,
comprehend the relative effects of each strategy on BRE, and evaluate the
relative cost-effectiveness of each.
The user determines the values of the reduction factors for each
mitigation technique. A factor value determined for one asset in one
environment for a given strategy may differ in value for the same type of
asset and strategy in a different operating environment and setting.
Mitigation factor values should be based on sound professional judgment
and should be asset specific in its operating environment.
When used in conjunction with suggested mitigation techniques, the BRE
Tool may be used to identify assets with a high potential for risk exposure
and, in more sophisticated applications, to evaluate the relative risks of an
unintended failure occurrence. Relative risk information helps an asset
manager make better business choices.
The BRE Tool Structure and Steps
The following stages are applied as part of the BRE methodology:
• Recognize probable danger or malfunction instances
• Determine BRE scores.
• Determine which high-risk failure occurrences to prioritize.
• Create management plans for the failure occurrences that are
prioritized.
To create a company risk exposure profile, users of the tool should adhere
to the sequential procedures shown in the flow chart. The user has access
to information pertinent to each phase at any time. The Tool's steps are as
follows:
• Step 1: Provide Project Information
• Step 2: Ascertain the Primary Failure Mode That Is Most Imminent
Step 3A: Determine the Consequences of Failure (CoF) from a Social and
Community Aspect
• Step 3B: Determine the Economic and Financial Consequences of Failure
(CoF)
Step 3C: Determine the Consequences of Failure (CoF) from an
Environmental Point of View
Establish the Likelihood of Failure (LoF) in Step 4.
Step 5: Take into Account Risk Mitigation Techniques
• Step 6: Create a risk map and determine the BRE score
• Step 7: Evaluate and Complete Risk Profile
The BRE Tool's layout makes it possible for users to go through the risk
assessment procedure step-by-step. Keep in mind that the tool is
"progressive," meaning that the best way to determine cell/column values
is to construct the spreadsheet from left to right, column by column, with
the columns that come before providing context for the columns that
follow. Unless significant effort is taken to maintain consistency in grading
throughout the columns, we do not recommend bouncing about the
columns.
It is critical that scoring remain consistent across time and among risk
scoring teams. The best way to do this is by:
• Written grading guidelines (use this tool's content to support
development when appropriate);
• An Asset Management Task team's impartial review of each risk score;
and
• The asset manager's audit evaluation, which is based on periodic
sampling.
ADDITIONAL OUTSIDE VISUAL
All of us use the services that transportation firms provide. For instance,
it's likely that you took the bus into town, rode the school bus, or taken
the train between cities. Some of you may have taken use of the Park &
Ride bus service or traveled on an ultra-green, energy-efficient tram.
The biggest surface transportation firm in the UK is FirstGroup plc,
sometimes referred to as First. Its annual sales exceeds £5 billion. It
transports over 2.5 billion people annually and has over 137,000
employees spread throughout the UK and North America.
• The biggest train operator in the UK, which transports about 275 million
people annually, comes in first. This represents 25% of the whole
passenger network. Regional, intercity, and commuter train passenger
services such as First Great Western, First TransPennine Express, First
Capital Connect, First ScotRail, and Hull/Trains are operated by First.
• First, operating more than one in five local bus routes, is the biggest bus
operator in Britain. Three million people are transported daily by a fleet of
around 9,000 buses in more than 40 major cities and towns, including
Manchester, Leeds, and Glasgow.
• The firm also runs the Croydon Tramlink network, which transports
around 26 million people annually, and First GBRf, a rail freight company.
• First is the biggest student transportation company in North America,
transporting around 4 million students each day.
The pioneer in dependable, secure, creative, and environmentally friendly
transportation services comes in first. First strives to remain local in its
approach even if it is a worldwide company. This indicates that those who
mostly reside and work in that area handle local concerns. This
guarantees a quicker reaction and a better grasp of what must occur.
Outside factors
If the directors and management had to worry about solely internal
business matters, running a firm would be easy. They may focus on
making internal choices about bus operations, schedules, and routes.
Nonetheless, business planners also need to be aware of external events.
By doing a PESTEL study, businesses may find external developments that
might have an impact on them. This tool for business uses the PESTEL
acronym, where each letter denotes a different kind of change occurring
in the external business environment.
Many of these external changes—like new government regulations, for
instance—might not be within the company's control. Certain alterations
might endanger the company, such a rival employing fresh or enhanced
technological innovations.
