Diversity in Human Resource. The Influence of the general Performance of Companies

A short Analysis

Academic Paper, 2018

7 Pages, Grade: 1,3



1. LGBT policies and its impact in Organizations

2. Religion and its impact in Organizations

3. List of References

Index of Abbreviations

LGBT Lesbian, gay, bisexual, transgender

CF. Compare

1. LGBT policies and its impact in Organizations

The first of October 2017 - a day which will be remembered especially within the LGBT-community of Germany, it’s actually more than that, a sign crossing our borders. Full marital and adoption rights for same-sex couples have been legalised by passing the parliament. The workforce of todays globalized world is highly diverse, not only in terms of sexual orientation, but additionally in race, religion, gender identity and much more. But what does LGBT mean for organizations regarding diversity and its positive impact on their performance?

In July 2017, the European Commission published a communication paper explaining their policies containing a diversity-supportive approach within the organization. Regarding LGBT-staff, the EU stated: “(...) inclusion can mean putting measures in place to help all employees feel comfortable and confident to be open about their LGBTI identity and fully participate in the social dimension of the workplace”. Moreover, the commission commits to “Implement a human resources policy where diversity is regarded as a source of enrichment, innovation and creativity and where inclusion is promoted by all managers and all staff (...)”. The first part of the reference shows the overall problems the LGBT-community has to deal with and how the European Commission seeks to solve this problem by providing a frame of information including communication and environment policies. The second part clarifies that the European Commission judges diversity as a crucial benefit within the organization.1

In 2016, a study examined whether LGBT-supportive policies are able to improve a company’s overall performance. Research has yield a positive connection between policies implementing a support for diversity such as LGBT-policies and an enhanced company performance. There is growing evidence stating that organizational policies that support LGBT workers may have a competitive advantage. As more firms adopt such LGBT-friendly policies, a company’s decision not to do so might result in a negative signal for stakeholders such as customers or applicants. Empirical research has shown significant links between LGBT-friendly policies and the following performance benefits in:

- Better results in employee recruitment
- A lower employee turnover
- More comfortable environment of work

A less stressful work environment should allow its workforce to be open minded regarding their sexual orientation.2

Scholars of a study published in 2010 confirm that a combination of inclusive highperformance work systems as well as diversity and equality management systems can create benefits to both employees and employers. Factors such as productivity, innovation and turnover were included as dependent variables. The implementation of such diversity-supportive frameworks can lead to financial benefits at the firm level. Companies which provide a proper policy structure and suitable environment such as e.g. diversity champion within the organization, offering trainings and incorporate a diversity-friendly approach in its culture have a better chance to gain positive outcomes.3

Indeed, it is not a new field of research, already in the late twentieth and early twenty first centuries, scholars began to examine the economic impact of LGBT-friendly dealing of organizations. Richard Florida, an American economist stated that local economic growth can benefit from creative employers who rather seek for a diverse, tolerant and open-minded work environment. If organizations do not provide such a desirable working environment, creative people will apply in different places, where they can experience a high degree of tolerance, respect and a community which is open to new ideas. Arranging an all-inclusive approach with the three T’s of economic development (Technology, Talent and Tolerance) can play a crucial role in engaging new creative people, who can improve compelling business factors such as e.g. innovation.4

The following graphic outlines the relationship between the number of studies and their results of LGBT-friendly policies and work environment considering business outcome as the crucial result.

Abbildung in dieser Leseprobe nicht enthalten

Figure 1: Number of studies showing relationship between LGBT-supportive policies or workplace climates and business outcomes

The most positively influenced factor is job commitment. LGBT-friendly policies create a greater commitment of employers towards the organization they are working for. The so-called Gallup Engagement Index, conducted by researchers in Germany, have achieved one of the biggest studies dealing with workplace quality. Within the study, three different groups were identified: employees with no commitment, low commitment, and employees with a very strong emotional commitment. Employees with a very strong emotional bond had one thing in common: a large part of their most important needs were fulfilled. This part of the staff felt that an internal drive was very good, which had a positive effect on the company's performance.5 Hence, the essence of creating a strong commitment is decisive considering a company’s competitiveness.

Additionally, the graphic shows significant positive outcomes regarding job satisfaction and an improved health rate, which can lead to a lowered absence quota.

To close this part of LGBT-friendly policies and its impact on organizations, it is to be concluded that companies are being able to gain crucial benefits if they provide an inclusive, fair and open-minded working environment.

2. Religion and its impact in Organizations

Religion - one of the oldest sources of ethical behaviour and social structure, still providing a major social framework in many countries. But does religion really enhance a good climate, or does it rather create conflicts? In several countries some industry branches are directly driven by religious values, think of e.g. Islamic banking. The impact on organizations probably highly depends on the degree of religion influence within the society. Diversity does not only include LGBT-friendly policies, but also tolerance and respect considering different beliefs. A crucial question in this context is to what extent should organizations provide freedom related to religion and when does discrimination start?

Despite Adam Smith already examined the influence of religion on economic issues and a broad discussion regarding religious beliefs and its impact on ethical behaviour in society is taking place, there is only little awareness and discussion about the impact on economic affairs, both in society and research. In Smith’s work, the so-called famous invisible hand, is responsible (among other factors) for the unconscious promotion of commonweal. The invisible hand is influenced by religious beliefs and values.6

Some researchers assume that religion, in case the considered organization has blurred the line between religion and business, can have a positive influence on business considering its moral authority. If there is a strong exertion of religious moral authority, it leads to higher a commitment of affected employees, resulting in possible internal whistle-blowers and internal advocate.7 Organizations can be more successful in terms of commitment and organizational structure, if the working relationship is “(...) positively dealing with working spirit and mental strengths as well as dedication accompanied by religious value that has been a set as a belief system. The pattern of spiritual working ethos is an effort to shape the human resource above their foundation of emotional and rational consciousness based on the religious value, belief, faith, peace and calmness of what is believed. It also to shape morale standard for selfcontrol which support employees’ individual working ethos to be honest, responsible and can be trusted for the sake of god”8

Considering the well-being of employees, the recognition of any religious confession is a crucial step to improve. Because of someone’s own belief, it might sometimes be difficult to understand someone else’s belief. By providing a certain degree of freedom, it is possible to make intercultural teams work in a sufficient and peaceful way. Examples regarding integration could be the establishment of prayer rooms or implementing an interfaith calendar, respecting religions which are represented within the organizations. Additionally, efforts such as trainings of employees could lead to a better understanding of different religions.9

To conclude the issue, we can state that factors such as religion and LGBT have to be included considering a successful diversity approach, therewith gaining a better performance. A suitable working environment where employees feel free and safe are crucial to gain benefits such as innovation and work commitment. With the background of a high immigration phase since 2015 in Germany, with people coming from different backgrounds with different beliefs, it will be important for German companies to implement diversity-supportive approaches, especially with the lack of skilled labour existing in the country. As we have seen, a diversity-friendly approach can lead to a competitive advantage in terms of employee recruitment.


1 Cf. European Commission, 2017, Online

2 Cf. Pichler et al., 2016, P. 5 ff.

3 Cf. Armstrong, 2010, P. 986 ff.

4 Cf. Box, 2015, P. 1001 ff.

5 Cf. Nink, 2014, P. 27 ff.

6 Cf. Althammer et al., 2016, P. 372 ff.

7 Cf. Pfeifer, 2015, P. 366 ff.

8 Cf. Harinoto, 2016, P. 75

9 Cf. Winter, 2010, P. 20 ff.

Excerpt out of 7 pages


Diversity in Human Resource. The Influence of the general Performance of Companies
A short Analysis
International University of Applied Sciences Bad Honnef - Bonn
Catalog Number
ISBN (eBook)
Diversity, Performance, Human Resource Management, HR, Culture
Quote paper
Manuel Jacoby (Author), 2018, Diversity in Human Resource. The Influence of the general Performance of Companies, Munich, GRIN Verlag, https://www.grin.com/document/985640


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