The cultural diversity of U.S. organizations is increasing rapidly. In spite of this, relatively little attention has been paid to the impact that the increase in diversity may have on (a) the acceptance of human resource management processes and practices (e.g., recruitment, selection, training, performance appraisal, and compensation and benefits) by individuals and (b) the effectiveness of such processes and practices. Thus, we consider the moderating effects of both individual culture and organizational culture on relations between (a) human resource management processes and practices and (b) the acceptance and effectiveness of such processes and practices. In addition, we offer recommendations for both research and practice.
Organizations in the U.S. are becoming more culturally diverse. One reason for this is that they are increasingly operating in a global environment. Another reason is that there is a growing level of domestic diversity in the U.S. For example, recent census data reveal that there are now over 84 million members of the four primary minority groups, i.e., African–Americans, Hispanic–Americans, Asian–Americans, and Native-Americans (U.S. Bureau of Census, 2000). In addition, the growth rates of the these groups are expected to rise in the twenty-first century due rising immigration rates from non-European countries (e.g., Latin America, Asia), and higher birth rates among ethnic minority group members (U.S. Bureau of Census, 2000). Thus, it is expected that by the year 2030, over 50% of the U.S. population will consist of ethnic minorities (U.S. Bureau of Census, 2000). Given the increasing levels of globalization and domestic diversity, many organizations now employ large numbers of individuals with multicultural backgrounds. For example, minority group members make up 49.9% of the workforce at Advantica, 58% at Levi Strauss, 55.6% at Dole Foods, 54% at Union Bank of California, 48% at Avis Rent-a Car, and 90% at some Walt Disney World Resorts (Fortune, 2007).
In view of the changing nature of workforce in organizations, researchers have argued that multiculturalism offers substantial benefits in terms of increased creativity, improved decision-making, and broader markets for products and services (Adler, 1983 and Cox, 1993). However, the rise in cultural diversity also poses challenges for organizations, and has prompted many of them to develop new strategies for managing a diverse workforce. For example, some companies (e.g., CNL Bank, Darden Corporation, Walt Disney World) have developed strategic initiatives designed to attract and retain employees from multicultural backgrounds in order to meet the needs of their diverse customer base. Thus, we believe that it is vital that we develop a better understanding of the issues that arise in organizations that employ workers from various cultures.
A major premise of this article is that the culture of prospects, applicants, and incumbents influences the acceptance and effectiveness of HRM processes and practices. Stated somewhat differently, we posit that culture moderates the relation between (a) HRM processes and practices and (b) the acceptance and effectiveness of such processes and practices (see Fig. 1). Although numerous dimensions of culture might operate to moderate the same relation, our focus is on values. There is a very important reason for this. More specifically, socialization practices lead individuals in various cultures and subcultures to have different levels of values (e.g., individualism, collectivism, power distance, and familism).
The theoretical and empirical literature considered above are highly consistent with the article's major premise. For example, the results of numerous empirical studies offer direct and indirect support for the just-described moderating effect. However, as noted above, in many cases there are only a handful of studies dealing with any given relation (e.g., the moderating effect of values on the relation between the characteristics of compensation systems and workers' responses). Regrettably, in many of the studies, the values of prospects, applicants, and employees were measured indirectly (e.g., by ethnic group membership). In addition, most of the studies considered only a few culture-based groups. Thus, there is a clear need for additional research on the moderating effects of culture on the relation between (a) HRM processes and practices and (b) the acceptance and effectiveness of such processes and practices.
In spite of the paucity of research on the same relation, it seems clear that the HRM processes and practices of many U.S. organizations must change so as to be more sensitive to the ever increasing cultural diversity of prospects, applicants, and incumbents. Unless organizations devote more attention to this issue, there may be dysfunctional consequences vis-á-vis the acceptance and effectiveness of HRM processes and practices. As a result, organizations may experience decreases in both efficiency and effectiveness. In addition, there may be a host of negative consequences for individuals whose culture differs from that of the dominant culture. In short, sensitivity to culturally diverse prospects, applicants, and incumbents not only makes good business sense, but it should serve to promote the well-being of the large number of individuals in the U.S. who have cultures that differ from that of the dominant culture.
