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David Alexander

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Business, E-Commerce, Econometrics, Economics, Management, Manufacturing, Marketing, Mathematics, Operations Management

I graduated from the University of Cambridge in 2004 with a Masters Degree in Management from the Judge Business School. I started writing soon after I graduated. I initially saw it as a way to earn some extra money, but soon found out that not only was I very good at it but I also enjoyed it a great deal. As a result, I have been a full time academic writer for the past six years.

Over this period I have learned to write in numerous areas, and complete pieces of all lengths from 300 word summaries up to 25,000+ word dissertations. My main areas of specialisation are strategic management, HRM, accounting and finance, marketing, organisational behaviour, information systems, operations management and project management. I am continuously looking to expand my areas of expertise, including qualifying as a CIMA professional management accountant and I am currently studying for a law qualification.

The legal implications of a HR policies

With reference to relevant case studies, consider the legal implications of a HR policies which relies on positive action as a means of recruitment and selection towards securing a diverse workforce.

1.0 Introduction

            Employee resourcing strategies are increasingly focusing on improving diversity in the workplace, in order to benefit from greater creativity and more flexible approaches to working. However, in many nations the promotion of diversity is being restricted by continuing cultural preferences and organisational norms that reinforce the status quo and prevent the development of true diversity. As such, this piece will examine the ability of human resource professionals to use positive action in their recruitment and selection strategies to secure a more diverse workforce. The focus of this analysis will be on the legal implications of said action, and the potential pitfalls into which an organisation can fall.

2.0 Employee resourcing developments

            Rowlay and Bae (2002) claim that human resource management is currently undergoing significant high profile developments, however these developments tend to be hampered by implicit views and cultural beliefs. In particular, they cite the example of the argument that traditional employment and employee resourcing based on seniority and cultural similarities are being replaced by newer more flexible systems based solely on performance and ability. Whilst this seems to be a rational argument in the current competitive and inhospitable global climate, Rowley and Bae’s (2002) analysis indicates that the actual practices continue to be constrained and ambiguous due to cultural resistance and traditions.
This is supported by Raiden et al (2004), who argue that the characteristics of many modern industries, specifically the construction industry, make it difficult for companies to implement effective human resource management and employee resourcing practices. In particular, the dynamic nature of many modern industries tends to drive fluctuations in the workloads of organisations, thus creating varying demands for employees and issues in the efficient management of employee resourcing. As a consequence of this, Raiden et al (2004) showed that whilst many managers attempted to carry out strategic planning in their employee resourcing activities, this rarely translated into effective operational practices designed to balance organisational and employee requirements. This implies that it is very difficult for managers to exert effective strategic control over their employee resourcing practices, further increasing the use of traditional methods of resourcing and recruitment, which are not necessarily based purely on ability.

2.1 Diversity and positive action in recruitment and resourcing

            In spite of such constraining forces, Stone et al (2007) argue that cultural diversity in most organisations seems to be increasing rapidly as populations and workforces become more diverse and accepting. However, this in itself is having implications on the acceptance of employee resourcing processes and practices, as well as the effectiveness of said practices. This implies that as organisations become more diverse, so the changing organisational cultures will necessitate contingent approaches to human resource management and resourcing, to recognise the impact that diversity will have on the acceptance and effectiveness of organisational practices.
This is often seen in the recruitment aspect of human resource management, with McKay (2005) stating that a large number of companies are increasingly adopting positive action diversity recruitment initiatives with the intention being to increase diversity through attracting the interest of a range of job applicants. However, there is evidence to indicate that the minority of job applicants attracted by these initiatives tend to believe that the recruitment messages did not accurately represent the actual work place and levels of diversity within it. This indicates that a positive environment for diversity can only truly be achieved through the development of a diverse environment. Indeed, McKay (2005) argues that some of the most common diversity recruitment practices could actually lead to higher levels of turnover among new minority hires due to the misleading information provided at the recruitment stage (McKay, 2005).
However, Williamson et al (2008) found that the language used in such diversity recruitment practices could actually influence the perceptions of the attractiveness of the organisation held by prospective minority applicants. In particular, the race and previous experiences of discrimination of potential applicants were found to be key determinants of their reactions to any recruitment campaigns that demonstrated identity conscious diversity practices. This implies that firms can use recruitment and resourcing to increase diversity, provided they approach the subject in a subtle manner (Williamson et al, 2008).

3.0 Discrimination in organisations

            One of the most important works of discrimination to date comes from Becker (1971), who argued that some employers are naturally predisposed to discrimination. This is claimed to be reflected in the fact that wages for minorities such as women and blacks are usually lower, as employers and co-workers require a premium to work with said groups, hence reducing their value to the firm. However, Cain (1986) argues against this, claiming that such wage differentials could only be sustained in the short term, and in the long term they would naturally disappear through segregation, as people that belonging to a certain group will avoid interacting with discriminatory employers. This would ultimately lead to the creation of discriminatory firms and non-discriminatory firms. However, as the non-discriminatory firms would have lower wage differentials, due to the lack of wage premiums demanded, they would be more profitable, and thus will eventually drive all discriminatory firms from the market, eliminating any inequality.
However, Rosen’s (2003) analysis of the same issue indicates that discriminatory firms tend to pay their minority workers a much lower wage compared to the premiums afforded to the majority workers, hence making for a lower total wage bill. This will counter the fact that the discriminatory firms are not hiring employees with the view of maximising profits. As such, whilst highly discriminatory firms will tend to be less profitable, firms who display a reasonable amount of discrimination will tend to make slightly higher profits, thus creating a natural tendency for discrimination amongst firms. This is somewhat countered by the fact that the non-profit maximising decisions give discriminatory firms a lower utility than their non-discriminatory peers. However, Rosen (2003) argues that this utility only applies to owners and directors, and not to all managers. As such, many HR managers have a built in incentive to discriminate, as to do so will increase short-term profits at their firm, and also the rewards of the managers.
This is supported by Humphries and Rubery (1995), who argue that the main barriers to the increase of diversity occur due to the perceived costs of the interventions required to overcome the natural tendency to discriminate. These costs tend to overcome the widespread acceptance of the importance of diversity and equality as an ethical concern as well as a driver of good practice. However, at the same time there are some positive public attitudes regarding equal opportunities, which are generated by cultural and individual factors, hence helping to drive diversity at some levels.

4.0 The use of positive action

Given the economic incentives and cultural tendencies towards discrimination in employee resourcing shown above, it is clear that the commitment to achieving equal opportunities made by many governments and firms requires some aspect of proactive development to achieve. However, Laufer (1998) indicates that many of the proactive initiatives are derailed by the existence of unequal traditions and stereotypes, regardless of how well supported the initiatives are. This is highlighted through the case study of France, which has an egalitarian culture and a strong legal basis for the promotion of equality for all minorities. In spite of this, there are still many inequalities in the labour market, with few effective positive action strategies in place (Laufer, 1998).
As a result, Management Services (1986) reports that there is a growing trend towards the use of positive action intended to end discrimination towards minority groups in recruitment and promotion. This ranges from targeting adverts to appeal more to certain minorities, to specifically stating that applications from ethnic, sexual, gender or religious minorities will be welcomed, as well as applications from those with disabilities or criminal convictions. These positive actions have been successful in attracting minorities into several professions, and have often been inspired by altruistic and idealistic concerns. However, as will be seen below, the implementation of these policies is often fraught with legal hazards.

4.1 Legal implications of positive action

In particular, the same article that reported the growth in many of these initiatives highlighted some of their issues, particularly the case of Hackney Council, which was reprimanded by an industrial tribunal after it refused to allow three white people to apply for roles specifically created to attract black people (Management Services, 1986). This case helps to indicate the most significant legal implication of the use of positive action: the danger that it may develop into positive discrimination, which whilst it may be admirable to many, is largely illegal. This is demonstrated by Slater (2002) who demonstrates that the Sex Discrimination Act and the Race Relations Act, as well as the European Commission, allow employers to take several positive actions to increase the level of diversity and equality in their workplace, but do not allow discrimination on the grounds of sex, race or other aspects, even if this is intended to benefit minorities (Slater, 2002).
This is most strongly voiced in the UK Race Relations Act 1976, which forbids any discrimination on the grounds of race, regardless of the intentions of said discrimination (Whincup, 2007). Indeed, the provisions of the Act specifically forbid any attempts to address perceived racial imbalances in a workforce by deliberately recruiting additional minority staff. Such provisions are stringent, making it difficult for employers to draw a clear line between the use of positive action, used to encourage minority applications and interest, and illegal positive discrimination. Whincup (2007) cites the case study of Taylor v Acas (1998) where Acas specifically instructed its recruiting staff to take positive actions to reinforce the view that Acas is an equal opportunities employer. However, whilst this instruction was legal, when Taylor applied for a job and a less qualified woman was selected in his place, Taylor was able to sue for illegal discrimination by Acas, on the grounds that they only chose the less qualified woman because she was a woman. Ultimately, this implies that positive action can only be legal in the UK if it ensures that roles go to the most able person regardless of their race, sex, age or other factors, and hence does not actually favour the minorities that are subject to the action (Whincup, 2007).
However, another case study by Woodhams and Corby (2007) indicates that the Disabled Persons (Employment) Act 1995 and the Disability Discrimination Act 2003 have both encouraged employers to include some aspects of positive discrimination. In particular, the case study indicates that proactive HR policies have been used to increase disabled employment, and these have included aspects of positive discrimination. Furthermore, these actions have been shown to have made a significant impact on the level of disabled employment. However, as the same time HR policies aimed at increasing managerial responsibilities and adapting organisations to cope with disabled employees have also had a significant positive impact. This implies that positive discrimination is not the only way to create diversity in the workplace, and that positive actions focused on managers can have similar impacts but with less legal issues.
Indeed, recent case studies indicate that organisations in the UK, particularly in the public sector, are focusing on positive action whilst considering all the potential legal aspects. In particular, Forster (2008) discusses how the West Midlands Police Force has taken positive action aimed at improving female representation in specialist units. These actions are focused on encouraging women to apply to the specialists units, as well as resolving issues such as the uniforms and equipment, and promoting positive work life balance. Similarly, the DWP has recently introduced a scheme to ensure that private firms wishing to work with government departments are diverse equal opportunities employers, who have strong policies on equality and diversity, whilst not looking to implement any discriminatory quotas on these firms (Employers Law, 2006).
Finally, it is important to consider how factors such as the average age and makeup of the workforce will affect attitudes towards positive action, as this could help firms avoid falling foul of the legal issues. Chu et al (2001) found that discriminatory attitudes varied depending on the demographic and cultural factors affecting the workforce. Through a case study of workers in Hong Kong and the UK, Chu et al (2001) demonstrated that the culture of workers was a strong predictor of their attitudes towards minorities, as well as factors such as the age, race and gender of the workers. At the same time, the study showed that anti-discrimination policies tended to have positive impacts both on the attitudes employees held towards minority workers, and also their attitudes towards the use of positive discrimination. As such, the provision of anti-discrimination policies and training can potentially help shield employers from any legal fallout from the use of positive action, and any confusion between positive action and discrimination.

5.0 Conclusion

            The evidence from the theory and case studies discussed above indicates that human resource policies arguably need to rely on positive action in recruitment and selection in order to secure a diverse workforce and equality in the workplace. This is because of the natural tendency towards discrimination, and the economic benefits that can arise from discriminatory recruitment and selection. As such, some form of positive action is often needed to overcome this. However, care must be taken because, whilst positive action and encouragement for minorities is completely legal in most countries, any attempt to actively discriminate in favour of the minority is often illegal, and leaves employers at risk of legal action. Therefore, care must be taken to focus positive action on providing a more supporting working environment for minorities and encouraging them to apply for jobs to be judged on their merits, and not on placing them ahead of the majority in the workplace.

6.0 References

  1. Becker, G. S. (1971) The Economics of Discrimination. Chicago: University of Chicago Press.
  2. Cain, G. G. (1986) The Economic Analysis of Labor Market Discrimination: A Survey. In Ashenfelter, O. and Layard, R. Handbook of Labor Economics. p. 693-785. Amsterdam: North-Holland.
  3. Chiu, W. C. K. Chan, A. W. Snape, E. and Redman, T. (2001) Age stereotypes and discriminatory attitudes towards older workers: An East-West comparison. Human Relations; Vol. 54, Issue 5, p. 629-661.
  4. Employers Law (2006) DWP insists there are no plans for ethnic quotas. Employers Law; September 2006, p. 4.
  5. Foster, C. (2008) West Midlands Police: making positive action work. Equal Opportunities Review; Issue 180, p. 8-13.
  6. Humphries, J, and Rubery, J. (1995) The Economics of Equal Opportunities. Manchester: Equal Opportunities Commission.
  7. Laufer, J. (1998) Equal Opportunity Between Men and Women: The Case of France. Feminist Economics; Vol. 4, Issue 1, p. 53-69.
  8. Management Services (1986) More equal than others. Management Services; Vol. 30, Issue 7, p. 5-6.
  9. McKay, P. F. and Avery, D. R. (2005) Warning! Diversity Recruitment Could Backfire. Journal of Management Inquiry; Vol. 14, Issue 4, p. 330-336.
  10. Raiden, A. B. Dainty, A. R. J. and Neale, R. H. (2004) Current barriers and possible solutions to effective project team formation and deployment within a large construction organisation. International Journal of Project Management; Vol. 22, Issue 4, p. 309.
  11. Rosen, A. (2003) Search, Bargaining, and Employer Discrimination. Journal of Labor Economics; Vol. 21, Issue 4, p. 807-829.
  12. Rowley, C. and Bae, J. (2002) Globalization and transformation of human resource management in South Korea. International Journal of Human Resource Management; Vol. 13, Issue 3, p. 522-549.
  13. Slater, H. (2002) Making a positive difference: a legal guide to positive action. Equal Opportunities Review; Issue 111, p. 12.
  14. Stone, D. Stone-Romero, E. F. and Lukaszewski, K. M. (2007) The impact of cultural values on the acceptance and effectiveness of human resource management policies and practices. Human Resource Management Review; Vol. 17, Issue 2, p. 152-165.
  15. Whincup, D. (2007) Ethnic compliance is against spirit of law. Personnel Today; 20th February 2007, p. 19.
  16. Williamson, I. O. Slay, H. S. Shapiro, D. L. and Shivers-Blackwell, S. L. (2008) The effect of explanations on prospective applicants reactions to firm diversity practices. Human Resource Management; Vol. 47, Issue 2, p. 311-330.

Woodhams, C. and Corby, S. (2007) Then and Now: Disability Legislation and Employers’ Practices in the UK. British Journal of Industrial Relations; Vol. 45, Issue