Part A: Equality, Diversity and Inclusion (EDI) and Corporate Social Responsibility (CSR)

Introduction

Equality is the state of being equal, where persons or groups are treated fairly and have access to the same opportunities, resources, and rewards without bias (Ely, et al., 2019).Diversity refers to the differences that exist among individuals or groups, including visible and non-visible characteristics (Kossek & Lobel, 2020).Inclusion is the act of creating an environment that values and respects diversity and allows individuals to participate fully and be able to contribute their unique talents and perspectives

Corporate Social Responsibility (CSR) refers to the concept that organizations have a responsibility to contribute to society beyond their financial and involves taking into account the social, economic, and environmental impacts of business (Nishii, et al., 2021).

Importance of Equality, Diversity and inclusion (EDI) to Organisations and benefits of a Diverse Workforce

Equality, Diversity and Inclusion (EDI) have become a critical concern for contemporary organizations due to several reasons, including improved business outcomes and legal and regulatory compliance. The importance of EDI organisations and the benefits of having a diverse work force is described as follows:

Organizations that value and prioritize EDI can benefit from improved business outcomes, such as increased innovation, creativity, and profitability. According to a study by Catalyst revealed that companies with more women on their boards of directors, on average, outperformed those with fewer women by 53% in return on equity, 42% in return on sales, and 66% in return on invested capital (Catalyst, 2011).

EDI policies and practices can support to address historical disadvantages and promote social cohesion. Historically, marginalized groups have experienced disadvantages, such as discriminatory practices in employment, education, and housing, leading to economic and social inequalities (Fernadez, et al., 2019). Organizations that prioritize EDI policies can help to address these disadvantages and promote social justice. The promotion of EDI policies can result in improved social cohesion, where individuals from diverse backgrounds can work together to achieve a common goal. This can create a pleasant work environment where employees feel valued leading to improved productivity and employee morale.

EDI can also help to mitigate discrimination and harassment in the workplace, which can lead to increased employee satisfaction and improved workplace culture. Discrimination and harassment can create a hostile work environment that can affect employee morale, motivation and productivity (Figueroa & Ruiz, 2018). By implementing EDI policies and practices, organizations can create a more inclusive workplace culture where everyone is respected and valued.

Attracting and retaining talent is another critical reason why EDI is an important CSR concern for contemporary organizations. EDI policies and practices can help to attract and retain a diverse pool of talented employees. A diverse workforce can provide different perspectives, creativity, and innovation, leading to better decision-making, problem-solving, and improved business outcomes (Singh, et al., 2020). Business world is becoming increasingly globalized, and customers, investors, and other stakeholders are placing greater emphasis on social responsibility and ethical business practices. A recent study by Cone Communications and Echo Research found that 91% of global consumers expect companies to operate responsibly and address social and environmental issues. This suggests that organizations that prioritize EDI may be better positioned to meet these expectations and enhance their reputation and brand image in the eyes of stakeholders (Nishii, et al., 2021).

Research has shown that EDI can have a positive impact on reputation and brand image. A study by the Reputation Institute found that companies that prioritize EDI are viewed as more ethical, transparent, and trustworthy by stakeholders, which can enhance their reputation and brand image.

Despite this, EDI should not be viewed as a means to only enhance a brand’s image and reputation but rather, in addition as a crucial part of CSR. EDI is also a critical component of ethical and responsible business practices. Research has shown that organizations that prioritize EDI are more likely to achieve improved business outcomes, such as increased innovation, creativity, and profitability. Moreover, EDI can help to mitigate discrimination and harassment in the workplace, promote employee satisfaction and well-being, and enhance workplace culture.

Racism and CSR Strategy

The issue chosen to address in this scenario is racism. The company has identified that there are ongoing problems with racism, and this is impacting its ability to retain employees from minority groups like the British and Asia Ethnic Minorities. Racism is a form of discrimination that is based on a person’s race or ethnicity and can manifest in various forms such as verbal abuse, exclusion, stereotyping, or harassment. Most of this racism is based on prejudices and false rhetoric on these groups in the community propagated by disagreeable individuals and usually over time to cause profound quasi-plausible fallacies on these prejudices that people may tend to believe or expect. It is essential for organizations to address racism and promote inclusion to ensure that all employees may feel valued and respected, and that diversity can be harnessed as a source of strength (Fernadez, et al., 2019).

One practical recommendation for a CSR initiative that HR could develop to improve inclusion at this company in relation to racism is to conduct diversity and inclusion training for all employees, with a particular focus on anti-racism training. The objective of such training is to help employees comprehend the impact of racism on individuals and organizations, and to develop skills and strategies to promote a more inclusive workplace. These trainings will also make the employees realize the importance of rich diverse culture and also learn to be accepting of each other beyond colour, ethnicity or language. The training could cover topics such as cultural competence, unconscious bias, privilege, and ally ship, and could be delivered through various methods such as workshops, e-learning modules, and coaching sessions.

There is empirical evidence to propose that diversity and inclusion training can be effective in reducing prejudice and promoting positive attitudes and behaviours towards diverse others. For example, a recent study by Smith and colleagues (2020) found that diversity training led to significant improvements in attitudes towards LGBTQ+ individuals among a sample of Australian university students (Smith, et al., 2020). Similarly, a meta-analysis conducted by Kalev and colleagues (2020) showed that diversity training was associated with positive changes in attitudes and behaviours towards minorities in the workplace especially those in the LGBTQ+ group while still in the minority subset (Kalev, et al., 2020).

In addition to the training, HR could also consider implementing other initiatives to address racism and promote inclusion, such as establishing a diversity and inclusion committee, conducting consistent diversity audits, and developing an inclusive recruitment and retention strategy. These initiatives could be integrated into the company’s CSR program and aligned with its values and goals. This will be a long term sustainable strategy that will transcend time. Since it will be part of company policy, I will nurture a progressive culture in the institution which will give satisfaction to minority employees.

Addressing racism and promoting inclusion is essential for organizations to ensure that all employees feel valued and respected. HR can play a critical role in developing and implementing CSR initiatives that promote inclusion and address issues such as racism. Diversity and inclusion training is one practical recommendation that HR could develop to improve inclusion at this company in relation to racism, supported by academic literature as an effective intervention to promote positive attitudes and behaviours towards diverse others.

Conclusion

In conclusion, EDI is critical for organizations in building better relationships with stakeholders, improving financial performance, and enhancing their reputation. EDI is also a moral imperative, as treating employees with respect and dignity, creating a level playing field, and promoting social justice and equality are key ethical considerations for organizations.

While implementing EDI initiatives can be challenging, there are best practices that organizations can use to promote EDI, such as conducting diversity audits, establishing diversity and inclusion councils, implementing unconscious bias training, providing mentoring and sponsorship programs, and setting measurable goals and targets. It is very vital for organizations to recognize the importance of EDI as a CSR concern and commit to promoting a more diverse, inclusive, and equitable workplace. The research supports this notion, as studies have shown that organizations that embrace EDI are more likely to be successful, innovative, and profitable in the long run

Part B: Performance and Reward Management

Introduction

Performance and reward management are key parts of human resource management that can be used to inspire employees and increase their productivity. In this scenario, Mr Jones, the director of Automotive Private Limited, noticed a lack of growth in productivity over the past two years and identified that there was a lack of motivation among staff as the major issue. The current performance management system at the company is informal, with individual line managers responsible for performance management, and no clear guidance on how to undertake performance reviews. The company also has a limited reward system, which has not changed for ten years.

Performance Management in Automotive Private Limited

The current performance management system at Automotive Private Limited is informal, with individual line managers responsible for performance management. The only policy related to performance management is that line managers have to undertake a yearly performance review, but there is no guidance for how to conduct this, and most staff see this as a tick-box exercise. This informal system can lead to bias, irregularity, and lack of transparency in performance evaluation (Alfes, et al., 2013). Employees may feel demotivated if they believe that their performance is not being evaluated fairly, which can majorly affect their productivity (Ederer, et al., 2018). Moreover, the lack of clear performance expectations and feedback can hinder employees’ development and growth, which can further reduce their motivation (Guest and Clinton, 2018). It’s important to have a performance review system that clearly outlines the expectations from employees with a clear bench marking system that can gauge the performance fairly. In this set up there is no clear performance measures or performance indicators which performance can be measured against.

If the company installed a formal performance management system it may rip many benefits to, such as improved employee engagement, clearer performance expectations and improved communication between managers and employees. A formal system can offer a structured approach to performance management, ensuring that all employees are appraised against the same criteria and in a consistent manner compared to the informal system that disregards fairness for most part (DeNisi & Murpy, 2017). This can improve transparency, fairness, and objectivity in performance evaluation, which can boost employee motivation (Alfes, et al., 2013). For example, a set of operating procedures for each department in the company which outline the performance goals and benchmarks for each position against which performance will be reviewed against. These will be transparent and measurable and more reflective of fairness.

Moreover, a formal system can provide employees with clear performance expectations and feedback, which can help them understand their roles better and develop their skills and abilities (Guest & Clinton , 2018). This can increase their motivation to perform well and contribute to the organization’s success. In addition, a formal system can enable communication between managers and employees to be much easier, allowing them to discuss performance, set goals, and align individual objectives with organizational goals (DeNisi & Murpy, 2017). This can improve collaboration, trust, and commitment among employees, which can further enhance their motivation and productivity.

The current informal performance management system at Automotive Private Limited may be contributing to the lack of motivation among staff, which in turn translates to dismal productivity. The introduction of a formal performance management system can bring numerous benefits to the organization, such as increased employee engagement, clear performance expectations, and improved communication between managers and employees. A formal performance management system can help Automotive Private Limited to motivate its employees and increase their productivity.

Benefits and Drawbacks of Financial and Non-Financial Rewards

Financial incentives are commonly used in organizations to motivate employees to improve their performance and increase productivity (Chen, et al., 2019). One of the most popular financial incentives is issuance of bonuses, which are a type of performance-based payment that is paid out once to employees who meet or exceed predetermined performance goals. One-off bonuses have been shown to be effective in increasing motivation and productivity in the short term (Chen, et al., 2019). They can also help organizations to retain their best-performing employees and attract new talent.

There are limitations to using financial incentives. One of the limitation is their short-term impact on employee motivation. Once the bonus is paid out, employees may revert to their previous level of motivation, as they are no longer incentivized by the prospect of receiving the bonus (Chen, et al., 2019).

There is also potential for creating unhealthy competition among employees. Financial incentives can encourage employees to focus on individual performance rather than teamwork, which can lead to a toxic work environment and decreased collaboration (Chen, et al., 2019).

Non-financial incentives include opportunities for career development, work-life balance, and recognition for good performance. Non-financial incentives can have a positive influence on employee motivation and job satisfaction in the long term (Chen et al., 2019). For example, providing employees with chances for career development can help them feel valued and invested in the organization’s success (Menguc, et al., 2014).

However, there are also limitations to using non-financial incentives. A major limitation is their subjectivity, as different employees may have different preferences for what constitutes a valuable incentive (Chen, et al., 2019).

In addition, limitation is the difficulty of measuring their impact on motivation and productivity. Unlike financial incentives, which are easy to quantify, non-financial incentives are more difficult to measure and may require more qualitative analysis (Menguc, et al., 2014).

To ensure that the one-off bonuses are effective in motivating employees, the company should clearly communicate the criteria for receiving the bonus and ensure that it is tied to specific, measurable goals. Furthermore, the company should also consider offering non-financial incentives such as recognition and opportunities for growth and development to promote intrinsic motivation and employee engagement.

Research suggests that a combination of financial and non-financial incentives may be most effective in promoting motivation and productivity. For example, a study by Cameron and Pierce (1994) found that a combination of pay-for-performance and skill-based pay led to greater productivity improvements than either incentive alone (Cameron & Pierce, 1994). Additionally, a meta-analysis by DeVaro and Heywood (2010) found that a combination of monetary and non-monetary incentives was more effective than monetary incentives alone in improving productivity and job satisfaction (DeVaro & Heywood, 2010).

Therefore, Mr. Jones should consider a combination of financial and non-financial incentives as part of a comprehensive approach to performance and reward management. For example, the company could consider offering bonuses as well as opportunities for training and development, recognition for exceptional performance, and increased autonomy in decision-making.

Conclusion

It is important that Automotive Private Limited considers implementing a formal performance management system with clear goals, regular feedback, and opportunities for employee development in a progressive bid to improve performance. This would help to ensure that employees are aware of the expectations for their performance and have the resources and support needed to achieve their goals. In addition, the company should consider offering a range of incentives that are tailored to the needs and preferences of different employees, as research suggests that different individuals may respond differently to different types of incentives.

As for the rewards, a comprehensive approach to performance and reward management that includes both financial and non-financial incentives is likely to be most effective in promoting motivation and productivity at Automotive Private Limited.