The Impact of Workforce Diversity on Organizational Performance: A Case Study of Aar Group

A Research Project Report Submitted to the Chandaria School of Business in Partial Fulfillment of the Requirement for the Degree of Master of Science in Organizational Development (MOD)The general purpose of the study was to determine the impact of workplace diversity on organizational performance at AAR Group of Companies. The study sought to realize three specific objectives, namely; to investigate how age diversity influences the performance of AAR Group of Companies, to examine how gender diversity affects the performance of AAR Group of Companies and, to assess the influence of ethnic diversity on the performance of AAR Group of Companies. The study adopted a descriptive research design, which was deemed appropriate, as it permitted the researcher to describe the impact of organizational performance and the three types of diversities that the study focuses on. The population for this study comprised of employees of AAR Insurance and AAR Healthcare Kenya Limited working within Nairobi. This population comprised of 90 individuals from all levels of the organizations who were considered to possess the relevant information that the researcher needed for the study. It used the survey sampling and sampled the 90 employees or respondents to participate in the study. The study found that the respondents were age diverse, aged between 20 and 55 years. The study also established that the majority of the respondents were males and that the majority of the respondents were Kikuyu, followed by Gusii and Luo, then Meru among others. The majority of the respondents were Bachelor’s degree holders followed by holders of diploma certificates. The study established further that “Educational Diversity” had the highest in terms of ranking by percentage mean rating, followed by “Age Diversity” and “Gender Diversity”. And that “Ethnic Diversity” and “Religious Diversity” were ranked as the second least important and the least important respectively. Regarding the impact of gender diversity on aspects of performance, the study found that competitive advantage was ranked the highest among aspects of performance affected by gender diversity, followed by “Management and Leadership Quality”. “Organizational culture” and “job satisfaction” were ranked as the second least important and the least important respectively. The study found that of the aspects of performance affected by ethnic diversity, “corporate reputation” had the highest in terms of ranking by percentage mean rating, followed by “Employee productivity”. “Job satisfaction” and “team performance” were ranked as the second least important and the least important respectively. The study found that the correlation between the dependent and independent variables revealed weak relationships between the dependent and independent variables. Pearson co-efficient correlation value for age diversity and organizational performance was a weak positive value; r =0 .041, p <.05, that between gender diversity and organizational performance was a weak negative, r = -0 .358, p <.05 while that between ethnic diversity and organizational performance was also a weak positive value was, r = .119, p <.05. The study found through a regression analysis that the adjusted R2 value of the model indicated that 13.1% of the change or variance in the model could be accounted for by age, gender and ethnic diversities. The study concluded that, age diversity is a very crucial resource for firms that intend to have sustainable workforce. It argues that gender diversity is a vital factor for organizational performance. This is because it has both internal and external values that facilitate organizational performance. It further contends that ethnic diversity has been determined to be a significant factor in organizational performance. This is especially true for firms that operate in multi-ethnic societies. The principle giveaways for ethnic diversity to corporation are in terms of their value for decision-making, skills pool, creativity and innovation, problem-solving, service and product quality and belonging among other aspects critical for organizational performance. It recommends that managers should perceive age diversity as a source of competitive advantage within the firm. They should embrace age diversity for the potential impact that it has for creativity and innovativeness in the firm. It also suggests that the management of organizations that want to remain successful in the contemporary gendered world must appreciate gender diversity and integrate it within their corporate strategy. It further recommends that firms must embrace ethnic diversity as a crucial resource for achieving the corporations marketing and sales objectives and for achieving employee job satisfaction. For further studies, it suggests that there is need for more research to examine why in theory it is suggested that diversity results in greater performance but research, such as this one find the association to be relatively weak