Title
Contents
Acknowledgements 7
The Authors 8
Abbreviations 9
Summary 10
1. Introduction 14
1.1 Background 14
1.1.1 Diversity Management versus Equal Opportunities 15
1.1.2 Research evidence on the aggregate effects on business performance 15
1.2 The aims and scope of the study 17
1.3 Key issues 18
1.4 Limitations of the study 19
1.5 The structure of the report 20
2. Equal Opportunities policies and practices 21
2.1 Introduction 21
2.2 Equal Opportunities policies, practices and effectiveness 21
2.3 Measures of Equal Opportunities policies and practices 23
2.3.1 Introduction 23
2.3.2 Individual and conglomerate variables 24
2.3.3 Variable choice for the study 25
2.3.4 Selection process 29
2.4 Factors affecting the adoption of Equal Opportunities policies 30
3. The business benefits of Equal Opportunities policies and practices 33
3.1 Introduction 33
3.2 Potential business benefits of Equal Opportunities policies and practices 34
3.2.1 Improved recruitment 36
3.2.2 Enhanced staff utilisation: matching employees and jobs 36
3.2.3 Enhanced staff utilisation: family-friendly working practices 37
3.2.4 Morale and employee commitment 37
3.2.5 Greater employee diversity 38
3.2.6 Shareholder approval 39
3.3 The costs of implementing Equal Opportunities policies and practices 39
4. Identifying the effect of Equal Opportunities on business outcomes using WERS 2004 42
4.1 The basic identification problem 42
4.2 Identification strategy 43
4.3 Modelling business performance 45
4.3.1 Measuring business performance in WERS 2004 45
4.3.2 Estimating models of business outcomes in WERS 2004 48
4.4 Modelling treatment selection 53
4.4.1 Models of Equal Opportunities 53
4.4.2 Instrumental variables 58
4.5 Summary 59
5. Estimates of the relationship between Equal Opportunities and business outcomes using WERS 2004 60
5.1 Sample correlations between Equal Opportunities and business performance 60
5.2 Estimates of the effects of Equal Opportunities on business performance 65
5.2.1 Workplace performance and Equal Opportunities policies 65
5.2.2 Workplace performance and Equal Opportunities monitoring and reviewing practices 71
5.2.3 Workplace performance and Equal Opportunities practices concerning ethnic background 78
5.2.4 Workplace performance and family-friendly practices 82
6. Summary and conclusions 94
6.1 Introduction 94
6.2 Linkages between Equal Opportunities policies and practices and business performance 94
6.3 Limitations of the evaluation of the impacts of Equal Opportunities policies and practices on business performance using WERS 2004 95
6.4 Evidence of the effects of Equal Opportunities policies and practices on business performance using WERS 2004 96
6.5 Policy implications 97
6.5.1 Regulation 97
6.5.2 Changing the net costs: subsidies and penalties 97
6.6 Further research 98
Appendix A. The possible routes to business benefits of Equal Opportunities policies and practices 99
Appendix B. Descriptive statistics on Equal Opportunities policies and practices 101
Appendix C. Notes to Tables 5.2-5.8 108
References 110
Table 2.1 Equal Opportunities policy and practice variables analysed and their incidence 29
Table 4.1 The incidence of Equal Opportunities policies and practices in UK workplaces 47
Table 4.2 Models of business performance 50
Table 4.3 Models of Equal Opportunities selection 54
Table 5.1 Difference in business performance between establishments with and without Equal Opportunities policies/practices 62
Table 5.2 Estimated workplace performance effects of having a formal written policy on Equal Opportunities or managing diversity 68
Table 5.3 Estimated workplace performance effects of reviewing promotion procedures or relative pay rates to identify indirect discrimination 72
Table 5.4 Estimated workplace performance effects of measuring the impacts of Equal Opportunities policies in the workplace 75
Table 5.5 Estimated workplace performance effects of reviewing recruitment or promotion procedures or relative pay rates to identify indirect discrimination on the grounds of ethnic background 79
Table 5.6 Estimated workplace performance effects of working time arrangements that include working from home in normal working hours 83
Table 5.7 Estimated workplace performance effects of arrangements where time off for family emergencies is usually taken as special paid leave 87
Table 5.8 Estimated workplace performance effects of arrangements where time off for childcare is usually taken as special or parental paid leave 91
Table B.1 Presence of Equal Opportunities policies and/or practices (percentage of workplaces), by workplace characteristics 102
Table B.2 Presence of Equal Opportunities policies and/or practices (percentage of workplaces), by workforce compositions 104
Table B.3 Presence of Equal Opportunities policies and/or practices (percentage of workplaces), by workplace performance outcome 105
Table B.4 Presence of equal opportunities policies and/or practices (percentage of workplaces), by workplace intermediate outcome 107
Figure 2.1 Some potential routes to business benefits of Equal Opportunities policies 22
Figure 3.1 Potential business benefits of effective Equal Opportunities policies 35