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ABSTRACT

Diversity is increasingly recognized and utilized as an important organizational
resource in regards to whether the goal is to be an employer of choice, to provide
excellent customer service, or to maintain a competitive edge. Workplace
diversity is a multi-faceted concept that will continue to evolve as more industries
move toward a global marketplace. It also has proven to have led to a perception
of being fundamental for employee performance. This fundamental belief forces
managers to embrace and comprehend the concept of workplace diversity, its
barriers and benefits.
The purpose of this research is to investigate the effect of work force diversify
towards employee performance in an organization which focus into air line
industry. The research also focuses on workforce diversity which includes the
gender, age, ethnic and education background of the employees which is the most
critical variables among all the others. The investigation was done by distributing
300 questionnaire to the air line industry„s management team. The questionnaire
results show that there is a significant impact on performance when different
workforce is working in the airline industry.

CHAPTER 1

INTRODUCTION

1.0 Introduction
Advances in technology and the advent of a global economy bring the people of
the world closer together than ever before. Given this fact, businesses, educational
systems and other entities are investigating ways to better serve their constituents.
This includes being able to attract and retain the best and most qualified workers.
Organizations that can develop and employ the necessary policies and procedures
to do this will maintain a competitive advantage among their counterparts and
increase their effectiveness. To achieve success and maintain a competitive
advantage, we must be able to draw on the most important resource such as the
skills of the workforce. With the increasing richness of diversity in the workforce,
we need to expand our outlook and use creative strategies to be successful.
Employees can provide this resource. This study identifies the effect of workforce
diversity toward employees‟ performance in Malaysia‟s airline industries.
Workforce diversity refers to organizations that are becoming more heterogeneous
with the mix of people in terms of gender, age, race, and education background
(Robbins, 2009). A diverse workforce for instance, includes gender, age, ethnicity,
and education background According to Robbins (2009), workforce diversity has
important implications toward management practices and policies. Frequently,
diversity is viewed in a limited fashion, primarily addressing issues of race or
gender differences, and linked to the laws providing protected status to certain
groups. We have used a very broad definition of diversity, to encompass most
characteristics that individuals possess that affect the way they think and do
things.
Today‟s managers are responsible for both leading employees and responding to
the needs of customers who are more ethnically and culturally diverse, older, and
in greater need of child and elder care. Leaders in both the public and the private
sectors are focusing more attention on the issue of diversity. Whether the goal is
to be an employer of choice, to provide excellent customer service, or to maintain
a competitive edge, diversity is increasingly recognized and utilized as an
important organizational resource.
Leaders and managers within organizations are primarily responsible for the
success of diversity policies because they must ensure that the policies are
effective. Instead of treating every employee alike to recognizing and responding
to those differences, it is a way to ensure employee retention and greater
productivity. The most important issues of workforce diversity are to address the
problems of discrimination in terms of gender, age, ethnicity and education
background. When diversity is not managed properly, there will be a potential for
higher turnover, difficult in communication and interpersonal conflicts. Overall, it
will be adversarial to organization‟s performance, profitability and reputation.
1.1 Research Background
The main objective of this research is to identify the factors that affect the
workforce diversity towards employees‟ performance in an organization. It
distinguishes the factors that can affect the employees‟ performance mainly
focuses on Malaysia‟s airline industry. This research would also act as a guideline
for the potential new entrants who wish to enter the industry on issues that will
need to be considered before starting the business.
Other than that, our purpose is to develop a methodology that can be applied to the
analysis of workforce diversity towards the employee performances. Based on our
analysis, an airline is a multi product firm, with each of its products corresponding to travel in a particular origin-destination city-pair market. The purpose of this
study is to examine the factors of workforce diversity can potentially affect the
employee performance. Firstly, a brief review of the factors such as gender, age,
ethnicity and education background. Secondly, a past research findings on
workforce diversity will be summarized and applied to the employees‟
performance. Then, the result of an empirical study of airlines industry, which
examines issues related to workforce diversity and employees‟ performance.
Lastly, recommendations will provided concerning the effect of workforce
diversity towards employees‟ performance in an airlines industry.
1.2 Problem Statement
Today, workforce diversity is a global workplace and marketplace topic. Any
business that intends to be successful must have a borderless view and an
underlying commitment to ensuring that workforce diversity is part of its day-today
business conduct (Childs, 2005). Besides, understanding the impacts of
diversity on organizational outcomes, such as organizational performance,
employee satisfaction, and turnover, has become essential (Sungjoo and Rainey,
2010). When these trends were first identified in the mid-1980s, they were
proclaimed as an opportunity for organizations to become more creative, to reach
previously untapped markets, and in general to achieve and maintain a
competitive advantage (Loriann and Carol, 2007; Cox, 1994; Robinson and
Dechant, 1997; Thomas and Ely, 1996).
Erasmus (2007) mentioned that diversity management and workforce diversity is a
forced integration that creates conflict and uncertainty in the workforce as
leadership is not skilled in the discipline of diversity management and its
principles. As a result, managers do not know how to effectively practice diversity management, and what factors contribute to effective diversity management and
task that can deal with diversity related issues in the work place.
Even though companies train employees upon hire, conduct ethics test, online
training and targeted anti-harassment training, employees still make decisions to
break the rules with their behavior when it comes to diversity (Victoria and Mary,
2010).
According to Dahm (2003), diversity within the workplace can evoke an array of
emotions as, some view diversity as something to be dealt rather than a tool to be
used to improve the organization. Even though, many will agree that the results of
a diversity-conscious organization add value to the employee and organization,
yet research evaluating diversity for the sake of developing training interventions
does not exist (Dahm, 2003). Hilary and Elaine (2000) suggested that
organizations should embrace diversity in their workforce and work towards
achieving it by creating a culture where difference can thrive, rather than working
simply for representatives and assimilation.
For instance, CIMB group’s chief executive officer Datuk Nazir Razak reported in
The Star Online that Malaysia needs to build on its diversity and its strength and
review the affirmative action policy created under the New Economic Policy.
However, according to an article in The Star online, most of the Malaysian
companies are not doing enough in retaining women professionals by creating
conducive working environment. Based on a report from a Ranstad 2010 World of
Work, many women in their 30‟s were choosing to leave their workplace to find
balance between work life and their home life (Lee, 2011).
Most attention on diversity management focused on the organizational decision
maker who is prejudiced against certain groups and who allows these prejudices to
influence how he or she treats employee. Moreover, they become embodied in organizational policies and practices that systematically disadvantage some
employees (Loriann and Carol, 2007). As an extension, employee diversity does
not necessarily boost creativity, market share, or competitive advantage. In fact,
research suggests that left un-managed, employee diversity is more likely to
damage morale, increase turnover, and cause significant communication problems
and conflict within the organization (Loriann and Carol, 2007; Jackson, 1991;
Jehn, Neale, and Northcraft, 1999; Tsui, Egan, and O‟Reilly, 1992; Zenger and
Lawrence, 1989).
According to Kochan, Bezrukova, Ely, Jackson, Joshi, Jehn, Leonard, Levine, and
Thomas (2003), people began to realize that visible, legally recognized,
demographic differences such as race and gender were not only types of
differences that affected work relationships among employees. Furthermore, most
studies show that training programs on workforce diversity management ,that
presumed to enhance decision making, problem solving, and creativity at work;
rarely leads to the desired long-term changes in attitudes and behavior.
As a conclusion, decades of research on the effects of diversity within teams and
small groups indicate that diversity can have negative effects, as well as positives
ones (Kochan et al. 2003). Moreover they elaborated that the lack of evidence
linking workforce diversity to employee performance may be that the relationship
between diversity and the bottom line is more complex than is implied by the
popular discussion. Therefore, this study focuses on the relationship among
gender, age, ethnicity, and education background towards employee‟s
performance in an organization.
1.3 Research Objectives
Establish better understanding on the antecedents of employee performance and
its relationship with demographic variables.
1.3.1 General Objective
The first aim of this research is to provide insights and in-depth
understanding of the workforce diversity that will affect the employee
performance in an organization. Secondly, the purpose of this research is
to identify whether the variables include gender, age, ethnicity and
education background would affect employee performance in an
organization. Lastly, the specific objectives of this research are as follows:
1.3.2 Specific Objectives
The objectives of this proposed study are to:
1. Investigate the relationship of gender towards employee
performance in an organization.
2. Investigate the relationship of age towards employee performance
in an organization.
3. Investigate the relationship of ethnicity towards employee
performance in an organization.
4. Investigate the relationship of education background towards
employee performance in an organization.
5. Investigate the impact of independent variables towards the
dependent variable.
6. Investigate which independent variable has greater influence on the
dependent variable.
1.4 Research Questions
The research questions of this proposed study are:
1. What is the relationship between gender and employee
performance?
2. What is the relationship between age and employee performance?
3. What is the relationship between ethnicity and employee
performance?
4. What is the relationship between education background and
employee performance?
5. What is the relationship between workforce diversity and employee
performance?
6. What are the factors affecting the employee performances in the
airline industry?
7. What are the factors affecting the employee performances in Air
Asia and Malaysia Airlines?
1.5 Hypothesis of the Study
In this study, employee performance is our dependent variables. Meanwhile
gender, age, ethnicity and education background will be our independent
variables. Thus, our hypothesis is that there are significant relationship between
these dependent variables and independent variables. Either one of these
independent variables or some of them do have positive effect to influence
employee performance in an organization.
H1 : There is significant relationship between gender and employees
performance
H2 : There is significant relationship between age diversity and employee
performance
H3 : There is significant relationship between ethnicity and employee
performance
H4 : There is significant relationship between education background and
employee performance
H5 : The four variables (gender, age, ethnicity, and education background)
are significant in explaining the variance in employee performance.
1.6 Significance of the study
Organizations that view diversity as part of their key strategy rather than a
business expense will benefit far greater than the organization that does not, and
will reap the benefit of cost reduction in attrition and increased revenues (Brown, 2008; Stalinski, 2004). The importance of this study is explained by Choy (2007);
diversity would lead to synergistic performance when team members are able to
understand and appreciate each other, and capitalize on one another‟s experiences,
knowledge and perspectives. Through effective communication, members would
be able to evaluate problems and situations from various viewpoints, determine
underlying cultural assumptions and create a common social reality, ascertain and
explain culturally synergistic alternative solutions appropriately, and establish
agreed-upon norms for interaction (Choy, 2007; Adler, 1980; Maznevski, 1995).
According to Pitts, Hicklin, Hawes and Melton (2010), diversifying workers from
different education background creates opportunities for greater innovation and
more creative solutions to problems (Richard, 2000; Richard, 2003; Watson,
1993). Consequently, the management is diversified and work on the effects of
increasing diversity is the key to assuring that the organization will be able to fully
benefit from bringing underrepresented groups into the organization. Some
organizations have adopted diversity management initiatives as a way to improve
the ability of diverse groups to work together, and limited empirical research has
demonstrated that diversity management can improve outcomes in diverse
organizations (Kalev, 2006; Ng and Burke, 2005; Pitts, 2009).
Furthermore, workforce diversity is closely related with Human Resource
Management in airline industries to attract and recruit the most talented people
from a pool of diverse workforce. Such a diversity-driven approach towards
recruiting a range of qualified candidates is needed not least because of the
country‟s diverse population of age and gender (Soltani, 2010). According to
Soltani, diversified human resources contribute to determining and realizing
strategic objectives of the organization, and a systemized approach for making a
linkage between organization excellence and effective people management is
critical to organizational continuity (Berger and Berger 2003).
Moreover, this study improves the understanding toward culture difference and at
the same time promotes to a better communication with workers from different
races. For example, one of airline industry in Malaysia, namely Malaysian
Airlines encountered cultural differences when dealing with United States
companies (Clarke, 2004). By nature, Asians are quiet and do not like to confront
issues so, when contentious issues needed to be discussed with the US vendor, it
was often difficult for these to be addressed openly and directly. Consequently,
vendors do not understand the root of the problem and the significance of the
concern. In some ways, having a third party project manager and a foreign
business implementation manager as part of the team meant that these
negotiations were made easier for all concerned. It allowed for a mediator to
communicate between the two cultures effectively and efficiently.
On the other hand, implementation of workforce diversity promotes to political
stability by unlocking the potential for excellence among all the workers by
providing them tools, resources and opportunities to succeed (Raatikainen, 2002;
Crockett, 1999). According to Todd and Peetz (2001), Malaysian population is
made up of three major ethnic groups which are Malay, Chinese and Indian; with
the Malays comprising 61 per cent of the population, the Chinese 30 per cent and
Indians 8 per cent. Ethnic grouping, as much as class, has been important in
Malaysian politics. As an extra effort, Malaysia‟s government established labour
union to maintain a satisfactory relationship between the three ethnic groups by
giving equal opportunity and rights as workers regardless of age, race, education
background and gender. Therefore, there is less conflicts between ethnics group in
Malaysia.
The optimum outcome of this study is to benefit the airline industries in Malaysia
by getting along with the top management and workers from different
backgrounds that would find the information in this research study useful in
accessing the value of workforce diversity in their organization.
1.7 Chapter Layout
This research is structured as follows:
In chapter 1, the researchers present the overview of the study context and explain
the research problem. This chapter addresses the research objective to be
achieved, the research question to be answered and briefly explain about the
importance or contribution of the research.
Chapter 2 focuses on the literature review of the theoretical argument from
secondary sources such as journal, articles and etc. The empirical studies will be
done in this chapter to enable the researchers to construct the hypotheses and
conceptual framework of the research.
Chapter 3 is conducted to describe how the research is carried out in terms of
research design, population, sample and sampling procedures, data collection
methods, operationalization and the methods of data analysis.
The results of the analysis presented in chapter 4, will be using the data and results
generated from the procedures set in chapter 3.
Finally, chapter 5 concludes with overall findings and provides the
recommendations of the present research. Besides, the limitation in carrying out
this research will also be included as well as the suggestion for the future research.
1.8 Conclusion
In this chapter, it is the introduction about the few variables of the workforce
diversity (gender, age, ethnicity, and education background) and on whether these
variables affect the employee performances in an airline industry, more
specifically Air Asia and Malaysia Airlines. Thus to better understand the concept
of workforce diversity and what its effect on employees performance in the airline
industry, a review of literature and a testing of framework should be conducted, in
which will be revealed in the following chapters of this study.

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