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The term diversity refers to all human characteristics that make people different from one another. These differences may be represented by visible characteristics, such as gender, race, ethnic background, and age. However, these differences may also be represented by nonvisible characteristics, such as education, functional background, organizational tenure, socioeconomic background, and personality.

Diversity as a workplace issue was triggered by reports published in the late 1980s indicating that the representation of women and ethnic minorities in the workforce would experience accelerated growth rates in the years ahead. Such changes in the demography of U.S. workforces implied that organizations would be required to change the ways in which people were managed. For example, as the White male demographic decreased in relative size, organizations desiring to attract and retain the highest-quality talent would have to recruit from all demographic categories. Further, because such workforce changes were emerging in an increasingly global economy and marketplace, organizations desiring to remain competitive would have to create strategies for addressing the needs and demands of potential customers from a variety of cultural backgrounds. Organizations also would have to contend with various legal and ethical issues that come with employing more diverse workforces.

Consistent with predictions, the 21st-century workforce is typified by more women and employees with diverse ethnic backgrounds, varied lifestyles, and intergenerational differences than in the past. Such trends are projected to continue, as forecasts show that people entering the workforce in the next 20 years will be more diverse than in the current workforce. Current census projections for the year 2050 are that ethnic minorities will account for almost half of the U.S. population and will soon constitute the majority of new net entrants in the U.S. workforce, particularly because of continued high levels of immigration into the United States. In addition, experts predict that the representation of women and people with disabilities in the workforce as well as the average age of the workforce will increase.

The Consequences of Diversity

With the increasing focus on diversity in the Workplace, there is a growing need for organizations to understand the effects of such diversity. Research generally suggests that diversity can influence employees' attitudes, behavior, and career outcomes, as well as their abilities to interact with others and function effectively in work groups. However, these effects may be both positive and negative.

Diversity brings about differences in people's backgrounds and experiences and, therefore, differences in perspectives on key issues or problems. Because diverse groups have a broader and richer base of experiences from which to approach a problem, they tend to produce a wider variety of ideas, alternatives, and solutions. In addition, the expression of alternative views in diverse groups may raise the quality of decision making by increasing the group's attention to its decision-making processes. Diversity also increases the cognitive and informational resources available to the group, which enhances critical analysis in decision groups. Because of these different perspectives, diversity tends to result in more creative and higher-quality decisions. In addition, diversity lessens the likelihood of group think, or the absence of critical thinking caused in part by a group's desire to maintain cohesiveness.

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