Do Corporate Diversity Rankings Make Sense?

Do Corporate Diversity Rankings Make Sense?

Much of the work organizations now refer to as diversity began as equal opportunity and affirmative action. However, in the last 15 years, diversity as a profession and organizational reality has grown, and diversity in the United States is now a multibillion-dollar business.

Many diversity professionals and organizations have moved from a legal and social justice framework to a business case for diversity. This case, which dominates industry claims and corporate goals, focuses on three related objectives: to allow organizations to tap talent pools and incorporate new ideas and perspectives from employees of different backgrounds; to expand market share; and to ensure legal compliance.

In 2011, the Consortium of Chief Diversity Officers at Georgetown University analyzed publicly available diversity ranking methodology used by DiversityInc, Diversity MBA Magazine, Black Enterprise magazine, Working Mother magazine, the Human Rights Campaign, and Hispanic Business magazine’s Top 60 Diversity Elite.

The survey instruments and the publicly stated methodology of the aforementioned organizations were analyzed, and the findings were reported in “Diversity Rankings: A Critique of the Landscape.” Further, researchers conducted interviews with more than 300 diversity practitioners and business leaders globally to assess their understanding of the rankings process. Some 100 diversity professionals were interviewed for follow-up questions. The researchers also conducted a review of related diversity and business management literature.

What Do Those Rankings Actually Mean?
In this study, researchers examined the stated rationale for an organization’s pursuit of diversity performance ranking and the flaws inherent in many of these ranking systems. That stated rationale was then tested against the way diversity professionals in organizations experience the rankings process and its aftermath.

After explaining the history of diversity and inclusion, the study analyzed the basic idea behind the ranking thesis and explored some associated difficulties; researchers observed a distinction between the reality of diversity as organizational transformation and the compliance conditions for diversity rankings. The study results revealed that diversity rankings are more often an exercise in reputation building than they are an illustration of diversity as a tool for organizational transformation.

Finally, the study set forth objections to the rationale for rankings, concluding it is often a justification for advancing ranking organizations’ agendas — agendas that may not have much to do with actual diversity strategy. Further, it determined that empirically sound social science research and methodology related to the rankings functions undermines the genuine accomplishments organizations believe they are achieving in institutional diversity contexts.

According to study participants and the analysis of diversity literature, one of the ways organizations measure their return on investment in diversity has been to seek external recognition for their efforts via “the best lists for diversity.” Many organizations proudly extol their rankings in their marketing and recruiting strategies. The challenge for organizations is to examine the dichotomous relationship between recognition for diversity and the lack of significant empirical support for those same rankings by external organizations.

Researchers in this study concluded that the proliferation of list makers and rankers, along with a lack of a standard definition or methodology from which to contextualize and rank, has created a complicated landscape for organizations looking for diversity validation. It also has called into question whether appearing on these lists can conclusively prove that an organization is best in diversity.

The researchers spoke to more than 100 diversity professionals, 80 percent of whom said they are starting to conclude that despite the rhetoric that diversity is not only about demographics, the measures they use and the rankings they seek are still largely based on equal employment opportunity and affirmative action criteria. This is not to suggest that demographic data is not relevant to diversity. It suggests that an over-reliance on demographic data is no different from the compliance yardstick that organizations claim is no longer completely valid.

Not on the List? You Don’t Care About Diversity!
It is within this clouded landscape that many organizations have become concerned that their absence from these lists may send a negative message about their commitment to diversity. Only a few chief diversity officers and other executives have begun to question publicly the rigor behind the rankings. Many are afraid to question the methodology in public for fear of backlash by the rankers.

Seventy-five percent of the diversity professionals polled for the study said these rankings are an important recruitment tool. However, 100 percent of them reported they were unaware of a potential candidate who rejected an offer because a company or organization was not on a list ranking companies for diversity.

Ninety-five percent of the diversity professionals polled reported they found a correlation between the amount of their organization’s spending with some rankers and their place on the rankings. Essentially, the rankings offer a pay-for-play element. However, these professionals are not ready to state this in any public forum for fear of backlash.

The problem with having valid diversity rankings is that practice is ahead of theory. Rankers must join the knowledge of practice with the fundamentals of research to ensure rankings have meaning, but the study found the majority of rankers are unwilling to do so. What follows are partial observations on the value and validity of diversity rankings.

  1. There is no universally accepted definition of either diversity or inclusion. There is also no universally accepted methodological approach for ranking diversity. Thus, rankers are subject to valid criticism based on the indicators they chose to employ and the weighting formula they apply.
  2. The practice of diversity and thus inclusion is neither an art nor a science. Thus, attempts to quantify the practice and rank organizations based on ostensibly objective criteria cannot, and should not, escape critique.
  3. The rankings are done either by private enterprise driven to sell products, services or by organizations advocating for a particular segment of the population. The inherent problem with this is that in many of the rankings there can be and are widely divergent results from year to year because the ranking and weighting criteria change from year to year. It follows then that year-to-year positioning and comparisons can be very misleading.
  4. It is worth noting that the Human Rights Campaign’s (HRC) scoring method is quite simple. Organizations either have these policies in place or they do not. Thus, the only way for an organization to increase its score is to adopt the policies. HRC defines a best place to work for GLBT based on the policies rankings. Thus, there is no mystery.
  5. It is still unclear what valid metrics rankers use and the relative weights assigned to each.
  6. There is no evidence from the study information analyzed or from information in the associated diversity literature that rankers engage in their own high-quality data collection measures.
  7. Diversity rankings are best understood as a self-fulfilling prophecy. Some organizations have participated in rankings for a long time. They do so largely to increase their reputation in diversity. They intend to protect that reputation at all costs.
  8. The appearance of objectivity that outside rankers provide needs serious examination from those ranked and from researchers.
  9. Rankers should disclose the qualifications and experience of the people doing the rankings as well as their academic background. This also should include their qualifications in research as well as research design and analysis.
  10. Rankers who claim a separation between editorial, advertising, events and rankings functions should have to prove this.
  11. Rankers should submit to a transparency audit by an outside board of visitors to assess the efficacy of their rankings methodologies.
  12. To produce the rankings, the rankers require a great deal of data and transparency from the ranked. However, the rankers fail to provide such transparency for themselves. Some even call this request for transparency an attempt to request proprietary data. They also call it an attack on diversity. This is a self-serving and unacceptable answer.

The rationale for ranking companies as “best in diversity” rests on precarious intellectual, practical and social-science grounds. To date, efforts to rank diversity are best viewed as attempts at reputation management rather than use of diversity as a tool for organizational transformation. The problem is that as these rankings become more commonplace, organizations that refuse to participate are being criticized in public forums, thus causing some reputational devaluation.

However, the more widespread rankings become over time, the less meaningful their content will be as an organization can pick and choose those rankings that either cost the least to participate in or are the easiest to complete. Maybe the rankings landscape is a testament to where the profession of diversity and inclusion finds itself. If this is true, the quest for outside recognition based on elusive criteria will undermine diversity as a tool for organizational transformation and relegate it to the land of compliance and visible diversity.

2018-03-28T00:51:15+00:00 November 6th, 2016|Commentary|