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The Effect of Workforce Diversity and Organizational Culture on

Employee Performance in Pakistan

Submitted By

Muhammad Haseeb Khan

Hadique Tahir

Saifullah khan





Submitted to

Sir Subhan Qazi

Department of Management Sciences,

Baharia University Islamabad.

Table of Content


Problem statement……………………….………………………………4


Research questions………………………………………………………4

Signifance of study…………………………………………………….. 4

Scope of study…………………………………….…………………… 5

Organization of study…………………………….……………………. 5

Literature review…………………………………….…………………..5

Theoretical framework…………………………………………..……..13

Research hypothesis……………………………………………...…… 13

Data and Methodology………………………………………...……….14







Some of the key characteristics of workforce diversity

include race, ethnicity, gender, age, religion, ability, and sexual orientation. A company that
embraces diversity can broaden its skill base and become more competitive and innovative.
Workforce diversity also brings with it a number of issues and challenges.

Every organizations objective is to maximize the utility of their factors of production, including
their labor (employees). Employees are humans and will work best when there are pleasant
working conditions. An employer would want to see how they can improve their employee’s
performance within their business. Ever since the twenty first century there has been an increasing
emphasis on encouraging workforce diversity within the work force.

Many recent Organizational Behavior studies have integrated the encouragement of workforce
diversity as a crucial determinant of improving the efficiency of an organization. Diversity has
been considered significant to a business’s success and is estimated to increase its importance in
the future as a result of globalization in the world (Maingi, 2015) Organizational culture also has
become an important topic for businesses today. Organizational culture can be defined as the
common views, attitudes, and beliefs within an organization.

Businesses are encouraged to create a positive organizational culture that allows equal opportunity
for everyone regardless of their ethnicity, age, gender or background. (Saad & Awadh, 2013) This
type of organizational culture will encourage diversity which can have a positive impact on
employee performance. Organizational culture has the potential to change the relationship between
workforce diversity and employee performance. Having a diverse workforce but an organizational
culture that is unfair in terms of providing equal opportunities for each worker and is
discriminatory there may be an adverse effect on the performance of employees.

Problem Statement:

The research paper seeks to analyze the impact of workforce diversity on employee performance
and how organizational culture can alter this relationship within the Pakistani Banking sector.
Knowing this businesses within Pakistan can look into improving their workers performances
through having a diverse workforce with an organizational culture that is supportive of it.


The objective of our study is to find out the link between workforce diversity and employee
performance within the Pakistan, and to see how organizational culture can impact the relationship
of workforce diversity and employee performance. This would help provide basic fundamentals
for Pakistani firms to apply in order to manage their workforce's diversity better and to improve
their employees’ performance. The study will show how having a diverse workforce may not be
enough to improve employee performance, but a positive organizational culture must also be in

Research Questions

Q1) what is the link between workforce diversity and employee performance within the Pakistan?

Q2) what is the impact of organizational culture on workforce diversity and employee

Significance of Study

On a daily basis we are exposed to countless forms of diversity in our everyday dealings, and with
the fast speed that the world is progressing, in our exposure to different kinds of people will only
increase. Knowing this, it would be interesting to see if having a diverse workforce and positive
organizational culture would help improve the performance of employees at work. Having
knowledge of workforce diversity and diversity accepting organizational culture can help

organizations adopt policies where they are more accepting of diversity and allow equal
opportunity for everyone. This can help improve businesses labor efficiency.

Scope of study

Pakistan is rich in diversity as it has varying cultures among all of their provinces. Islamabad being
an integrated city has a vast cultural diversity. Pakistan is also known to have a more hereditary
culture where females are often not given much opportunity for advancement within the

However, with a vast cultural change where more and more women are accepted within the
workforce, and migration between provinces has become common major cities such as Islamabad,
Karachi and Lahore are experiencing diversity in the workforce. This cross sectional study will
analyze the impact of workforce diversity on the performance of employees within the Pakistan.
It will also analyze the change in the relationship caused between workforce diversity and
employee performance through organizational culture.

Organization of study

In present study, section 1 discusses the introduction, section 2 discusses the literature review,
section 3 discussed the theoretical framework, section 4 discusses the data and methodology,
section 5 results and discussion, section 6 discusses the conclusions and recommendations and in
the end we have references.

Literature review

Workforce diversity can be broadly defined as any differences between people. Diversity can
include surface level differences such as ethnicity, religious preferences, gender, cultures, race,
and caste. It also includes more deep level diversity such as different skills, experiences, learning
aptitudes, comprehension skills, and personality.

According to (Ehimare, 2006) the increase in the concept of diversity can have a very positive
effect on diversity management programs in businesses and can improve overall performance of
workers. Researchers found that having a diversity of employees in the workforce can result in
increased innovation, a wide pool of skills, different observations and more experience can
improve overall efficiency. (Saxena, 2014) Said that the workforce has various qualities amongst
workers which is not just limited to different dialects, observation skills, states of mind, different
aptitudes and learning. Workforce diversity allows for the sharing of information which works to
enhance efficiency amongst the workers.

(Arokiasamy, 2013) Claimed that diverse workforce is a natural response to the changes taking
place in the world and global market. It was found that diverse work teams bring high value to
organization and by having an organizational culture that respects diversity will add to the
significance of the organization by developing a competitive edge and increasing work
productivity. According to (Saxena, 2014) a diversified workforce has the potential to give
different favorable circumstances like innovativeness, critical thinking, and adaptable adjustment
to change that can give a business an upper hand compared to a business that runs a non-diversified

The authors (Selvaraj & Joseph R., 2015) hypothesize that if the prevailing diversity of the workers
in the organization is effectively managed, it will allow the organization to reap benefits in terms
of high productivity, and if not managed properly it could lead to low performance However, one
limitation to workforce diversity improving overall employee performance identified by (Ehimare,
2006) was discrimination that arises in workplaces. Workplaces should be free of any
discrimination or bias towards a certain group of people. Diversity can only breed well in an
organizational set up that is free from discrimination and that applies a broad concept of including
all sorts of people in the organization. This type of behavior can be seen as the organizational
culture. The concept of encouraging workforce diversity must be embedded into the organizational
culture. The organizational culture must give equal opportunity to every single member of the
organization. Researchers generally accept that having an organizational culture that encourages
workforce diversity generally has better quality performance of workers.

(Saeed, 2013) Found that managers that have more likeable and flexible personalities tended to
yield higher workforce performance than managers who were more rigid. They also found that

positive organizational culture and workforce performance are directly related. Working in a
company that provides equal opportunity to all regardless of any differences and that encourages
diversity can highly motivate workers. These high levels of motivation will ultimately reflect in
the work of the employees. (Kaufman, Christensen, & Newton, 2015) Found that recognition was
the main driver of great work. They also found that creativity, self-motivation and autonomy are
also important for great work. While increasing pay, promotions and training increase work
performance to a lesser scale. Self-motivation can be highly improved through positive
organizational culture.

(Guidroz, 2009) Found that good organizational culture may be the key to success for businesses
to achieve high workplace performance. They also found that organizational culture is more
important than national culture in the workplace. Through positive organizational culture the work
performance of workers would improve and thus reduce any inefficiencies in the workplace. (Josh
Greenberg, 2004) said that diversity mainly addresses benefits, increased adaptability, broader
service range, variety of viewpoints, and more effective execution. These methods are used to
execute diversity in a workplace to keep a workplace functioning. Results were adaptability of
employees, they had broader service knowledge and can do effective execution. Future research is
to utilize diversity training, promote diversity in leadership positions, and launch a customizable
employee satisfaction survey that provides comprehensive reporting.

The researcher (Emma, 2018) found that more 25 million people working in U.S are foreign born
and data suggest that in less than 3 decades, the country will truly be a multicultural society with
no single group holding majority. Main article suggests that it has many advantages and
disadvantages. Some results says it is beneficial like it would have better financial results and will
have a good competition with global markets etc. Although the transition to a diverse workplace
can be difficult, employees across the country and globe are making to diversify the work places.
Further (Reagan, 2005) claimed that diversity fatigue is increasing in the workplaces in the U.S.
There are some plans or ideas discussed to eradicate fatigue and keep the company successful.
Employees from different backgrounds need to trust each other, companies should focus on their
management styles and companies should appoint right people as managers for right diverse group
of people. Results can eradicate the fatigue in the company. Future research discusses the
elimination of fatigue and bringing new ideas.

(Deering, 2010) said that diversity’s definition can be same for everyone like it is of age, gender,
race, cultural background etc. In her article she tells that diversity can be beneficial in the
workplace in different ways. The results are it can unleash talents, skills and experiences. It creates
innovation, different language barriers, it will grow your talent, and it improves employee
performance. Future research is off to discover more ways to make workplaces diverse a keep it
friendly and keep it efficient.

(Demby, 2011) said that implementing of diversity work efficiently in the workplace will help the
company and the employees to work efficiently. The methodology is to make everyone aware of
the workforce diversity so that there are no ambiguities here and after as a result it will be beneficial
for everyone, Future research is mainly focusing on how to make this work. (Aberu, 2014) claimed
that there are many factors which can make a workplace good while being diverse too. She has
shared many ideas and advantages of being a diverse workplace. The methodology works on being
well efficient for the company and do more work. The results are it drives innovation, increases
creativity, it makes recruitment easier, it avoids high turnover and it captures more of the market.
Future research is off to find more ways to make the workplace diverse and be highly efficient as
well so that the company is booming.

(Smith, 2010) said being divergent has numerous advantages for both the employee and the
workplace. Main objective is discussing the advantages like higher morale, different perspectives,
global impact, and community relations. Methodology is employee will have higher morale and
will be able to work from different aspects, and will have more global impact and will have good
relations with people from different communities. Results for the diverse companies are really
good because it has many advantages and future research is to find more ways to make the
workplace up to the mark.

Later on the author (Amadeo, 2011) said that “Cultural diversity is when differences in race,
ethnicity, age, ability, language, nationality, socioeconomic status, gender, religion or sexual
orientation are represented within a community. The group is culturally diverse if a wide variety
of groups are represented. Cultural diversity has become a hot-button issue when applied to the
workplace. Why does cultural diversity matter? It can benefit a workplace. The benefits are
achieved through the following methods, for diversity to excel in a workplace, it needs time

otherwise it can end in misunderstandings and miscommunications. The employees need to
understand each other and the company has to safeguard the rights of their employees no matter
how diverse they are. (Wharton Business School consultant Pamela Tudor) found the key to
managing diversity. Members of the team must be dedicated to a shared goal. She found that this
commitment to a common goal overcame any diversity issues. (Sophia, 2012) claimed that
Celebrating diversity will for sure help in developing and increasing the economy, since everyone
present will play a vital role if they are given respect and opportunity. A diverse workforce
combines workers from different backgrounds and experiences that together breed a more creative,
innovative, and productive workforce. A diverse workforce drives the economy. The method to
complete these objectives can be recruiting from a diverse pool of candidate’s means a more
qualified workforce. When companies recruit from a diverse set of potential employees, they are
more likely to hire the best and the brightest in the labor market. Which will end in Economic
growth of a workplace. Diverse Workforce Is Integral to a Strong. Future research has to be upon
Diversity as a key aspect of entrepreneurialism.

Further the (Wall , 2010) added that Promoting workplace diversity has many bottom line benefits.
But you need to approach the hiring process holistically retaining employees can be more difficult
than recruitment. This is especially true for companies in less diverse regions where relocated
minority employees may feel disconnected. You may need to take a more active role in helping
them adjust to the culture at work as well as in their new communities. First, identify what your
needs are. Does your workforce resemble the communities that you operate in? Do they match the
demographic that you serve or want to serve? If not, develop a hiring strategy to increase workforce
diversity. Talk to local organizations with community connections, including churches, cultural
institutions and colleges. They can help you connect with candidates. You can also enlist help from
nonprofits like the Urban League, the National Council of La Raza or from websites
like that offer searchable channels of minority job hunters. Ask employees
for referrals, since they will have peers in the industry or know qualified candidates who may be
looking for work. The relationship can also help new employees adjust to the move. Offer rewards
for successful referrals. Which will help in making the job more compelling to job hunters by
emphasizing details that will attract a more diverse candidate pool. Be culturally sensitive when
describing what makes your company a good place to work. In the future we have Develop and
implement an equal opportunity employment policy.

The Forbes magazine further added and questioned that why we need diversity and answered it
which helped us to understand all the articles defining diversity above. (Glenn, 2012)Why does
the term diversity still need to exist in a title when you're solving for inclusion? Does the addition
of the word mean companies think diversity solves for addition? Or that if you add inclusion, you
are therefore inclusive and not just diverse? Are we sending the wrong message? Yes, we are.
Focusing on diversity does not solve for inclusion. Method to follow this is to focus on diversity
which creates independence, Promotes a compliance minds set a compliance mindset happens
when organizations place an emphasis on ensuring that diversity initiatives are in place to celebrate
employee differences. Makes people feel judged not valued People want to be part of an
organization that encourages them to be themselves and allows them to challenge the status.
Resulting in individuality which is going to continue to shape present and future business models
and if inclusion is the platform for leveraging the collective intellectual capital in all people to
drive business growth, why do we allow diversity to stand in the way? When we do, it feeds the
old narrative that continues to be repackaged in other forms that promote disconnection,
marginalization, and even victimization. In the future Inclusion should be in corporate strategy
focused on driving growth.

(Juliet, 2007) Diversity and inclusion has become a CEO-level issue around the world. The digital
organization of today, which operates as a network of teams, thrives on empowerment, open
dialogue, and inclusive working styles. Leading organizations now see diversity and inclusion as
a comprehensive strategy woven into every aspect of the talent life cycle to enhance employee
engagement, improve brand, and drive performance. Methodology for these objectives can be
carried through today's political, economic, and global business environment where diversity has
become increasingly important. Which can result in Diversity and inclusion which now impacts
brand, corporate purpose, and performance. Not only is the public increasingly aware of the issue,
but employees are also expressing stronger views on diversity and inclusion. The most popular
solution today is training. But while such interventions are helpful, it appears that making people
aware is not enough. Organizations should consider making structural changes, implementing
transparent, data-driven solutions, and immersing executives in the world of bias to give them a
visceral understanding of how bias impacts decision making, talent decisions, and business

According to (George, 2007) main objective is to have diversity in organization for the growth.
For making it diverse firstly making mixed workplace for better skills secondly, diverse
perspective can help fighting challenges in an easy way and by breaking all barriers that lead to
diversity can help in workplace diversity. As a result for getting competitive advantage in market
you need to have work diverse in future. The organization that has a diverse environment will have
greater growth and be better in competition. Author (Alison, 2012) further added that main
objective is to boost the organizations performance by accepting diversity of thoughts. For doing
this methodology followed is; that includes bringing people from different background to the same
table and having group discussions & thinking. Hiring candidate’s unconventionally not only high
scorers but also smart workers. Assigning work according to the talent the team member contains.
Reverse mentoring can be practiced for improvement and make a culture that prefer innovation of
ideas. As a result senior people might face egoistic problems but at the end the organization will
grow more.

(Diana, 2010) Main objective is to have work force diversity for long lasting success of an
organization. Methodology used is to have recruiting opportunity by hiring females in male
dominating organizations, have an open minded learning by accepting ideas from everyone. Make
teams with a better relationship rather than working on individuals and making it more effective
by having mixed talented people on same platform. Further on using latest technology and using
innovative ideas to reach potential customer in the market. As a result there would be a strong
company culture that will lead to a greater performance of the organizations with better repute
according to employees too

According to (Hult Business School, 2009) main objective is to embracing cultural diversity in the
workplace, and it is an important first step for businesses that want to be competitive on an
international scale. Organizations across industries are embracing the benefits of a diverse
workforce. But with benefits, necessarily come challenges of working across borders, cultures,
and languages. For doing this methodology adopted that benefits is that to acknowledge the
organization thoroughly, keep hunting for innovative ideas , making comparison with
organizations better than the current, appreciating best talents and embracing them. For challenges
there is making multi-cultural teams and negative stereotyping, employees don’t let their
colleagues’ voice be heard for their personal benefit, difficult to understand across languages and

cultures. As a result good with bad can happen but for future if there is proper governance kept in
the organization so these challenges can be eliminated.

(Blaze, 2012) main objective is that prioritizing workplace diversity can lead to increased sales,
profitability and a better connection with customers. Methodology adopted is that diversity should
be reflected by the workplace where it is developed. Be realistic in setting the goals, tell managers
to be diverse in receiving employees work, educate and train every employee for diversity by
breaking stereotypes and make diversity as a part of your a result there would be better
work performance. In future it can be said that this culture would flourish because ultimately the
organization is benefitted from implementing diversity. The (Jim, 2009) further added that the
main objective is to know which thing goes best with the combination with the diversity; Diversity
and Compliance, Diversity and Political Correctness, Diversity and Leadership. The methodology
used in this firstly, its diversity with compliance and diversity with political correctness, both of
these ways are highly ineffective because they hardly lead towards diversity. But diversity with
leadership is highly effective because it is an unbiased a workplace where people from all race feel
respected is called diverse environment, not where people who are just neglected by their race. As
a result when there is diversity along with leadership that is only effective others don’t get to the
conclusion. In fture if you want to have a prospering diverse environment in the organization you
need to have diversity with strong leadership control where natural difference must not be an issue.

(Lee, 2009) main objective is workers from culturally diverse backgrounds into their workforce
companies become much stronger. For this diverse environment the methodology adopted is new
talents are brought forward by creativity not education, productivity is increased by bring every
idea to a single table which is then combined with others, language barriers are broken by focusing
on idea understanding not the language and presentation and new processes are followed by giving
new ways to work . as a result company will face a lots of challenges that would need to be fixed.
In future along with these methods if challenges are equally resolved organizations will flourish.

Theoretical Framework

Research Hypothesis

1. An organization that has more workforce diversity will have better employee performance
2. An organization with a positive and supportive organizational culture will have increased
employee performance
3. An organization that has a positive and supportive organizational culture will have more
workforce diversity
4. The organizational culture will moderate and bring a change to the relationship between
workforce diversity and employee performance

Data and Methodology
This research is exploratory in nature as the research area has been tapped into through the
exploration of different literatures on the effects of diversity on employee performance and how
organizational culture can modify it. It is a correlation study as we aim to analyze if there is a
relationship that exists between workforce diversity and employee performance, and if
organizational culture has the ability to change the nature of the relationship. There is no researcher
interference. It has a non-contrived setting and is a field study. It is a cross-sectional or one shot
study as the data collected for this research will only be done at one period of time. The sample
size for this research is 50, and data will be collected through a questionnaire given to the random
sample. The questionnaire entails about 30 questions and is designed to be answered through a
five-point Liker scale. The results of the questionnaire will help us analyze the relationship
between the variables and was analyzed using the SPSS software to generate the data from the

Frequency Table

Frequency Percent Valid Percent Percent
1 2.0 2.0 2.0
1 2.0 2.0 4.0
2 4.0 4.0 8.0
2 4.0 4.0 12.0
3 6.0 6.0 18.0
3 6.0 6.0 24.0
7 14.0 14.0 38.0
3 6.0 6.0 44.0
7 14.0 14.0 58.0
5 10.0 10.0 68.0
5 10.0 10.0 78.0
10 20.0 20.0 98.0
1 2.0 2.0 100.0
Total 50 100.0 100.0

Frequency Percent Valid Percent Percent
1 2.0 2.0 2.0
4 8.0 8.0 10.0
5 10.0 10.0 20.0
9 18.0 18.0 38.0
1 2.0 2.0 40.0
6 12.0 12.0 52.0
11 22.0 22.0 74.0
3 6.0 6.0 80.0
1 2.0 2.0 82.0
5 10.0 10.0 92.0
4 8.0 8.0 100.0
Total 50 100.0 100.0

Frequency Percent Valid Percent Percent
1 2.0 2.0 2.0
1 2.0 2.0 4.0
1 2.0 2.0 6.0
4 8.0 8.0 14.0
6 12.0 12.0 26.0
4 8.0 8.0 34.0
5 10.0 10.0 44.0
5 10.0 10.0 54.0
5 10.0 10.0 64.0
4 8.0 8.0 72.0
10 20.0 20.0 92.0
2 4.0 4.0 96.0
1 2.0 2.0 98.0
1 2.0 2.0 100.0
Total 50 100.0 100.0


The findings of the research were that workforce diversity is related to employee performance.
Organizations that promoted and encouraged diversity within their workplace had higher employee
performance. Having a positive employee culture where employees are free of any discrimination
and tend to be more motivated towards achieving higher performance for the organization.


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Questionnaire on Workforce Diversity, Organizational Culture and Employee

Tick the relevant option

Q. What is your gender?

Male ______ Female ______

Q. What is your age?

Between 20 - 25 ______
Between 26 - 35 ______
Between 35 - 45 ______
Between 45 - 50 ______
50 + ______

Q. Where do you belong from?

Punjab ______
KPK ______
Sindh ______
Balochistan ______
Other ______

Respondents are required to measuring the items by rating on the five-point Likert‟s Scale with
the range from strongly disagree (1) to strongly agree (5). In the space given write down the
number from the range 1 to 5 that you agree with where:
1 - Strongly disagree
2 - Disagree
3 - Neutral
4 - Agree
5 - Strongly Agree

Section 1: Modified Operational Definition of construct for workforce diversity

1 The organization does a good job of attracting and hiring women. ______

2 Women are involved in the organization’s decision making as much as men. ______

3 The performance criteria for success are expected to be higher for men than for
women. ______

4 The organization does a good job of attracting and hiring minorities. ______

5 Different languages that are used to communicate do not create problem

among employees. ______

6 At work, I developed low self-esteem due to my ethnicity. ______

7 The ethnicity differences in work group do not encourage conflict. ______

8 The team leader includes all members at different ethnicity in problem

solving and decision making. ______

Section B: Modified Operational Definition of construct for Organizational Culture

1 The employees have not been discriminated by employer while hiring and
recruitment process on the gender basis. ______
2 Fair treatment is given to all employees, whether they are male or female. ______

3 Opportunities for growth and advancement exist for women in our organization. ______

4 A career development that includes women is encouraged within our organization ______

5 The organization‟s training and development program is developed to meet the

criteria/requirement of the male and female gender. ______

6 I am positive about gender diversity in this workplace ______

7 This organization provides me with equal opportunities for training and

career development. ______

8 Opportunities for growth and advancement exist for minorities in our organization ______

9 The organization concerns about the employee’s customs, cultures, and values. ______

10 I am positive about ethnicity diversity in this work place. ______

Table 3.7: Modified Operational Definition of construct for employees performance

1 I enjoy my tasks and the division's work approach. ______

2 I am committed to the mission and direction of my organization. ______

3 I am motivated to complete the task that is assigned to me ______

4 I co-operate well with my colleagues of different ethnicity. ______

5 Opposite gender can perform well and I enjoy working with them. ______

6 My performance level affects my salary level. ______

7 I am satisfied with my current salary level. ______

8 I am given the chance to try my own method of doing the job. ______

9 By learning more skills through courses/training, I can improve my task

performance. ______

10 Good employee performance is important for the future growth of my

organization. ______