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Diversity, equity and inclusion (DEI) are the new buzzwords of management in today’s organizations. Top management and human resource departments are having conversations around them, considering various measures to implement them, and designing new policies to enforce them. Many of the organizations have already put infrastructure and policies in place to ensure adherence to their DEI mandate.

However, how much do we know about the success of these initiatives? Are organizations able to create diversity, promote equity and foster inclusion through these initiatives? Are their ways of finding out whether they do or don’t? Which initiatives succeed or fail? Is it possible that an organization has diversity, but not equity or inclusion?

To answer all these questions, we need to define and measure DEI.

Why define DEI?

Diversity, equity and inclusion are often discussed together which makes it difficult to understand what they individual imply. Even though related, they are distinct concepts with different implications.

Why measure DEI?

Effectiveness of DEI initiatives can be evaluated only when they are measured. Once we know how diversity, equity and inclusion are different from each other, we can identify ways of measuring them accurately, which can in turn, provide feedback to improve upon these initiatives.

The following paragraphs provide the definition and conceptual difference in DEI based on academic research.

Defining diversity, equity and inclusion

Diversity implies variety. Diversity in employees is indicated by the heterogeneity amongst them in terms of age, gender, educational background, marital status, work experience, skills, ethnicity, and physical and mental abilities. Diversity may also exist in the cultural and regional background, personality and personal preferences. Diversity brings in multiple perspectives, knowledge, capabilities and strengths. If harnessed properly, it can promote idea generation, innovation, problem solving and decision making, and thus improved and sustainable performance. It is important to note that diversity does not itself lead to better performance

Equity implies fairness. Equity amongst employees is considered to be present when they perceive that their outcomes vis-à-vis inputs are equivalent to outcomes vis-à-vis inputs of comparable peers in the organization. Inputs are in terms of competence, and time, cognitive and emotional investment in a job. Outcomes can be in terms of compensation, hierarchical position, access to information and employment experience. If employees perceive equity with their colleagues, they are less likely to be dissatisfied with their job or disengaged from their work. Since employees expect equity, it is its absence that impacts performance, rather than its presence.

Inclusion implies a sense of belonging. Inclusion of employees occurs when they feel that the organization cares for them, supports them and promotes their development. Employees feel included when they are respected, treated well, asked for opinions regarding organizational matters, called to participate in decision making, provided resources along with learning and mentoring to develop skills and abilities, and offered with prospects to grow in their career. If employees sense inclusiveness, they would identify with the organization, and therefore be more committed and motivated to perform well. They are also likely to be loyal to the organization, and may go out of their way to make a positive impact.

To summarize, diversity relates to differences amongst employees, equity relates to fairness, and inclusion relates to belongingness. It is possible that the organization is able to create diversity by implementing appropriate guidelines for recruitment, promotion and learning and development. However, equity may be absent due to unfair compensation, policies and processes and distribution of information. It is also possible that the organization is able to create equity, but inclusion may be missing due to lack of concern, consideration, resources, infrastructure, support or opportunities for the diverse employees.

Measuring diversity, equity and inclusion

Given this distinction, we can conclude that measurement of diversity, equity and inclusion in an organization would also vary. Diversity can be measured using objective pre-defined parameters. Benchmarking and analytics can help assess the degree of diversity, and the improvement in diversity within and across departments, regions, business units and hierarchical levels. Data on diversity can be easily collected from employee records available with HR department and the reporting managers.

In contrast, measurement of equity and inclusion would need to be done in terms of employee perceptions. This is because organizational objectives of equity and inclusion of a diverse workforce can be met only when the employees of the workforce ‘believe’ in their presence based on their personal experiences and interpretation. It is possible that despite the best intentions, initiatives and affirmations of an organization, diversity may not spell equity, inclusion or both for some employees.

Equity would need to be measured in terms of employees’ perception of fairness with regard to aspects like their compensation, authority and responsibilities, and organizational practices and communication. Inclusion would need to be measured in terms of employees’ perception of belonging formed on the basis of interactional environment, organizational support and opportunities. Assessment of organizational culture can also give a reliable indication of inclusion. Data on perceptions would need to be collected directly from employees through questionnaire surveys.

To conclude, DEI are the three pillars of people management that are critical to the sustainability and success of organizations today. However, the difference amongst the three is not clearly understood, resulting in suboptimal initiatives and poor assessment of their effectiveness. If organizations can comprehend the distinctive implications of diversity, equity and inclusion, they would be able to design initiatives in a holistic manner and measure them appropriately. This would not only enable the diverse workforce to contribute to organizational performance, but also help them remain satisfied, engaged and committed to the organization in the long run.