“Diversity Solutions at Pennymart Ltd”

Instructions
This assignment represents 50% of your total grade for this module.
Pennymart Ltd
Pennymart is a chain of 30 low budget stores in North America, largely
specialising in domestic goods such as light bulbs, stationery, small tools
etc. In recent years they have added a low cost toiletries range that has
been very successful. Their motto is “Anything priced above $10 we won’t
sell it”. The company has been trading since 1984. It has had quite a
turbulent management history since the founder sold his controlling shares
in 1998. The CEO has changed 4 times since then. The current CEO, Julia
Perch, has been in post since 2002. In the last three years, she has built a
thriving company with an annual turnover of $1 billion. Coming from an HR
background, Julia is extremely interested in people management, creating
‘innovation through diversity and the importance of training and
development for staff to increase Pennymart’s competitive advantage.
The Situation:
Since julia’s arrival, this large company was considered an early diversity leader,
with its strong work/life benefits, high rates of hiring and promoting women, and
frequent public communications about having an inclusive corporate culture. julia
appointed a Chief Diversity Officer (COO), Kim Merchant, about that time. Kim
joined many diversity-related organizations and was a visible face of corporate
diversity in the mainstream press. Although the CEO was not making personal
statements about her commitment to diversity, she was holding senior leaders
accountable for results and meeting with regional, departmental and store
managers. Pennymart created regional, open “diversity forums”, were staff could
nominate “diversity champions” who could attend and represent the varying
employee views on such matters. Representation in the workforce and lower
management was racially diverse, especially compared with the industry
averages, but there remained a gap at the top levels of management.
What Happened?
Following the recession, Pennymart has found that its representation of all
groups, including women, has declined relative to the other companies in the
retail industry. The main reason for the decline: Changes to the company
structure meant that the CEO has had much less oversight of the management of
operations and has been focussing on strengthening the company’s position
nationally, with a view to growth into global markets. This company, like many
others, was hit hard by the economic turbulence in the last three years. The chief diversity officer, who did not speak of diversity in business terms, could not
maintain diversity as a business imperative. The company has even removed the
diversity section from its homepage.
In addition, the CDO did not track participation in diversity forums or have metrics
for monitoring diversity within their supplier companies. There was no way to
assess what was workinq and what was not-and what ramifications it NaS
having on the bottom line. The chief diversity officer did not have frequent access
to the CEO or to her direct reports, reporting in two levels down to the head of
HR.
The CDO was viewed strictly as a staff person whose business advice was not
considered.
The Results:
As other companies innovated and added diversity-management practices,
Pennymart actually dropped best practices. The diversity forums were disbanded
due to cost to the resource costs of allowing employees to attend. The CEO no
longer signed off on supplier-diversity goals. Alternative career tracks for
employees with long-term family concerns weren’t offered. Management
participation in formal, cross-cultural mentoring declined dramatically.
Those results were reflected in the company’s representation numbers, which
showed an even more dramatic decline in racial and gender diversity at the top
ranks as well as sharp gaps in retention when examined by race/ethnicity. While
the company was downsizing, Black and minority ethnic employees were leaving
at a rate triple that of their white counterparts.
TASK
You are a Human Resource Consultant, specialising in the area of
organisational development and diversity. The CEO, Julia Perch, has
requested that you carry out a diagnostic analysis of diversity issues at
Pennymart and produce a full report with suggested solutions to get
Pennymart back on track. Julia is keen to be at the cutting edge of diversity
practice and therefore has requested that you include “up-to-date” theoretical
research to support your diagnosis and recommendations.
GUIDANCE
1. The 3000 word report should be in business format:
Introduction/Background
Diagnosis of the problem/Analysis
Conclusions
Recommendations
2. In your introduction, you should give a brief explanation of diversity and
how it relates to the business imperative. This should be supported
with relevant theoretical references.
3. You should select the main themes emerging from the case study, for
example, recruitment, communications, leadership, organisational
culture etc, in the structuring of your analysis
4. You should use relevant theory to support your analysis, referring to
any models of practice where appropriate. This should be properly
referenced using Harvard format.
5. Pennymart are interested at becoming a leader in diversity and equal
opportunities. You should use current examples of good employment
practices from other organisations where appropriate.
6. You should identify the key conclusions from your analysis on each of
your main themes.
7. You should ensure that your recommendations relate to your identified
conclusions and reflect best practice in the HRM field
 

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