The True Cost of Discrimination

In a small business, having a culture of equality can mean the difference between success and failure

Feedback to my last column on the discrimination that women face in the engineering field (see BW Online (see BW Online, 03/14/06, "Fixing Engineering's Gender Gap") was insightful. Several men sent e-mails saying that gender discrimination simply does not exist in engineering and other businesses or that it is justified, that I was "beating a dead horse," and "pandering" to women. Some said I had no idea what I was talking about.

All of the women who responded shared their personal experiences in the workplace and thanked me. They said they could relate directly to what I had written. It was clear that I had hit a nerve, and there was quite a chasm between those who are discriminated against and those who aren't. Some readers did not seem to understand what discrimination means and the damage it can do to a business.

To start with, discrimination is not limited to women, it affects all minorities. As we know, human beings often hold biases based on color, religion, ethnicity, age, disability, and gender. Even unconscious associations have an effect on behavior and attitudes. Yes, it's a reality in society. But in the workplace, discrimination is a problem employers can't afford to ignore.

To show you why, I've included the following problems a business will surely experience if discrimination is tolerated:

Damaged reputation

Appearing to support discriminatory policies can hurt a company's reputation. Take the example of The National Council of Women's Organizations taking on ExxonMobil (XOM) for its sponsorship of the Augusta National Masters Golf Tournament. The damage to the reputation of the company is probably greater than any benefits derived from the corporate sponsorship.

Limited internal competition

In business, it's always survival of the fittest. You need your best and brightest making critical decisions and every employee pulling his weight. By restricting advancement to certain groups or types of employees, you're limiting your business. In my previous column, I talked about how women felt they were being stereotyped based on their gender. Ultimately the business loses because productivity suffers.


A December, 2005, Gallup poll showed that job satisfaction was lowest when employees experienced discrimination. This should be no surprise -- employees know when they've been short-changed. They feel demoralized, stop caring about the business, and develop negative attitudes. This stifles innovation. After all, why should an employee who is made to feel like a second-class citizen take initiative?


The Gallup poll also showed a direct correlation between loyalty, retention, and discrimination. Employees are more likely to be looking for jobs when they feel they have been wronged. They'll jump at the first opportunity they get.

Wrong signals to potential clients

When employees interact with customers and partners, any deep-seated resentment usually becomes apparent. Customers can sense when employees aren't enthusiastic or don't believe in their company.

Limited hiring pool

Job applicants usually look very carefully at the attitudes of people they are going to work with. They can often sense that something is wrong. Negative word of mouth from former employees can be damaging. On the other hand, the positive signals sent by employees who feel they are treated fairly can help attract top talent.

Ethical precedents

Allowing stereotypes and personal prejudice to permeate the decision-making process sets a bad example. "If it's considered okay to tolerate bad judgment of one type, then why not another?" an employee will surely wonder. This confusion can result in ethical violations, and these usually spread through an organization like a cancer -- eating away at its very fabric.

Legal violations

There are a number of federal and state laws that outlaw different types of discrimination. These include:

• Title VII of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race, color, religion, national origin, and sex.

• The Equal Pay Act of 1963, which prohibits employers from paying different wages to men and women who perform essentially the same work under similar working conditions.

• The Americans with Disabilities Act, which prohibits discrimination against persons with disabilities.

•The Age Discrimination in Employment Act, which prohibits discrimination against individuals who are age 40 or above.

You can find more on federal laws prohibiting job discrimination at the Equal Opportunity Commission's Web site.

In small businesses, having a culture of equality can make the difference between success and failure. You need every employee working at maximum potential, freely offering diverse ideas and opinions, and sending positive signals to customers and potential recruits. Build a workplace with clear policies, where all are treated equally and only competence, hard work, and results are rewarded. Allow no room for discrimination. You simply can't afford to.

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