The Role of Workforce Diversity in Firm Performance: An Empirical Study

The inclusion of people with varied experiences, backgrounds, cultures, races, genders, and ages in the workforce is referred to as workforce diversity. It is now more important than ever to do so in order to improve business performance than ever for businesses to give diversity and inclusion top priority when employing new employees. As India continues to diversify and becomes more globally integrated, workforce diversity has been receiving more attention. The innovation, creativity, and problem-solving skills of businesses that value diversity and inclusion tend to be greater. Additionally, businesses need to foster a culture that is open to different viewpoints and ideas. This includes giving all workers an equal chance for professional progress and encouraging a sense of community among all workers. In India, the performance of businesses is significantly influenced by employee diversity. Businesses that place a high priority on diversity and inclusion often have a competitive edge and are better able to meet the demands of a competitive and complicated global market.


Introduction
The significance of workforce diversity in fostering organizational effectiveness in India. Diversity can be used as a useful resource to encourage knowledge sharing, improve reputation, and enhance high-performance work systems. However, it's crucial to foster an inclusive workplace that values different viewpoints and encourages equal opportunities for career advancement. Businesses in India can gain a competitive edge and succeed in the long run by putting a priority on diversity and inclusion. Roberson and Park (2007) looked at the effects of diversity reputation and leader racial diversity to study the connection between diversity and business performance in India.In PSYCHOLOGY AND EDUCATION (2018)  contrast to businesses with a poor reputation for diversity, they revealed that businesses with a good reputation for diversity performed better financially and had happier employees. This implies that a good reputation for diversity can be a valuable advantage for Indian businesses, as it can draw in clients and talent, boost brand recognition, and raise employee morale.Furthermore, they found a positive correlation between firm performance and the diversity of leaders' races. In contrast to companies with less diverse leadership, those with executives from a variety of racial origins generally performed better.
In India, Muduli (2015) evaluated the connection between high-performance work systems (HPWS), the HRD environment, and organisational success. It was found that organisational performance was favourably correlated with the "HPWS and HRD" atmosphere. It also showed that diversity was a crucial element of HPWS and that it significantly enhanced organisational performance. It emphasised the significance of developing a diverse workforce and fostering an inclusive workplace culture to promote high-performance work systems. Jain and Moreno (2015) looked at the connections between organisational learning, knowledge management techniques, diversity, and firm performance in an Indian heavy engineering firm.
They revealed that the firm's organisational learning and knowledge management practises influenced its performance in a favourable way. Creating opportunities for workers to share knowledge and experience and learn from one another was a part of these practises.They also demonstrated how diversity promoted knowledge transfer and sharing inside the organisation.
They pointed out that diversity united people with various origins and viewpoints, facilitating the flow of knowledge and ideas.They showed that diversity influenced organisational learning and knowledge management practises favourably, which resulted in enhanced performance.To improve organisational performance in India, diversity can be used as a beneficial resource.
Businesses can gain from a variety of viewpoints and ideas that can help spur innovation and enhance performance by supporting diversity and cultivating an inclusive work environment. This can be accomplished by promoting teamwork among employees, offering training and development opportunities, and encouraging people to share their knowledge and skills. PSYCHOLOGY AND EDUCATION (2018) Mishra and Mohapatra (2010) revealed a positive relationship between emotional intelligence and job performance, demonstrating that people with higher emotional intelligence were more likely to do well at work. They came to the conclusion that since emotional intelligence may aid people in navigating challenging social circumstances, forming relationships, and communicating clearly with others, it may be a great asset for Indian businesses. Businesses can enhance employee job performance and overall organisational success by promoting emotional intelligence. Mathew et al. (2012) examined the connection between culture, employee work outcomes, and performance in Indian software organisations. They revealed that culture had a major impact on how well employees performed at their jobs, including dedication and job satisfaction, which in turn had an impact on business performance. They opined that businesses in India may gain from encouraging an inclusive and pleasant organisational culture. Businesses can improve the work outcomes of their employees and eventually raise their performance by fostering an inclusive workplace that respects and honours workers from different backgrounds. Pitts et al. (2010) noted potential areas for workforce diversity in the new millennium. They emphasised the value of diversity in the workplace since it may bring together people with a range of knowledge, viewpoints, and experiences. They recommended that companies learn more about the advantages of hiring a diverse workforce and adopt policies for encouraging inclusion and diversity.

Literature Review
Businesses can create policies and procedures that encourage a varied and inclusive work environment by acknowledging the importance of worker diversity in organisational success. This can eventually boost performance.
According to Srinivasa Rao (2007), Indian enterprises' use of performance management systems was explored. They observed that successful implementation is the only way for performance management systems to have a beneficial effect on organisational performance. They revealed that crucial elements of a good performance management system included effective systems for training, feedback, and communication. They also identified that a significant factor in the system's success was employee engagement and participation. They emphasised the significance of a welldesigned and implemented performance management system in enhancing organisational performance in Indian enterprises overall. PSYCHOLOGY AND EDUCATION (2018)  In the Indian business process outsourcing sector, Nadkarni and Herrmann (2010) looked into the connections between CEO personality, strategic adaptability, and firm performance. They revealed that characteristics of CEOs like emotional stability and openness to experience were positively correlated with strategic flexibility, which in turn had a beneficial impact on firm success.
Additionally, they found that in dynamic environments, where strategic flexibility was particularly crucial, the effect of CEO personality on firm performance was more pronounced. In the context of the Indian business process outsourcing industry, this highlighted the importance of the CEO's personality and strategic adaptability in fostering corporate performance.
Total quality management (TQM) procedures and quality performance in Indian service organisations are correlated, according to Talib et al. (2013). They observed that the use of TQM practices was positively correlated with quality performance, with employee and customer satisfaction serving as mediators of the association. They noticed specifically, that TQM practices including continuous improvement and employee involvement boosted staff and customer satisfaction levels, which in turn fueled increased quality performance. This emphasised the significance of TQM practices in raising quality performance in Indian service firms, and it also emphasized the crucial role of employee and customer satisfaction as critical intermediaries in this relationship.
In the context of economic liberalisation in India, Som (2008) examined the link between creative human resource management and company performance. They observed a strong correlation between creative HR practices and corporate performance. Additionally, they found that the adoption of cutting-edge HR practices like employee empowerment, training and development, and performance evaluation were important predictors of improved firm performance. This brought home how crucial cutting-edge HR techniques are for attaining long-term corporate growth in India. On the relationship between racial diversity and organisational performance, Cunningham (2009) looked at the moderating impact of diversity strategy. The association between racial diversity and organisational performance was revealed to be significantly moderated by diversity strategy. Additionally, it was found that organisations that implemented PSYCHOLOGY AND EDUCATION (2018)  Diversity in the workplace is becoming more and more valued in recent years, especially in light of India's quickly changing economic environment. The relationship between diversity management strategies and organizational performance in India was looked into by Cooke and Saini in 2010.To determine how diversity management practices affected organisational performance, they looked at the diversity management strategies used by a range of organisations, including those with varied forms of ownership and those engaged in a variety of commercial endeavours. This shown that diversity management strategies are positively linked to improved organisational performance outcomes, such as higher employee retention rates and lower employee turnover. The promotion of diversity and inclusion in organisations has been proven to be particularly beneficial when it comes to diversity training, mentoring programmes, and diversity task groups. Diversity management techniques are crucial for building an inclusive and supportive work environment in the setting of India, where the workforce is diverse in terms of gender, race, religion, and language. Organisations may give their staff the knowledge and skills needed to collaborate productively with people from different backgrounds by offering diversity training and mentoring programmes. Companies can create plans for increasing inclusion and diversity in the workplace by forming diversity task teams.

Objective:
To measure the role of workforce diversity in firm performance.

Methodology:
This study is descriptive in nature in which the data were obtained from the 200 respondents to find the role of workforce diversity in firm performance. A checklist question was used to analyse and interpret the data. In a checklist question respondents choose "Yes" or "No" for all the questions. PSYCHOLOGY AND EDUCATION (2018) Table 1 and Figure 1 show the role of workforce diversity in firm performance. It was found that around 94.5% respondents accept that diversity raises employee morale, helps in great problemsolving for businesses (92.5%), Builds dedication and job satisfaction (91.5%), Draws in clients and talent (90.0%), Boosts brand recognition (88.0%), Helps in increasing employee performance (87.5%) and Builds positive correlation between firm performance (85.0%).

Conclusion
In a country like India, which is an intersection of cultures and has a sizable population of different religions, castes, and languages, the value of a diverse staff in a company's performance cannot be understated. A diverse workforce may boost creativity and innovation, improve problem-solving abilities, and help organisations understand and meet the varied needs of their customers. Having a varied workforce has several advantages, one of which is that it can improve how well customers are understood by firms. Employees from varied origins each offer their own set of experiences and viewpoints to the workplace. This can help businesses better understand the demands and preferences of their diverse consumer base, which will increase customer happiness and loyalty. PSYCHOLOGY AND EDUCATION (2018)  Increased creativity and innovation are two important benefits of a diverse workforce. Employees from various backgrounds can contribute a variety of thoughts and viewpoints when they work together. Employees are more inclined to think outside the box and develop original, creative solutions to challenges as a result, which can promote creativity and innovation. The ability to solve problems can also be improved by a varied staff. When workers from various backgrounds collaborate to solve a problem, they are able to use a range of various viewpoints and approaches.
Employees who are better able to recognize and address different aspects of a problem may be able to solve problems more successfully. In conclusion, it is impossible to exaggerate how crucial worker diversity is to a company's success, particularly in a nation like India. Increased creativity and innovation, improved problem-solving abilities, and a more diverse workforce are all benefits that businesses can gain from. Businesses will be more likely to prosper in a market that is becoming more globalized and competitive if they place a high priority on diversity and inclusion.