Diversity Audit of United Parcel Service

Table of Content

UPS Diversity Audit Table of Contents Executive Summary3 Diversity Audit4 I. UPS Organizational Background4 I. 1. Corporate History4 I. 2. Corporate Business Culture and Scale4 I. 3. Delivery Service Industry4 I. 4. Operational Management5 I. 5. Technology and Innovation in UPS5 II. Selected Criteria6 II. 1. Diversity Audit Background6 II. 2. Audit Criteria7 III. Diversity Management in UPS8 III. 1. Diversity of UPS people8 III. 2. Diversity of UPS Community8 III. 3. Diversity of UPS Customers8 III. 4. UPS Supplier Diversity9 III. 5. UPS Diversity in Board Members9 IV.

Evaluation of UPS Diversity Initiatives9 IV. 1. Feedback Facility10 IV. 2. Employee benefits10 IV. 3. Benchmarking and Cooperation10 IV. 4. Diversity Initiatives Objectives11 IV. 5. Business Culture11 IV. 6. Mentoring and Training Program12 IV. 7. Reward System12 IV. 8. Customers and Supplier Satisfaction12 IV. 9. Teamwork13 IV. 10. Recruitment13 IV. 11. Employee Retention and Career Advancement13 IV. 12. Demographic and Representation14 IV. 13. Corporate Reputation14 V. Recommendations15 Bibliography16 Organizations normally consist of diverse structures, whether in its people, customers, and board members.

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In that I have chosen to audit the diversity within the global organization: United Parcel Service (UPS). The diverse structure of this company shows the various roles within each department from corporate management down to the actual labor force doing the work. Conversely, without proper management skills, managers could neglect to acknowledge the role of each part of the corporate structure. Therefore, a unique form of audit is necessary, a form of audit that can deliver information of how well the company manages the diversity of its resources. In order to perform this audit properly, a set of sound criteria is required.

I will be evaluating the diversity initiatives of UPS, one of the most prolific package delivery service companies in the world. The assessment will indicated whether or not UPS has a sound ability of diversity management. Diversity Audit I. UPS Organizational Background I. 1. Corporate History Until today, United Parcel Services Inc. is the largest package delivery company in the world in terms of delivery scale. The company delivered more than 10 million packages to millions of destinations in 200 countries. The company has been around exactly a decade in 2007. It was established in Seattle in 1907 by the 19 year old Jim Casey.

It was not until 1919 that Jim Casey and his partners Evert McCabe and Charles W. Soderstorm decided to establish the name United Parcel Services because the business has been expanding outside its home city (Friedman, 2006). I. 2. Corporate Business Culture and Scale The company is created with the basic perspective that the best services combined with lowest rates will win the market’s attention. Since the beginning, leaders of the company managed its staff by stressing the value and importance of reliability, low rates, customer courtesy and round the clock services.

The business culture remains at the core of UPS activities until today. Today, the company is the one of the most recognized symbols American capitalism with $42. 6 billion worth of assets and more than 400,000 employees (Friedman, 2006). I. 3. Delivery Service Industry Since its inception, the company has been living in an environment of harsh competition. Even back in 1907, there are already several other players in the delivery service industry that threaten to take away UPS’s market share. Today, the competition does not lessen.

Some of the notable competitors of the company are FedEx, United States Postal Services, and DHL (Friedman, 2006). I. 4. Operational Management The company is built on a highly integrated and highly efficient network structure. Throughout the history of the company, it has always displayed considerable attention to efficiency, cost effectiveness and environmental concerns in performing its daily operations. The company operates various types of delivery services, whether it is air and ground in nature, domestic or international in nature and commercial or residential in nature.

All of these operations are performed through a single network (‘Overview’, 2007). Managers of the company believed that the integrated operating model maintained by the company will deliver significant benefits in respect of many performance evaluation criteria, like employee management, environmental issues and financial viability. UPS defines itself as the first delivery service company that has the ability to synchronize the flow of goods, information and funds into a single integrated form of service.

Managers and employees at UPS have worked hard to build the scale, the infrastructure, the financial foundation and the specific expertise to give birth to such synchronized form of service (‘Overview’, 2007). I. 5. Technology and Innovation in UPS Mostly, the company is proud to promote its high-tech communication technology employed to assist its operations. Managers of the company ensure stakeholders that technology always powers every line of service they offer. For instance, a PLD (package level detail) is always created to guide UPS officers in their global delivery operations.

Each PLD is built from the information delivered by UPS customers through UPS electronic information system. UPS delivery officers are also guided by UPS package routing technology which is designed to enhance timeliness and reliability of package delivery, reduce fuel consumption and also provide customized solution for customers’ variety of needs. Moving into the future UPS managers promised their stakeholders that they will continue to focus on constantly reviewing UPS processes and introduce new initiatives to maintain and improve their sustainability.

This goes for every dimension of the business, economic, employee management and social contributions. For instance, for community investment activities, UPS had more than 20,000 of its employees to volunteer 100,000 hours in more than 40 nations worldwide (‘Global Workforce Development’, 2007). II. Selected Criteria An organization is generally comprised of a diverse set of supporting elements. These elements include board members, employees, suppliers and consumers. Corporate ability to manage such condition is often paramount to corporate growth and success.

Thus, there should be a system of evaluation that has the ability to measure the effectiveness of organization’s effort in managing existing diversity within the business environment. In this paper, we are evaluating UPS’s effort in managing diversity within the corporation. In order to come with presentable results, I will provide a set of criteria that will be the basic of evaluating diversity management in UPS. II. 1. Diversity Audit Background Prior to defining those criteria, I will provide a reasoning of why a diversity audit is required in the modern business environment we live in.

A diversity audit is important because the feedback gained from the process is important to aid recognition and prevention of future problems. The process will also allow employee to submit their inputs which will enhance sense of ownership throughout the workforce. It will help managers identify staff development need and enhance the value of the entire organization. In other words, it will shed lights to previously unmanaged issues, promoting both awareness and improvement. The audit should be performed in the best time relative to each organization’s needs.

However, managers should pay attention of the specific criteria that are required to support a successful diversity audit. Some of those important criteria are for successful diversity audit are: perceived need from people in power, commitment from people of the dominant culture, and allocation of necessary resources. II. 2. Audit Criteria In reviewing diversity management of a company, it is important to have both a quantitative and qualitative sets of criteria. For example, a quantitative set of criteria include: 1) Demographic and representation 2) Career development management 3) Absenteeism ) Studying the prevalence of a group compare to other in the workforce 5) Pay equity, studying the equality of pay between people in the same job 6) Promotions equality 7) Recruiting management 8) Productive measures, studying the level of productivity of a group compare to others 9) Sales figures; employee retention; training costs (Ball, 2004) On the other hand, qualitative measures include: 1) Evaluating the results of suggestion boxes, hotlines, and web pages 2) Evaluating the benefits provided by the company, whether they are accommodative in nature or not 3) Benchmarking from best practices ) Reviewing the diversity initiatives objectives 5) Assessing the business climate and business culture 6) Existence of training and mentoring program 7) Existence and Evaluation of recognition programs and the reward system 8) Assessing corporate reputation 9) Evaluating internal and external customer satisfaction 10) Assessing teamwork, whether or not members of the company has a team-oriented atmosphere, how often does friction occur? (Ball, 2004). III. Diversity Management in UPS The company consists of diversity issues in several dimensions.

Below is the condition of those diversity issues and corporate efforts to address them. III. 1. Diversity of UPS people UPS has a multicultural workforce. Managers stated that the diversity of UPS’ people reflected the broad attributes of UPS global business and global community. The company’s workforce consists of various ethnicity, gender, age and culture. UPS managers do not discourage differences to achieve control, but rather they encourage diversity by assessing the value of different cultures in terms of experiences and perspectives.

UPS stated that diversity is valuable because it allows wider range of skills, ideas and resources. The company believed that diversity will impact UPS’ business in respect of many economic and social perspectives (‘Diversity at UPS’, 2007). III. 2. Diversity of UPS Community As provider of global package delivery service, UPS exist in a community of vast diversity. Realizing the nature of the business, UPS has always been attentive to the community in which it operates and lives. UPS displayed partnership agreements with local as well as international organization to improve social condition in the communities where the company exists.

Managers of the company believed that this is important not only to sustain corporate existence but also to sustain corporate growth (‘Diversity at UPS’, 2007). III. 3. Diversity of UPS Customers Being an international package delivery service provider, the company also has customers with vast nature of diversities. Among other diversity issues, this is perhaps the most influential toward corporate growth. This is true because customer diversity requires the company to understand different needs and preferences of each customer demands before delivering the service.

UPS managers however, do not see customer diversity as a threat, but rather as a challenge for corporate operating teams. As the company expands to various different locations with different cultures and people, the company strives and learns how to address individual needs of customers (‘Diversity at UPS’, 2007). III. 4. UPS Supplier Diversity The company also has various types of supplier according to their size, locations and the way they do business. UPS believed in supporting its business partners for mutual benefits. Thus, the company develops strategic elationships with all kinds of business partners, including minority and women-owned business. Managers of the company stated that they are committed to ensure that their supplier diversity does not weaken, but rather strengthen the minority and women owned business, because they believed that the action will drive economic development in the communities in which UPS is operating, and in the end enhances economic capability of UPS’ markets. UPS believed in establishing a diverse supplier network and gaining benefits and momentum from the various kinds of contributions from the diverse supplier (‘Diversity at UPS’, 2007). III. 5.

UPS Diversity in Board Members UPS has a diverse board structure which represented the various influential cultures behind UPS’ decisions. Similar to their attitude in addressing workforce diversity, UPS take advantage of the diversity in their board to the best benefit of the company. Strategic contributions from different perspectives are encouraged to reflect the preferences of different cultures in the community in which UPS operates. IV. Evaluation of UPS Diversity Initiatives In order to cope with limited available data, I will perform both quantitative and qualitative assessment on corporate diversity management initiatives.

The criteria mentioned above will be utilized to evaluate UPS on the basis of available information provided by the company in its official website. IV. 1. Feedback Facility Assessing how the company creates chances for the workforce and managers to send their complaints and suggestion to the company revealed corporate sensitivity toward differences in preferences and needs of members of the company. Companies who provide many opportunities for members of the company to send suggestions will have a better awareness of diversity issues rather companies who neglect to provide the chance.

UPS has an employee feedback program called the Employee Opinion Survey (EOS) since 1983. The EOS is annual a voluntary in nature. It has the objective of: creating positive attitude and a customer focused workforce, identify areas of concerns, enhance awareness to employee management issues, and helps the company achieve its goals. In 2005, the survey was promoted globally in all UPS offices and 88% of the UPS communities participated within it. This is considered a healthy development considering the survey was performed completely voluntary (‘Employee Opinion Survey’, 2007). IV. 2.

Employee benefits The way UPS manages diversity issues within the company can also be assessed by observing corporate benefits program. A transparent, equal and efficiency-supportive benefit program indicated better diversity management initiatives. In the case of UPS however, there is no elaboration of employee benefit program. IV. 3. Benchmarking and Cooperation Working together with other companies is a good indication of diversity awareness. Companies who never compare itself with other companies will have much larger risk of lacking diversity awareness as it is performs its daily operations.

Therefore, a good diversity awareness program is the one that involves various partners and relevant companies. In the case of UPS, the company work together with more than 20,000 businesses across America to create a strategic relationship with minorities within the industry. The program of ‘UPS Supplier Diversity’ is actually launched in 1992, with the commitment to provide business opportunities to small companies, minority companies and companies owned by women (‘Diversity at UPS’, 2007). In 2005 alone, the company spent more than US $ 249 million to minority and women-owned business.

However, managers of the company stated that they are far for finish. The company is currently striving to enhance the level of contributions in the Supplier Diversity Program that involves the entire line of UPS businesses worldwide. As mentioned previously, the company has been working with various organizations to address its diversity issues. Some of those organizations are: the Hispanic Chamber of Commerce (HCC), 100 Black Men of America (100 BMOA), Women’s Business Enterprise National Council (WBENC), and Organization of Chinese Americans (OCA). UPS is actively participating in local and national women and minority business groups.

For instance, UPS is registered an active member of 36 out of 39 National Minority Supplier Development Council (NMSDC) (‘Diversity at UPS’, 2007). IV. 4. Diversity Initiatives Objectives The printed vision statement is ensuring workforce, customer and supplier diversity remains at the core value of the business and community relationship. This displays managerial understanding the diversity is a requisite of successful global operations. Rather than avoiding diversity issues, it is wiser to use them as weapons that enhance corporate capability and creativity in solving problems and promoting growth.

IV. 5. Business Culture Diverse business cultures are lot more difficult to maintain compare to a company operating under a single business culture. Therefore, despite promoting diversity within the organization, good managers must also foster a single set of corporate cultures and values will guide members of the company in achieving common goal. Today, UPS has 400,000 employees working in the designed atmosphere of respect and cooperation. In 2005, 28% of officers and managers of the company are women and 30% of officers and managers are of minorities. % of the company’s workforce is Asian, 16% are Black, 9% are Hispanic and 1% is Native Americans. From the Board of Directors, 17% are recorded female and 8% are minorities (‘Opportunity and Diversity’, 2007). IV. 6. Mentoring and Training Program From their employee management programs and trainings, the company displayed acceptable understanding that diversity is more than just different ethnicity, age and gender, but also different way of thinking and behaving toward life. The company performs all activities of recruiting, training and promoting employees and managers based on work-related criteria.

These policies are designed to support fair employment and labor management practices in UPS. IV. 7. Reward System The characteristic of a reward system indicated how the company took account of its workforce. Some companies differentiate reward system between employees of different race because of efficiency reasons. This is highly discriminative and disruptive toward the working environment. UPS however, have stated that their employee management code of conduct ensures that all members of the company will be treated equal. IV. 8.

Customers and Supplier Satisfaction Within their corporate website, the company stated that they have pledged their commitment to small, minorities and women-owned business partners and suppliers that they will: • Appoint specific people to perform the task and assume the responsibility in reviewing further business opportunities available with small, minorities and women-owned businesses. • Ensure that all partners and suppliers of the company meet the standards of UPS. This includes meeting corporate quality, costs and delivery objectives. The company promised that it will review supplier application and certification as quickly as possible and get back to applicants as soon as possible with their status. (‘Supplier Diversity’, 2007) IV. 9. Teamwork Managing diversity within the need for good teamwork is quite a challenge even for experienced managers. This is why teamwork quality assessment is also an important part of any diversity audit undertakings. In the case of UPS, the company has a unique way of ensuring that its people are always motivated and ready to do the job.

UPS designed their diversity charter with the philosophy that people will do their best if they are provided a working environment where they can feel pride and dignity within their contributions. Thus, their entire employee management regulations are based on the need to motivate teams in UPS’ workforce. Furthermore, UPS believed that a working environment which encourages talent will foster further employee retention. IV. 10. Recruitment Preferences in recruiting based on non-performance-relevant criteria often occurred in the world of human resource management.

Disrespecting diversity taking advantage of it in the false manner will easily generate such manner. In UPS however, the company hires people from diverse background. In the United States, corporate workforce consists of Hispanics, Asian Pacific, African-American, and other minorities who account for about 35% of the total employee of UPS. IV. 11. Employee Retention and Career Advancement Corporate Diversity activities are expressed within corporate policies and procedures. In the UPS Code of Business Conduct it is stated that each individual within the company will be treated fairly.

The company also regulates employee management policies within its Professional Conduct and Anti-Harassment Policy. The rules prohibit any form of workplace harassment, whether they are sexual in nature, race, national origins, age or religion. UPS also provide training to educate employees on the Professional Conduct and Anti-Harassment policies. UPS is working together with existing labor unions to maintain the fulfillment of employee’s rights but also upholding working quality. This is recorded within the UPS Policy Books. The labor agreements include wage rates and working conditions.

Considerations to make the final decisions took account of the unique operations of the company and involve top leaders of the company. IV. 12. Demographic and Representation In further assessment of corporate diversity awareness and diversity initiatives, we can assess the extent to which each different group within the company (whether they are based on race or gender) are represented in managerial positions as well as other strategic positions. In 2005, census recorded that minorities accounted for 50% of UPS’ new employees in 2005. In terms of managerial workforce, the company displayed a slightly weaker performance. 0% of the entire US managers are representing minorities, this already include district managers, UPS Management Committee and UPS Board of Directors (‘Opportunity and Diversity’, 2007). In this diversity assessment we must also take account of the fact that UPS has a Diversity Steering Council, which responsibility is to foster and encourage workforce’s and partners’ commitment to the company. The council consists of internal and external representatives. The internal representatives include Chairman and CEO, Senior Vice Presidents, and The Director of Human Resources and Public Affairs.

IV. 13. Corporate Reputation Assessing corporate reputation is often neglected as an effective method of evaluating diversity management. However, this is also a useful tool to assess past performance of the company and its most likely future. For UPS, one of the apparent achievements in this respect is that the company ranked one of the ‘50 best companies for minorities’ according to Fortune Magazine. The company is also known by the Hispanic or Latino society for being one of the companies that perform tremendous effort in creating job and business opportunities for Hispanic Americans.

In the world of women, UPS has also win awards for its equality in managing gender diversity. V. Recommendations Being a global package delivery service provider, the company simply has more needs to address its diversity issues rather than most companies. Having the need to understand customer preferences and local areas is also indicating the need to pay attention to diversity issues even more. Furthermore, strategist might suggest that the company take advantage of its diverse nature of workforce to get to know local conditions in each of the targeted markets.

The evaluation of UPS’ diversity initiatives displayed previously indicated that the company has a high sensitivity toward diversity issues within the company and its roles on corporate operations. However, some posts are neglected as the company aims for costs efficiency and production effectiveness. Some of these posts are the workforce reward systems and employee benefits. These two posts can be extremely important in influencing how the business is run, with regards to diversity issues or not.

I am suggesting that the company reveal its benefit systems more transparently because such information is unavailable in the corporate website. On the other hand, a more supporting reward system is also necessary although there are little criteria available to judge which one deserves a reward and which one a punishment. It is also important to let people know when managers of the company deserve to have a treat. Managers of the branches should pay attention to suggestions delivered by both professional and un-professional worker. The diversity initiatives are sufficient to maintain integration and cooperation of the organization.

There is work needed in the following are areas need more work, like employee benefit and reward structure. Bibliography Ball, Calvin B. 2004. ‘Diversity Metrics: A Guide to Constructing an Inclusiveness Audit’. Diversity Training Group. Retrieved February 21, 2007 from ‘Diversity at UPS’. 2007. Retrieved February 21, 2007 from http://www. ups. com/search ‘Economic’. 2007. Retrieved February 22, 2007 from http://www. ups. com/search ‘Employee Opinion Survey’ 2007. Retrieved February 22, 2007 from http://www. ups. com/search Friedman, Thomas L. ‘2006.

The World Is Flat: A Brief History of the Twenty-first Century’, New York: Farrar, Straus and Giroux, updated and expanded, pp. 167-176 ‘Global Workforce Development’. 2007. Retrieved February 22, 2007 from http://www. ups. com/search ‘Overview’. 2007. Retrieved February 22, 2007 from http://www. ups. com/search ‘Opportunity and Diversity. 2007. Retrieved February 22, 2007 from http://www. ups. com/search ‘Supplier Diversity’. 2007. Retrieved February 22, 2007 from http://www. ups. com/search ‘Worldwide’. 2007. Retrieved February 22, 2007 from http://www. ups. com/search

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