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How Denny's went from icon of racism to diversity award winner
Abstract
Can a company that has fallen to boycotts and even comedians' jokes remake its corporate culture and salvage its image? In the case of the Denny's restaurant chain, the answer is a resounding yes. After charges of racial discrimination led to the company's signing a court imposed consent decree, Denny's went beyond the decree's requirements and radically changed its culture and functioning, its public image, and its bottom line. It recently won one of the Council of Economic Priorities' six Corporate Conscience Awards —for diversity. © 2000 John Wiley & Sons, Inc.
... Such a policy was an element of a much larger diversity initiative implemented by Denny's in the years immediately following its 1994 class-action discrimination settlement (Adamson 2000). Denny's employees are required to decree to "never make derogatory or inflammatory comments about any groups of people and never knowingly allow such comments to be made," and according to Jim Adamson (2000, 59), former CEO of Advantica Restaurant Groups, Inc., parent company of Denny's: "Denny's employees know from the start that they face penalties for not living up to what we expect of them." ...
... Adamson's motto was simple: "If you discriminate, I'm going to fire you" (Jones 1995). By 1998, just four years after having been the industry exemplar of racial injustice, Denny's found itself on Fortune magazine's list of the fifty best companies for racial minorities to work (Adamson 2000;Brathwaite 2002). ...
Most of the scholarly and popular discourse to date on the topic of racial discrimination within the restaurant industry has centered on the unjust treatment experienced by employees who are racial minorities. However, discriminatory service based on race also is—or should be—an industry concern. Based on a review of evidence, race-based discrimination in restaurants is a systemic, industry-wide problem. One source of this problem is a social psychological process involving the diffusion and reinforcement of racial stereotypes that servers use to inform the nature of their interactions with customers. Using social psychological principles, restaurateurs should first interdict the diffusion of inappropriate stereotypes by immediately squelching all such talk. Then management must reverse existing damage, by demonstrating the inaccuracy or exaggerated nature of certain beliefs. This article concludes with a call for increased engagement with the issue of racially motivated discriminatory service in our nation’s restaurants.
... If employees are observed using such language, they should be formally reprimanded and potentially even terminated. Such a policy was an element of a much larger diversity initiative implemented by Denny's in the years immediately following their 1994 class- action discrimination settlement (Adamson, 2000), and today Denny's is consis- tently recognized as being among the best companies in America for Asians, Hispanics, and Blacks to work (Brathwaite, 2002;Speizer, 2004). Aside from situations that warrant the use of race as a descriptive adjective, we see no rea- son why servers (or managers) would have any reason to discuss or comment on the race of restaurant customers. ...
Existing studies have found that restaurant servers sometimes deliver service that is informed by their customers’ race. However, we know considerably less about the causes underlying such discriminatory behaviors within the restaurant context. In this study, we advance this literature by analyzing data derived from a survey of restaurant servers (N = 195) to assess the effects of working in a racialized workplace environment, characterized by racist and stereotypical discourse, on servers’ reports of providing race-based service. Our findings reveal a strong statistically significant positive relationship between observing racialized workplace discourse and servers’ self-professed discriminatory behaviors. Furthermore, we find that these effects are not mediated or moderated by servers’ willingness to participate in the discursive spreading of racial stereotypes by discussing their customers’ race with peers. We conclude by identifying suggestions that restaurant leaders might consider to reduce racial discrimination within the restaurant industry.
... In America, overt displays of discrimination, particularly toward those from protected classes, were very visible prior to the Civil Rights Act, in which examples include job advertisements that stipulated 'Whites only' or separate seating areas assigned for 'Coloreds.' There are still recent examples of very overt types of discrimination (e.g., the restaurant chain Dennys' refusal of service, forcing Black customers to wait longer and pay more than White customers; Adamson, 2000; the home improvement retail store Home Depot's overt preferences for men over women in hiring positions, job assignments, promotions and compensation; Selmi, 2005); but for the most part, such overt displays are much less common and tend to be isolated incidences. Such changes may be due, in large part, to legislative action as well as changing social norms, pressures to appear politically correct, and changing attitudes. ...
Individuals do not always face overt, unambiguous forms of discrimination that often have legal repercussions. Rather, the current paper introduces the construct of interpersonal discrimination, a set of behaviors (e.g., increased interpersonal hostility, decreased eye contact, abbreviated interactions) that has negative implications for both individuals and organizations. For individuals, interpersonal discrimination may result in consequences such as lowered performance (2009, doctoral dissertation, Rice University). For organizations, this type of discrimination may lead to negative bottom line consequences (Journal of Applied Psychology, 91, 2006, 579–592). Individuals and organizations can both take steps to combat this discrimination and in this article, we review these strategies. While research on some individual-level strategies in reducing interpersonal discrimination is showing success, the research on other strategies (from allies and organizations) is sparse, and we end by encouraging such future research.
... These cooperative behaviors may be indirectly influenced by the organization's treatment of external parties such as patients. Thus, organizations should review their policies and practices concerning external parties to identify and remove systemic inconsistencies, biases, and other potential barriers to justice that may lead employees to believe that the organization mistreats external parties (e.g., Adamson, 2000). Moreover, organizations should consider implementing policies that maximize information transparency and empowerment of customers (e.g., customer bill of rights), which have been used with increased frequency in service-oriented industries and recently popularized by JetBlue Airways (McGregor, 2007). ...
There is growing theoretical recognition in the organizational justice literature that an organization’s treatment of external parties (such as patients, community members, customers, and the general public) shapes its own employees’ attitudes and behavior toward it. However, the emerging third-party justice literature has an inward focus, emphasizing perceptions of the treatment of other insiders (e.g., co-workers or team members). This inward focus overlooks meaningful “outward” employee concerns relating to how organizations treat external parties. We propose a relational response model to advance the third-party justice literature asserting that the organization’s fair treatment of external parties sends important relational signals to employees that shape their social exchange perceptions toward their employer. Supporting this proposition, in two multi-source studies in separate healthcare organizations we found that patient-directed justice had indirect effects on supervisory cooperative behavior ratings through organizational trust and organizational identification.
... In cases of previous discrimination, formal apologies may prove useful if the company accepts responsibility for its actions and demonstrates contrition by acting to rectify its discriminatory practices. For instance, in the wake of a major lawsuit, Denny's overhauled its diversity image to become one of Fortune's "best companies for minorities" by bolstering its employee training considerably to promote a more diversity-friendly environment (Adamson, 2000). Similarly, the Navy made a concerted effort to increase awareness of gender issues and developed better career opportunities for women following a sexual harassment scandal (Ebbert & Hall, 1994). ...
On account of a number of factors, many companies have increased recruitment targeting female and ethnic or racial minority job applicants. Despite evidence suggesting that these applicants are attracted by different factors than traditional applicants and an abundance of recruitment tactics suggested in the popular press, no empirically based approach to recruiting these populations has emerged. This article reviews and integrates literature on organizational impression management, recruitment, marketing, and social psychology and provides a framework to assist practitioners in attracting minority and female job applicants. In addition, several avenues for future research are discussed.
In recent years, U.S. newspapers and television have featured some company in crisis almost daily. The crises have ranged from corporate fraud to allegations of widespread sexual harassment or discrimination. In almost all cases, the leaders of these companies are caught off guard; yet with the world watching, they are expected to say (and do) something to manage the situation. The consequences of mishandling a corporate crisis on a firm's reputation can linger for decades. We want to emphasize that it is often the mishandling of crises, not the crises themselves, that can have the most severe consequences for a firm. What differentiates those firms that thrive following a crisis from those that do not is the leadership displayed throughout the process. Consider, for example, how most people continue to hold Johnson and Johnson (J & J) as the standard for how to effectively manage a crisis situation when cyanide-laced Tylenol capsules caused numerous deaths in Chicago in the early 1980s. To this day, the popular press consistently rates J & J as one of America's top companies, despite a crisis situation that could have adversely affected consumer trust and firm performance.
An analysis of a database compiled by the authors from claims recorded by the Ohio Civil Rights Commission found that three causes of action accounted for most employment-discrimination claims against restaurants in that state. Those causes are (in decreasing order of frequency) race, sex, and retaliation. When the restaurants are analyzed according to type, however, the frequency of claims changes. One particular change of note is the rise of retaliation claims, which overwhelmingly follow complaints based on other causes. This cause of action merits attention from restaurant operators because a retaliation claim can continue even if the original complaint fails or is dropped.
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