Managing a diverse or variable work population presents challenges. Managing diversity simply means recognizing variations in individuals. It involves recognizing the value of differences, promoting inclusion and combating or eradicating discrimination. Managers may be faced with losses in staff and work productivity due to prejudice, discrimination, complaints and legal action against the organization (Devoe, 1999). Negative attitudes and behaviors can be barriers to organizational diversity because they will harm working relationships and harm work morale and productivity (Esty, et al., 1995). Negative attitudes and behaviors within the workplace embody prejudice, stereotypes and discrimination, which should never be used by management for hiring, retention and firing practices (it could result in costly litigation). Diversity issues are currently deemed necessary and are expected to become even more necessary in the future due to increasing variations within the U.S. population. Companies should target diversity and appearance for tactics to become all-encompassing organizations because diversity has the potential to produce greater productivity and competitive benefits (SHRM, 1995). Stephen G. Butler, co-president of the Business-Higher Education Forum, believes that diversity is a useful competitive asset that America cannot afford to ignore (Robinson, 2002). Managing and valuing diversity can be a key part of effectively managing people, which could improve work productivity (Black Enterprise, 2001). Effective diversity management has traditionally been used to provide a legally invulnerable position against charges of discrimination. A company that has… middle of paper… some best practices in human resources management for effective diversity management. These practices are believed to improve worker and organizational performance (Adler 1986; Deluca & McDowell 1992; Morrison 1992; Fernandez 1993; Hall and Parker 1993; Schreiber et al. 1993; Grace 1994). However, past research on human resource diversity management mostly ignores the requirements and constraints of small businesses and focuses on larger, more resource-rich organizations. Small organizations often find that they are unable to implement the simplest practice, as they are better suited to giant organizations. For example, small businesses may not have adequate budgets for recruiting workers, advertising, and hiring human resources consultants. Small organizations contribute significantly to the overall performance of the Australian economy (Wijewardena & Tibbits 1999).