According to Neil Cavuto, it is addressing your employees concerns.
In his recent Fox News article (http://www.foxnews.com/story/0,2933,260267,00.html) he described the event where Target allowed their Muslim cashiers to either wear gloves or shift them to other positions, so that they wouldn't come in contact with pork.
While such a belief is certainly quite absurd to me, I fail to see how Target's reaction to it was a result or example of Political Correctness. This term is more often used to describe laws and mandates.
Mr Cavuto does attempt to give a non-governmental and a purely business challenge to this "pandering": it will offend customers. How so Mr Cavuto? Why does a customer care who rings up their groceries as long as it is done quickly and accurately? Why would a customer care if they have a Muslim stocking the shelves in apparel rather than handling pork products? The reassignment did not cause Target loss of their "financial goals". I would argue that them "pandering" to the employees will only result in higher retention and less turn-over. Which what Target was struggling with in the first place.
As to his final conclusion that we "live in a multi-cultural world where we attempt to blend, not stand out" gives me images of rows of brown shirts with identical hair cuts and boots. Standing in perfect line waiting for the leader to tell them what direction the world needs to move. In many aspects, I'm certainly not a minority. But in others, I do make sure I stand out. I'd rather be seen as an individual than a bland node in some kind of a cultural collective.