Harnessing demographic differences in organizations: What moderates the effects of workplace diversity?

• Published date: 01 February 2017
• Date: 01 February 2017
• DOI: http://doi.org/10.1002/job.2040

Harnessing demographic differences in

organizations: What moderates the effects of

workplace diversity?

YVES R. F. GUILLAUME

1

*, JEREMY F. DAWSON

2

, LILIAN OTAYE-EBEDE

3

,

STEPHEN A. WOODS

4

AND MICHAEL A. WEST

5

1

Aston Business School, Aston University, Birmingham, U.K.

2

Sheffield University Management School, University of Sheffield, Sheffield, U.K.

3

Liverpool Business School, Liverpool John Moores University, Liverpool, U.K.

4

Surrey Business School, University of Surrey, Guildford, U.K.

5

Lancaster University Management School, Lancaster University, Lancaster, U.K.

Summary To account for the double-edged nature of demographic workplace diversity (i.e,. relational demography, work

group diversity, and organizational diversity) effects on social integration, performance, and well-being-

related variables, research has moved away from simple main effect approaches and started examining

variablesthat moderate these effects.While there is no shortage of primarystudies of the conditions under which

diversity leads to positive or negative outcomes, it remains unclear which contingency factors make it work.

Using the Categorization-Elaboration Model as our theoretical lens, we review variables moderating the effects

of workplace diversity on social integration, performance, and well-being outcomes, focusing on factors that

organizations and managers have control over (i.e., strategy, unit design, human resource, leadership,

climate/culture, and individualdifferences). We pointout avenues for future researchand conclude with practical

implications.© 2015 The Authors. Journalof Organizational Behavior published by John Wiley & Sons, Ltd

Keywords: relational demography; work group diversity; organizational diversity; TMT diversity; workplace

demography; diversity management

The business case for diversity holds that when workplace diversity (i.e., relational demography, work group

diversity, and organizational diversity) works, it benefits the organization through more innovations, better

decision-making, a larger talent pool, and a wider customer base (Cox, 1993). However, diversity does not always

work, being linked to lower employee morale (Tsui, Egan, & O’Reilly, 1992), more conflicts (Jehn, Northcraft, &

Neale, 1999), and poorer job performance (Chatman, Polzer, Barsade, & Neale, 1998). To account for this double-

edged nature of diversity, research has moved away from simple main effect approaches and started investigating

variables that moderate the effects of diversity on social integration, well-being, and performance related variables

(cf. Joshi, Liao, & Roh, 2011; van Knippenberg & Schippers, 2007). While there is no shortage of primary studies

of the conditions under which diversity leads to positive or negative outcomes, it remains unclear which contingency

factors make it work (Guillaume, Dawson, Woods, Sacramento, & West, 2013). In the literature, there are many

examples of predicted moderators for which empirical support was not found, often leaving managers and organiza-

tions perplexed about how to manage diversity effectively (Avery & McKay, 2010).

To clarify the issue, meta-analytic reviews (e.g., Guillaume, Brodbeck, & Riketta, 2012; Joshi & Roh, 2009;

Thatcher & Patel, 2011; van Dijk, van Engen, & van Knippenberg, 2012) are of limited use because they are bound

by their methodology to the investigation of contextual and methodological moderators derived from study charac-

teristics (e.g., industry setting, study setting, diversity type, diversity operationalization, team type, team longevity,

© 2015 The Authors. Journal of Organizational Behavior published

by John Wiley & Sons, Ltd

Received 30 November 2013

Revised 17 April 2015, Accepted 12 June 2015

This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in

any medium, provided the original work is properly cited.

*Correspondence to: Yves Guillaume, Aston Business School, Aston University, Birmingham, B4 7ET, U.K. E-mail: y.r.f.guillaume@aston.ac.uk

Journal of Organizational Behavior, J. Organiz. Behav. 38, 276–303 (2017)

Published online 22 July 2015 in Wiley Online Library (wileyonlinelibrary.com) DOI: 10.1002/job.2040

The IRIOP Annual Review Issue

team interdependence, team size, and task type). They can say very little about moderator variables examined within

studies (e.g., diversity climate, transformational leadership, or diversity beliefs) because the coefficients of interac-

tion terms are not generally comparable between studies because of differing study design (Peterson & Brown,

2005), and conditional effects are often difficult to derive and interpret based on these metrics (cf. Kristof-Brown,

Zimmerman, & Johnson, 2005). Similarly, earlier qualitative reviews either did not look at moderating variables

(e.g., Joshi et al., 2011) or were restricted by the number of primary studies available (e.g., van Knippenberg &

Schippers, 2007). No review is available that evaluates what management practices moderate the effects of diversity

(cf. Avery & McKay, 2010). The aim of our paper is therefore to take stock and provide a comprehensive and up-to-

date qualitative review of variables moderating the effects of diversity on social integration, performance, and well-

being-related variables, focusing on factors that organizations and managers have control over. In the following, we

outline the scope of our review, define key variables, review the literature on what moderates diversity effects, dis -

cuss the implications of our findings for theory and practice, and point out future directions for research in this arena.

Scope of the Review

In line with research in workplace demography (Joshi et al., 2011), we apply the term workplace diversity to any

form that relational demography (i.e., individual level dissimilarity from peers), work group diversity, and

organizational diversity may take (e.g., separation, variety, and disparity, Harrison & Klein, 2007; actual and

perceived, Harrison, Price, Gavin, & Florey, 2002; faultlines, Lau & Murnighan, 1998). We subsume research in

top management team (TMT) diversity under organizational diversity because of its focus on organizational level

outcomes (cf. Joshi et al., 2011). Our review focuses on demographic attributes, such as gender, race/ethnicity,

age, tenure, education, and functional background, because of their relevance and importance to research and orga-

nizations (cf. Williams & O’Reilly, 1998). Grounded in the social categorization/similarity attraction perspective

and the information/decision-making perspective, research in workplace diversity has mainly looked at two broad

sets of outcome variables: social integration variables (e.g., conflict, cohesion, and attachment) and performance-

related variables (e.g., organizational performance, work group performance and innovation, and individual in-role

and extra-role performances; cf. Joshi et al., 2011). More recently, research in workplace diversity building on the

social categorization perspective has also started examining employee’s well-being-related variables, such as stress

and health (e.g., Wegge, Roth, Kanfer, Neubach, & Schmidt, 2008). Accordingly, our review investigates what

moderates the effects of workplace diversity on performance, social integration, and employee well-being variables.

To access the relevant literature, we conducted a manual search of the latest qualitative and quantitative

reviews on work group and organizational diversity (Joshi et al., 2011; Joshi & Roh, 2009; Thatcher & Patel,

2011; van Dijk et al., 2012; van Knippenberg & Schippers, 2007; Williams & O’Reilly, 1998) as well as on relational

demography (Guillaume et al., 2012; Joshi et al., 2011). To identify further studies, we searched relevant databases

(ISIWeb of Knowledge, PsycInfo, and ABI/INFORM) for empirical quantitative studies that looked at the moderated

effects of workplace diversity (i.e., relational demography, work group diversity, and organizational diversity) on

social integration, performance, and health-related outcomes and were published or in press in peer reviewed journals.

We included studies that examined higher-order interactions and studies that treated workplace diversity variables as

a moderator rather than an independent variable, as long as the results could be re-interpreted as a moderated work-

place diversity effect. We also discuss the findings of previous meta-analyses if relevant. As our review is intended to

inform organizations and managers about how to manage workplace diversity effectively, we only included studies

that examined moderating variables over which organizations and managers have control. While analysis of the

papers that we found did not reveal any obvious structure into which the moderators fell, we tried to organize them

into substantial themes that occur in the diversity management literature (Avery & McKay, 2010; Guillaume,

Dawson, et al., 2014). Accordingly, we categorized moderating variables into the following groups: strategy, unit

design, human resource (HR) practices, climate and culture, leadership, and individual differences.

WHAT MODERATES THE EFFECTS OF WORKPLACE DIVERSITY? 277

© 2015 The Authors. Journal of Organizational Behavior published

by John Wiley & Sons, Ltd

J. Organiz. Behav. 38, 276–303 (2017)

DOI: 10.1002/job