The Business Case for Gender Diversity: Examining the Role of Human Resource Management Investments

• DOI: http://doi.org/10.1002/hrm.21736
• Author: Eugene Kim,Hyuntak Roh
• Published date: 01 May 2016
• Date: 01 May 2016

Human Resource Management, May–June 2016, Vol. 55, No. 3. Pp. 519–534

© 2015 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com).

DOI:10.1002/hrm.21736

Correspondence to: Hyuntak Roh, School of Business, Yonsei University, 262 Seongsanno, Seodaemun-gu,

Seoul,Korea 120-749, Phone: +82-2-2123-6577, Fax: +82-2-392-6706, E-mail: hroh@yonsei.ac.kr

better results and enhance organizational effec-

tiveness (e.g., Conference Board, 2006; Cox, 1994;

Cox, Lobel, & McLeod, 1991; Society for Human

Resource Management, 2008; Thomas & Ely,

1996). This view has been well espoused in the

field and considered as an essential business strat-

egy to gain competitive advantage in the chang-

ing business environment (Cox & Blake, 1991;

Kochan etal., 2003; Richard, 2000).

Although the business-case-for-diversity per-

spective is now popular, it lacks theoretical and

empirical guidance indicating how gender diver-

sity in the workplace can positively influence

As women have made significant inroads

into the workplace for the past decades,

organizations have sought the impli-

cations for business. Since the 1990s,

diversity rhetoric has moved beyond

a traditional focus on equal opportunities and

discrimination and shifted to emphasize the

“business case” for diversity (e.g., Catalyst, 2004;

Herring, 2009; Kochan etal., 2003). Many diver-

sity researchers and practitioners have suggested

that managing workforce diversity is one of

the key business imperatives because a diverse

workforce provides unique resources to produce

THE BUSINESS CASE FOR GENDER

DIVERSITY: EXAMINING THE

ROLE OF HUMAN RESOURCE

MANAGEMENT INVESTMENTS

HYUNTAK ROH AND EUGENE KIM

Integrating opposing theoretical perspectives from the past literature, the

authors hypothesize and test a U-shaped curvilinear relationship between gen-

der diversity and workforce productivity. They further propose that the curvilin-

ear effects vary depending on the levels of an organization’s human resource

management (HRM) investments in pay, benefi t, training, and communication;

that is, the patterns are more salient when HRM investments are high rather than

low. To enhance understanding of how HRM investments have impact on diverse

employees, the authors also examine the moderating infl uence of organiza-

tional identifi cation of diverse members that can exert proximal infl uence on the

diversity- productivity relationship. As predicted, results reveal that high levels

of HRM investments infl uence the gender di versity–workforce productivity asso-

ciation to form a U-shaped curvilinear relationship. Organizational identifi cation

also yields the same moderating patterns. Research and practical implications

are discussed. ©2015Wiley Periodicals,Inc.

Keywords: gender diversity, human resource management investments,

organizational identifi cation, productivity

520 HUMAN RESOURCE MANAGEMENT, MAY–JUNE 2016

Human Resource Management DOI: 10.1002/hrm

To better understand

performance

implications of

gender diversity

in organizations,

researchers have

suggested that

the relationship is

potentially curvilinear,

meaning that the

opposing theories

in the past literature

may be compatible.

diversity–organization performance relationship.

Limited research examining the relationship has

yielded somewhat mixed evidence (e.g., Frink

etal., 2003; Richard etal., 2004).

Another way to reconcile unclear findings

from past research is to take a more nuanced, con-

textual perspective (e.g., Johns, 2006). Diversity

researchers have recommended going beyond

examination of the main effects of diversity on

performance by asking specific questions about

when and how diversity effects translate into

positive performance outcomes (Joshi & Roh,

2009). Several studies conducted at the organiza-

tional level have found significant performance

effects of diversity under certain environmental

conditions depending on industry type, environ-

mental munificence and stability, or community

demographics (e.g., King et al., 2011; Richard,

Murthi, & Ismail, 2007; Sacco & Schmitt, 2005)

and strategic orientation (e.g., Richard, 2000;

Richard etal., 2004). However, less research atten-

tion has been devoted to the internal work con-

text of organizations, the actual environments

in which diverse close interactions take place

(Jackson, 1992). Researchers have suggested that

organizations choose human resource manage-

ment (HRM) practices to create certain work con-

texts that signal and promote desirable behaviors

(e.g., Bowen & Ostroff, 2004). HRM approaches

reflect organizational investments in employees,

such as pay, training, benefits, and communica-

tion, and their different forms of exchange rela-

tionships and social norms (e.g., Shaw, Dineen,

Fang, & Vellella, 2009; Tsui, Pearce, Porter, & Hite,

1995). In a diverse work setting, an organization’s

HRM approach can also influence the percep-

tions, behaviors, and social interactions of dissim-

ilar members (e.g., Coyle-Shapiro & Shore, 2007;

Homan etal., 2008), which in turn will affect orga-

nizational performance outcomes. With regard

to the influence of HRM investments on diverse

employees and its implications for organizational

performance, we still lack insights into its inter-

vening mechanism.

In this study we address the following impor-

tant questions: (1) What is the relationship

between workforce gender diversity and organiza-

tional performance? and (2) to what extent is this

association affected by the contexts created by

HRM investments? By answering those questions,

we aim at extending past research in several ways.

First, integrating opposing theoretical perspec-

tives, we hypothesize and test the U-shaped rela-

tionship between gender diversity and workforce

productivity. Given the multidimensional nature

of organizational performance, in this study

we focus on the effects of gender diversity on

organizational performance (Joshi, Liao, & Roh,

2011; Kochan etal., 2003). In the past literature,

opposing theoretical perspectives have suggested

that the increasing diversity in the workplace has

various performance implications. For instance,

drawing on the value-in-diversity perspective,

scholars have argued that culturally diverse groups

can outperform homogeneous ones because dis-

similar members bring diverse, nonredundant

experience, perspectives, and expertise and uti-

lize them for better problem solving and decision

making (Cox, 1994; Cox et al., 1991; Jackson,

1992; Richard, 2000). Others, however, have indi-

cated negative consequences of diversity such as

in-group–out-group biases, discrimination, and

intergroup conflict due to social comparison

among dissimilar members and

competition over limited resources,

which often result in inefficien-

cies in organizational function-

ing (Blalock, 1967; Tajfel & Turner,

1986; Williams & O’Reilly, 1998).

While both views have gained some

support in the past literature, espe-

cially at the small-group level and

with attitudinal (e.g., commitment)

or behavioral (e.g., problem solving,

conflict) outcomes (for a review see

Jackson & Joshi, 2011; Williams &

O’Reilly, 1998), less is known how

both perspectives can be applied

in explaining the effects of gender

diversity on organizational out-

comes such as performance.

To better understand perfor-

mance implications of gender diver-

sity in organizations, researchers

have suggested that the relationship

is potentially curvilinear, meaning

that the opposing theories in the

past literature may be compatible.

Combining these perspectives would indicate a

U-shaped association between gender diversity

and performance (Blau, 1977; Richard, Barnett,

Dwyer, & Chadwick, 2004; see also Pfeffer &

Davis-Blake, 1987; Tolbert, Simons, Andrews, &

Rhee, 1995). Past research suggests that biases,

categorization, and intergroup competition

might exert initial negative performance effects,

but increased diversity and intergroup interac-

tions can diminish those negative consequences

(e.g., Tolbert etal., 1995). As diverse employees

engage in information elaboration, organizational

performance can improve (Blau, 1977; Richard

etal., 2004). Although this theoretical integration

appears to be relevant, past literature has rarely

examined the possible curvilinearity of the gender