Editor’s Note: WorldatWork, in partnership with the Center for Evidence-Based Management (CEBMa), is proud to announce a new Workspan Daily series that will utilize research as evidence to inform decision-making for the benefit of our readers and to encourage further discourse on topics vital to the total rewards profession. This series will present scientifically sound research on topics that rewards practitioners deal with as well as informed opinions that, at times, may actually contradict what sound research tells us.
Special thanks to Natasha Ouslis, director and science translator at ScienceForWork, for her consultation and review of this article.
Organizations are being challenged to create cultures that provide equivalent access and opportunity to people with different individual characteristics. Appearances and beliefs are inappropriate factors to use in selecting people and in providing career opportunities and rewards.
When an organization attempts to formulate strategies that facilitate diversity, equity and inclusion (DEI), it is helpful to know what is likely to be effective in achieving the desired outcomes. Research can be a valuable form of evidence that a particular program is likely to produce the results that are desired. However, research findings must be relevant and of a high quality. Articles appearing in practitioner publications often lack validity and may be no more than someone’s opinion or what they are trying to promote. Practitioner literature is often extremely biased, since only successes are documented. Even though failure could be a source of learning, it’s difficult for individuals to take the initiative to broadcast their mistakes.
Evidence reviews come in many forms. One of the best-known types of accessible information is the conventional academic literature review, which provides an overview of the relevant scientific literature published on a topic. However, their trustworthiness is often low. Clear criteria for inclusion in the analysis are often lacking and studies may be selected based on the researcher’s individual preferences.
Summary of an Evidence Review Related to DEI
The following is from a CEBMa study published in August of 2019.
Research Question: What do we know about the factors and interventions that enhance diversity, equity and inclusion in the workforce?
Finding 1: Workforce diversity is associated with both beneficial and detrimental organizational outcomes.
Finding 2: Diversity management efforts that promote a climate of inclusion are strongly associated with positive organizational outcomes.
Management practitioners and scholars alike have long considered workforce diversity to have a positive impact on a wide range of organizational outcomes, such as organizational commitment, job satisfaction, employee retention, creativity, innovation, improved corporate image and higher organizational performance.
The outcome of recent empirical studies, however, paint a more nuanced picture. In fact, several studies have found mixed results or even detrimental outcomes such as a lack of retention, decreased performance, task conflicts, miscommunication and decreased social identity. Diversity management efforts, however, particularly those designed to create an organizational climate for equity and inclusion (see finding 4), are consistently associated with positive organizational outcomes while concurrently reducing negative consequences.
These findings suggest that it is important to develop organizational policies and practices that move beyond simply promoting workforce diversity and actively manage diversity to engender an equitable and inclusive climate.
Finding 3: The mixed effects of workforce diversity on organizational outcomes — and the moderating effect of an inclusive climate — can be partly explained by social identity theory.
Social identity theory suggests that people tend to classify themselves and other people into social categories — such as race, ethnicity and gender — that have meaning for them. This classification shapes the way they interact with others from their own identity group, as well as with people from other groups.
The theory states that people feel more comfortable with others who they perceive to be more like them, particularly with respect to characteristics that are central to their sense of social identity. An associated phenomenon is “in-group favoritism” and “outgroup derogation.” People tend to express more empathy for (and tend to favor) members from their own group and view people from outside the group as less sympathetic, less talented, or underperforming. This phenomenon can lead to biased performance evaluations, unfair promotion opportunities and resource allocations.
In addition, social identity theory states that people tend to compare their group to other groups to determine which has greater (perceived) social status. Social groups create boundaries between themselves to differentiate themselves and gain or maintain superiority over other groups. As such, employees who belong to groups with greater perceived social status will accept and include colleagues they consider to be like them while excluding those they perceive to be different. For example, if a female Asian American is added to a team of White males, the team may reject the woman’s ideas, undervalue her contribution, and emphasize differences. This is especially likely when White men occupy the higher-level positions in the organization. This can generate distrust and miscommunication between groups.
People often feel that they belong to multiple groups. As such, generating an inclusive climate can help decrease the detrimental effects of diversity. If members of an organization feel included and feel they are all part of the same group, the organization, division, or team becomes another social identity group to which they belong. This lowers individual boundaries, increases commonality, fosters trust and enhances communication.
Finding 4: Diversity management has a moderate to large positive effect on an organization’s climate of inclusion and, consequently, employees’ inclusive behavior.
Diversity management involves specific policies, programs and HR practices to enhance the recruitment, inclusion, recognition, promotion and retention of employees who are different from the majority of an organization’s workforce. Multiple research studies have shown that such policies and practices have a moderate to large positive effect on an organization’s climate of inclusion and, consequently, employees’ inclusive behavior.
Finding 5: Diversity training has a moderate, positive effect on employees’ attitudes, cognitions, and inclusive behaviors.
Research indicates that diversity training elicits strong positive emotional responses and that most participants see the training as very effective and worthwhile. In addition, diversity training has a moderate positive effect on employees’ attitudes, cognitions and behaviors. Attitudinal learning refers to the development of trainees’ attitudes towards diversity. Cognitive learning refers to the extent to which trainees acquire knowledge about other cultures, characteristics, customs and issues among different groups. Behavioral learning concerns the development of skills and behaviors to positively interact with members from other groups. The effect of diversity training is moderated by contextual factors (e.g., organizational vs educational setting, voluntary vs mandatory attendance, stand-alone vs part of a broader institutionalized effort), design (e.g., duration, opportunities to practice, instructional methods), and trainer/trainee characteristics.
Finding 6: Gender representativeness is strongly associated with perceptions of inclusion, whereas minority ethnic representativeness is weakly associated.
Finding 7: Employees’ perceptions of inclusion are affected by organization size, organizational decline and level of organizational autonomy.
A large cross-sectional study from the United Kingdom indicates that a balanced gender representativeness is positively related to workplace inclusion. This suggests that efforts to improve the recruitment of female staff has a positive impact on employees’ perception of the organization’s inclusive climate. Minority ethnic representativeness, however, has only a weak impact on perceptions of inclusion. In addition, it was found that an inclusive workplace is more difficult to achieve in large organizations, when an organization is downsizing or experiencing a recruitment freeze, or when an organization lacks autonomy.
Finding 8: Employees’ perceptions of inclusion are affected by leadership style.
A large cross-sectional study from The Netherlands indicates that employees’ perceptions of inclusion are strongly affected by managers’ leadership style. It was found that the more a manager displays a transformational style of leadership, the more employees will experience an inclusive organizational climate.
A transformational leadership style is based on the creation of a shared vision that employees are encouraged and empowered to pursue. Leaders who favor this style focus on the organization’s higher-order goals and look for potential motives in followers, seek to satisfy higher needs, and engage the full person of the follower.
In addition, a cross-sectional study indicates that leadership that is perceived by employees as authentic is strongly associated with perceptions of inclusion. Smaller associations were found for trust in leader and supervisory support.
Finding 9: Leader engagement predicts perceived inclusion climate.
Leaders who engage employees in decision making have a strong association with higher employee inclusion. Managers that have a special relationship with an inner circle of trusted employees give them higher levels of responsibility, decision influence and access to resources. Research indicates these employees see their organization as more inclusive. Employees who are encouraged by their manager to give their unique perspective and to participate in decision making also have higher inclusion scores.
Finding 10: Employees’ perceptions of inclusion are strongly affected by board inclusion behaviors and practices.
A cross-sectional study found that employees’ perceptions of workplace inclusion is strongly determined by the inclusive behavior and practices of the company’s board, suggesting that top executives and board members serve as an important example to the organization.
About the Authors
Robert J. Greene is the CEO of Reward Systems Inc.