Realizing the Performance Benefits of Workforce Diversity in the U.S. Federal Government: The Moderating Role of Diversity Climate

Abstract

Conventional wisdom in diversity research holds that biodemographic diversity is harmful to performance, whereas job-related diversity is beneficial to performance. Empirical evidence in this area, however, remains mixed and inconclusive. Due to this inconsistency, scholars have recently called for a search for moderators of the relationship between diversity and performance to expand the theoretical perspectives on organizational diversity. In this context, we examine how biodemographic (gender, race, and age) and job-related (function and tenure) diversity influence organizational performance and how diversity climate as a potential moderator shapes the relationships between the two dimensions of diversity and performance. Using panel data from the U.S. federal government, we find that racial and tenure diversity have positive relationships with organizational performance, whereas functional diversity has a negative relationship. Further analysis reveals that a diversity climate positively moderates the relationship between racial diversity, functional diversity, tenure diversity, and organizational performance. Theoretical and practical implications are discussed.