Workforce diversity and firm performance: Relational coordination as a mediator and structural empowerment and multisource feedback as moderators

Abstract

Workforce composition in organizations has become increasingly diverse. As an important step in determining how workforce diversity leads to firm performance, we proposed relational coordination as a mediator through which diversity in age and education indirectly affects firm performance. We also highlighted two human resource management practices (structural empowerment and multisource feedback) as critical contingencies that moderate the effects of workforce diversity on relational coordination and firm performance. We conducted hierarchical multiple regression on multisource data (including responses from senior directors, department directors, managers, and employees, as well as financial performance) from 189 Korean firms in the manufacturing sector, which yielded support for our hypotheses. These findings offer novel theoretical and practical insights into the effective management of workforce diversity.