The Contextual Importance of Diversity: The Impact of Relational Demography and Team Diversity on Individual Performance and Satisfaction

ABSTRACT : Organizations are seeing an increase in the level and types of diversity among their employees. It is important that managers understand the myriad of ways that diversity influences employees. This study investigates the effect of being different on an individual's performance and satisfaction levels. Being different on visible characteristics (i.e., sex, age, race) predicted negative outcomes. Being different on informational characteristics (educational background, years of work experience) had both positive and negative effects on objective performance but no effect on satisfaction or perceived performance. The level of team diversity (the degree to which a team is heterogeneous and homogeneous) influenced the outcomes above and beyond that of being different. The results of this study have real consequences for the way diversity is managed in organizations.