Ethnic Diversity and Organizational Performance: Assessing Diversity Effects at the Managerial and Street Levels

ABSTRACT As the public sector workforce becomes more ethnically diverse and as government agencies make attempts to manage that diversity, the importance of understanding how diversity affects workplace interactions and work-related outcomes increases. Little public-sector research has examined the impact of diversity on performance outcomes. This article seeks to fill this gap by studying the effects of the ethnic diversity of managers and street level public officials on work-related outcomes. We use basic in-group/out-group theories from psychology to formulate research questions relating diversity and performance, along with empirical research on the effects of diversity on work-related outcomes. We then use data from schools to test the relationship between ethnic diversity and organizational performance, identifying different impacts for managerial diversity and diversity among teachers. Results are consistent across three different models: manager diversity is routinely non-significant in predicting organizational performance, while teacher diversity has a consistently significant, and negative, impact on performance. These findings suggest that process-oriented problems are causing diverse organizations to experience drawbacks instead of gains, and that any benefit that could be drawn from a diversity of viewpoints is overshadowed by communication and collaboration problems.

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