Are there negative consequences of workforce diversity? Investigating the effect of group faultlines on turnover and organizational performance

Abstract

"There is strong empirical evidence that workforce diversity is beneficial for organizations. The theoretical concept of faultlines stresses, however, that diversity can also have negative consequences. This is the case when the subgroups differ not just with regard to one characteristic but with regard to several characteristics simultaneously. This paper is the first to examine the negative consequences of faultlines with large-scale data on organizations in the public and private sector. Fixed-effects-regressions are used to investigate the impact of functional (working time, tenure, qualification) and demographic (age, gender, nationality) faultlines on turnover and organizational performance. We also consider the interaction between firm size and faultlines. Regarding turnover, we do not find the expected negative effects of demographic and only limited evidence for functional faultlines. The effects of demographic faultlines on performance, in turn, are negative for small organizations and become positive for organizations with more than 10 members." (Author's abstract, IAB-Doku) ((en))

Cite article

Krug, G., Stegmaier, J. & Buche, A. (2018): Are there negative consequences of workforce diversity? Investigating the effect of group faultlines on turnover and organizational performance. (SocArXiv Papers), 29 p. DOI:10.31235/osf.io/j9nc6