Broadening Team Composition Research by Conceptualizing Team Diversity as a Cross-Level Moderating Variable

A major challenge facing managers in current organizations is an increasingly diverse workforce (Jehn, Lindred, & Rupert, 2008). Diversity, “a characteristic of a social grouping that reflects the degree to which there are objective or subjective differences between people within the group” (Van Knippenberg & Schippers, 2007, p. 519), refers to an almost infinite number of dimensions of differences between group members, ranging from differences in age to nationality, from religious background to personality, from work skills to emotions (Van Knippenberg, De Dreu, & Homan, 2004). Until recently, the diversity field had been dominated by the main effects approach and thus mainly examined whether diversity has negative or positive effects on team outcomes. Typically, researchers draw on two seemingly contradictory theoretical perspectives to answer this question (see Williams & O'Reilly, 1998).

The “value in diversity” perspective (Cox, Lobel, & Mcleod, 1991) proposes that diversity may improve team functioning due to an increased variety of knowledge, expertise, and opinions. An opposing, pessimistic perspective posits that diversity may result in social divisions and negative intra-group processes, which may detract from team functioning (Mannix & Neale, 2005).

Despite the intuitive sense that both approaches make, two decades of research has resulted in highly inconsistent findings and corroborated the conclusion that the main effects approach is unable to account for the effects of diversity adequately (Bowers, Pharmer, & Salas, 2000). Consequently, researchers have recently begun to explore the question of whether, and how, the perspectives on the effects of diversity can be reconciled and integrated (Van Knippenberg et al., 2004). Prominent attempts to answer this question mainly rely on contingency models (e.g., Wegge, 2003), proposing that whether diversity results in negative or positive outcomes depends upon several moderators. The research agenda set by such models informs the major part of research efforts in the field. Indeed, the contingency approach has proved useful for the purpose of integrating past contradicting findings and advancing knowledge of the moderators and mediators underlying the effects of diversity.

However, despite these notable theoretical developments, current research is still limited in its ability to capture the rich and wide-ranging influence of diversity in the workplace. This dissertation identifies two main sources for this weakness. First, the majority of diversity research regards diversity as an isolated phenomenon that occurs only on a single organizational level. Cross-level influences of diversity, however, are largely ignored. Second, despite the richness that the contingency approach has added to the study of diversity, it has not changed the fundamental goal guiding this field: examining the relationship between diversity and work outcomes. I shall argue that diversity research has so far overlooked other aspects of the influence of diversity and that it can benefit from turning into new and unexplored avenues. In particular, diversity research may benefit from examining team diversity in roles other than the independent variable, and especially explore the influence of diversity as a context (i.e., moderating) variable. Thus, in an attempt to overcome these two limitations, the overarching aim of this dissertation is to extend previous work by reassessing the role of diversity. In particular, this dissertation illustrates the empirical and theoretical usefulness of conceptualizing diversity as a cross-level moderator and explores the ways in which team diversity sets the context and influences work phenomena across organizational levels.

Study 1 explored the cross-level relationship between organizational tenure and employee performance in a prospective design. It was found that employee tenure, team leader tenure, and team tenure diversity exert positive effects on employee performance. An additional finding, a three-way interaction between employee tenure, team tenure diversity, and team leader tenure on employee performance, suggests that the positive effect of employee tenure on performance is weaker when either team tenure diversity or team leader tenure or both are high. The hypotheses were tested using multi-level modeling and an objective measure of employee performance with a sample of 1767 employees and 256 leaders in intact working teams of a large financial services firm. The findings suggest that team diversity grants organizational tenure its meaning, thereby determining to what extent the benefits associated with organizational tenure will unfold.

Study 2 further examined the empirical and theoretical usefulness of conceptualizing team diversity as a cross-level moderator. Particularly, the relationship between gender diversity in teams and individual-level health symptoms of men and women was examined in two consecutive years in 220 natural work teams (N 1st year = 4538; N 2nd year=5182). In an attempt to account for inconsistencies in the literature regarding the relationship between gender and health symptoms, I examined this relationship from a multilevel perspective.

As expected, it was found that individual-level gender was not related to health symptoms but that team gender diversity determined this relationship. Specifically, while there were no individual-level differences between men and women in health symptoms, it was found that women report more health symptoms as the proportion of female employees in the team increased. In contrast, men’s self-reported health symptoms remained invariant with team gender diversity changes. These findings were found stable across two measurement points, over two years.

Finally, Study 3 examined the role that subjective team diversity plays in facilitating affective linkages (i.e., the convergence of affect among team members over time) within teams. The results of Study A (170 employees in 33 Israeli teams) provide evidence that affective linkages among team members were moderated by perceived team diversity such that the linkages were stronger in teams with lower perceived diversity.  Study B (304 employees in 61 German teams) replicated the findings of Study A and extended them by including an additional moderator, team identification. Using hierarchical linear modeling, it was found that team identification moderated the influence of perceived diversity on affective linkages.

The most striking contribution that all three studies offer is a strong support for the usefulness of conceptualizing diversity as a cross-level moderator. Particularly, in Study 1 team tenure diversity determined whether and to what extent the positive effects of organizational tenure on individual performance might be realized. In Study 2, gender diversity determined the relationship between individual gender and health. Finally, in Study 3, perceived diversity influenced the strength of affective linkages in teams. The three studies are also consistent in illustrating the theoretical usefulness of conceptualizing team diversity as a context variable. To be exact, the current approach integrates the micro domain's focus on individuals with the macro domain's focus on groups. The result is a richer portrait of organizational life—one that acknowledges the influence of the team context on individuals' actions and perceptions. In sum, the findings demonstrate that viewing team diversity as a moderator broadens the focus of diversity research, illuminates new roles of team diversity, draws a richer and more complex portrait of other work phenomena, and opens new horizons for diversity research.

Dissertation by Meir Shemla
Technical University of Dresden