Diversity Climate in Organizations
- Elissa L. PerryElissa L. PerryTeachers College, Columbia University
- and Aitong LiAitong LiTeachers College, Columbia University
Although defined in numerous and sometimes inconsistent ways in the literature, diversity climate can be described as employees’ shared perceptions of the extent to which their organization values diversity as reflected in the policies, practices, and procedures that the organization rewards, supports, and expects. Diversity climate studied at the individual level (individual perceptions of the impact of the work environment on the individual’s own well-being) is referred to as psychological climate. When it is conceived of and studied at the group or organization level (employees’ shared perceptions of their work environment aggregated to the unit level), it is referred to as group- or organizational-level climate. Two consistent criticisms raised in recent reviews continue to plague diversity climate research. These can most simply be stated as a lack of clarity about what diversity climate is and is not, and inconsistency in how diversity climate is measured and aligns (or does not) with how it has been conceptualized. Despite these criticisms, there is evidence that diversity climate can positively impact individuals’ (especially minority group members’) work-related attitudes (e.g., organizational commitment, satisfaction) and unit-level outcomes (e.g., performance). As a result, diversity climate is both practically relevant to organizations and conceptually meaningful to researchers.
As the U.S. labor force has continued to age, become more diverse, and globalized over the last several decades (Toossi, 2015), diversity has become an incontrovertible fact that organizations must better understand and manage. Further, managing diversity is not a uniquely U.S. concern, as countries in Europe and beyond must also confront this issue (e.g., Singh & Point, 2006). Unfortunately, as the need to understand the benefits and pitfalls of diversity has intensified, research evidence related to the effects of diversity on employment-related outcomes has been inconsistent (Kulik, 2014; McKay & Avery, 2015; van Knippenberg, De Dreu, & Homan, 2004), resulting in the search for critical moderators (Cachat-Rosset, Carillo, & Klarsfeld, 2017; Guillaume, Dawson, Otaye-Ebede, Woods, & West, 2017; McKay & Avery, 2015).
Diversity climate is a key moderator that has gained increasing interest over the past 25 years. It is hypothesized to facilitate the positive effects of diversity (e.g., improved decision-making, innovation) and to minimize its potentially negative effects (e.g., poor communication, interpersonal conflict) (Cachat-Rosset et al., 2017; McKay & Avery, 2015). Organizational climate generally has been defined as “the shared perceptions of and the meaning attached to the policies, practices, and procedures employees experience and the behaviors they observe getting rewarded and that are supported and expected” (Schneider, Ehrhart, & Macey, 2013, p. 362). Climate is related to but distinct from organizational culture. While climate refers to how things are done, culture is more abstract, referring to the underlying, often unconscious, hidden but shared assumptions, values, and beliefs of an organization that are communicated to newcomers in the form of myths and stories (Kuenzi & Schminke, 2009; Schneider et al., 2013). When researchers study climate at the individual level (individual perceptions of the impact of the work environment on the individual’s own well-being), it is referred to as psychological climate, and when it is conceived of and studied at the group or organization level (employees’ shared perceptions of their work environment aggregated to the unit level), it is referred to as group or organizational climate (Kuenzi & Schminke, 2009).
Diversity climate has been defined in numerous and sometimes inconsistent ways in the literature (see Appendix 1 in Cachat-Rosset et al., 2017, for a comprehensive list of definitions used across publications). One recent review of the diversity climate literature suggested that diversity climate is best understood as “employees’ perceptions about the extent to which their organization values diversity as evident in the organization’s formal structure, informal values, and social integration of under-represented employees” (Dwertmann, Nishii, & van Knippenberg, 2016, p. 1137).
Within the last five years there have been no fewer than four reviews of the conceptualization and measurement of diversity climate in organizations (Cachat-Rosset et al., 2017; Dwertmann et al., 2016; Goyal & Shrivastava, 2013; McKay & Avery, 2015). These reviews raised two consistent criticisms that continue to plague diversity climate research. These can most simply be stated as a lack of clarity about what diversity climate is and is not, and inconsistency in how diversity climate is measured and aligns (or does not) with how it has been conceptualized. More recently, researchers have conceptualized inclusion as a climate, making it even more difficult to determine how the construct of diversity climate is similar to or different from related constructs and how to measure it appropriately (Cachat-Rosset et al., 2017; McKay & Avery, 2015).
Diversity Climate: A Brief History
Diversity climate researchers often attribute the origins of the diversity climate construct to the work of Cox (1993) and Kossek and Zonia (1993). Cox’s book, Cultural Diversity in Organizations: Theory, Research and Practice, and his Interactional Model for Cultural Diversity (IMCD) posited a relationship between diversity climate and employment-related outcomes. Diversity climate was conceptualized as consisting of individual- (e.g., stereotyping, personality), group/intergroup- (e.g., cultural differences), and organizational-level factors (e.g., structural integration). Cox’s IMCD model proposed that different types of diversity within a system interacted with the diversity climate within that system to impact what he referred to as first-level (e.g., productivity, work quality, workgroup cohesiveness) and second-level outcomes (e.g., market share, profitability) (Cox, 1993). At about the same time, Kossek and Zonia (1993) empirically assessed psychological diversity climate perceptions among university faculty, finding that demographic groups differed in their perceptions of their institution’s support for diversity. A significant amount of subsequent diversity climate work has empirically tested and/or extended Cox’s conceptual work, and a number of researchers have used items from Kossek and Zonia’s (1993) original measure and continued to empirically explore the nature of the diversity climate construct.
A thorough review of the diversity climate literature was undertaken using three interrelated approaches. First, a structured search of a variety of databases (e.g., ProQuest, JSTOR, Wiley Online Library, Web of Science, Google Scholar) was conducted using the terms “diversity climate,” “inclusive climate,” “climate for diversity,” “climate for inclusion,” “diversity culture” and “inclusive culture.” Articles that focused on climates in work-related organizations were considered relevant. Second, a more targeted search using these search terms and including the word “review” or “meta-analysis” was conducted, focusing more specifically on handbooks and annual reviews (e.g., Annual Review of Psychology, Annual Review of Organizational Psychology and Organizational Behavior, and Research in Organizational Behavior). Third, the reference sections of the relevant articles identified in the first two steps were reviewed to identify additional relevant articles that were not generated in the initial two searches. The three steps resulted in a total of 108 peer-reviewed articles (21 conceptual papers or reviews and 87 empirical papers) that were published or in press by 2018.
Antecedents of Diversity Climate
Recent reviews of the diversity climate literature find that more research has explored the outcomes than the antecedents of work climates generally and diversity climate specifically (Cachat-Rosset et al., 2017; Dwertmann et al., 2016; Kuenzi & Schminke, 2009). It is likely that different antecedents play a role in the development of psychological, group-, and organizational-level climates (Kuenzi & Schminke, 2009). While individual-level factors (e.g., gender, race, tenure, education) may influence psychological climates, group size, composition, and leadership style and behavior may influence group climates, and firm characteristics and policies may influence organizational-level climates (Kuenzi & Schminke, 2009). Additionally, it may also be the case that different dimensions of diversity climate have different antecedents within any given diversity climate level (Dwertman et al., 2016), although there are insufficient studies to assess this.
Psychological Diversity Climate
In their review of the diversity climate literature, McKay and Avery (2015) concluded that they could find no individual-level studies examining antecedents of incumbent employee views of diversity climate. However, Dwertmann et al. (2016) noted that a number of studies have found differences in individual-level perceptions of diversity climate based on race and sex, with women and minorities tending to report relatively lower levels of climate (Hicks-Clarke & Iles, 2000; Kossek & Zonia, 1993; Mor Barak, Cherin, & Berkman, 1998; Oberfield, 2016; Price et al., 2009; Sia & Bhardwaj, 2008). This finding is consistent with intergroup theory that suggests that perceptions of organizational policies and actions are influenced by identity group memberships (e.g., gender, racial affiliation) (Mor Barak et al., 1998). Women and minorities, who are more likely to experience sexism and racism, are expected to see the organization’s climate as more negative than men and whites (Oberfield, 2016).
Although not intended as a study of the antecedents of psychological climate, Volpone, Avery, and McKay’s (2012) investigation of the mediating effect of diversity climate has implications for understanding the potential antecedents of diversity climate. The authors found that employees with more favorable perceptions of their organization’s performance appraisal system (e.g., utility, accuracy, fairness) had more favorable psychological diversity climate perceptions. Similarly, Oberfield (2016) found that employee perceptions that their organization’s decision-making policies and practices were procedurally fair positively influenced perceptions of diversity climate. Finally, Köllen (2016) found that sexual orientation diversity management (including organizational policies, mentoring, and training programs explicitly addressing sexual orientation) was related to positive psychological climates for gay men and lesbians. This research suggests that fair personnel procedures and practices have positive implications for diversity climate perceptions. Researchers have also found that demographic composition of the group or organization (e.g., gender heterogeneity, racioethnic heterogeneity) may impact employees’ perceptions of diversity climate (Kossek & Zonia, 1993; Oberfield, 2016).
Aggregated, Unit Level Diversity Climate
Research has provided some but limited knowledge regarding the antecedents of aggregated, unit-level diversity climate (Herdman & McMillan-Capehart, 2010; McKay & Avery, 2015; Pugh, Dietz, Brief, & Wiley, 2008). Based on signaling theory, organizational characteristics (e.g., organizational diversity) and human resource management practices provide organizational cues that are interpreted by employees and influence climate (Bowen & Ostroff, 2004; den Hartog, Boselie, & Paauwe, 2004). Pugh et al. (2008) found that the racial composition of the organization as well as the larger community in which it was embedded influenced organizational diversity climate. The relationship between percentage of minority employees and diversity climate was more strongly positive when banks were located in communities with few minority residents, sending a signal that the organization strongly valued diversity. Additionally, Herdman and McMillan-Capehart (2010) found that formal diversity programs interacted with management team heterogeneity and the extent to which managers valued investing in employees to strengthen perceptions of positive diversity climate. Diversity programs enhanced diversity climate when managerial diversity and managerial values also emphasized the importance of diversity. Finally, Boehm, Kunze, and Bruch (2014) found that age-inclusive HR practices positively influenced the development of an organization-wide age-diversity climate.
Leaders and managers have a substantial impact on what does and does not happen in their workplaces, including whether their employees discriminate (Avery & McKay, 2010). Leadership therefore likely plays an important role in shaping diversity climate at the individual, group, and organizational levels. For example, the role of inclusive leadership figures prominently in conceptual models of climates for inclusion (e.g., Boekhorst, 2015; Randel et al., 2018). Inclusive leaders transmit social information about the importance of inclusion in the work environment through role modeling, which impacts employee perceptions of inclusive climate. However, despite its potential importance, the impact of leadership on diversity climate specifically has been understudied.
Outcomes of Diversity Climate
Researchers have explored the impact of diversity climate (psychological and aggregated) on outcomes at the individual and unit (e.g., organizational) levels. Recent reviews of the diversity climate literature conclude that there are far more studies exploring the impact of climate on individual outcomes (e.g., worker attitudes, behaviors) than work unit– and organizational-level outcomes (e.g., performance) (Cachat-Rosset et al., 2017; McKay & Avery, 2015). Additionally, although it is likely that different dimensions of climate impact different outcomes (e.g., Hicks-Clarke & Iles, 2000; Dwertmann et al., 2016), given the lack of consistency in how diversity climate has been measured across studies, it is difficult to systematically explore this possibility.
Psychological Diversity Climate
The majority of research exploring psychological climate has explored its impact on worker attitudes and to a lesser extent worker behaviors (McKay & Avery, 2015). A variety of theories have been applied to understand the impact of diversity climate on individual outcomes including social identity theory, social exchange theory, psychological contract, calculative attachment theories, organizational justice theory, and signaling and sense-making theories (Cachat-Rosset et al., 2017; Dwertmann et al., 2016; McKay & Avery, 2015). A number of these theories suggest that employees who work in positive diversity climates reciprocate by having more positive work attitudes and engaging in more positive work-related behaviors than employees who work in less positive climates. The outcomes of diversity climate most frequently studied are those related to employee retention and attachment (e.g., job satisfaction, organizational commitment, turnover intentions, absenteeism) (e.g., Avery & McKay, 2010). Very few studies have explored the impact of individual diversity climate on less positive outcomes (e.g., discrimination) (McKay & Avery, 2015). Favorable diversity climate perceptions appear to improve commitment and well-being and decrease employees’ propensity to leave the organization (Avery & McKay, 2010).
Psychological diversity climate is consistently associated with more favorable employee attitudes including organizational commitment (Brimhall, Lizano, & Mor Barak, 2014; Buttner, Lowe, & Billings-Harris, 2012, 2010a, 2010b; Gonzalez & DeNisi, 2009; Hicks-Clarke & Iles, 2000; Hopkins, Hopkins, & Mallette, 2001; Houkamau & Boxall, 2011; Kaplan, Wiley, & Maertz, 2011; McKay et al., 2007; Parks, Consulting, Knouse, Crepeau, & McDonald, 2008), intentions to stay or leave (Buttner & Lowe, 2017; Buttner et al., 2010a, 2010b; Gonzalez & DeNisi, 2009; Kaplan et al., 2011; McKay et al., 2007; Stewart, Volpone, Avery, & McKay, 2011), satisfaction (Hicks-Clarke & Iles, 2000; Hofhuis, Van Der Zee, & Otten, 2012; Houkamau & Boxall, 2011; Parks et al., 2008), and engagement (Sliter, Boyd, Sinclair, Cheung, & McFadden, 2014; Volpone et al., 2012). Additionally, Lauring and Selmer (2011) found that diversity climate was positively related to individuals’ perceived group performance and group satisfaction.
Research has generally found that the relationship between diversity climate and individual-level work-related attitudes tends to be stronger for minority group members who stand to benefit more from a diversity climate that emphasizes fairness (Cole, Jones, & Russell, 2016; Hofhuis et al., 2012; McKay et al., 2007; Newman, Nielsen, Smyth, Hirst, & Kennedy, 2018; Singh & Selvarajan, 2013; Volpone et al., 2012). Additionally, Parks et al. (2008) found that both trust and transformational leadership moderated the relationship between diversity climate and organizational commitment, such that the relationship was stronger when employees perceived the organization as a place where employees trusted each other and when employees perceived high transformational leadership in the organization. Relationships between employee perceptions of diversity climate and intentions to stay or leave have also been found to be moderated (stronger) by low perceived pay equity (Buttner & Lowe, 2017), a highly unethical climate (Stewart et al., 2011), and a perceived poor community diversity climate (Singh & Selvarajan, 2013). Lastly, Kaplan et al. (2011) found that pay satisfaction strengthened the positive relationship between employee perceptions of diversity climate and their calculative attachment (employees’ satisfaction with career and job opportunities in their organization).
Several studies have explored the processes by which psychological diversity climate may influence individual-level work attitudes. One category of mediation processes is psychological, identity, and attachment related. For example, psychological empowerment, calculative attachment, organizational identification, identity freedom, organization commitment, and job satisfaction have been found to mediate the diversity climate and intentions to turnover relationship (Brimhall et al., 2014; Chrobot-Mason & Aramovich, 2013; Hwang & Hopkins, 2012; Kaplan et al., 2011; McKay et al., 2007). Avery et al. (2013) found that perceived organizational value of diversity influenced individuals’ job pursuit intentions, and this relationship was mediated by identity affirmation (a feeling that their identities were accepted). Research has also found that organizational identity and psychological capital (individuals’ positive psychological resources and capabilities) mediate the effect of diversity climate on job satisfaction (Hofhuis et al., 2012; Newman et al., 2018). A second category of mediators studied are those related to conflict, justice, and support. Buttner et al. (2010b) found that interactional justice partially mediated relationships between diversity climate and organizational commitment and diversity climate and turnover intentions for employees of color. Madera, Dawson, and Neal (2013) found that role ambiguity and conflicts due to lack of communication mediated the relationship between diversity climate and job satisfaction for hotel managers. Sliter et al. (2014) found that different sources of interpersonal conflict mediated the relationship between diversity climate and work engagement and burnout. Finally, a study by Jauhari and Singh (2013) found that perceived organizational support mediated the relationship between perceived diversity climate and employees’ organizational loyalty.
A more limited number of studies have explored the impact of psychological diversity climate on individuals’ work-related behaviors and performance. Some of this research has also explored mediating mechanisms as well as moderating conditions of this relationship. Guchait, Madera, and Dawson (2016) found that diversity climate in service organizations positively influenced employees’ learning behavior, and this positive relationship was mediated by psychological safety and communication satisfaction. Diversity and inclusion climates have also been found to impact safety participation behaviors through individuals’ motivation to actively promote safety at work (Paolillo, Silva, & Pasini, 2016). Drawing on social and racial identity theories, Singh, Winkel, and Selvarajan (2013) found that psychological safety mediated the relationship between a supportive diversity climate and employee performance (organizational citizenship behaviors directed toward the overall organization and individual employees), and this indirect relationship was stronger for minorities than for whites. Avery, McKay, Wilson, and Tonidandel (2007) examined racial differences in employee absenteeism and found that differences were more pronounced when employees perceived that their organization placed little value on diversity. Leslie and Gelfand (2008) conducted an experiment to examine how gender identity and climate for diversity interacted to predict internal claims of gender discrimination. They found that individuals with strong gender identity were more likely to make internal claims of gender discrimination in organizations that valued inclusion, whereas individuals with weak gender identity were more likely to make claims in organizations with a negative climate for diversity. Finally, perceptions of diversity climate for women were found to be associated with a greater likelihood of nominating female successors, and this relationship was moderated by nominating managers’ performance ratings, such that high-performing managers were more likely to nominate women than low-performing managers when there was a less favorable diversity climate for women (Virick & Greer, 2012).
Aggregated, Unit-Level Diversity Climate
Research and theory also suggest that aggregated, unit-level climate is likely to impact unit-level and individual-level outcomes (Boehm, Dwertmann, et al., 2014; Boehm, Kunze, et al., 2014; Chen, Liu, & Portnoy, 2012; Drach-Zahavy & Trogan, 2013; Gonzalez & DeNisi, 2009; McKay, Avery, Liao, & Morris, 2011; McKay, Avery, & Morris, 2008, 2009). These studies have primarily relied on organizational climate theory and social identity theory to make predictions (McKay & Avery, 2015). Positive diversity climates are expected to positively influence employee attitudes and performance and to cumulatively result in higher organizational outcomes. Social identity theory is often used to explain why positive effects of diversity climate on unit-level outcomes are likely to be stronger for historically marginalized groups. Boehm, Kunze, et al. (2014) found that positive shared age diversity climate was associated with higher unit performance and lower collective turnover intentions. McKay et al. (2009) found that the positive relationship between aggregated organization diversity climate and store-unit–level sales growth was greatest when managers and subordinates shared positive perceptions of diversity climate. Another study by McKay and colleagues (2011) found a positive relationship between diversity climate and customer satisfaction that was higher in stores with a strong pro-service climate and a high proportion of minorities, for whom diversity climate was presumably more important.
Relatively little empirical research has explored the process by which aggregated, unit-level diversity climate influences employee and/or organizational outcomes (McKay & Avery, 2015). A study by Boehm, Dwertmann, et al. (2014) provides some insight into the potential mediating process by which aggregated diversity climate impacts business outcomes. The authors found that positive diversity climate positively impacted workgroup performance indirectly through reduced workgroup discrimination. Two additional studies provide some insight into the mediating mechanisms that link aggregated diversity climate and individual- and unit-level outcomes. Hajro, Gibson, and Pudelko (2017) conducted qualitative research and developed a model identifying team knowledge exchange processes as a key link between organizational diversity climate and the effectiveness of multicultural teams. Finally, at the organizational level, Kunze, Boehm, and Bruch (2011) examined the relationship between collective perceptions of age discrimination climate and overall company performance and found that this relationship was mediated by employees’ collective affective commitment.
Diversity Climate as a Moderator
Both psychological diversity climate and collective perceptions of diversity climate at the work unit and organizational-levels can serve as moderators that either strengthen or weaken diversity-related relationships. A number of studies have explored the moderating role of psychological climate on individual-level outcomes. Research has found that individual psychological climate moderates the relationship between racioethnic differences in employee absenteeism (Avery et al., 2007) and employee sales performance (McKay et al., 2008); differences were significantly more pronounced when employees believed their organization placed little value on diversity. Randel, Dean, Ehrhart, Chung, and Shore (2016) found that the positive relationship between leader inclusiveness and helping behaviors (both leader directed and group directed) was stronger when psychological diversity climate was positive. Although not explicitly labeled psychological diversity climate, Triana and García (2009) found that employees’ perceptions about organizational efforts to support diversity mitigated the negative relationship between perceived racial discrimination and perceived procedural justice in the organization. Finally, Luijters, van der Zee, and Otten (2008) found that the negative relationship between low perceived similarity in values and employee identification with the organization was mitigated by perceived intercultural group climate (the extent to which group members value diversity).
In addition to psychological climate, several studies have examined the moderating role of aggregated diversity climate on individual-, work unit–, and organizational-level outcomes. Aggregated, unit-level diversity climate has been found to moderate the effect of organizational demography on organizational attachment (i.e., affective organizational commitment, organizational identification, and intention to leave) (Gonzalez & DeNisi, 2009) as well as the relationship between team diversity (e.g., tenure, ethnic, age, gender) and interpersonal aggression, such that a negative relationship occurred only when work unit diversity climate was low (Drach-Zahavy & Trogan, 2013). Unit-level diversity climate was also found to moderate mean racial-ethnic group differences in sales performance such that both black-white and Hispanic-white mean differences in sales performance were smaller in stores with highly supportive diversity climates and larger in stores with less supportive diversity climates (McKay et al., 2008). Chen et al. (2012) found that aggregated firm-level diversity climate enhanced the positive relationship between individuals’ motivational cultural intelligence (individuals’ mental capacity to direct and sustain energy toward learning about and functioning in situations of cultural differences) and their cultural sales (sales transactions involving clients from cultures different from the employee’s own culture). Chung et al. (2015) found that aggregated work unit diversity climate moderated the relationship between faultline strength (the strength of the configuration of team members’ demographic attributes) and employees’ loyal behaviors. The negative relationship between relationship-related faultline strength and loyal behavior was lessened and the positive relationship between task-related faultline strength and loyal behavior was enhanced in work units with a collective pro-diversity climate (Chung et al., 2015). Lastly, Gonzalez and DeNisi (2009) found that aggregated organizational diversity climate moderated the effect of organization diversity (gender and racial heterogeneity) on firm effectiveness, measured as productivity and return on profit and income.
Additionally, although the relationship between diversity climates and climates for inclusion is unclear, it may be informative to discuss research evidence of the moderating role of climates for inclusion. Climate for inclusion aggregated to the work unit level has been found to moderate the relationships between team cultural diversity and team information sharing, and team cultural diversity and employee information elaboration (Li, Lin, Tien, & Chen, 2017). These moderated relationships were in turn found to impact both individual-level and team-level creativity (Li et al., 2017). Unit-level climate for inclusion was also found to moderate the relationships between gender diversity and relationship conflict and gender diversity and task conflict (Nishii, 2013). These moderated relationships in turn influenced unit-level satisfaction (Nishii, 2013). Finally, unit-level climate for inclusion was found to moderate the negative relationship between manager–employee disability dissimilarity and leader–member exchange quality (Dwertmann & Boehm, 2016). The negative relationship that arose in situations in which the supervisor, but not the subordinate, had a disability was attenuated when there was a higher unit-level climate for inclusion (Dwertmann & Boehm, 2016).
Diversity Climate as a Mediator
Kuenzi and Schminke (2009) suggested that individual-, group-, and organizational-level factors may influence psychological climates, group climates, and organizational-level climates, respectively, which in turn impact outcomes at different levels of analysis. However, very little research has examined diversity climate, particularly at the unit level, as a mediator (Avery & McKay, 2010). At the individual level, Volpone et al. (2012) found that psychological diversity climate mediated the positive relationship between employees’ reactions to performance appraisals and employee engagement, and this indirect relationship was stronger for ethnic minority employees than for white employees. Additionally, Boehm, Kunze, et al. (2014) found that age-inclusive HR practices fostered a collective age-diversity climate, which in turn led to collective perceptions of social exchange and consequently enhanced company performance and reduced collective turnover intentions. These findings are consistent with authors who suggest that firm practices and policies (and whether they are fair and inclusive) are likely to shape climate perceptions and consequent outcomes (Bowen & Ostroff, 2004; Cox, 1993; Kuenzi & Schminke, 2009).
Although climates of inclusion and diversity climate may not be completely overlapping, it may be informative to review Shore, Cleveland, and Sanchez’s (2018) conceptual model of inclusive workplaces. In their model, management plays an important role in promoting inclusion and preventing discrimination, both of which contribute to the formation of an inclusive climate. In turn, inclusive climates are proposed to have implications for organizations’ retention and expansion of talent. Stoermer, Bader, and Froese (2016) proposed that climates of inclusion might mediate the relationship between diversity and inclusion management and innovation. They suggested that employees who work in inclusive climates are more likely to feel empowered to participate in decision-making processes and less likely to experience the negative consequences of conflict, resulting in more robust debates and discussions that are critical for generating and adopting novel ideas. Avery and McKay (2010) suggested that future research is necessary to specify the links between HR practices, diversity climate, and work outcomes, given that HR practices that foster supportive climates should enhance workers’ likelihood of contributing to organizational strategic objectives.
Summary of the Literature
While numerous studies related to diversity climate have been conducted, few firm conclusions can be drawn. First, more research attention has been given to the outcomes than the antecedents of diversity climate. There is some evidence that individual-level demographics and demographic composition of units influence psychological diversity climate. Additionally, perceived fairness of organizational procedures and practices also influence psychological diversity climate. The demographic composition of organizations and communities in which they operate and diversity related organizational programs operate at the unit level to influence unit-level diversity climate. Second, more research has examined the outcomes of diversity climate at the individual than the unit level. Individual-level, work-related attitudes (e.g., commitment, satisfaction, engagement, well-being, intentions to stay or leave) appear to be more influenced by diversity climate than individual-level behaviors and performance. Additionally, there is some evidence that these relationships are stronger for minority than majority group members. There is also some (but more limited) evidence that diversity climate at the unit level impacts unit-level outcomes including performance, sales growth, customer satisfaction, and collective turnover. Third, there is evidence that psychological and aggregated unit-level diversity climates operate as moderators, facilitating positive effects and minimizing negative effects on both individual- and unit-level outcomes when diversity climate is positive. Fourth and finally, far less research has explored diversity climate as a mediator, particularly when it is measured at the unit level.
Diversity Climate: What It Is and What It Is Not
A closer inspection of the research reviewed reveals that there is in fact an absence in the literature of conceptual clarity about what diversity climate is. This is reflected in the lack of consensus regarding the dimensional nature of the diversity climate construct (Cachat-Rosset et al., 2017; Dwertmann et al., 2016), which may in part be due to a disconnect between diversity theory and empirical research on diversity climate (Dwertmann et al., 2016). Research suggests that diversity can have both negative effects that result from social-categorization–based stereotypes, biases, and conflict as well as positive effects that result from cognitive variety that can contribute to improved decision-making and greater creativity (Guillaume et al., 2017). However, Dwertmann et al. (2016) concluded that most conceptualizations and operationalizations of diversity climate are unidimensional in nature, focusing on preventing negative outcomes including discrimination, exclusion, and interpersonal aggression, adopting what they refer to as a fairness and discrimination perspective. They noted the relative absence of researchers adopting a focus on the potential positive outcomes of diversity—what they referred to as a synergy perspective. The authors also noted that a number of papers they reviewed included in their definitions references to social integration or inclusion of minorities. However, it was often ambiguous as to whether integration referred to the absence of discrimination or synergy (active integration).
Still other researchers have proposed and found that diversity climate comprises different numbers (anywhere from one to at least four) and sets of dimensions (Chrobot-Mason & Aramovich, 2013; Hicks-Clarke & Iles, 2000; Hobman, Bordia, & Gallois, 2004; Kossek & Zonia, 1993; McKay et al., 2008; Mor Barak et al., 1998). For example, Chrobot-Mason and Aramovich (2013) found that diversity climate comprised two dimensions (equal treatment and equal access), while Mor Barak et al. (1998) found two dimensions at the organizational level (fairness and inclusion) and two at the individual level (personal comfort and openness to diversity and personal value of diversity). It is critical to establish both conceptually and empirically the number and content of diversity climate dimensions as research suggests that the antecedents, theoretical mechanisms, levels of analysis, and outcomes associated with different dimensions are likely to be different (Dwertmann et al., 2016).
The lack of conceptual clarity is also reflected in the failure to articulate clear boundaries around the diversity climate construct relative to similar but differentiated constructs, identifying more clearly what diversity climate is not (Cachat-Rosset et al., 2017). In their recent review, Cachat-Rosset et al. (2017) concluded that conceptual definitions of diversity climate in the literature overlap with concepts including organizational justice, inclusion, perceived organizational support, fairness, and equity.
The failure to identify clear construct boundaries is perhaps best illustrated in the literature’s discussion of climates for diversity and climates for inclusion (McKay & Avery, 2015; Mor Barak et al., 1998, 2016; Nishii, 2013; Shore et al., 2011). Recently, scholars and practitioners have sought to differentiate the concepts of diversity and inclusion (Shore et al., 2018), and while there is some evidence that these concepts are overlapping but distinct (Roberson, 2006), the nature of this relationship remains far from clear (McKay & Avery, 2015). For example, in a figure depicting the antecedents and outcomes of inclusion, Shore et al. (2011) showed diversity climate nested under a broader inclusiveness climate construct. In a later paper, Shore et al. (2018) suggested that diversity and inclusion climate constructs overlap (both emphasize fairness) but are different; however, their figure of inclusive organizations did not depict how inclusion and diversity climates were related.
Unfortunately, little empirical research has clarified the relationship between climates for diversity and climates for inclusion. A study by Mor Barak et al. (1998) revealed organizational inclusion as one of four factors comprising their measure of diversity climate, suggesting that inclusion may be nested within a broader diversity climate contrary to the relationships depicted in Shore et al.’s (2011) figure. Nishii (2013) developed a measure of climate for inclusion based on a review of the diversity climate literature and emerging conceptualizations of inclusion, suggesting that while diversity climate “tends to focus on the fairness of personnel practices and the treatment of minority employees, inclusion focuses more broadly on the engagement of whole selves and learning from divergent perspectives” (p. 1760). Finally, it is informative that while one recent review of the diversity climate literature included climate for inclusion as a search term (e.g., Dwertmann et al., 2016), a second did not (e.g., Cachat-Rosset et al., 2017). A third review referred to climates for diversity as representing a culture of diversity and inclusion (Goyal & Shrivastava, 2013), failing to address the relationship between diversity climates and climates for inclusion.
A lack of construct clarity is also illustrated by some authors’ inclusion of non-climate concepts in their diversity climate conceptualizations. Climate is a perceptual construct rather than an objective characteristic of an organization (Kuenzi & Schminke, 2009). It is the subjective interpretation of organizational practices and programs, not the existence of these practices and programs nor the actual proportion of minority members. However, some researchers have conceptualized diversity climate as pertaining to the existence of certain diversity management programs and policies (e.g., whether they have a mentoring system or provide flexible work arrangements) (e.g., Hicks-Clarke & Iles, 2000; Mor Barak et al., 1998) and/or the demographic composition within the unit (Kossek, Markel, & McHugh, 2003). Additionally, climate is a property of a unit (e.g., group, organization) originating from individual perceptions aggregated when they are sufficiently shared to warrant it (Kuenzi & Schminke, 2009). However, some authors focus on perceptions of organizational efforts to promote diversity as well as individuals’ attitudes about the targets of those efforts (Kossek & Zonia, 1993; Mor Barak et al., 1998). For example, Mor Barak et al. (1998) proposed that diversity climate comprises a personal and organizational dimension, the former of which pertains to individuals’ attitudes and prejudices toward others different from themselves. However, diversity climate and individual attitudes have different causes and effects, and unit-level assessments tend to be based on cognitive appraisals while individual level experiences tend to be more affective in nature. As a result, climate should focus on the work environment as a whole rather than individuals’ own experiences, personal attitudes, or affective evaluations of the environment (Dwertmann et al., 2016; Kuenzi & Schminke, 2009). In sum, diversity attitudes, individual experiences, affective evaluations, and the presence or absence of specific practices do not reflect climate and should not be included in climate conceptualizations (Dwertmann et al., 2016).
Finally, researchers are inconsistent in their focus; while some authors are interested in perceptions regarding how organizations treat all employees, others are more narrowly interested in the treatment of or attitudes about particular minority groups (Cachat-Rosset et al., 2017). For example, Kossek and Zonia (1993) were interested in perceptions related specifically to women, minorities, and the disabled, while Hobman et al. (2004) focused on perceptions related to dissimilarity across ethnicity, gender, and/or age generally.
How Diversity Climate Has and Should Be Measured
There are numerous examples of inconsistencies in how diversity climate has been measured across studies as well as misalignments between conceptual definitions and operationalizations within studies (Cachat-Rosset et al., 2017). For example, across the 52 empirical studies they reviewed, Cachat-Rosset et al. (2017) found that despite the fact that a majority of definitions were multidimensional, only 12 studies used scales that measured more than one dimension. Further, as a result of the lack of conceptual clarity about what diversity climate is and is not, there are inconsistencies across studies regarding the number and content of diversity climate dimensions and how items should be classified with respect to them. In one recent review of the diversity climate literature, Dwertmann et al. (2016) proposed that diversity climate has two aspects based on the potentially positive and negative effects of diversity, what they refer to as a fairness and discrimination and a synergy perspective. In contrast to the deductive, theory-based approach taken by Dwertmann et al. (2016), Cachat-Rosset et al. (2017) took an inductive approach in their review of diversity climate definitions and measures. They concluded that diversity climate could be captured by three underlying dimensions (intentionality, programming, and praxis) and coded measures accordingly. While Dwertmann et al. (2016) coded items into one of two dimensions, Cachat-Rosset et al. (2017) coded items across 16 categories to arrive at the three dimensions of climate they ultimately identified. Consequently, items across measures were coded differently in these two recent reviews of the diversity climate literature. Further demonstrating diversity climate’s lack of conceptual clarity, the current review of diversity climate measures revealed that a number of items within any given measure could be cross-classified as representing two or more dimensions of diversity climate (e.g., fairness and discrimination and organizational support, safety and authenticity). Despite this, similar to the conclusion reached by Dwertmann et al. (2016), the current review of the measures suggests that the majority of items across measures are consistent with the fairness and discrimination perspective; far fewer items were unambiguously consistent with the synergy perspective.
There is also variation in whether and how researchers think about and incorporate the concept of inclusion into their diversity climate measures. Authors (occasionally the same author) sometimes refer to the same measure (e.g., Mor Barak et al., 1998) as both a measure of diversity climate (Mor Barak, 2015) and a climate of inclusion (Mor Barak et al., 2016). Recent reviews of diversity climate measures have not clarified the relationship between inclusion and diversity climate and, as a result, code inclusion-related items differently (Cachat-Rosset et al., 2017; Dwertmann et al., 2016). For example, Dwertmann et al. (2016) suggested that social integration or inclusion of minorities can refer to synergy (active integration) or the lack of discrimination. In contrast, Cachat-Rosset et al. (2017) included a coding category specifically related to inclusiveness (e.g., inclusive workplace, organizational inclusiveness). However, the authors’ coding category is quite broad, including items related to but not specifically reflecting inclusiveness per se (e.g., diversity friendly work environment, value of diverse people). As a result, the same measure could be coded quite differently across the two reviews. For example, Dwertmann et al. (2016) identified Mor Barak et al.’s (1998) measure as primarily measuring the fairness and discrimination dimension of diversity climate, while Cachat-Rosset et al. (2017) classified items from this measure into additional categories (e.g., “diversity friendly work environment/inclusive workplace/value of diverse people/organizational inclusiveness/openness to diversity,” “appreciation/enjoy/opportunities to work with diverse people”). Additionally, while Mor Barak (2015) identified three measures of inclusive climate (Mor Barak, 2014; Nishii, 2013; Roberson, 2006), Dwertmann et al. (2016) placed items from these measures into different coding categories (some of Nishii’s items were coded as strong or weak synergy focused; all of Mor Barak et al.’s items were coded as fairness and discrimination focused). As a result, it is unclear whether inclusion is more highly correlated with a synergy or fairness and discrimination perspective or whether it should reflect a unique dimension.
Shore et al. (2011) provided a review and conceptual model of employee inclusion in which they defined inclusion as the degree to which employees’ needs for both belongingness and uniqueness are satisfied. Jansen, Otten, van der Zee, and Jans (2014) introduced a conceptual framework of inclusion and used it to develop a measure of perceptions of inclusion. Similar to Shore et al. (2011) they concluded that inclusion consists of two dimensions: perceptions of belonging and authenticity. While theirs was not a measure of diversity climate or climate for inclusion, their work suggests that it may be fruitful to explore how belongingness and authenticity may fit into the diversity climate construct. The current review of diversity climate measures revealed that there were relatively few that contained items directly related to belongingness and authenticity (Chung et al., 2011; Nishii, 2013; Pugh et al., 2008; Wolfson, Kraiger, & Finkelstein, 2011). Similar to McKay and Avery (2015), the current review suggests that it is difficult to determine the extent to which diversity climate and climate for inclusion are independent or redundant constructs.
Measurement inconsistencies and misalignment also occur in the form of measures that include both diversity climate and non-climate items. Non-climate items have included those that ask about the extent of actual diversity in the organization or the existence of diversity management practices (Chrobot-Mason, 2003; Hicks-Clarke & Iles, 2000; Kossek et al., 2003; McKay et al., 2007; Mor Barak et al., 1998; Triana & García, 2009; Wolfson et al., 2011). A number of diversity climate measures also included items asking respondents about their personal beliefs and experiences (versus shared ones) and/or personal attitudes about diversity rather than their perceptions of the environment (e.g., Chrobot-Mason & Aramovich, 2013; Chung et al., 2015; McKay et al., 2008; Mor Barak et al., 1998; Wolfson et al., 2011). Example items include: “I feel I have been treated differently here because of my race, sex, religion, or age” (Mor Barak et al., 1998); “I trust the company to treat me fairly” (McKay et al., 2008); “I feel excluded from casual conversations with members of other demographic groups” (Chrobot-Mason & Aramovich, 2013); and “I can fit in without changing who I am” (Wolfson et al., 2011). Diversity climate is a property of a unit, and therefore items should focus on the work environment as a whole rather than an individual’s own experiences, attitudes, or beliefs (Dwertmann et al., 2016).
The majority of research has studied diversity climate at the individual level of analysis, referring to it as psychological climate (Cachat-Rosset et al., 2017; McKay & Avery, 2015). Even when authors are interested in organizational climate, they often measure psychological climate (Kuenzi & Schminke, 2009). All climate measures are based on individuals’ perceptions of their work environment, which may be measured in one of two ways. First, respondents can provide their own perceptions of the climate, answering questions that begin with “I.” Alternatively, respondents can be asked to make a referent shift, answering questions about “employees” or their “work unit.” However, it is important to note that regardless of how it is measured, climate questions should focus on perceptions about policies, practices, and procedures (the work environment as a whole) rather than personal beliefs, attitudes, affective evaluations, and experiences (Kuenzi & Schminke, 2009). The work climate literature generally and the diversity climate literature more specifically has not been consistent about whether or when it is more appropriate to measure climate using an individual referent (direct consensus) or referent shift approach (Kuenzi & Schminke, 2009). There is some evidence that the choice might depend on what it is that researchers want to predict (Wallace et al., 2016). Some research finds that a referent shift approach may be better at predicting aggregated, unit-level cognitive-based outcomes, while a direct consensus approach may be more appropriate when predicting aggregated, unit-level affective-based outcomes (Wallace et al., 2016).
Differences in diversity climate items within and across measures raise serious questions about the validity of current diversity climate measures. Climate items differ both within and across measures with respect to whether a direct or referent shift approach is taken, the nature of the referent specified, and the target of focus. Some measures include both direct consensus as well as referent shifting items, asking individuals to answer questions from their own perspective as well as to provide perceptions about their units (e.g., group, organization, top management) (e.g., Chung et al., 2015; McKay et al., 2008; Mor Barak, et al., 1998; Wolfson et al., 2011). Additionally, items within and across measures are related to different referents (e.g., top leaders, coworkers, managers, group, organization) (e.g., Chung et al., 2015; Kossek et al., 2003; McKay et al., 2007; Nishii, 2013; Pugh et al., 2008). For example, a measure by Chung et al. (2015) asked respondents to provide their own perspective (direct consensus items) as well as to comment on their coworkers, managers, and organizations (Chung et al., 2015). However, different referents are located at different levels of analysis and may have different amounts of influence on diversity climate. In some cases the referent found in specific questions is inconsistent with the researchers’ own definition (McKay et al., 2007; Volpone et al., 2012). Finally, current measures also differ in terms of the target of their questions. Some measures focus on diversity generally (e.g., “Open communication on diversity”; McKay et al., 2007) or across multiple identity subgroups (e.g., “In my team, members enjoy doing jobs with people of different ethnicity, gender, and/or age”; Hobman et al., 2004). Other measures include items that focus on members of distinct identity subgroups including women (Kossek et al., 2003; Kossek & Zonia, 1993; Price et al., 2009; Virick & Greer, 2012), ethnic and/or racial minorities (Chrobot-Mason, 2003; Ragins, Gonzalez, Ehrhardt, & Singh, 2012), individuals who are LGBTQ (Liddle, Luzzo, Hauenstein, & Schuck, 2004; Szalacha, 2003), or those who are foreign born (Price et al., 2009).
Non-Measurement Methodological Issues
Levels of analysis studied in current diversity climate research are more often informed by convenience than by theory (Dwertmann et al., 2016). As a result, researchers typically explore the impact of psychological climate perceptions on individual-level outcomes rather than exploring the impact of shared perceptions on unit- or organizational-level outcomes (Dwertmann et al., 2016). Additionally, Dwertmann et al. (2016) suggested that certain dimensions of diversity climate may be most appropriately measured at different levels of analysis, despite the fact that this rarely occurs in practice. For example, they suggested that the synergy perspective may be most appropriately considered at the work unit level where synergy is created in group interaction processes with consequences for group-level outcomes. A stronger connection between theory and research design in terms of levels of analysis should be established in future research (Dwertmann et al., 2016). Additionally, most diversity climate research has been conducted at a single level of analysis with few exceptions (e.g., Gonzalez & DeNisi, 2009; McKay et al., 2008), resulting in an incomplete picture of diversity climate’s influence at multiple levels (Avery & McKay, 2010). Finally, a modest number of studies have explored the impact of aggregated diversity climate at different unit levels—workgroup (e.g., Boehm, Dwertman, et al., 2014), organization (e.g., Boehm, Kunze, et al., 2014), firm (Chen et al., 2012), and store (e.g., McKay et al., 2009)—consistent with theory and research suggesting climates can exist within organizations at different levels of analysis (Bowen & Ostroff, 2004). Research is needed to better understand at which levels of analysis the construct of diversity climate is meaningful and robust in any given context. For example, shared diversity climates may be more likely at levels where diversity-related practices are strongest (e.g., visible, consistent, understandable), signaling to employees what is valued and rewarded (Bowen & Ostroff, 2004).
The research contexts of current diversity climate literature are very U.S.-centric. Cachat-Rosset et al.’s (2017) review of the diversity climate literature revealed that 77% of the societal context of diversity climate research focused on North America or Australia, 12% on Europe, 12% on Asia or the Middle East, and no research examined South America or Africa. Further, the authors found no studies that replicated results obtained in a given context (society and country) to another. However, culture differences can be significant contextual factors that shape the development of diversity climate (Stoermer et al., 2016). For example, Stoermer et al. (2016) proposed a model suggesting that national culture moderates the relationship between diversity and inclusion management practices and climate for inclusion. They suggested that certain national cultures (e.g., those with low power distance, high collectivism, low uncertainty avoidance, low masculinity, high long-term orientation, high indulgence) may be more likely to foster inclusive climates. Thus, it is essential to conduct diversity climate research in countries other than United States as well as to replicate studies across a variety of societal contexts (Cachat-Rosset et al., 2017).
Kulik (2014) observed that much of the diversity management literature more generally focuses on comparing workgroups, departments, or other units within a parent organization rather than across organizations. Similarly, data collected in diversity climate research tends to come from a single source (e.g., a single organization) at a single point in time. For example, McKay et al. (2011, 2008, 2009, 2007) studied multiple stores from a single large, national retail organization in the United States. This sampling approach makes it difficult to understand the factors that contribute to differences across organizations. Additionally, the majority of current diversity climate research is cross-sectional, gathering data at one point in time. Research exploring psychological diversity climate that collects data from respondents regarding their perceptions of climate and their attitudes and behaviors as outcomes at one point in time is particularly subject to common method variance. To avoid concerns about common method variance and to better understand the impact of diversity climate on more distal organizational outcomes (e.g., business performance), research with a longitudinal focus should be conducted (Kulik, 2014). An example of this type of research was conducted by McKay et al. (2011), who examined the effect of diversity climate on customer satisfaction with a one-year time lag.
Finally, McKay and Avery (2015) pointed out that the impact of diversity climate, particularly at the aggregated level, has primarily focused on the work outcomes of people as a function of their sex and racioethnic background. Future research is required that studies the impact of diversity climate on members of other stigmatized groups (e.g., LGBTQ, disabled). Relatedly, it seems important to better understand the relationship between diversity climate and work climates focused on particular demographic groups (e.g., age climate). For example, Boehm, Kunze, et al. (2014) found that positive aggregated age diversity climate was associated with higher company performance and lower collective turnover intentions. King, Hebl, George, and Matusik (2010) explored the antecedents and outcomes associated with psychological climates of gender inequity. It seems important to understand how specific diversity climates associated with age, race, and gender, for example, are related to and/or interact with a more general diversity climate.
The current review of diversity climate research identifies a number of areas requiring additional research, including greater focus on the antecedents of both psychological and aggregated, unit-level climate; research that takes a multi-level approach to climate within the same study; and research that is conducted across organizations, industries, and societies. Both individual-level and aggregated, unit-level diversity climate research has provided limited information about the antecedents of diversity climate (McKay & Avery, 2015), which may differ across different dimensions of diversity climate (e.g., fairness and discrimination versus synergy). While some attention has been paid to the role of organizational policies and practices, little research has explored the role of leaders in fostering diversity climate despite the important role they are likely to play in shaping both psychological and collective diversity climates (Avery & McKay, 2010; Boekhorst, 2015; Randel et al., 2018). The current review also suggests that future research should consider the role of climate strength. Where policies and procedures are inconsistent or result in inconsistent practices, climate is likely to be weak (Bowen & Ostroff, 2004; Schneider et al., 2013). Additionally, based on research finding gender and racial differences in diversity climate perceptions, McKay and Avery (2015) suggested that the greater the diversity within a given unit level, the fewer shared perceptions and less agreement there may be regarding the diversity climate. Climate strength may play an important role in moderating the effect of diversity climate on outcomes (Kuenzi & Schminke, 2009). When there is greater consensus about the diversity climate, its impact on outcomes is likely to be stronger (Kuenzi & Schminke, 2009). If there is little agreement at the overall unit level, McKay and Avery (2015) suggested that, in some cases, it may be more appropriate to study sub-climates (e.g., diversity climate among black compared to white workers).
Researchers have been studying diversity climate for the past 25 years, and thus our conceptual thinking about what diversity climate is and what it is not is still unfolding. Unfortunately, as a result, there is still much that we do not know about the antecedents and consequences of both psychological and aggregated unit-level diversity climate. While there are a number of areas that may benefit from additional research, our review suggests that the greatest attention should be given to obtaining conceptual clarity about what diversity climate is and how best to measure it. Specifically, there is a need for more theory-based studies of diversity climate that identify and define the different dimensions of diversity climate. Once empirical support for the relevant dimensions is obtained, a critical review of current measures could be undertaken with the purpose of revising and consolidating items and/or measures where appropriate. Research exploring the causes and consequences of diversity climate will provide little insight if we cannot define and measure diversity climate reliably and validly. The failure of researchers to develop clear conceptualizations and evidence-based measures of diversity climate results in little guidance to practitioners about how to assess diversity climate in their own organizations. This no doubt contributes to the proliferation of idiosyncratic approaches to studying diversity climates across organizations. This, in turn, further contributes to conceptual confusion and limited consensus about what diversity climate is and consequently how it can be leveraged for organizational benefit.
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