Workplace diversity and job satisfaction

• Pages: 419-446
• Published date: 30 April 2020
• DOI: https://doi.org/10.1108/EDI-01-2019-0030
• Date: 30 April 2020
• Author: Laetitia Hauret,Donald R. Williams
• Subject Matter: HR & organizational behaviour,Employment law,Diversity,equality,inclusion

Workplace diversity and

job satisfaction

Laetitia Hauret

Luxembourg Institute of Socio-Economic Research (LISER), Esch-sur-Alzette,

Luxembourg, and

Donald R. Williams

Department of Economics, Kent State University, Kent, Ohio, USA and

Luxembourg Institute of Socio-Economic Research (LISER), Esch-sur-Alzette,

Luxembourg

Abstract

Purpose –This article estimates the empirical relationship between workplace diversity in terms of

nationality and individual worker job satisfaction in the context of a multicultural country. It also examines the

role of the level of communication between coworkers in moderating this relationship.

Design/methodology/approach –Using merged survey and administrative data, the paper estimates OLS

and ordered Probit regression estimates of the correlations between two measures of workplace diversity and

self-reported job satisfaction.

Findings –The relationship between nationality diversityand job satisfaction is negative. While there is some

evidence of a nonlinear relationship, it depends on the specification and measure of diversity used. Contrary to

expectations, the level of interaction between colleagues does not moderate this relationship.

Practical implications –The research highlights the need for employers to actively manage the diversity

within their firms.

Originality/value –The paper adds to the diversity and job satisfaction literature by focusing on the

nationalities of coworkers. It also is the first to measure the impact of the levels of interactions with coworkers

on the diversity-satisfaction relationship.

Keywords Job satisfaction, Diversity, Blau index, Relational demography

Paper type Research paper

Introduction

The workplace has grown more diverse over the past several decades, with a growth of

employment of underrepresented workers in many sectors of the economy. For example, in

the United States the female proportion of employees increased from 46.3% in 2006 to 46.8%

in 2016. The increase in the European Union was more dramatic, from 44.6% in 2006 to 46.1%

in 2016. The proportion of employees in the United States who were Asian grew from 4.6% to

6.3% over the same decade [1]. In the EU-15, 8.2% of employees had a nationality different

from the country in which they lived in 2007. This proportion had grown to 10.4% in 2016 [2].

In both the United States and in Europe, therefore, women and racial or ethnic minorities are

larger percentages of the workforce today than they were in the past.

This increasing diversity has spurred many questions inside firms. In particular, firms

question the effects of diversity on their competitiveness and on the individual worker’s

psychological well-being. Knowing the potential effects of diversity on employee attitudes is

important in order to adopt managerial policies that mitigate any negative consequences of a

more diverse workforce and promote any positive ones.

The conclusions of research trying to answer these questions of the effects of diversity on

competitiveness, productivity and well-being have been mixed (Bell et al., 2011). That is,

increased diversity in some studies is found to increase team productivity (Horwitz and

Horwitz, 2007), for example, and in others it is found to decrease it or have no effect (Webber

and Donahue, 2001;Kochan et al., 2003). In part this is because the answer is often found to

Workplace

diversity and

job satisfaction

419

The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/2040-7149.htm

Received 28 January 2019

Revised 29 May 2019

26 September 2019

3 December 2019

11 February 2020

Accepted 11 March 2020

Equality, Diversity and Inclusion:

An International Journal

Vol. 39 No. 4, 2020

pp. 419-446

© Emerald Publishing Limited

2040-7149

DOI 10.1108/EDI-01-2019-0030

depend on a number of moderating factors. The relationship between diversity and team

productivity depends on the culture of the organization, the nature of the tasks of the team,

and efforts on the part of the firm to manage the changing workforce, for example (Jackson

et al., 2003).

Over the past few decades several empirical studies have addressed diversity in terms of

nationality (recent examples include Alfes and Van Engen, 2017 and Wong et al., 2017). With

economic globalization and the movement of workers across borders, as in the EU, this kind

of diversity is of growing importance. Identifying whether working in a nationality diverse

workplace affects the attitudes of workers, especially their job satisfaction, is increasingly

crucial for managers. Should managers encourage national homogeneity within working

groups to increase employees’job satisfaction and therefore limit turnover? Should firms

limit national diversity to a certain threshold so as not to dissatisfy their employees? Should

managers put in place specific actions, such as promoting interactions between employees, to

counter diversity’s effects for majority and/or minority workers? Previous studies, whether

theoretical or empirical, do not clearly answer these questions. On the one hand, according to

some theories (e.g. the similarity-attraction approach (Byrne, 1971)), working in a more

diverse demographic environment negatively influences employees’job satisfaction. On the

other hand, according to other theories (e.g. the social contact perspective (Blau, 1977;Kanter,

1977)), working in a more diverse environment positively influences employees’job

satisfaction. Previous empirical studies on the determinants of job satisfaction do not provide

answers to these questions either, since they have not addressed the issue of diversity

according to nationality.

The Luxembourg labor market provides an interesting laboratory for the study of

national workplace diversity. Indeed, the majority of workers in Luxembourg are not

Luxembourgish natives. Rather, a substantial part is made up of immigrants (29%) and the

largest part (44%) is comprised of “cross-border”workers from the surrounding countries of

Belgium, France, and Germany. By merging data from administrative records with a survey

of working conditions and the quality of working life in Luxembourg, this study is able to

look closely at workplaces and the subjective job satisfaction of individuals in those

workplaces, with the benefit of controlling for a wide range of job and worker characteristics.

This includes a control for the level of interaction among members of the group. The paper is

thus able to measure the relationship empirically, something unique in the literature.

The empirical results suggest that increased workplace diversity, according to

nationality, has a negative relationship with job satisfaction for the sample as a whole.

When the sample is limited to a sample of workers who are in the minority in their workplace,

however, the level of job satisfaction decreases with diversity initially, but then increases

after reaching a threshold level of diversity. Increases in the extent to which workers interact

with each other, through teamwork, open work spaces, or committees, are associated with

increased levels of job satisfaction for all samples. The increased interaction is not found to

moderate the negative impact of diversity, however.

The paper is organized as follows: the next section provides a brief overview of the

literature related to diversity and job satisfaction in particular, as well as other diversity

studies. This is followed by a description of the data and the methodology. The following

section presents empirical results, followed by a discussion. The paper concludes with a

summary and topics for further research.

Relevant previous work

To the authors’knowledge, no study specifically analyzes the relationship between diversity

in terms of nationality and job satisfaction. National diversity has been studied in other

contexts, but not in relation to job satisfaction (Alfes and Van Engen, 2017;Wong et al., 2017).

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