Perceived Diversity and Organizational Performance,\"

¶ … Perceived Diversity and Organizational Performance," University of Tennessee at Chattanooga researchers Allen, Dawson, Wheatley and White report on their study investigating the relationships between perceived diversity and perceived organizational performance across all levels of workers in organizations of many kinds. They claim that their research is unique in that it takes into account employee perceptions of diversity and performance, which are qualitative measures as opposed to the statistical data collected by most other studies on the topic. Also, the authors state that their research stands apart because it focuses on entire organizations instead of sub-units or work teams and because it looks at all levels of employee status, from senior management to middle management to non-managerial workers (Allen et al., 2008).

The study aimed at testing three hypotheses. The first hypothesis was that perceived diversity at the senior management level will be positively related to perceived firm performance. The second asserted that perceived diversity in other managerial positions will be positively related to perceived firm performance. Similarly, the third hypothesis stated that perceived diversity in non-managerial positions will be positively related to perceived firm performance (Allen et al., 2008).

The researchers decided to collect qualitative data in the form of employee perceptions of diversity and organizational performance based on the concept that perception is reality. While statistical analyses of workplace diversity and financial data concerning organizational performance is more concrete, the authors felt that perceived measures of these variables made for a richer, more complex data set. This approach also employs a kind of Rogerian viewpoint that assumes that a subject's perceptions of his or her world are valid in and of themselves (Allen et al., 2008).

The researchers collected data through structured interviews with a convenience sample of 391 managers and professional employees at 130 organizations in the southeastern United States. They ensured that they interviewed at least one minority and one non-minority worker at each organization. Each participant was questioned about her perception of diversity in her organization at the levels of senior management, junior management, and non-management. Also, each participant was asked to rate the performance of his organization in regards to quality, productivity, profitability, market share, return on equity, and overall performance. The researchers used the Dess and Robinson scale to ascertain the workers' perceptions of organizational performance (Allen et al., 2008).

The study's results are interesting and present a mixed bag of findings. Forty-two per cent of interview subjects strongly agreed that minorities are proportionately represented at the non-managerial level in their organizations. While not an especially high percentage, the numbers concerning the other two levels were even lower; 22% strongly agreed with that statement at the junior management level and only 10% strongly agreed that minorities were proportionately represented at the level of senior management in their firms. In fact, more than a quarter of respondents strongly disagreed with the statement in regards to senior management in their organizations (Allen et al., 2008).

Interestingly, the first hypothesis, concerning senior management diversity, received the strongest support. Across perceived measures of organizational performance, it was positively related to all of them except market share. Market share was, however, the only performance measure positively related to perceived diversity at other levels of management. The third hypothesis showed broad, strong support much like the first hypothesis did (Allen et al., 2008).

The study's findings suggest that perceived diversity at senior and non-managerial levels in an organization is most important to the perceptions of the organization's performance. At the senior management level, diversity might best fulfill its role as a strategic concept. Diversity at the higher levels may positively influence higher-level decision-making concerning the organization's overall strategic direction. Such big decisions are very visible to all in a firm and have obvious impacts on a company's performance. Moreover, diversity at the senior management level can send a positive message regarding the possibilities and opportunities for advancement within the firm, and that message can have a boosting effect on employee morale at lower levels in the organization's hierarchy (Allen et al., 2008).

Higher perceived diversity at the non-managerial level was related to higher perceived measures of return on equity, market share, and overall organizational performance. Diversity at this level may help expand market share by making minorities more visible to customers and by enhancing the firm's collective understanding of the market. Perceived diversity at this level correlated to communication problems and negative impacted decision-making time and task completion time. As for the findings regarding the second hypothesis, the authors suggest that diversity at the middle management level might contribute to the perception of tokenism a company and negatively affect employee morale, identification with the firm, and perceptions of performance (Allen et al., 2008).

The authors acknowledge the limitations of their study. Qualitative research cannot show causality. Convenience sampling is not as robust as random sampling. Moreover, the sample was overwhelming composed of Caucasians and management level employees. Geographical and cultural limitations reduce the generalizability of the study's findings. Since they interviewed only 3 workers per firm on average, they did not plumb very deeply into any of the organizations studied. The authors did not operationally define the term "minority" and thus can't really say what the term means in relation to the research findings. Also they acknowledge that the in-person interview may have affected subjects' responses given the sensitivity of the issue of diversity in the workplace (Allen et al., 2008).

This reviewer finds this study seriously flawed. First, a study of diversity should not have a sample that is 77% Caucasian and 61% male. While that first figure might be near the actual percentage of whites in the U.S. population as a whole, effort should be made to include more racial minorities in research of this nature. This seems more like a lazy sample than a convenience sample. Second, the total reliance on employees' perceptions is problematic. Given that financial data is available for publicly held companies and for many non-profit organizations, the researchers possibly could have made a stronger case for their research if they could have shown some congruity between employees' perceptions of the firm's performance and the actual numbers.