This study investigates the relationship between gender diversity and financial performance at the business-unit level and whether employee engagement moderates this relationship. Using more than 800 business units from two companies belonging to two different industries, we found that employee engagement and gender diversity independently predict financial performance at the business-unit level. One implication is that making diversity an organizational priority and creating an engaged culture for the workforce may result in cumulative financial benefits.
AldrichH. E.PfefferJ. (1976). Environments of organizations. Annual Review of Sociology, 2, 79-105.
2.
AliM.KulikC. T.MetzI. (2009, August). The impact of gender diversity on performance in services and manufacturing organizations. Academy of Management Annual Meeting Proceedings, Chicago, IL.
3.
AnconaD.CaldwellD. (1992). Demography and design: Predictors of new product team performance. Organization Science, 3, 321-341.
4.
BarneyJ. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17, 99-120.
5.
BarneyJ. B. (2001). Resource-based theories of competitive advantage: A ten-year retrospective on the resource-based view. Journal of Management, 27, 643-650.
6.
BaronR. M.KennyD. A. (1986). The moderator-mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology, 51, 1173-1182.
7.
BöhrenO.StrömR. (2005). The value-creating board: Theory and evidence (Research Report No. 8/2005). Oslo, Norway: Department of Financial Economics, Norwegian School of Management.
8.
BowenD. E.SchneiderB. (1988). Services marketing and management: Implications for organizational behavior. In CummingsL. L.StawB. M. (Eds.), Research in organizational behavior (Vol. 10, pp. 43-80). Greenwich, CT: JAI Press.
9.
CampbellK.Mínguez-VeraA. (2008). Gender diversity in the boardroom and firm financial performance. Journal of Business Ethics, 83, 435-451.
ChatmanJ.PolzerJ.BarsadeS.NealeM. (1998). Being different yet feeling similar: The influence of demographic composition and organizational culture on work processes and outcomes. Administrative Science Quarterly, 43, 749-780.
14.
CoxT.BlakeS. (1991). Managing cultural diversity: Implications for organizational competitiveness. Academy of Management Executive, 5, 45-56.
15.
DaltonD.DailyC.EllstrandA.JohnsonJ. (1998). Meta-analytic review of board composition, leadership structure, and financial performance. Strategic Management Journal, 19, 269-290.
16.
DesvauxG.Devillard-HoellingerS.MeaneyM. C. (2008). A business case for women. McKinsey Quarterly, 4, 27-33.
17.
DezsoC. L.RossD. G. (2008). Girl power: Female participation in top management and firm quality. Retrieved from http://ssrn.com/abstract=1088182
18.
DignamJ. T.BarreraM.Jr.WestS. G. (1986). Occupational stress, social support, and burnout among correctional officers. American Journal of Community Psychology, 14, 177-193.
19.
EasleyC. A. (2001). Developing, valuing and managing diversity in the new millennium. Organization Development Journal, 19, 38-50.
FieldsD. L.BlumT. C. (1997). Employee satisfaction in business-units with different gender composition. Journal of Organizational Behavior, 18, 181-196.
22.
FrinkD.RobinsonR. K.ReithelB.ArthurM. M.AmmeterA. P.FerrisG. R. (2003). Gender demography and organization performance: A two study investigation with convergence. Group and Organization Management, 28, 127-147.
23.
Gallego-AlvarezI.Garcia-SanchezI. M.Rodriguez-DominguezL. (2009). The influence of gender diversity on corporate performance. Revista de Contabilidad—Spanish Accounting Review, 13, 53-88.
24.
HambrickD.ChoT.ChenM. (1996). The influence of top management team heterogeneity on firms’ competitive moves. Administrative Science Quarterly, 41, 659-684.
25.
HarrisonD.PriceK.GavinJ.FloreyA. (2002). Time, teams and task performance: Changing effects of surface- and deep-level diversity on group functioning. Academy of Management Journal, 45, 1029-1045.
26.
HarterJ. K.SchmidtF. L. (2006). Connecting employee satisfaction to business-unit performance. In KrautA. I. (Ed.), Getting action from organizational surveys: New concepts, methods, and applications (pp. 33-52). San Francisco, CA: Jossey-Bass.
27.
HarterJ. K.SchmidtF. L. (2008). Conceptual versus empirical distinctions among constructs: Implications for discriminant validity. Commentary on employee engagement. Industrial and Organizational Psychology, 1, 37-40.
28.
HarterJ. K.SchmidtF. L.AsplundJ. W.KillhamE. A.AgrawalS. (2010). Causal impact of employee work perceptions on the bottom line of organizations. Perspectives on Psychological Science, 5, 378-389.
29.
HarterJ. K.SchmidtF. L.HayesT. L. (2002). Business-unit level relationship between employee satisfaction, employee engagement, and business outcomes: A meta-analysis. Journal of Applied Psychology, 87, 268-279.
HeilmanM. E.HaynesM. C. (2005). No credit where credit is due: Attributional rationalization of women’s success in male–female teams. Journal of Applied Psychology, 90, 905-916.
32.
HeilmanM. E.OkimotoT. G. (2007). Why are women penalized for success at male tasks? The implied communality deficit. Journal of Applied Psychology, 92, 81-92.
33.
HerringC. (2009). Does diversity pay? Race, gender, and the business case for diversity. American Sociological Review, 74, 208-224.
34.
HillmanA.ShropshireC.CannellaA. (2007). Organizational predictors of women on corporate boards. Academy of Management Journal, 50, 941-952.
35.
HobmanE. V.BordiaP.GalloisC. (2003). Consequences of feeling dissimilar from others in a work team. Journal of Business and Psychology, 17, 301-325.
36.
HorwitzS. K. (2005). The compositional impact of team diversity on performance: Theoretical consideration. Human Resource Development Review, 4, 219-245.
37.
HorwitzS. K.HorwitzI. B. (2007). The effects of team diversity on team outcomes: A meta-analytic review of team demography. Journal of Management, 33, 987-1015.
38.
JacksonS. E.SchulerR. S.RiveroJ. C. (1989). Organizational characteristics as predictors of personnel practices. Personnel Psychology, 42, 727-786.
39.
JamesL. R.BrettJ. M. (1984). Mediators, moderators, and tests for mediation. Journal of Applied Psychology, 69, 307-321.
40.
JehnK. A.BezrukovaK. (2004). A field study of group diversity, business-unit context, and performance. Journal of Organizational Behavior, 25, 703-729.
41.
JimenoF. J.RedondoM. (2007, September). Diversidad de género en el consejo de administración y características económico-financieras de las empresas [Gender diversity in the board of directors and financial characteristics of the companies]. Paper presented at XIV Congreso de la Asociación Española de Contabilidad y Administración de Empresas, Valencia, Spain.
42.
JimenoF. J.RedondoM. (2008, November). Efectos sobre los ratios financieros de la diversidad de género en los consejos de administración de empresas españolas [Gender diversity in the board of directors and the effects on the financial performance of Spanish companies]. Paper presented at the First Workshop on Diversity, Gender, Governance and Accounting, Carmona, Seville, Spain.
43.
JonesJ. R.HarterJ. K. (2005). Race effects on the employee engagement-turnover intention relationship. Journal of Leadership and Organizational Studies, 11, 78-88.
44.
KahnW. A. (1990). Psychological conditions of personal engagement and disengagement at work. Academy of Management Journal, 33, 692-724.
45.
KahnW. A. (1992). To be fully there: Psychological presence at work. Human Relations, 45, 321-349.
46.
KanterR. M. (1977). Men and women of the corporation. New York, NY: Basic Books.
47.
KochanT.BezyrkovaK.ElyR.JacksonS.JoshiA.JehnK.. . . ThomasD. (2003). The effects of diversity on business performance: Report of the diversity research network. Human Resource Management, 42, 3-21.
48.
KonradA. M.WinterS.GutekB. A. (1992). Diversity in business-unit sex composition: Implications for majority and minority workers. In BacharachS.TolbertP. (Eds.), Research in the sociology of organizations (pp. 115-140). Greenwich, CT: JAI Press.
49.
KrishnanH.ParkD. (2005). A few good women-on top management teams. Journal of Business Research, 58, 1712-1720.
50.
LeeC.FarhJ. (2004). Joint effects of group efficacy and gender diversity on group cohesion and performance. Applied Psychology: An International Review, 53, 136-154.
51.
MaceyW. H.SchneiderB. (2008). Meaning of employee engagement. Industrial and Organizational Psychology, 1, 3-30.
52.
MannixE.NealeM. A. (2005). What differences make a difference? The promise and reality of diverse teams in organizations. Psychological Science in the Public Interest, 6, 31-55.
53.
MartinP. Y. (1985). Group sex composition in work organizations: A structural-normative model. Research in the Sociology of Organizations, 4, 311-349.
54.
MayD. R.GilsonR. L.HarterL. M. (2004). The psychological conditions of meaningfulness, safety and availability and the engagement of the human spirit at work. Journal of Occupational and Organizational Psychology, 77, 11-37.
55.
MillikenF.MartinsL. (1996). Searching for common threads: Understanding the multiple effects of diversity in organizational settings. Academy of Management Review, 21, 402-433.
56.
MyaskovskyL.UnikelE.DewM. (2005). Effects of gender diversity on performance and interpersonal behavior in small business-units. Sex Roles, 52, 645-657.
57.
O’ReillyC.CaldwellD.BarnettW. (1989). Business-unit demography, social integration and turnover. Administrative Science Quarterly, 34, 21-37.
58.
OrlitzkyM.BenjaminJ. D. (2003). The effect of sex composition on small-group performance in a business school competition. Academy of Management Learning and Performance, 2, 128-138.
59.
PelledL. (1996). Demographic diversity, conflict, and business-unit outcomes: An intervening process theory. Organization Science, 7, 615-631.
60.
PelledL.EisenhardtK.XinK. (1999). Exploring the black box: An analysis of business-unit diversity, conflict, and performance. Administrative Science Quarterly, 44, 1-28.
61.
PfefferJ.SalancikG. R. (1978). The external control of organizations: A resource dependence perspective. New York, NY: Harper & Row.
62.
PolzerJ. T.MiltonL. P.SwannW. B.Jr. (2002). Capitalizing on diversity: Interpersonal congruence in small work groups. Administrative Science Quarterly, 47, 296-324.
63.
RoseC. (2007). Does female board representation influence firm performance? The Danish evidence. Corporate Governance: An International Review, 15, 404-413.
64.
SchaufeliW. B.BakkerA. B. (2004). Job demands, job resources, and their relationship with burnout and engagement: A multi-sample study. Journal of Organizational Behavior, 25, 293-315.
65.
ShraderC. B.BlackburnV. B.IlesP. (1997). Women in management and firm financial performance: An exploratory study. Journal of Managerial Issues, 9, 355-372.
66.
SicilianoJ. I. (1996). The relationship of board member diversity to organizational performance. Journal of Business Ethics, 15, 1313-1320.
67.
SmithD. R.DiTomasoN.FarrisG. F.CorderoR. (2001). Favoritism, bias and error in performance ratings of scientists and engineers: The effects of power, status, and numbers. Sex Roles, 45, 337-358.
68.
SmithN.SmithV.VernerM. (2006). Do women in top management affect firm performance? A panel study of 2,500 Danish firms. International Journal of Performance Management, 55, 569-593.
69.
StewartG. L. (2006). A meta-analytic review of relationships between team design features and team performance. Journal of Management, 32, 29-54.
70.
TougasF.RinfretN.BeatonA. M.de la SablonniéreR. (2005). Policewomen acting in self-defense: Can psychological disengagement protect self-esteem from the negative outcomes of relative deprivation. Journal of Personality and Social Psychology, 88, 790-800.
71.
TsuiA.EganT.O’ReillyC. (1992). Being different: Relational demography and organizational attachment. Administrative Science Quarterly, 37, 549-588.
72.
TurnerJ. C.OakesP. J.HaslamS. A.McGartyC. (1994). Self and collective: Cognition and social context. Personality and Social Psychology Bulletin, 20, 454-463.
73.
U.S. Department of Labor. (2011a). Bureau of labor statistics: Labor force statistics from the current population survey, 1942 to date. Retrieved from http://www.bls.gov/cps/cpsaat01.htm
74.
U.S. Department of Labor. (2011b). Bureau of Labor Statistics: Employment outlook: 2010-2020. Labor force projections to 2020: A more slowly growing workforce. Retrieved from http://www.bls.gov/opub/mlr/2012/01/art3full.pdf
75.
WatsonW. E.KumarK.MichaelsenL. K. (1993). Cultural diversity’s impact on interaction process and performance: Comparing homogeneous and diverse task groups. Academy of Management Journal, 36, 590-602.
76.
WhartonA. S.BaronJ. N. (1987). So happy together? The impact of gender segregation on men at work. American Sociological Review, 52, 574-587.
77.
WhartonA. S.BaronJ. N. (1991). Satisfaction? The psychological impact of gender segregation on women at work. Sociological Quarterly, 32, 365-387.
78.
WilliamsH. M.MeanL. J. (2004). Measuring gender composition in business-units: A comparison of existing methods. Organizational Research Methods, 7, 456-474.
79.
WilliamsK. Y.O’ReillyC. A.III. (1998). Demography and diversity in organizations: A review of 40 years of research. In StawB. M.CummingsL. L. (Eds.), Research in organizational behavior (Vol. 20, pp. 77-140). Greenwich, CT: JAI Press.
80.
WoodW. (1987). Meta-analytic review of sex differences in group performance. Psychological Bulletin, 102, 53-71.
81.
ZengerT. R.LawrenceB. S. (1989). Organizational demography: The differential effects of age and tenure distributions on technical communication. Academy of Management Journal, 32, 353-376.
