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MIT: Like It or Not, Diversity Pays

Monday, October 13, 2014

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Workplaces with an equal split of men and women are more productive, even though some workers may not be happier, a new MIT study concludes.

Individual employees may favor more homogenous settings, preferring the"idea" of diversity over "actual" diversity, according to a research announcement.

©skynesher / iStock

Having a more diverse set of employees means you will have a more diverse set of skills and that could translate to an office that functions better.

But diversity is better for the bottom line, reports “Diversity, Social Goods Provision, and Performance in the Firm,” recently published in the Journal of Economics and Management Strategy.

'Social Capital' and Performance

“Having a more diverse set of employees means you have a more diverse set of skills,” which “could result in an office that functions better,” said Sara Ellison, an MIT economist and co-author of the research.

Still, despite the benefits, individual employees may prefer less diverse settings, she said.

The study focused on how much “social capital” offices build up in the form of cooperation, trust, and workplace enjoyment.

“The more homogeneous offices have higher levels of social capital,” said Ellison.

“But the interesting twist is that … higher levels of social capital are not important enough to cause those offices to perform better. The employees might be happier, they might be more comfortable, and these might be cooperative places, but they seem to perform less well.”

©tsz01 / iStock

Ellison suggests an analogy with a baseball team. “A baseball team entirely composed of catchers could have high esprit de corps,” Ellison said, noting that a band of catchers could share experiences, equipment, or tips for handling knuckleballs. “But it would not perform very well on the field.”

They researchers analyzed eight years of revenue data and survey results from a professional-services firm with more than 60 offices in the U.S. and abroad. The data included some all-male and all-female offices as well as mixed-gender offices, the researchers note.

Boost to Bottom Line?

The researchers found that shifting from an all-male or all-female office to one split evenly along gender lines could increase revenue by roughly 41 percent.

In addition, greater social diversity invites a greater spread of experience, which could add to a work team's collective knowledge and increase its effectiveness, the researchers found.

Perception vs. Reality

The self-perception of diversity proved “sufficient to produce satisfaction among employees,” according to the study.

But the good feelings did nothing for the bottom line.

“In offices where people thought the firm was accepting of diversity, they were happier and more cooperative,” Ellison says. “But that didn’t translate into any effect on office performance. People may like the idea of a diverse workplace more than they like actual diversity in the workplace.”

The study was funded in part by the National Science Foundation and co-authored by Wallace P. Mullin, an economist at George Washington University.


Tagged categories: Business conditions; Business matters; Good Technical Practice; North America; Personnel; Research; Workers

Comment from Robert Bullard, (10/13/2014, 8:32 AM)

Again, the question is chicken and egg. Is the diversity itself the source of the improved productivity or is it a progressive corporate culture which is especially focused on appropriately compensated merit as an inevitable consequence?

Comment from Sarah Geary, (10/14/2014, 8:04 AM)

It may be completely in the "battle of the sexes" mentality; maybe it's not a predominant thought, but it is always present in the back of the mind. Humans are hard-wired that way.

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