Supportive Diversity Climates Increase Sales Results for Minorities
Patrick F. McKay, Derek R. Avery, Mark A. Morris
Personnel Psychology, May 2008
Available
online (abstract)
Laws that make discrimination in the workplace illegal have spurred many organizations to develop their own diversity policies that emphasize the importance of recognizing and respecting employees' differing perspectives.
Yet, according to a study in the summer 2008 edition of Personnel Psychology, having a policy does not always mean a favorable diversity climate.
To find out if organizations truly "walk the talk" in embracing their policies and valuing diversity throughout the workforce, Patrick F. McKay of the School of Management and Labor Relations at Rutgers University and two other authors undertook a study of racial and ethnic differences in employee sales performances. They chose a large American retail company that is ranked in the “Top 50 Companies for Diversity” by Diversity, Inc. magazine and surveyed over 6,000 workers at nearly 750 stores around the country.
The research showed some variations among the different store units. The authors attribute these to differences in management styles of each unit. Pro-diversity policy, they found, starts at the top. Leaders have to set the tone and climate throughout the organization and support the policy through practices and leadership.
They also found that a pro-diversity climate has an impact on employees. Their study showed that African-American employees in stores with high pro-diversity climates increased their sales by about $20 per hour, an annual sales gain of nearly $21,000. Hispanic employees increased hourly sales by $26, resulting in annual gain of $27,000.
Also, white sales personnel showed improvement in their sales figures, although not as strongly, primarily because there is less discrimination directed at whites.
The bottom line? Sales performances for both African-American and Hispanic employees, and to a lesser extent white workers, produce significantly larger sales per hour in store units perceived to have highly pro-diversity work climate.