Should you opt for diversity, picking an equal number of men and women to comprise your team, or should you instead create a single-gender office?
Well, it all depends on whether you’re aiming for a happy staff—or a productive one.
The researchers looked at anonymous employee surveys administered at a Boston-based professional services company between 1995 and 2002 that measured cooperation, trust and work enjoyment; they also analyzed the teams’ revenue over that same time period.
The managers of firms face the challenge of assembling a workforce and a culture that
will succeed in the task at hand. The results of this paper shed light on how actual and
perceived diversity is associated with indicators of firm social capital and measures of
ultimate office performance, revenues.
We find that the perception that a firm is supportive of diversity in an office is posi-
tively associated with indications of the level of cooperation in that office. Other proxies
for social capital or corporate culture, such as employee morale and satisfaction, were
also higher in offices in which this perception was higher. Nevertheless, the presence of
actual gender diversity was a significant factor in
reducing
these same measures of social
capital. At the same time, tenure diversity had little measurable association with proxies
for social capital.
Inoursecondsetofresults,weinvestigatethedeterminantsofoffice-levelrevenues.
We find that the perception that the firm accepts diversity has no estimated payoff in this
dimension. Interestingly, gender diversity is associated with a positive contribution to
revenues, although this effect is diminished once office-level fixed effects are included.
In contrast, tenure diversity is associated with lower revenues.
We note an interesting contrast between our results on tenure diversity and gender
diversity. Tenure diversity had little association with our measure of social capital but
a strong negative association with performance. Gender diversity seems to affect the
functioning of the firm in quite a different way. Our first set of results suggests that
gender diversity could have detrimental impacts on the formation of firm social capital,
but the revenue results suggest that whatever impacts it had were outweighed or at least
canceled by the direct contribution of gender diversity in the office
