Good team processes were far more important to bank branch performance than diversity, either by itself or as addressed in formal diversity training, according to a new study out of Harvard. Diversity did not hurt performance, either, even without the training.
An associate professor specializing in diversity issues, Robin Ely, compared demographics, diversity training, and employee ratings of their branches' teamwork with financial performance at 486 retail branches of a U.S. bank (7,500 employees). Performance measures included the overall score from a bonus program, and goal attainment in new sales, customer satisfaction, and customer referrals. Each branch in this company was treated as a multifunctional team. The company had an impressive record of hiring and promoting women and minorities, and of reinforcing diversity as an important value, plus has a well-attended diversity training program. Despite mixed results for diversity in the research literature, Ely predicted that in this bank, diversity would clearly improve performance.
Ely was surprised by the results. Diversity by itself had no clear relation (good or bad) to performance. For example, branch teams whose employees had spent very different lengths of time in the company performed moderately better by one measure, but worse by others. Age diversity was linked to lower scores on one measure, but was neutral otherwise. Gender and racial diversity had no relation to performance, better or worse. Also counter to Ely's prediction, having higher levels of participation in diversity training did not improve performance. Ely questions whether skills-based programs might be more effective than the mere awareness programs the bank emphasized.
But good teamwork was strongly related to good performance. Ely measured teamwork quality based on the results of an annual employee survey on five team-related questions, including, "How do you rate teamwork in your area at the present time?" Overall, team processes were six times more closely related to performance than was diversity training.
However, what Ely described as an "inexplicable, yet consistent pattern of results" showed that among branches with high tenure/age diversity, those with better teamwork performed somewhat worse than those with less teamwork. One theory Ely had was that these branch employees might believe their teamwork was better than it really was, because they don't openly express their diversity. In other words, people would think they had better teamwork but were really just "groupthinking" or avoiding confrontation, which are known to hurt group performance. But Ely readily admits this will need more research.
[Editor's note: Teamwork training was not measured, so we can't know if that would have changed the type of teamwork the branches experienced. And this study looked only at patterns of data, not causes, and only at one point in time, not changes over time.]
Source: Ely, R. (04), "A Field Study of Group Diversity, Participation in Diversity Education Programs, and Performance," Journal of Organizational Behavior 25:755.
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© 2009 by Jim Morgan. All rights reserved.