The role of diversity practices and inclusion in promoting trust and employee engagement

Do an organisation’s diversity practices drive employee engagement, or are there other critical factors like trust and inclusion at play - and what does this mean for business?

This research conducted by Stephanie N. Downey (University of Georgia), Lisa van derWerff (Dublin City University), Kecia M. Thomas (University of Georgia) and Victoria C. Plaut (School of Law, University of California, Berkeley) explores the relationship between diversity practices, inclusion, trust, and employee engagement at work.

Trust is defined as “a psychological state comprising the intention to accept vulnerability based upon positive expectations of the intentions or behaviour of another”.Employee engagement is defined as “a positive, fulfilling, work-related state of mind that is characterized by vigor, dedication, and absorption”).

The research examines whether an organisational ‘trust climate’ is a mediating factor in the relationship between diversity practices and employee engagement.  It assesses the question: Is an individual’s feeling of trust in their organisation a necessary factor for diversity practices to drive employee engagement, and the positive consequences that come with it?

The research also examines inclusion as a “moderator” (or influencing factor) in this relationship or, more specifically:  Does the degree to which employees feel like they have control over decisions, or are involved in critical processes and groups, impact the influence of an organisation’s diversity practices as a driver of engagement?

The researchers found that a high trust climate in an organisation provided a strong ‘underlying mechanism through which diversity practices transmit its positive effect on engagement’. Simply put, when diversity practices and trust co-exist in an organisation, it increases employee engagement.

However, the research also identified that perceptions of diversity are only positively related to trust when employees also perceive high levels of inclusion. Therefore, to achieve an engaged workforce through this combination of ‘diversity and trust climate’, perceptions of inclusion are critical.

Aim

The aim of the research is to improve  understanding about the association between diversity practices and employee engagement. Specifically it investigate the roles that organisational trust climate and perceptions of inclusion play in providing a platform for diversity practices to drive employee engagement.

Method

An anonymous online ‘diversity climate assessment’ was conducted of employees from a large healthcare organisation.  A total of 4,597 respondents (49% response rate) completed the assessment. Respondents were a blend of females (79.2%) and males, and a range of ethnicities including employees identified as ethnic minorities (21%).

Three hypotheses were tested using Edwards and Lambert’s (2007) moderated mediation analysis framework.

1. Employee positive perceptions of diversity practices will be positively related to employee engagement
2. A positive trust climate will partially mediate the relationship between diversity practices and employee engagement
3. Perceptions of inclusion will moderate the relationship between diversity practices and engagement.

Findings

The key findings of the research are that: (1) statistically, diversity practices relate positively to employee engagement; (2) there are strong causal linkages between diversity, trust and employee engagement; (3) perceptions of inclusion are an important moderating factor in diversity creating trust and therefore driving employee engagement.

1. There is a statistically significant relationship between diversity practices and employee engagement at work, for all employees.

The research demonstrates that employee perceptions of their organisation’s diversity practices were directly related to their levels of engagement. Importantly, perceptions in this case are not of the diversity ideology or values, but more importantly perceptions of actual ‘policies and practices that make up an organisation’s diversity practices’ – the tangible actions taken for diversity.

By selecting and studying a blended group of employees from a large organisation, the authors believe the research is the first to show that diversity practices do not only have a positive relationship with engagement for minority groups, but for all employees.

2. There are statistically significant causal linkages (path coefficients) from diversity practices to trust, and trust to engagement.

Trust climate was demonstrated to be a significant ‘partial mediator’ of the relationship between diversity and engagement. That is, trust accounts for a significant degree of the relationship between diversity practices and engagement.

3. The effect of diversity practices on trust and engagement are statistically significant with higher perceived levels of inclusion.

The relationship between diversity practices and trust climate was examined at different levels of inclusion, measured by perceptions of feeling valued, appreciated and encouraged to contribute and share ideas. The results showed that positive perceptions of diversity practices positively relate to a trusting climate only when employees perceive high levels of inclusion.

Layering findings (3) and (2) above, the research identified that for diversity to drive engagement, enabled by a climate of trust, perceptions of inclusion must be high.

Implications

Employee engagement is an important issue companies around the world face today. It is a priority both for HR and for the business and plays a critical role in business performance (Global Human Capital Trends 2015, Deloitte University).

Whilst diversity practices themselves are not necessarily a new strategy for businesses seeking to build engagement, this research challenges practitioners to critically assess how  diversity practices are applied as a driver of engagement. Essentially, it demonstrates and explains that there is more to the equation than just implementing diversity practices.

By unpacking the critical ingredients of diversity practices, trust and inclusion that must exist for the related outcome to be an engaged workforce, the research challenges practitioners to reflect on how these factors are aligned and brought to life in an organisation.

The research suggests that organisations that actively seek to promote employee inclusion are better placed to realise the well-known benefits of a high trust and high engagement workplace, including increased employee performance.

Given the findings, key learnings and implications for business include:

1. The importance of “promoting inclusion in organisations as a potential means of increasing employee trust and engagement”. That is, enabling the organisation to understand and practice inclusion, not just diversity
2. The need to go beyond diversity and inclusion for minority groups alone (e.g. via recruitment practices that target minority groups) and to prioritise both diversity and inclusion across the entire employee lifecycle, for all employees
3. The importance of ensuring that all business processes facilitate diversity and inclusion, for maximum opportunity to inspire trust and enable an engaged workforce.

In a world where engagement is a top corporate priority, and diversity an important factor in this, the recommendation is that businesses take the time to get the design and application of diversity and inclusion right.

To read the full article, see: Downey, Stephanie N., van derWerff, Lisa., Thomas, Kecia M., Plaut, Victoria C. (2015), “The role of diversity practices and inclusion in promoting trust and employee engagement”, Journal of Applied Social Psychology, Vol. 45, Issue 1, pp. 35–44.

For further information contact Vanessa Bugge.