Does leadership matter in diversity management? Assessing the relative impact of diversity policy and inclusive leadership in the public sector

Abstract

Purpose While prior research has emphasized the importance of diversity management for the betterment of future workforce, the role of managerial actors in leading the diversity management movement has not been substantiated. The purpose of this paper is to examine the role of managers in practicing diversity management and the extent to which inclusive leadership affects employee performance. Design/methodology/approach The study draws on a large survey data (n=415,696) with a representative sample of employees in federal government in the USA. Findings The quantitative results show that diversity policy alone predicts performance less strongly for employees of racial minority than for whites. In contrast, the study finds that inclusive leadership predicts performance more strongly for nonwhites. Research limitations/implications The embodied approach to diversity management proposed in this paper expands the understanding of diversity management research by exploring the interaction effect between diversity policy and diversity leadership. Practical implications The paper is unique in proposing an interaction effect between diversity policy and diversity leadership in managing diversity. Social implications Previous studies in the literature surprisingly neglected to take into account the role of leader behavior in managing diversity. As the study shows the significant moderating role of diversity leadership in diversity management, organizational leaders are encouraged to critically assess and provide training for those team leaders and middle level managers to promote diversity in the workplace. Originality/value This is the first empirical study to distinguish and examine the relative impact of diversity policy and inclusive leadership on employee performance in the public sector.