How Does Workplace Diversity Impact Team Performance?

Workplace diversity and team performance is a particular topic which was of interest to me, and so I decided to educate myself about it. I researched more about what diversity is and how it affects various spheres of our lives, especially our professional lives. Workplace diversity seems to affect team performance in many ways, which is clear from my research. What I found was quite interesting, and today, I would like to share that with you.

So, how does workplace diversity impact team performance? 

Diversity Leads to Better Team Performance by:

1. Stand out from your competitors

2. Foster a sense of inclusivity

3. Diversity prevents grouping

4. Diversity leads to better conflict resolution strategy

5. Diversity in the workplace leads to genuinely inclusive environment

A team that has a diverse informational background, can find it easier to come up with solutions which are out of the box. It can improve team performance by ensuring that each team has a diverse set of talents. When an organization values inclusivity, it can also help strengthen the relationship with employees and thus lead to improved individual performance as well. However, while diversity is known to bring about a lot of positive changes, it can be challenging to incorporate effectively in an organization.

Diversity is not just about race or gender. Instead, diversity can mean differences in cultural backgrounds, socioeconomic backgrounds as well as age and seniority. Diversity seems to be a hot topic nowadays, especially in the work environment. It is intriguing, and a lot of research has been done over the years about how diversity affects various spheres of our lives.

diversity leads to better team performance

Diversity Leads to Better Performance: Here is How

When most people think about diversity, they think about gender or race. However, diversity is more than just that. Although gender and race diversity is also essential, another essential factor in diversity is a person’s background and socioeconomic class. Why is it important? This was a question that I had asked, as well. When there are differences in background and socioeconomic classes, chances are there is a lot of difference among the group members in terms of the information and knowledge they have been exposed to.

This does not mean that one will be more educationally qualified than the other. Instead, it means that due to the differences in the nature of the information they have been exposed to, the chances are that they have been exposed to different types of situations as well. This, ultimately, helps in having a team which has a diverse group in terms of their problem-solving ability. Hence, some people may be more creative than others when it comes to coming up with a solution to a problem, and therefore ultimately lead to a better result for the group overall. With a diverse team, group performance is improved as people try to come up with unique and creative solutions for the task at hand.

When there is a diverse team, each team member is able to gain perspective into the other person’s world. They, thus, can become more understanding of the other over time, and hence, it can lead to better communication for the team overall. With better communication, team performance also improves.

As mentioned above, diversity is more than gender and race; it includes a lot more than just that. When you hire people who may be from a different geographic location, or at different stages of their career, or with different personalities, putting them in a group can be beneficial. A team which is diverse will show better performance.

When there is a diverse group, then the work is easily divided among the team members depending upon their skills. When one person is highly skilled at something, and someone else has a talent for something else, both of their abilities can be equally used to fulfil a task. Employees can strengthen and hone their skills faster, and team performance improves as a result of the work being assigned efficiently. When the different skills and talent that people in a group have are explored sufficiently, it helps the team understand what their strengths are. Some team members may not be as skilled as others in a particular task. They too can learn more by working as a team. Thus, not only does the team have a variety of skills, but it can also work together to hone and improve the collective skills.

For the organization, having diverse teams in terms of talents and skills are excellent, since it will ultimately lead to a large talent pool. Hence, an organization is able to expand the amount of talent that they have by hiring diverse workers in a group.

1. Stand out from your competitors

When a company has a diverse team, it ultimately helps them stand out from their competitors. It is not a surprise that most have still not understood the importance of having a diverse group. For most companies diversity does not seem to be the priority. With a diverse team, a company is able to come up with more creative ideas, and also have a large pool of talent. These two factors help in improving the performance of the team overall, and as a result, the performance of the organization. With a diverse team, everyone thinks outside of the box, and hence, they are able to show results that no one else can and come up with solutions that are more creative than others.

2. Foster a sense of inclusivity

It is no surprise that when companies seem to put emphasis on having diversity in their organization, employees feel a sense of inclusivity. When people belonging to different cultures, race, or gender, find that an organization values diversity, they feel cared for, and connected to the organization. Ultimately, it leads to the employees striving to perform better individually in the organizations, which leads to better performance for the team. When an employee is placed in a diverse group, then they are able to look at their team members and realize that their organization values inclusivity. Hence, when working in a diverse team, the value that inclusivity holds for the organization is reinstated over and over again.

As each employee strives to perform better individually, they also try to co-operate more with their group and improve communication. They strive to improve their performance in all spheres, which includes teamwork as well.

3. Diversity prevents grouping

When working with diverse people, it can be easy to form groups based on some similarity which you may find with the other. This is known as the herding instinct. However, a diverse team pushes employees past this instinct to ensure that the team is truly diverse and that the team members communicate with each other.

4. Diversity leads to better conflict resolution strategy

In a diverse workplace, conflict will arise. It is unavoidable. Hence, instead of trying to prevent it altogether, organizations should try to come up with strategies that will help reduce instances of conflict, and learn how they can manage conflict and prevent it from escalating further.

Thus, when working with a diverse team, the conflict resolution skills of the manager is honed, and it ultimately leads to a workplace environment with less friction.

5. Diversity in the workplace leads to genuinely inclusive environment

It is easy to hire people from different backgrounds. However, having a diverse workplace does not mean anything when the workplace does not have a staff which values diversity and inclusivity. A diverse team helps to counter this problem. When working with team members from different backgrounds, each member is able to interact in a one on one capacity with the other person. This helps in overcoming any prejudice which they may have, and also gain a better understanding of different cultures as well as their values and traditions.

Diversity in the Organization: The Adverse Effects on Team Performance

Cons of informational diversity

Diversity is not always functional. When a team is diverse, it has the potential to give rise to conflict. Conflict is usually caused when people have a different perspective or opinion about a topic or a task at hand because of differences in their personal needs or demands. When a team is diverse, it is not a surprise that each person will have different priorities, as well as different views on how a task should be handled.

Informational diversity arises from differences in background. While this may be beneficial in the sense that it helps members come up with more creative solutions to issues at hand, it can also be harmful to team performance by giving rise to conflict. When everyone has a different solution to the same problem, there can be a lot of debate about which solution will be the right fit. As people have different perspectives on the same issue, it can be challenging to come up with a solution to the problem as a team.

In fact, when one member’s solution is picked over the other, it can also foster a sense of low self-esteem and resentment towards the other member. Hence, the issue must be handled effectively.

1. Differences in goals and values

A team can also differ in their goals and values. This results in a conflict which can be quite damaging to the team. A team in order to be effective should have goal homogeneity. Without each member agreeing on a single goal for the team, each member may be trying to accomplish a different result, which can ultimately lead to stagnant team performance. Without agreeing upon a single goal, the communication within a team is affected adversely. Hence, in order for diversity in a team to be effective, all members need to agree on a single goal for the team so that each person knows that the intention of the other is the same.

2. Differences in communication

Communication in any situation is essential. But, when there is a diverse team with people belonging to different cultures and backgrounds, each person may have different communication styles. Some people may have a more direct and assertive way of communication due to their background, which may be perceived as rude or brash by others in the team.

On the other hand, another person’s communication style may be more indirect. In such cases, a person may feel uncomfortable with asserting themselves, and hence, they will also be less likely to speak up if they happen to disagree on a particular issue.

When there is a barrier in communication, it can be difficult to understand the other members of the team, which can adversely affect team spirit and performance. Hence, while diversity may bring about some positive changes, without an effective way to communicate, it is fruitless.

By adopting the following strategies, these shortcomings can be handled easily:

Set roles for the group: the role of each member of the team should be clearly defined. This ensures that everyone is able to focus on their own tasks while also working together as a team. When roles are clearly defined, it is easier for each member to focus on their own task rather than trying to take up as much as they can in order to prove their worth.

Set ground rules: Setting ground rules in a diverse team is essential. Without a set of rules, a group discussion can quickly delve into chaos, which is not something that you would want. Hence, when there are clear ground rules and code of conduct, each member is more likely to adhere to them. With a clear set of ground rules, it is easier for each member to understand how they should conduct themselves.

Improve communication: A lot of conflicts that arise in a diverse team are due to a lack of effective communication. Hence, when managing a diverse workplace or team, it is essential that you try to improve communication among the employees. This is quickly done with the help of team exercise as well as by defining the goal of the team to each member.

3. Differences in attitudes towards power-distance

Power distance refers to the seniority and status of another member in the team. In some countries, a person with higher status and security is respected more, and their opinions are valued. Those who have a lower power-distance often do not speak up against those with higher power distance.

Again, in some countries, the differences in power-distance are not so critically observed. Every person takes charge of the situation and strives to work together as a team where every member has the same position regardless of the status or seniority of the other.

This difference in attitude towards power distance can make it seem like those who respect owner distance lack self-confidence and are afraid to speak up. At the same time, it can make members who do not observe power-distance seem like they are disrespectful to the other.

Hence without a basic understanding of the other person’s background, it may be challenging to understand the intentions of the other person, and why they do the things they do, It can be easy to perceive others as being inferior to you simply because you do not understand their actions and you are only viewing them from your own perspective rather than trying to understand where they are coming from.

A diverse team needs to be able to foster a sense of understanding among the different members. Even with diverse members, a team should have a single goal which they work towards. Otherwise, the performance of the group may be affected negatively. Differences in personality, as well as attitudes, may also lead to a team which is not very efficient or productive. Hence, when it comes to workplace diversity, a lot of stress is put on the manager. The manager of a diverse workplaceOpens in a new tab. must have effective managing techniques in order to avoid any conflict which may arise among employees and team members.

Related Questions

How can you avoid conflicts when working with a diverse team?  It is clear to see that workplace diversity can have beneficial effects. However, at the same time, it cannot be denied that in order for diversity in the workplace to be effective, it needs to be appropriately managed. When you put diverse people in a team, there is a great possibility of conflicts arising. Repeated conflicts can reduce team morale, and it can also reduce the efficiency of the group. An effective conflict resolution strategy should be drawn up by the manager of the team who has a special insight on each of the members.

How can an organization realize the full potential of a team which is diverse? Even when you have a diverse team, you may not be seeing the results that you expected. This can be because even when a team seems to be working effectively on the surface, at a deeper level, each individual member may not be great at working with the other members of the unit. By helping build better communication channels, as well as fostering an environment where cultural diversity is truly valued, an organization can ensure that their diverse teams are truly effective. With an effective team, the performance of the organization as a whole improves.

Steve Todd

Steve Todd, founder of Open Sourced Workplace and is a recognized thought leader in workplace strategy and the future of work. With a passion for work from anywhere, Steve has successfully implemented transformative strategies that enhance productivity and employee satisfaction. Through Open Sourced Workplace, he fosters collaboration among HR, facilities management, technology, and real estate professionals, providing valuable insights and resources. As a speaker and contributor to various publications, Steve remains dedicated to staying at the forefront of workplace innovation, helping organizations thrive in today's dynamic work environment.

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