Workplace Diversity, Inclusion, and Organizational Effectiveness: An Empirical Study

This research explores the interrelationship among workplace diversity, inclusion climate, and organizational effectiveness with the help of the survey of 347 employees working in various industries. Based on the principles of social identity theory and optimal distinctiveness theory, this research hypothesizes that the dimensions of diversity (gender, age, and education) would have an indirect influence on organizational effectiveness via the mediating variable of inclusion climate. It is found out with the help of PLS-SEM model that inclusion climate plays an important role in this process since, on its own, demographic diversity does not predict any effectiveness outcome; however, together with inclusion practices, it improves organizational commitment and employee retention. This study is important since it highlights the point that inclusion cannot be seen as an optional component but rather a necessity for achieving performance improvement through diversity.