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TPM
22,5/6
Employment arrangements
diversity and work
group performance
310 Sagi Akron, Ofek Feinblit, Shlomo Hareli and Shay S. Tzafrir
Faculty of Management, University of Haifa, Haifa, Israel
Received 1 November 2015
Revised 3 April 2016
Accepted 6 May 2016
Abstract
Purpose – The purpose of this study was to explore the relation between diversity in work group
members’ employment arrangements and the actual performance of the work groups.
Design/methodology/approach – A field study was conducted on 31 work groups in a public plant
belonging to the industrial sector that constitute a unique data set. The 441 employees are contracted
under four significantly different employment arrangements and are mixed together in heterogeneous
work groups, but perform similar tasks.
Findings – The results indicated that the influence of employment arrangement diversity on work
group performance is best represented as variation, and work arrangements diversity is positively
correlated with improved work group performance.
Research limitations – The study design prevented assessment of employees’ opinions. Rather, the
authors used objective type of employment arrangements as the basis for calculating diversity as
separation. Using mean Euclidean distance as suggested by Harrison and Klein (2007), the authors
arbitrarily set the distance between two different employment arrangements as one.
Practical implications – The research results help in the stages of recruiting, structuring and
development and application of necessary work team. Formal emphasis of diversity in work
arrangements improves performance.
Originality/value – To the authors’ knowledge, this is one of the first studies using unique data set
analyzing real-life team diversity and performance in the public sector. The research highly contributes
to organizational decision-making processes regarding the importance of incorporating non-standard
work arrangements in organizations. Management’s implementation of formal diversity seems to
alleviate the negative sides of diversity and increases its positive performance effects.
Keywords Diversity, Employment arrangements, Work group performance
Paper type Research paper
Introduction
Recent decades have seen an increase in the use of non-standard employment
arrangements, such as part-time employment, recruitment of employees through
temporary help agencies and contract company employment. Cappelli and Keller
(2013a) state that the level of non-standard work arrangements is wide-ranging,
reaching 20 per cent in the USA and beyond in other countries. Furthermore, Cappelli
and Keller (2013b) found that overall, work arrangements of this type keep increasing
over time. According to The Economist (2015), the number of US temporary workers
Team Performance Management doubled and private-sector union membership rate decreased by about 50 per cent
Vol. 22 No. 5/6, 2016
pp. 310-330
© Emerald Group Publishing Limited
1352-7592
This manuscript is dedicated to the memory of Ofek Feinblit – a wonderful human being, who
DOI 10.1108/TPM-11-2015-0053 because of unfortunate circumstances, did not live to see the fruits of his labor published.
between the years 1990 and 2015. The shift from traditional (e.g. Befort, 2003; Bergstrom Employment
and Storrie, 2003; Kalleberg et al., 1997) to non-standard arrangements (Kelliher and arrangements
Anderson, 2010; Lautsch and Kossek, 2011) stems from the view that an organization
can reduce expenses and improve its strategic flexibility by using a human resource
diversity
architecture combining different employment modes (Houseman, 2001; Lepak and Snell,
1999). One significant outcome of such a strategy is that many firms combine standard
and non-standard workers within the same work groups, creating heterogeneity in 311
employment arrangements among employees who must work closely together
(Broschak and Davis-Blake, 2006). Although previous research focused on the effect of
such groups on its members (Krausz et al., 1995; Pearce, 1993), little is known about the
effectiveness of such work groups as a whole.
Diversity refers to observed or perceived attribute distribution among the members
of a unit: either a work group or the entire organization. Diversity in employment
arrangements can be seen as one such source of diversity that may operate differently
than other ascriptive variables characterizing differences among work groups, as it may
affect attitudes and behaviors of the work group members (Broschak and Davis-Blake,
2006; Harrison and Klein, 2007; Qin et al., 2014). Research on group diversity
consistently found that cross-functional groups (e.g. groups comprised of members from
different divisions within the organization) performed better than groups that are not
functionally diverse (Barsade et al., 2000; Bunderson and Sutcliffe, 2002; Jehn and
Bezrukova, 2004). Yet, findings concerning the effect of diversity in other ascriptive
factors, such as age, gender and racio-ethnicity (Broschak and Davis-Blake, 2006;
Reskin, 2003), on performance are less conclusive. Specifically, although some of the
studies show a positive relation between diversity in these factors and performance,
others documented a negative relation; still, other studies failed to find any effect for this
source of diversity on group performance.
Moreover, research on diversity in organizations rarely focused on work
arrangements as a source of diversity (Broschak and Davis-Blake, 2006). Thus, there
seems to be some inconsistency in the results of different studies exploring the
organizational effects of diversity. For instance, group creativity, innovation and
decision quality (Van Knippenberg et al., 2004) resulted in highly efficient job
performance and flexibility – namely, high production and sales, clients’ satisfaction
and costs saving, lower turnover intentions and ease of monitoring tasks (Kochan et al.,
2003; Cappelli and Keller, 2013a). By contrast, Pelled et al. (1999) found that various
measures of group diversity, such as race and tenure, increase emotional conflict and in
turn decrease performance. One possible major reason for this inconsistency is related to
the way diversity is operationalized. Indeed, different studies often use different
operationalizations of the same source of diversity and, hence, reach different results.
This may not only lead to inconsistent results but also to invalid ones (Harrison and
Klein, 2007). The present research used Harrison and Klein’s (2007) framework of
operationalizing diversity to test the effect of diversity in employment arrangements
within work groups on group performance at work. As our findings are based on
archival data, we were not able to examine diversity typologies that are based on
employee attitudes toward the non-standard work arrangements and their derived
behaviors, as in the studies of Bendapudi et al. (2003) and Broschak et al. (2008).
Previous research on diversity in the workplace has failed to consider differences in
employment arrangements as a source of diversity, despite its relevance to the subject at
TPM hand. Indeed, recently, conceptualizing diversity in employment arrangements among
22,5/6 work group members, in terms of diversity in demographic criteria, showed that
diversity in work arrangements was associated with less favorable attitudes toward
supervisors and peers, increased turnover intentions and decreased work-related
helping behaviors (Broschak and Davis-Blake, 2006). These conclusions stand in stark
contrast with other research that views the use of non-standard employment
312 arrangements as an advantage (Bacharach and Bamberger, 2004). For instance, it has
been claimed that such arrangements can be a means for creating and accumulating
valuable knowledge by generating a catalytic effect on the knowledge creation process
within a unit (Nesheim, 2003). Nevertheless, previous studies mainly focused on the level
of the individual worker (Ang and Slaughter, 2006; Ellingson et al., 1998) or on the
organizational level (Becker, 2004; Kahn, 2000) while ignoring the level of the work
group. The operationalization of diversity that was often used was inadequate,
according to the perspective offered by Harrison and Klein (2007). For example,
Broschak and Davis-Blake (2006) referred to diversity as separation but used an index
that presents diversity as variety. Finally, the scarce research focusing on the work
group level typically tested only a small number of work arrangements. For example,
Pearce (1993) dichotomously differentiates between regular employees and contract
workers. Davis-Blake et al. (2003) use an externalization of work arrangements based on
the length of employment and the level of supervision, dividing employment
arrangements into standard employees, contract workers and temporary workers.
The present paper studies the effect that variation in employment arrangements,
coexisting in an organization and differentiating between work-groups members, has on
their performance. The rationale underlying this choice is that employment
arrangements are observable and salient characteristics of workers and, as such, can
affect how employees’ function with coworkers in their work groups (Broschak and
Davis-Blake, 2006). A large body of literature shows that salient and observable
differences among work group members carry significant implications for the
organization and its work groups (Kalleberg et al., 2003; Davis-Blake et al., 2003;
Cappelli and Keller, 2013a). The typical attributes of interest in this line of research were
both those that can be readily perceived, such as age, sex and racio-ethnicity, and subtler
attributes such as personality, knowledge and values, as well as attributes that fall
between these two extremes of visibility, such as education, tenure, functional and
occupational background (Jackson et al., 2003; Williams and O’Reilly, 1998). We suggest
that diversity in employment arrangements is yet another important source of diversity
expected to have a significant effect on organizational performance. The present study
explores the relation between diversity in work group members’ employment
arrangements and the actual performance of the work groups.
Qin et al. (2014) state that the work of Harrison and Klein (2007) is limited because of
the fact that they conceptualize diversity as the difference in a single personal attribute.
However, more recently, there is a growing tendency to conceptualize diversity as
differences in multiple personal attributes (Meade and Eby, 2007). Mathews (2010,
p. 206) examined management of diversity reflected by dimensions reflecting both
competence and culture. Likewise, Heres and Benschop (2010) studied the effect of
diversity management, analyzing how it is reflected in the content of corporate websites
according to observable and non-observable perceived difference. Nevertheless, as our
unique database is especially suited for studying performance of work groups that differ
dimensions of work group arrangements, we find Harrison and Klein’s (2007) diversity Employment
typology the optimal framework for operationalizing our highly diverse group work arrangements
composition.
diversity
Theory and hypotheses
Traditionally, organizations employed workers under standard work arrangements
best characterized as “work done on a fixed schedule – usually full time – at the 313
employer’s place of business, under the employer’s control, and with the mutual
expectation of continued employment” (Kalleberg et al., 2000, p. 257). In recent years,
however, organizations have adopted non-standard work arrangements, which refer to
employment relations that lack one or more of the characteristics of standard work
arrangements, such as part-time employment, temporary workforce and contract
company employment. The expansion of non-standard employment is justified by
economic uncertainty, availability of new technologies (Atkinson, 1987; Lepak and
Snell, 1999), reduced costs, increased access to workers with special skills, screen
candidates for regular positions, bypass solution to head count limits (Houseman, 2001)
and changes in labor force demographic composition and workers’ preferences
(DuRivage, 1992).
Prior research in the area of non-standard work arrangements has tended to be
descriptive, focusing mainly on the demographic characteristics of the non-standard
workforce (Howe, 1986). Typically, non-standard jobs are inferior to regular full-time
jobs in that they offer less job security and less extrinsic reward packages and involve
lower levels of investment in recruitment, selection, training and development
(DuRivage, 1992; Horstman, 1988; Kalleberg et al., 1997). Another line of research
explored the relationships among workers with different work arrangements. Evidence
shows that individuals working as temporary employees are disengaged from social
relations with other employees and, thus, are regarded as second class or peripheral to
permanent workers (Bergstrom, 2001). Moreover, Pearce (1993) found that the presence
of contractor co-workers was associated with lower organizational trustworthiness by
the permanent employees.
Cooper et al. (2014) examines the impact of non-standard work arrangements, that is,
fixed-term contracts, on employees’ work outcomes as these are reflected by
commitment to the organization, supervisor and job goals. These authors found that a
non-standard employment arrangement is associated with a higher level of commitment
to the profession and job but lower organizational commitment, relative to the standard
employment arrangement. By contrast, Nesheim and Smith (2015) failed to find any
significant impact of employment arrangement on project knowledge sharing.
Specifically, they found similar levels of knowledge sharing for external consultants and
standard employees, hence supporting the merits of work arrangement diversification.
Despite its important contribution to our understanding of the effect that specific work
arrangements have on individual employees, it focuses less on the effect of work
group-level diversity on work group’s performance in the organization.
Harrison and Klein (2007) suggested a theoretical model that characterizes diversity
in three different ways: separation, disparity and variety. Diversity as separation is
defined as diversity stemming from differences in group members’ stances or opinions
regarding an issue relevant to the group or the work. Diversity as disparity represents
differences among group members in the attainment of valued social assets or resources,
TPM such as pay or status. Finally, diversity as variety represents differences among group
22,5/6 members in relation to type, category and source of knowledge or experience. In terms of
consequences, diversity as separation and disparity are expected to inhibit the work
group’s performance. In contrast, diversity as variety is expected to improve the work
group’s performance. Harrison and Klein (2007) argued that although certain attributes
can be clearly defined as one type of diversity, others can be defined as more than one
314 type. For instance, other attributes such as age, gender, racio-ethnicity, and tenure may
be meaningfully conceptualized as separation, variety or disparity. The true meaning of
each diversity factor in a given context depends on how the members of a given
organizational unit interpret the factor in question within the specific context of interest.
The effect of diversity is determined by the way work group members perceive it. Yet, in
a real work setting, it is difficult to directly assess how workers within a work group
actually perceive it. The use of the Harrison and Klein’s (2007) three-characterization
typology enables an indirect assessment of the effect of diversity in employment
arrangements as a function of the three major ways in which diversity can be perceived.
Although employment arrangements cannot be considered an example of a
demographic difference, several features of non-standard employment arrangements
may cause them to be perceived by employees as visible and as salient as differences in
age, ethnicity and other ascriptive characteristics (Broschak and Davis-Blake, 2006).
Moreover, Reskin (2003) argued that organizational actions that create visible
differences among group members have the potential to create some of the same kinds
of work group dynamics as ascriptive demographic differences. In line with these
considerations, diversity in employment arrangements can also be meaningfully
conceptualized as each of the alternative diversity types. This allows one to examine
how different aspects of diversity, that can potentially be the result of different work
arrangements, affect group performance[1].
When diversity in employment arrangements is viewed as separation, the focus is on
potential differences among group members in attitudes, beliefs and values regarding
job-related issues stemming from differences in employment arrangements. In this case,
higher diversity is expected to lead to increased conflicts among group members
(Broschak and Davis-Blake, 2006) and, hence, reduced performance. Alternatively,
when diversity in employment arrangements is viewed as variety, the focus is on
differences among members in terms of experience, approaches to problem solving,
their internal and external network ties and their skills (Houseman, 2001). A group is
expected to benefit from such diversity. Finally, when diversity in employment
arrangements is conceptualized as disparity, two facets are expected to hamper the
group’s performance. One is the differences among group members in status (Boswell
et al., 2012). The other is the access to organizational rewards as a function of the group
member’s employment arrangement (Broschak and Davis-Blake, 2006; Krausz et al.,
1995).
Factors such as age, dress code, working hours and extra work on non-professional
tasks are differences expected to serve as a basis for social categorization processes
(Jehn et al., 1999). This claim is in line with the social categorization perspective in
diversity research, which assumes that similarities and differences are used as a basis
for categorizing one’s self and others into groups, with ensuing categorizations
distinguishing between one’s own in-group and one or more out-groups (Van
Knippenberg et al., 2004). This type of process can affect how workers respond to each
other and to their work groups by limiting within-unit behavioral and social integration, Employment
fostering conflict and turnover and diminishing morale, cohesion and performance arrangements
(Harrison and Klein, 2007). This may hold true even if some of the tasks are not
performed by all members, as these employees work in close contact with one another.
diversity
The visibility of a diversity variable, and its relation to the job, influences the levels of
conflict in the group, which, in turn, influences the group’s performance (Pelled, 1996). In
terms of Harrison and Klein’s (2007) theory, such differences can be considered under 315
the notion of diversity as separation. This type of separation is associated with cohesion
and conflicts such that higher separation is linked with low cohesion and high levels of
conflict and is further expected to lead to poor performance. Hence, we hypothesize that:
H1. A negative relation will be found between diversity in employment
arrangements conceived of in terms of separation and work group performance.
Non-standard employment arrangements typically involve employment conditions that
are inferior, relative to more traditional employment arrangements (Wooden and
Warren, 2004). Moreover, firms typically invest less in the recruitment, selection,
training and development of their non-standard workforce (Horstman, 1988). Hence,
when employees who vary in employment arrangements work in the same work group
and perform similar tasks, those group members who are employed under “inferior”
arrangements are likely to perceive such differences as unfair. This is likely to happen
because employees tend to view coworkers as referents for equity comparisons rather
than as outsiders (Pearce, 1993). Such perceptions can reduce employees’ job satisfaction
and their commitment to the organization and organizational outcomes (McFarlin and
Sweeney, 1992). Furthermore, as employment arrangements are often associated with
certain statuses and different levels of access to organizational rewards (Broschak and
Davis-Blake, 2006; Krausz et al., 1995), any difference in such aspects can result in
stigmatization, prejudice and discrimination coming from those who have more power
toward those who have less power. This is also expected to lead to reduced productivity
(Linnehan and Konrad, 1999). Harrison and Klein (2007) consider such diversity as
disparity and, in accord with the analysis above, suggest that increased disparity results
in decreased job satisfaction and commitment, as well as poor organizational outcomes.
Hence, we hypothesize that:
H2. A negative relation will be found between diversity in employment
arrangement conceived of in terms of disparity and work group performance.
Occasionally, differences in employment arrangements are associated with differences
relating to employees’ knowledge, skills, attitudes and behaviors (Houseman, 2001;
Lepak and Snell, 1999). Such differences can contribute to group decision-making and
performance. Likewise, when differences are reflected in work hours and overtime pay,
it enables a more flexible job scheduling by levering the relative advantages of each
employment arrangement. Harrison and Klein (2007) conceive such diversity as variety
because it focuses on members who differ in terms of the type of relevant knowledge
they have, the source of this knowledge, how it is categorized or, more generally, in work
experience. Such differences can lead to greater creativity, innovation, and flexibility,
better choices, plans or products. Hence, we expect a positive impact of diverse
employment arrangements as conceived of in terms of variety on work group
performance. Particularly, we conjecture:
TPM H3. A positive relation will be found between diversity in employment
22,5/6 arrangements conceived of in terms of variety and work group performance.
Method
The study was conducted on work groups in an industrial public plant that repairs spare
parts. The project was conducted with the plant’s permission and on the condition that
316 information identifying the organization and/or its employees would not be revealed. To
control for non-random time effects, we sampled two separate data sets, each describing
work performed during a distinct period on the time line.
冪
兺 (s i ⫺ sj )2
兺
i
j
n
Ds ⫽ , (1)
n
where Ds refers to a work group’s diversity-as-separation measure and si-sj refers to the
distance between two work group members (i, j). This distance is defined as follows:
冪
N
兺X
i⫽1
i
2
⫺ nxˉ 2
Dd ⫽ CV1 ⫽ N
(3)
兺
i⫽1
Q ⫺ nxˉ 2
i
2
Dependent variables
Rate of success in carrying out the task of item repair was used as a measure of
performance. Malfunctioning items are brought to the groups in an attempt to repair
them. Some of the items are repaired by individual workers, whereas other repairs
are performed by ad hoc teams composed of work group employees whose
composition may vary among tasks. Hence, according to Steiner’s (1972) typology,
the repair task can be classified as a divisible discretionary maximizing task. Items
that have been repaired successfully are returned to the plant’s inventory, whereas
items that could not be repaired are labeled under a different stock segment. The
success index for each work group was calculated as the number of items
successfully repaired during the relevant quarter divided by the total number of
items that the group had to repair in that quarter. We considered only items whose
repair started and ended within the examined quarter. In the first quarter, there were
2,072 items overall that were brought for repair, and 73.2 per cent of them were
successfully repaired. During the second quarter, there were 2,482 items overall
brought for repair, and 83.8 per cent of them were repaired successfully.
Control variables
We included group size, average age of group members, group’s average income and the
group’s professional domain as control variables. Group size has been shown to be of
great importance for group processes and outcomes. For example, as the number of
workers within the work group increases, individual group members may exert less
effort, as the perceived dispensability of their efforts for group success increases (the
“free rider effect”, see Kerr and Bruun, 1983). Work group members’ age is another factor
known to influence work group performance (Waldman and Avolio, 1986). Work group
professional domain was also controlled for, as each domain is related to different
Data analysis
As each diversity dimension has a different meaning, shape, foundational theories and 321
predicted outcomes (Harrison and Klein, 2007), the alternative hypotheses regarding
each diversity dimension were tested using a different model such that different
diversity dimensions were not included in the same model. This allowed us to
differentiate and compare between alternative conceptual models as part of our
empirical tests of the contrasting conceptions.
Ordinary least squares linear regression could not be used as a modeling repair
rate-dependent variable, because a dichotomous dependent variable in a linear
regression model necessarily violates assumptions of homoscedasticity and normality
of the error term (Allison, 1999). Hence, we implemented a logistic regression model,
which is the most popular regression technique for modeling dichotomous dependent
variables (Kleinbaum et al., 2007). Logistic regression is a mathematical modeling
approach that can be used to describe the relationship of several predictor variables X1,
X2…Xk with a dichotomous dependent variable Y. The logistic regression equation used
was z ⫽ 0 ⫹ 1X1 ⫹ 2x2 ⫹ 3x3 ⫹ … ⫹ kxk , where z ⫽ ln ( p / 1 ⫺ p ) and p refers to
the mean of the Bernoulli dependent variable Y. As the repair of different items by a
given work group are not independent, we used a logistic mixed model with random
effect using an SAS Glimmix procedure. Hence, the logistic equation we used is
represented by: zi ⫽ 0 ⫹ 1X1i ⫹ 2x2i ⫹ 3x3i ⫹ … ⫹ kxki ⫹ 0i , where zi ⫽ ln
( pi / 1 ⫺ pi ) and pi refers to the mean success repair ratio of work group i.
Results
We tested our hypotheses regarding the relations between employment
arrangement diversity and work groups’ repair rates using a series of logistic
regressions. We analyzed the data for the first period, Q2 in 2005, using a backward
procedure, which is the one recommended for logistic regression analysis
(Kleinbaum, 1994). As shown in Table III, contrary to H1 and H2, we found a
marginally significant positive relation between diversity as separation and repair
success rates (⫹3.632, p ⬍ 0.10) and a significant positive relation between diversity
p1
1 ⫺ p1
e k·c ⫽ OR(DV⫹c,DV ) ⫽ , (4)
p0
1 ⫺ p0
where p0 ⫽ 60 per cent, k ⫽ 24.199 and Dv ⫽ 0. Note that c refers to the absolute change
in diversity as variety, and p1 refers to the expected repair success rate of the more
diverse work group.
When analyzing the data using a single predictor model for each of the variables, we
found that H1 and H2 were not supported for the second period, Q1 in 2008, either
(Table V). Replication of our first-period findings added robustness to our analyses.
Specifically, a non-statistically significant positive relation was found between diversity
as separation and repair success rates (⫹0.861, p ⬎ 0.10), and a significant positive
relation was found between diversity as disparity and repair success rates (⫹1.734,
p ⬍ 0.05). Also, in accordance with H3 and in line with the results of the first period, a
highly significant positive relation was found between diversity as variety and repair
success rates (⫹2.577, p ⬍ 0.01).
Note
1. Given the exploratory nature of our research, we decided to not commit ourselves to a single
type of characterization of work arrangements in terms of type of diversity according to the
typology offered by Harrison and Klein (2007). Rather, we tested the effect of diversity on
performance as a function of all three types of diversity characterizations. Results of each
characterization will also help assess which type is most suitable for the context under study
as is also suggested by Harrison and Klein (2007).
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Corresponding author
Sagi Akron can be contacted at: sagiakron@univ.haifa.ac.il
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