Business Units Have Better Financial And Service Performance When Diversity Climates Are Viewed Favorably

I had the pleasure of interviewing Professor Patrick McKay of Rutgers School of Management and Labor Relations.

Thank you so much for doing this with us! What is your “backstory”?

My backstory is one of a person who was raised in a working-class, military family with a father, mother, and older brother. Because of living in military contexts, I grew up around all kinds of people from all over the world. I had regular interactions with families of all races and nationalities. An important, early lesson I learned was that all people want the same things, namely favorable quality-of-life, good health, for their families and offspring to thrive, and to be treated with dignity and respect. Strangely, I lived in my first, non-military and/or college-oriented environment during my first academic job (in Wilmington, North Carolina), and the racism I encountered from the local residents was very stark and shocking.

Can you share the funniest or most interesting story that happened to you since you began researching diversity?

Instead of one interesting story, I can share a consistent theme that I have seen unfold in recruitment contexts. I have noticed that employers tend to hold implicit assumptions about what someone with my credentials (a PhD in Industrial and Organizational Psychology) looks like. On more than one occasion, I have been waiting alone in an office lobby to be seen for an interview, only for an administrative assistant to call my name and overlook me. I had to tell them that I was PatrickMcKay. Then, I would receive the reaction I call ‘the shiver’. That is, the person shakes spastically and appears startled that it is me for whom they are looking. Suffice it to say, I don’t think people expect to see a large Black man with my educational credentials.

What do you think makes your research stand out? Can you share a story?

I think my research stands out because it shows the bottom-line, financial ramifications of diversity management. When work climates are viewed as supportive of diversity, employees (particularly Black employees and Hispanic employees, to a lesser extent) sell more, report lower intentions to leave their jobs, and are absent less often. Also, business units have better financial and service performance when diversity climates are viewed favorably.

Are you working on any new or exciting projects now?

Yes, I have a project wherein I investigate how racial and gender diversity relate to business unit financial performance through diversity climate. Also, I examine whether employees perceptions of climate for cooperation and average organization tenure affects racial diversity and gender diversity relationships with diversity climate. The idea is that diversity should have its strongest impact on financial performance, by enhancing diversity climate, when the business unit climate is highly cooperative and its personnel have been employed a long period of time. The purported benefits of diversity should be most evident when people collaborate (and thereby learn what their colleagues of different backgrounds have to offer) and have sufficient time to get to know one another. In turn, employees will view their work environments as more supportive of diversity, which should motivated them to work better on behalf of the business unit, with positive financial ramifications.

What advice would you give to other CEOs or founders to help their employees to thrive?

CEOs and founders should enact policies that demonstrate commitment to diversity. Such policies would address matters such as broad recruitment (designed to reach potential candidates from various race-ethnicities, gender, age, etc.), fairness in selection (using standardized means to screen candidates), equal access to training and development, diversity training focused on unconscious biases that could undermine human resource functions (e.g., selection, performance appraisal) and civility between employees, opportunities for employees to freely voice grievances and concerns, fair appraisals of employee performance, policies to ensure pay equity, standardized promotion systems (versus informal promotions), and mentoring/networking opportunities for personnel, particularly those with low representation in the company’s workforce (for career and emotional support).

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are?

Of course, I would say my parents. They were sticklers for education, hard work, pursuing the greater good for others, and making a positive impact on the world.

How have you used your success to bring goodness to the world?

I tend to work heavily in mentoring junior professors in terms of how to navigate publishing research and working as a professor in general. It is quite difficult to thrive in such an ego-threatening environment (the top research journals reject submitted papers 90% of the time), so I try to equip budding scholars with the tools to be successful (e.g., how to frame theoretical logic, how to write a manuscript, etc.). I am very active in The PhD Project, an organization designed to increase the representation of minority professors in business schools. So, I mentor a number of doctoral students of color (and faculty) as well.

Can you share the top five ways that increased diversity can help a company’s bottom line.

Diversity, in isolation, will not help a company’s bottom line. Instead, diversity enhances the bottom line when a company has a climate supportive of diversity and pursues strategic initiatives aligned with diversity such as innovation, entrepreneurial activities, etc. To elaborate, diversity’s effects on the bottom line unfold as follows:

a. Employees tend to work harder when they treated fairly and made to feel like valued members of the organization (supportive diversity climate).

b. Business benefits more from the diverse perspectives, backgrounds, and knowledge held within a diverse workforce when the firm pursues a business strategy focused on innovation versus efficiency (innovation or entrepreneurial business strategies)

Other proposed benefits of diversity such as access to diverse consumer markets and greater coverage of labor shortages have not received strong support. There is some evidence that when a business unit’s overall racial-ethnic profile (i.e., the overall proportion of White, Black, Hispanic, and Asian employees) overlaps strongly with that of its consumer base, employee productivity is improved (through increased customer satisfaction).

Can you please give us your favorite “Life Lesson Quote”?

As Funkadelic said (I’m an avid record collector), “If you don’t like the effects, don’t produce the cause.”

Some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US whom you would love to have a private breakfast or lunch with, and why? He or she might just see this :-)

I would have to say Stevie Wonder since I am a huge music fan (and perform it as well). I would like to meet him because I find him to be a creative genius and very admirable and inspiring person. I would love to know more about his backstory, how he overcame his disability, his internal motivations, sources of creativity, etc. Unfortunately, many icons from previous generations are passing on, so Mr. Wonder is one I would love to join for breakfast.

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But we do not have unlimited time to assign to figuring out what the best choice is to make for each of these decisions. And we have even less time to agonize over if we have made the right choice…