Leaders’ relationships shape diversity climate

New research shows that how leaders form workplace relationships affects whether employees feel diversity is valued.

Researchers David J. G. Dwertmann and Haeseen Park, assistant professor of management for the Schmidthorst College of Business examined how leaders build different quality relationships with employees. They found that basing these differences on race, age or gender harms diversity climate. When leaders instead base relationship quality on performance, employees feel diversity is more valued.

The study included two parts. First, researchers created videos showing a leader interacting with employees. Participants who watched a leader favor one race over another reported much lower diversity climate. Second, researchers surveyed 434 employees across 50 teams at a wholesale distribution company. Teams where age-based favoritism was strong showed worse diversity climate and fewer new ideas.

The findings matter because diversity climate affects trust, sales and performance. Leaders have limited time and resources. They cannot treat everyone identically. But they can avoid basing relationships on demographics. When leaders give opportunities based on merit, all employees see a path to success.

Park, notes that leaders naturally develop closer bonds with some employees. The key is ensuring those bonds form around work contributions rather than personal characteristics. This approach helps all team members feel valued regardless of their background.

The research also found two types of diversity climate. One focuses on fairness and preventing discrimination. The other focuses on using diverse perspectives to solve problems. Only the second type led to more creative ideas in teams.

Linking Basis of Leader–Member Exchange Differentiation to Diversity Climate and Idea Generation is available via Wiley Online Library.