Not All Differences are the Same: The Role of Informal Status in Predicting Reactions to Demographic Diversity in Organizations

Increasing demographic diversity in the U.S. workforce translates into more interactions, shared responsibilities, and interdependencies among coworkers who are demographically different from one another. While research has shown both desirable and undesirable effects of increasing diversity on the performance of work tasks, the underlying social and psychological processes explaining effects of increasing diversity are not yet well understood. This study introduces the status value of a characteristic; that is, the extent to which a demographic characteristic is valued within the organization's informal social system; to show why differences on one characteristic (like sex) may be more or less meaningful than differences on another characteristic (like race). Further, examining one's informal status position, rather than just differences in discrete demographic characteristics that contribute to it, helps us understand how demographic differences between coworkers affect work outcomes. This field study of three different organizations analyzes naturally emergent informal status hierarchies in organizations to examine contributors to, and effects of, one's informal status position relative to coworkers. Results show demographic characteristics contribute to informal status positions, and such characteristics are valued differently across organizations. Further, status position positively relates to work outcomes, and one's status positions moderates the relationship of being different in status from immediate coworkers to work outcomes. That is, high status individuals working with lower status others experience lower performance, motivation and commitment than high status individuals working with high status others. And low status individuals experience increases in the same outcomes working with high status others.