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When is More Better? The Effects of Racial Composition on Voluntary Turnover

Author

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  • Christopher D. Zatzick

    (Faculty of Business Administration, Simon Fraser University, 8888 University Drive, Burnaby, British Columbia V5A 1S6)

  • Marta M. Elvira

    (Graduate School of Management, University of California, Irvine, California 92697-3125, and INSEAD, Boulevard de Constance, Fontainebleau Cedex 77305, France)

  • Lisa E. Cohen

    (Terranova Consulting Group, 61-F Avenida de Orinda, Orinda, California 94563)

Abstract

This study examines the relationship between racial composition and individual, voluntary turnover for minorities (i.e., Asians, blacks, and Hispanics) in a large organization. We present a critical test for two sets of contrasting predictions. The first draws on similarity attraction, social contact, and social identity theories to suggest that working with racially similar others enhances the work environment in terms of perceived career opportunities, mentoring relationships, and network ties, all of which would increase the likelihood of remaining in an organization. The contrasting predictions draw on group competition and group threat theories and propose that working with racially similar others might increase competition for resources and generate a backlash effect against minorities that would induce their turnover. We suggest the paradox that these two approaches might be compatible if the effect of demographic composition is nonlinear. Our data analyses show that individuals' likelihood of turnover decreases as the proportion of employees in a job from one's own race increases. Furthermore, this relationship is nonlinear : Members of minority groups with very small representation benefited more from the increased presence of their own race than minorities who already had a substantial presence. This finding suggests a potential backlash effect at higher minority proportions. Results also show that turnover decreases as the proportion of employees from one's own race increases in the level above an employee's job. Overall, these findings suggest that working with others of the same race reduces the likelihood of minority exits. Interestingly, the proportion of other minorities in a job has a marginally significant, negative effect on employees' voluntary turnover. Thus, increasing racial diversity from one's own race and other minorities appears to strengthen minority workforce retention.

Suggested Citation

  • Christopher D. Zatzick & Marta M. Elvira & Lisa E. Cohen, 2003. "When is More Better? The Effects of Racial Composition on Voluntary Turnover," Organization Science, INFORMS, vol. 14(5), pages 483-496, October.
  • Handle: RePEc:inm:ororsc:v:14:y:2003:i:5:p:483-496
    DOI: 10.1287/orsc.14.5.483.16768
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    References listed on IDEAS

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    1. Thomas C. Buchmueller & Robert G. Valletta, 1996. "The Effects of Employer-Provided Health Insurance on Worker Mobility," ILR Review, Cornell University, ILR School, vol. 49(3), pages 439-455, April.
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    Cited by:

    1. Autrey, Romana L. & Bauer, Tim D. & Jackson, Kevin E. & Klevsky, Elena, 2019. "Deploying “connectors”: A control to manage employee turnover intentions?," Accounting, Organizations and Society, Elsevier, vol. 79(C).
    2. Cao, Chunfang & Li, Xiaohui & Li, Xiaoyang & Zeng, Cheng & Zhou, Xuan, 2021. "Diversity and inclusion: Evidence from corporate inventors," Journal of Empirical Finance, Elsevier, vol. 64(C), pages 295-316.
    3. Zoleikha Abbasi & Jon Billsberry & Mathew Todres, 2024. "Empirical studies of the “similarity leads to attraction” hypothesis in workplace interactions: a systematic review," Management Review Quarterly, Springer, vol. 74(2), pages 661-709, June.
    4. Michael Palanski & James Avey & Napatsorn Jiraporn, 2014. "The Effects of Ethical Leadership and Abusive Supervision on Job Search Behaviors in the Turnover Process," Journal of Business Ethics, Springer, vol. 121(1), pages 135-146, April.
    5. Kathleen L. McGinn & Katherine L. Milkman, 2013. "Looking Up and Looking Out: Career Mobility Effects of Demographic Similarity Among Professionals," Organization Science, INFORMS, vol. 24(4), pages 1041-1060, August.
    6. Ray Reagans, 2005. "Preferences, Identity, and Competition: Predicting Tie Strength from Demographic Data," Management Science, INFORMS, vol. 51(9), pages 1374-1383, September.
    7. Aida Sijamic Wahid, 2019. "The Effects and the Mechanisms of Board Gender Diversity: Evidence from Financial Manipulation," Journal of Business Ethics, Springer, vol. 159(3), pages 705-725, October.
    8. Patrick F. McKay & Derek R. Avery & Hui Liao & Mark A. Morris, 2011. "Does Diversity Climate Lead to Customer Satisfaction? It Depends on the Service Climate and Business Unit Demography," Organization Science, INFORMS, vol. 22(3), pages 788-803, June.
    9. Mooweon Rhee & Tohyun Kim, 2014. "Identity-based learning and segregation in social networks under different institutional environments," Computational and Mathematical Organization Theory, Springer, vol. 20(4), pages 339-368, December.

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