EFFECTS OF WORKPLACE DIVERSITY ON PERCEIVED ORGANIZATIONAL PERFORMANCE: MEDIATING ROLE OF EMPLOYEE COMPETENCY

Abstract

Purpose In this competitive environment, employees are the backbone of the companies. Employees’ knowledge, skills, and abilities encourage organizational performance, and these competencies are dependent on the internal environment that’s why this study aims to examine the impact of workplace diversity on organizational performance by mediating the role of employee competency. Methodology & Design The research is quantitative in nature and based on a deductive approach. This study is based on a convenience sampling technique with sample size 384 white collar employees working in different companies. The questionnaires used as a data collection method. The questionnaire is adopted from previous studies. Smart PLS is used as data analysis tool. For hypothesis testing, Structural Equation Modelling is used in this study. Findings The findings showed that there is a significant relationship between workplace diversity and perceived organizational performance with the mediating role of employee competency. When employees work in diverse environment, their skills enhance. They become creative and develop problem solving skills which leads to high organizational performance. Limitations This research is limited to employees working in Karachi. Only white-collar employees5 opinion is considered for research purpose. The findings ofthis study can only be generalized if other countries ‘employee’s opinion is considered as the opinion of employees may vary from culture to culture. Employees working in western companies may have different opinion regarding diversity. Recommendations It is recommended to managers to manage diversity appropriately in order to increase organizational performance. Managers should create positive environment where employees’ skills and knowledge enhance. Managers should celebrate differences among employees and offer diverse mentorships. It is necessary for managers to promote diversity at all human resource practices, not just in hiring.