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Keywords:

  • diversity and equality management;
  • high performance work system;
  • labor productivity;
  • workforce innovation;
  • voluntary turnover;
  • firm-level performance

Abstract

This article demonstrates that a diversity and equality management system (DEMS) contributes to firm performance beyond the effects of a traditional high-performance work system (HPWS), which consists of bundles of work practices and policies used extensively in high-performing firms. A DEMS typically includes diversity training and monitoring recruitment, pay, and promotion across minority or other disadvantaged groups. Our analysis of quantitative data from service and manufacturing organizations in Ireland confirms that HPWS practices are associated with positive business performance and finds specifically that DEMS practices are positively associated with higher labor productivity and workforce innovation and lower voluntary employee turnover. © 2010 Wiley Periodicals, Inc.