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Abstract

This study examined the impact of four dimensions of diversity—tenure, age, sex, and race—on performance in 486 retail bank branches and assessed whether employee participation in the firm's diversity education programs influenced these relationships. Data came from archives of the demographic composition of branches, an employee attitude–satisfaction poll, and branch performance assessed as part of the bank's bonus incentive plan. Race and sex diversity were unrelated to performance. The direct effects of tenure and age diversity were largely negative, but were moderated by quality of team processes, suggesting that cooperation and teamwork may suppress potentially task-enhancing differences associated with these aspects of diversity. Diversity education programs had minimal impact on performance. The results of this study suggest that there is a complex relationship between age and tenure diversity and performance and that, even in firms with characteristics that should be conducive to performance benefits from diversity, other conditions must be in place to foster such effects. Copyright © 2004 John Wiley & Sons, Ltd.