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NATIONAL RESEARCH UNIVERSITY

«HIGHER SCHOOL OF ECONOMICS»

FACULTY OF SOCIAL SCIENCES

DEPARTMENT OF PSYCHOLOGY

MASTER'S PROGRAM «APPLIED SOCIAL PSYCHOLOGY»

Relationship between perceived ethnic diversity of organization and employee's performance

Erzhanova Asiia

Scientific supervisor

PhD in Social Psychology,

Associate Professor

Tatarko A.N.

Moscow 2020



TABLE OF CONTENTS

ABSTRACT

INTRODUCTION

CHAPTER 1. THEORETICAL BACKGROUND

1.1 Ethnic diversity and its perception

1.2 Theoretical approaches to ethnic diversity in the workplace

1.3 Personal effectiveness in the workplace

1.4 Perceived ethnic diversity affecting job performance and job satisfaction

CHAPTER 2. METHOD

2.1 Sample

2.2 Procedure

2.3 Instruments

CHAPTER 3. RESULTS

CHAPTER 4. DISCUSSION

CHAPTER 5. CONCLUSION

REFERENCES

APPENDIXES



ABSTRACT

The current study aims to investigate the relationship between perceived ethnic diversity in organization and employee's performance. According to the previous research (Salazar, Feitos & Salas, 2017), high level of ethnic diversity leads to increased productivity because of a numerous brand-new idea. These ideas are the result of cross-cultural cooperation. At the same time, Putnam claims that ethnic diversity weakens communication (2007).

In this research employee's performance consists of two components: job satisfaction and job performance. Regarding this matter, we suggest that higher level of ethnic diversity is positively related to job performance, and negatively related to job satisfaction. Ethnic diversity holds both positive and negative affect on the employee's performance (Alesina & Ferrara, 2004). Hence, understanding the pros and cons of the perceived ethnic diversity is not clear.

HR-managers can use the results of the current study in order to create programs to increase job performance in ethnically diverse teams. Moreover, disadvantages of ethnic diversity can be the key to understanding the reasons of some problematic issues in an organization.

Key words: perceived ethnic diversity, employee's performance, job satisfaction, job performance.



INTRODUCTION

In Russia and other developed countries over the past 10 years there has been an increase in the number of migrants (Tartakovsky, 2013). To the certain degree due to migration in the host country, the number of participants in various activities is increasing. This fact prompted scientists to examine the impact of ethnic diversity on various aspects of society.

Putnam (2007) states, that in ethnically diverse societies, it is more difficult for individual to identify with other people. This inevitably leads to a decrease in the level of trust between individuals, and in turn, the quality of communication between individuals suffers.

According to Salazar, Feitosa, and Salas (2017) on organizational level it is necessary to focus on the differences between the majority and the minority, as this creates a favorable atmosphere for generation of creative ideas.

In economic and organizational psychology, there is no consensus on the approach to studying the employees' performance. In this study, we consider to study employees' performance in connection with job satisfaction.

The question of whether top managers should highlight ethnic differences between employees or, conversely, make them invisible has always been controversial. Ethnic diversity and how it is perceived in a company can be a source of economic sustainability and motivate employees (Ottaviano, 2003).

Ethnic diversity can be considered both positive and negative in the company.

On the one hand, weakened communication leads to decrease of productivity and economic efficiency of the organization. An ethnically diverse group can be a source of conflict, prejudice, stereotyping and racism (Kauff, Asbrock, Thorner & Wagner, 2013).

On the other hand, ethnic diversity could create an environment for provoking brand new creative ideas based on cross-cultural team collaboration. McKinsey & Company research (2017) shows that

organizations that are more diverse in terms of employees' ethnicity and cultural background are 33% more likely to succeed financially.

Purpose of the study

Goal of the study is to examine the relationship between the level of ethnic diversity in company and employee's performance.

Research questions

The main hypothesis of the study is that the way employees perceive ethnic diversity of their organization influences their job performance and job satisfaction. More specifically, our suggestion is that a higher level of perceived ethnic diversity contributes to more efficient teamwork, but at the same time leads to lower levels of job satisfaction.

Definitions of terms

Perceived diversity is the level of subjective awareness that the environment or group includes different social categories and people that are different from the perceiving subject (Piekut & Gill, 2016).

Job satisfaction is the sum of cognitive evaluations of various aspects of work. The operational model, reflecting the degree of job satisfaction, consists of 3 categories of components: social, organizational, and personal (Ivanova, Rasskazova & Osin, 2012). The category of social components includes such indicators as the prestige of the profession and company. Organizational components represent the satisfaction of salary, work conditions, team. Personal aspects reflect the relation between actual and potential opportunities provided with the current job.

The job performance indicator combines two crucial aspects: task performance and contextual performance. Task performance shows the quality of employee's fulfilment his/her prescribed by the position duties. In turn, contextual performance reflects personal contribution of the employee to the social-psychological environment at work. Contextual performance component supports task performance component (Borman & Motowidlo, 1993).

Scientific relevance

a. Novelty of research

The ways how much ethnic diversity affects different levels of the workflow is well understood. Ethnic diversity can be considered both positive and negative affect on the employee's performance (Alesina & Ferrara, 2004). Hence, understanding the advantages and disadvantages of the perceived ethnic diversity of the company is not clearly formed.

b. Scientific and societal relevance

Based on the results of the study, HR-managers can suggest programs to increase job performance of the employees in organizations with ethnic diversity. Also, disadvantages of ethnic diversity covered in the current study can be seen as the way to understand the reasons of some problems within organization.

c. Hypothesis of the research

· H1: Higher perceived ethnic diversity is positively related to job performance.

· H2: Higher perceived ethnic diversity is negatively related to job satisfaction.



CHAPTER 1. THEORETICAL BACKGROUND

1.1 Ethnic diversity and its perception

Speaking about diversity it is important to emphasize the difference between actual and perceived ethnic diversity. Actual diversity is a characteristic of how many groups there are sharing the same attribute in a community or organization (Harrison & Klein, 2007). Perceived ethnic diversity defines how members of a group subjectively evaluate the composition of this group in terms of different categories.

Diversity characterizes groups of two or more people and is usually applicable to certain demographic differences between group members (McGrath, Berdahl & Arrow, 1995). As mentioned above, groups can be diverse in terms of diffident categories. These include age, gender, cultural, religious and language background, sexuality, family status, political views, disabilities and so on (Lynch, 1997).

The study of ethnic diversity can be based both on the study of composition (at the team level) and on the study of differences between members of a social unit (Jackson & Joshi, 2003).

Ethnic diversity is characteristic that can be easily detected by observing one's physical features (Jehn, Northcraft & Neale, 1999). Considering the above-mentioned, we state that ethnic diversity includes all the different thoughts, believes, values and practices of people within organization.

Thus, ethnic diversity is not only all the different thoughts and beliefs of the organization's employees, but also their values and practices.

The relationship between the actual number of ethnic minorities and the subjective perception of this diversity has hardly been investigated. At the same time, the perception of diversity can take a central place in the relationship between actual diversity and how individuals respond to external groups.

Indeed, studies of Hooghe and De Vroome (2013), Raijman, Semenov & Schmidt (2003) confirmed that individuals' perceptions of the degree of diversity influenced relationships within the team more than actual diversity. In addition to this, how the diversity is felt in the group probably depends on the perceiver itself.

Previous studies have also demonstrated that assessments of environmental diversity vary significantly. Assessing people's feelings about diversity varies depending on the individual differences in sensitivity to the detection of diversity (Stolle, Soroka & Johnston, 2008). This can be explained by the fact that some people are more attentive to members of the minority. The perception of a minority as a group that differs significantly from the majority and deviates from the point of view of morality and threats may be associated with a high level of authoritarianism (for example, Ford, 2011; Green, Fasel & Sarrasin, 2010; Kauff, Asbrock, Thorner & Wagner, 2013).

Some traits can be the so-called light objects of discrimination as they are visible, for example, race and ethnicity. Other features may not be visible at first glance, such as sexual orientation, marital status, religious preferences (Milliken & Martins, 1996). For example, the theory of intergroup relations Alderfer (1987) explains the distribution of power between cultural identity groups is the way to understand the reasons behind people's thoughts, feelings, and behaviors. And the way they perceive their relative status within the team affects their expectations and behavior.

Research on diversity is extremely important nowadays as they help to explain the ways in which members of a heterogeneous group communicate with each other, whether it influences their well-being, performance, and group dynamic as a whole. Williams and O'Reilly (1998) suggest guiding this question from two perspectives: social categorization theory and decision-making theory.

Features that people share or characteristics that make group members different are the basis for the social categorization theory. According to this theory, there are in-groups and out-groups based on similarities or differences the members have. There is a tendency for the group members to engage in cooperation more willingly with people from the in-group, as they tend to have more trust and sympathy to each other (Brewer 1979; Brewer & Brown, 1998; Tajfel & Turner, 1986).

Based on the social categorization theory, the assumption could be that homogeneous groups are more likely to work effectively than the diverse ones. Group members who share the same values, beliefs and behavior standards are more satisfied with the communication process. A number of studies

(O'Reilly et al. 1989; Murnighan & Conlon, 1991) concluded that homogeneity in a group is related to higher level of cohesion, leads to lower turnover intentions and higher productivity. The main idea of the social categorization perspective when speaking about diversity in a group is that people favor the similar members of the group over the ones that are different (Jackson, 1992).

On the contrary, there is the decision-making theory emphasizing the advantages of diversity within a group. The supporting point for this is diverse groups are more likely to be the ground for unique experiences and expertise based on differences in abilities and knowledge. In other words, diversity in a group provides more intellectual resources and helps the members to come up with non-trivial solutions. Moreover, heterogeneous groups tend to be more thoughtful when making suggestions considering all the differences the members of the group have. This careful consideration is related to a higher level of creativity (van Knippenberg, Haslam & Platow, 2004).

There are two levels of diversity suggested by Jackson et al (1995): surface and deep level. Surface-level of diversity includes some easily detectable mostly physical features as age, race, gender or ethnicity. Deep-level diversity involves differences in the attributes that are harder to be observed, i.e. beliefs, values, preferences, experiences, etc. Based on that concept, Oerlemans (2009) suggest another model for ethnic diversity levels. There are three ways to conceptualize diversity in terms of ethnicity. First of all, as mentioned above ethnicity is an easily observable characteristic which refers to surface-level diversity. At the same time, ethnic and cultural background both influence one's behavioral norms and beliefs which refers to the deep-level diversity. Ultimately, diversity in terms of ethnicity can also be seen in a context, where differences in attitudes among group members are connected to a general organizational culture and has its either positive or negative consequences (Ely & Thomas, 2001).

Given that, Oerlemans (2009) suggests three different approaches to understanding ethnic diversity as an advantage or a disadvantage for the teamwork. These approaches are the cultural approach, the social-psychological approach and the contextual approach (Figure 1).

Figure 1. Approaches to Ethnic Diversity

According to the cultural approach it is said that different cultural values (Hofstede, 1980) and orientations (Berry, 1997) have a huge impact on working process within a multicultural team. The social-psychological approach to diversity in terms of ethnicity suggests that heterogeneity in groups weakens communications as there is favoritism, bias and prejudice caused by social categorization process. Finally, the contextual approach is based on the assumption that a specific psychological climate of an organization can have a moderating role between diversity and employee's performance.

1.2 Theoretical approaches to ethnic diversity in the workplace

The Cultural Approach

According to this approach, people of the same origin share to some extent the same cultural values (Cashmore, 1996; Smith 1991) and therefore ethnic diversity naturally affects workers and job outcomes due to cultural differences, which arise due to the difference in cultural values of these ethnic groups. Hofstede (1980, 1991) identifies 4 groups of cultural values: masculinity-femininity, individualism-collectivism, power distance, and uncertainty avoidance.

The individualism-collectivism is known to affect a person's behavior, and therefore can affect the result of his work. This group of values determines whether an individual is guided by personal or collective choice and achievements. There is a tendency that people from collectivist cultures are ready to

help their social group even if they must sacrifice their personal interests (collectivist cultures are mainly represented in nonwestern countries). This means that people from individualistic cultures will be less cooperative and less willing to take responsibility for achieving collective results (Smith & Bond, 1998). National culture likely influences the organizational culture of the company. And therefore, employees from other countries may have problems adapting to organizational culture because they are raised in a different cultural environment.

Also, the problem may occur in communication. Ethnically diverse employees may encounter communicative difficulties associated with intonations, non-verbal aspects of communication (Maznevski, 1994).

The Social-Psychological Approach

This approach suggests that positive identification with the social group which individuals belong to increases self-esteem and a sense of belonging (Tajfel, Billig, Bundy, & Flament, 1971).People are ready to identify themselves with a social group even if membership in it based on criteria such as the letter A or B. The tendency to give preference to their ingroup rather than others has been proven in a series of laboratory studies conducted by Tajfel and his colleagues. These facts are confirmed in other studies, for example, meta-analysis of Mullen, Brown, & Smith, 1992). Thus, people who identify themselves with their ethnic group according the theory of social identity will prefer their ethnic group to others. Identification with their ethnic group also gives a sense of belonging.

The theory of social categorization (Turner, Hogg, & Oakes, 1987) (which is based on the assumptions of the theory of social identity) states that the degree to which people relate themselves to a social group depends largely on the context. According to this theory personal identity is not the same as social identity: first one means that human's identity should be distinguished from other humans in the ingroup (Turner, 1982), other one describes what is common with the inner group, but not with the outer group (Haslam, Powell, & Turner, 2000).That is, within one social group, there may be differences in attitudes, beliefs, opinions, etc. Individuals refer themselves to ingroup if the differences within members are less than the differences between this ingroup and other external groups. An example of such a difference is status, power, numerical majority, etc.

Immigrant often have a lower status than the national group of the country (due to their number, unemployment, for example). This means that differences in status between such ethnic groups will prompt individuals to stronger identification with their ethnic ingroup. Their priority will be the interests of the ethnic ingroup. And they will behave according to the interests of the ethnic ingroup.

According to Kanter (1977) this could lead to polarization between high and low status groups. Members of low status group are supposed to adapt to the values and norms of the high status group, but, for example, it is difficult for immigrants (low status group) as they are associated with their ethnic group (Taylor & Moghaddam, 1994; Cashmore, 1996).

Similarity-attraction paradigm of Byrne (1971) claims that people expect people with similar physical characteristics to share similar views and beliefs. This means that members of similar ethnical group will be more united, more attracted to each other than ethnically diverse people.

Social identity theory and social categorization theory explain that ethnic diversity could lead to negative outcome for organizations such as ingroup liking, ingroup attraction, and ingroup favoritism. This may lead to less cooperation, less communication, more conflicts, and less cohesiveness. Also, different ethnical background affect individuals as well. Individual may experience less organizational commitment, more turnover intention, and less job satisfaction than employees working in ethnically similar teams.

However, there is a theory of information and decision-making that claims the beneficial effects of diversity (Wittenbaum & Stasser, 1996). The quality of decision-making depends on the unique and useful information that an individual possesses and, on the ability, to discuss this information within a group. But people are more likely to use shared information, that is available to other members of the group (Stasser, 1992). The use of shared information reduces the possibility of unique insights and high-quality solutions.

At the same time, for group performances, diversity has a positive effect, because it includes different abilities, skills of members of a group performance.

Most organizational psychologists (Jehn, 1999; Jackson, Joshi, & Erhardt, 2003) predict that better team work can be achieved with diversity in task-related characteristics (characteristics that are necessary for performing a certain task). But the quality of teamwork with an ethnically diverse team of workers largely depends on the task itself.

For example, in teaching ethnically diverse students, ethnic diversity in a team of teachers will lead to better results due to the amount of information and skills of such a team. In producing companies' ethnic diversity may not influence performance results.

Contextual approach

The relationship between ethnic diversity and performance depends on the company's culture and ethnic diversity policies. Cox and Blake (1991) identified three types of organizations: monolithic, plural and multicultural organizations.

Monolithic type organizations are characterized by minimal structural integration of people from various ethnic groups. This type of organization may have an ethnic minority employee in the workforce, but not in a position of leadership and authority. According to researches this type has a number of negative features: less acceptance, more stress and lower self-esteem of staff (Heilman, 1994; Heilman, Block, & Lucas, 1992; Heilman, Rivero, & Brett 1991).

A plural organization has a more heterogeneous membership, and takes steps to be more inclusive of cultural individuals who are different from the dominant group. This type of organization provides promotion opportunities for ethnic minority employees. But still ethnic minorities are expected to assimilate to the dominant organizational culture.

Multicultural organizations appreciate the differences between workers and make full use of them to achieve company's goals. Cox and Blake stated that this type of organization brings benefits such as reduced staff turnover, fewer absenteeism, recruiting the most suitable personnel, a deeper understanding of culture, marketing sensitivity, and growing creativity and innovation.

Following Cox and Blake issue about multicultural organizations, Harquail and Cox (1993) highlight `tolerance for ambiguity', `valuing cultural diversity' and `low-prescription culture' as those aspects that lead company to success.

If the organization does not exert pressure on employees to comply with the system of existing organizational norms, values and culture, but rather maintain sociocultural differences, then it has an intercultural exchange, discussion of innovative ideas and a favorable environment for creating their own approaches to work.

Ely and Thomas (2001) also studied the dependence of organizational benefits on cultural diversity in the organization. Three perspectives of diversity were developed: 1) integration and training perspective: the skills and experience of members from various cultural groups are “potentially valuable recourses” (Ely & Thomas, 2001, p.240). This perspective encourages employees to openly discuss opinions based on their cultural experience and creates a friendly environment for cross-cultural enrichment and creativity.

2) access and legitimacy perspective: “organization's markets and constituencies are culturally diverse. Such recognition can lead to racial separation between employees on different functional levels, so this prospect is difficult for intercultural exchange, since it will only increase interracial and interfunctional tension.

3) discrimination-and-fairness perspective is based on “a statement that culturally diverse team is an imperative of justice and the fair. It focuses on diversification as a source of providing equal opportunities in hiring and promotion, avoiding prejudicial attitudes, and discrimination” (Ely & Thomas, 2001, p. 245). This perspective highlights the conditions of equal opportunities for employees and it does not concern the value of ethnic diversity. Therefore, the third perspective does not imply benefits from ethnic diversity,

such as higher creativity, innovation, and productivity. On the contrary, it can lead to disputes about fairness and strain the relations between employees of different cultures.

1.3 Personal effectiveness in the workplace

A general theory describing the performance of company employees has not been developed. Therefore, companies independently create programs to evaluate employee's performance, manage and stimulate employees. Employee performance involves quality of the output, productivity time at workplace, helpful nature to improve company's effectiveness (Shahzadi, Javed, Pirzada, Narseen & Khanam, 2014). There are various methods for assessing the effectiveness of a company: quality, quantity, knowledge, or creativity of an employee (Wong, 2007; Prajogo, 2007).

Assessing the individual effectiveness of the employee, the following indicators are studied: subjective and objective (Stumpf & Tymon 2012). It means that it is necessary to study in more detail such indicators as job satisfaction and job performance.

To assess job satisfaction could be used an operational model of job satisfaction T. Ivanova, E. Rasskazova and E. Osin (2012), which consists of social (salary, organization and profession), organizational (salary, working conditions) and personal (self-realization) components.

The concept of job performance can be defined as the combination of two aspects: task performance and contextual performance. Task performance demonstrates how the employee copes with his duties, contextual performance reflects personal contribution the employee brings to the team's psychological environment. It can also be considered as 2 aspects: dedication and interpersonal interaction (Borman & Motowidlo, 1993).

According to The Porter and Lawler Model (1968), there are 2 indicators which could be used to evaluate job performance: the effort that an employee spends on doing work and how the employee understands what the required task is (Shah & Shah, 2007).

Rasch's study (2012) suggests that high-tech companies reallocate employees from developed markets to channel capital into their emerging markets. Productivity as a factor in resource consumption has been considered by Pitt and Foreman (1999).

Employee satisfaction and productivity vary by culture of the country (Farh, Zhong, & Organ, 2004; G. B. Fisher & Hartel, 2004; Huang & Van De Vliert, 2003, 2004). In a collectivist culture employee satisfaction is not directly related to positive behavior at work. This can be explained by the fact that colleagues expect a demonstration of this behavior.

But in a situation where certain stimuli take place and cause uniform reactions, behavior will not be determined by the individual's internal attitude, but by these stimuli (Snyder & Ickes, 1985).

Watson, Johnson and Merrit (1999) proposed that individuals' negative emotions lead to withdrawal-type behaviors, because negative emotions provoke the behavioral inhibition system; they activate “vigilant apprehensiveness,” which directs individuals' behaviors away from negative stimuli (Watson et al., 1999, p. 830). For the company this means that employees who are dissatisfied with their work will be reluctant to make efforts to perform effectively doing their work tasks.

The theory of planned behavior (Ajzen, 1991) accentuates the importance of subjective norms in motivation or constraining behavior. This means that job satisfaction depends on the cultural standards of the employee's nation. Further research confirms that the fundamentals of job satisfaction and labor productivity components vary from one country to another (Farh, Zhong, & Organ, 2004; G. B. Fisher & Hartel, 2004; Huang & Van De Vliert, 2003, 2004). Thus, expectedly that the relationship between job satisfaction and job performance also differs in relation to culture. To date there are no studies proving this probability.

1.4 Perceived ethnic diversity affecting job performance and job satisfaction

The problem of ethnic diversity in the company has been researched for a long time. This question has always aroused debates about the benefits of a diverse workforce (Ely & Thomas, 2001; Hon & Brunner, 2002; McMillan-Capehart, 2005) and about hiring and retaining labor of different cultures. (Pless & Maak, 2004; Ward-Johnson, 2007). Resources exist for understanding employee perspectives on job diversity (for example, Ford &Appelbaum, 2005; Kotcher, 1995; Mor Barak, Cherin & Berkman, 1998; Peppas, 2006).

Pelled (1996) made two sets of predictions. One of them is connected with the intragroup influence of ethnic diversity. And another is about the effects of functional background diversity. The second one is lied on the appearance of ethnic diversity features and connection between work and the functional context. Others distinguish results of having workforce variety according to the type of distinction: cultural, physical, inherent and unchanged (Maznevski, 1994) or associated with roles (Maznevski, 1994; Pelled, 1996).

Social Identity Theory (Tajfel, 1974), in particular the concept of social categorization (Turner, 1999), as well as the paradigm of attractiveness of similarity (Horton, 2002), prove that the participation of workers from different ethnic groups in the work process could affect negatively the company's performance. In accordance with Social Identity Theory and the paradigm of attractiveness of similarity, multinationalism in working groups can cause intragroup sympathies, intragroup affinity and intragroup preferences. Therefore, such psychological connections between employees can influence the behavior of people in such a way that they will give preference to individuals of their own ethnic group, rather than to individuals belonging to other ethnic groups. In work units with a multinational team, this may have adverse effects: less partnership, less interchange, increased number of conflicts, and less cohesion.

In addition, differences in ethnic origin between a person and a team can influence the work of the team as well as have negative personal results. If the employee presents an ethnic minority in the company, then the probability of his or her less commitment, more turnover and less job satisfaction is higher than if he or she worked in an ethnically homogeneous work unit.

The quality of decision-making depends on the unique and useful information that an individual possesses and on the ability to discuss this information within a group. But people are more likely to use shared information, that is available to other members of the group (Stasser & Stewart, 1992).

Thus, using shared information reduces the likelihood of participating in creating unique insights and high-quality solutions. At the same time, for group performances, diversity has a positive effect, because it includes different abilities, skills of members of a group performance.

Most organizational psychologists (Jackson & Joshi, 2003) consider that the variety of characteristics associated with tasks, in particular, leads to better teamwork.

Most organizational psychologists (Jehn, 1999; Jackson, Joshi, & Erhardt, 2003) predict that better team work can be achieved with diversity in task-related characteristics (characteristics that are necessary for performing a certain task). But the quality of teamwork with an ethnically diverse team of workers largely depends on the task itself.

Characteristics related to a task are characteristics that are necessary to perform a particular task, such as specific proficiency, qualification, knowledge, and competencies. But the quality of teamwork with an ethnically diverse team of workers largely depends on the task itself. For example, in teaching ethnically diverse students, ethnic diversity in a team of teachers will lead to better results due to the amount of information and skills of such a team. But there are units which don't require having ethnically diverse workforce for example, production units at the operational level. In order to better manage the team and create a more supportive atmosphere, company management go through a diversity training program.

According to a study by Pitts, Hicklin, Hawes and Melton (2010), a diversified workforce with different levels of education and ethnicity creates the ground for innovative and creative tasks' solutions. The diversity in racial and ethnic origin of team members can allow work units with cognitive resources to develop solutions for better work outcome. A recent research by McKinsey (Hunt &Layton, 2015) displayed that companies with a high percentage of multinational personnel have 35 percent more chances to gain more profit.

There are many multinational team management strategies (Ely & Thomas, 2001). Hiring workers from ethnic minorities allows companies to reduce pressure from national and local governments. Some companies use ethnic diversity as a competitive advantage due to access to information, social and cultural networks, which means a more creative innovative and cooperative team

Yet it is considered that hiring racial minorities work force is also a moral question (for example, Mor Barak, 2005; Grossman, 2000), likewise to hiring other disadvantaged groups, such as women, the disabled, gay and lesbians. In this way, hiring ethnically diverse employees is part of a company's corporate social responsibility

Another companies' strategy to diversify workforce is access and authorize their presence on multinational markets (Ely & Thomas, 2001). For example, if the company has representatives of the same ethnic group as the company's customers, it is considered that they understand the needs of their customers better, which means they can satisfy them completely.

Empirical research of ethnical diversity and its influence on company's outcome demonstrate that ethnic diversity can be both beneficial and losing (for meta-analysis, see Jackson & Joshi 2003; Van Knippenberg & Schippers, 2007). Indeed, some studies confirm that multinational work units are more effective than ethnically homogeneous work units (Watson, Johnson && Merritt, 1998; Watson, Johnson, & Zgourides, 2002). On the other hand, employees of different cultures working together as a team may run into such problems as conflicts (Pelled, 1999), low level of cohesion (Riordan & Shore, 1997), and as a result an ineffective teamwork and poor health of employees (Jackson et al. 2003). Therefore, due to the opposition of these positive and negative factors, ethnic diversity is called a double-edged sword (Williams & O'Reilly, 1998). So, ethnic diversity could either lead to better results due to the creativity and innovative atmosphere or destroy teamwork and employee well-being (for example, Jackson et al. 2003).

From the foregoing it follows how controversial are the opinions on the positive and negative effects of the multinationalism of the team (Williams & O'Reilly, 1998). Therefore, it is necessary to minimize the negative impact and integrate the prospects of the positive impact. Some studies have confirmed that diversity can lead to positive results in group work, but considering interpersonal relations it can have the opposite effect. This is explained by the fact that the information/decision-making perspective assumes the fulfillment of work tasks, and the social categorization perspective focuses on the relational aspect (e.g., Triandis. 1994). However, it is difficult to evaluate separately the contribution the social categorization and the information/decision-making because there is a strong interconnection between teamwork interaction and teamwork performance (De Dreu & Weingart, 2003).

There are several theoretical models that describe the impact of cultural diversity on relationships within a team. The first group of theoretical models are so called conflict theories: the theory of ethnic competition (Bobo & Hutchings, 1996) and the theory of group threats (Quillian, 1995). In line with these theories, a higher percentage of ethnic minorities leads to an increased sense of external threat (Semenov & Glikman, 2009) and a less positive reaction to minorities (Scheepers, Gijsberts & Coenders, 2002),

The second group of theoretical models is based on the theory of intergroup contacts (Allport, 1954; Pettigrew & Tropp, 2006), argues that diversity may ease anxiety and concerns about an external threat and also as well as enhance empathy and create a positive atmosphere outside the team (for example, Wagner, Van Dick, Pettigrew & Krist, 2003).

According to Hдrtel's research (2004) appeal to the fact that companies organizations that assume assimilation, which means erasing all the features that differ them from others, just for fitting the dominant culture, do not just do not show a willingness to accept diversity. And, contrary, human resource management policies that value diversity create a fertile ground for employees' growth.

According to the theoretical background, following hypotheses can be formed:

· H1: Higher perceived ethnic diversity is positively related to job performance.

· H2: Higher perceived ethnic diversity is negatively related to job satisfaction.



CHAPTER 2. METHOD

We conduct this study to investigate the relationship between perceived ethnic diversity, job performance and job satisfaction. The prediction is that higher perceived ethnic diversity will be positively related to job satisfaction and job performance.

The degree of perceived ethnic diversity is accepted as an independent variable. As an independent variable, the degree of ethnic diversity can vary from a complete absence to a high degree (intermediate values are moderate and high degree). The dependent variables are the two components of employee's performance - job satisfaction and job performance.

We use the following methods for the current study: questionnaire for job satisfaction, questionnaire, considering the job performance and perceived ethnic diversity measurement.

2.1 Sample

260 participants working in different cities of Russia (Moscow, Kaluga, Volgograd, Vladimir, Kazan) took part in the study voluntarily. Participating employees hold different job positions. Employees from the sample represent organizations of different size, field and type. The represented types of organizations are Medicine and Education (22, 4%) IT and communication (19,9%), Engineering (16,3%), Retail (11,7%) and others. Participants of the study are aged by the groups from 18 to 64. The most frequent group is aged between 25-34 years (52,3%). Among them there are 53% of women and 47 % of men. As for educational level, 47,9% of participants reported Master's degree, 36,3% - Bachelor's degree. 45,9% of the participants work for big companies with more than 100 employees.



2.2 Procedure

The questionnaires were posted online and the involvement of participants was carried out on social networks, as well as by spreading surveys among company employees. The survey structure included the following groups of questions: 15 items for job satisfaction, 20 items for job performance, 2 questions about ethnic diversity, 4 demographical questions, 4 questions about the organization and questionnaire feedback. The procedure of completing all the surveys took approximately 10 minutes.

2.3 Instruments

Job satisfaction questionnaire. Minnesota Satisfaction Questionnaire (Weiss, Dawis, England & Lofquist, 1967) allows us to assess the degree of employee's job satisfaction. The complete survey structure includes 100 statements that form 20 subscales, assessing the success of the opportunity to realize their talents, success, activity, promotion, progress, policies and practices of the company, salaries, team, creativity, independence, moral values, recognition, responsibility, guarantees of the future, its usefulness to society, social status, intragroup relationships, technical leadership, diversity and working conditions. These twenty subscales are usually called the short form of MSQ.

An example of an assessment of job satisfaction is “The competence of my supervisor in making decisions”. The statements are evaluated on a five-point scale, where 1 = completely dissatisfied with this side of my work and 5 = completely satisfied with this side of my work. Overall job satisfaction is calculated as the average of answers to research questions. It was demonstrated by previous researches that

the shortened version of the questionnaire had a constructive and predictive validity. An original version of the survey is offered for English-speaking participants, an adopted version of the survey is offered for Russian-speaking participants

Job performance questionnaire. The basis of the measurement methodology of job performance is the study of A. Schat and M.Frone (2011). During their research, a self-questionnaire was created based on the job performance measurement techniques from studies of Van Scotter and Motowidlo (1996), Van Dyne, Graham, and Dienesch (1994), Wayne and Ferris (1990) and Van Dyne and LePine (1998).

According to the research of Schoorman and Mayer (2008) it was discovered a high correlation between self-assessments and the actual assessment of the job performance by the supervisor.

The process of adapting the questionnaire from English to Russian took place in three stages: translation, reverse translation and cognitive interview with 5 experts (employed people of different ages).

The example of item used for task performance is “Evaluate the quality of your work” and of contextual performance “How likely will you train your discipline and self-control?” For task performance we use the scale from “poor” to “excellent”, while for contextual performance the scale from “not likely at all” to “extremely likely” is used.

Perceived Ethnic Diversity. We used The DOPA (Diversity in Organizations: Perceptions and Approaches) model from the study of Horenczyk & Tatar (2011) to measure Perceived Ethnic Diversity. The example of item used for perceived ethnic diversity is “How diverse is the organization you work for in terms of ethnic/cultural/language/religious background?” and “Describe the diversity in your organization as a problem/a challenge/a resource/not a problem.” We also asked the participants to decide what diversity means to their company. The possible options were “a problem”, “a challenge”, “not a problem”, “a resource”.

Analyses

We conducted statistical analysis with the help of statistics program IBM SPSS. After correlation analysis between perceived ethnic performance, job performance, and job satisfaction multiply linear regression was run. For job performance we ran two models for task performance and contextual performance.

We used Spearman's Rank correlation coefficient for the relationship between how diverse the organization is and how much the colleagues' background differs from the one of the respondents. Finally multiply linear regression for job satisfaction and job performance was run.

Before data processing we recoded all the answers. We also calculated Cronbach's alpha coefficient for job performance and job satisfaction. Job satisfaction's Cronbach's alpha was 0,914. Cronbach's alpha coefficient for job performance was 0,889. Given that, we may state that both job satisfaction and job performance questionnaires are reliable.



CHAPTER 3. RESULTS

Before examining the data on if there is any correlation between perceived ethnic diversity of organization and employee's performance, we decided to find out the correlations between the proportion of different ethnicities in organization and how colleagues' background differs from the respondent's background.

Distribution of the given variables is non normal, thus, we use Spearman's Rank Coefficient to run the correlation test. The correlation test is presented in the table 1. ethnic workplace performance

Table 1. Correlation Test between Proportion of different ethnicities and different backgrounds

	Diverse in the organization: Ethnic background	Diverse in the organization: Cultural background	Diverse in the organization: Language background	Diverse in the organization: Religious background
Proportion of different ethnicities in organization	0,497	0,097	0,303	0,297
p-value	0,000	0,148	0,000	0,000

Based on the data given in the table 2, we can state that ethnic diversity of organization is positively related to ethnic, cultural, language and religious backgrounds of the respondent's colleagues. However, there is a relatively a high probability (14,8%) of error for cultural background. In other words, the more diverse is organization in respondent's perception, the more different their colleagues' ethnic, language and religious background is.

We ran regression analysis to find out if we can predict employee's job satisfaction based on perceived ethnic diversity of organization.



Table 2. Regression analysis for Perceived Ethnic Diversity predicting Job Satisfaction

Variable	в	t	у	VIF
Diverse in the organization: Ethnic background	-,059	-,606	,545	1,496
Diverse in the organization: Cultural background	,236	2,520	,013	1,401
Diverse in the organization: Language background	-,070	-,684	,495	1,668
Diverse in the organization: Religious background	,101	1,083	,281	1,397
Nationalities excepting own	,006	,067	,947	1,309

According to the summary R2 for this model equals 0,057.

Table 3. Model summary for Perceived Ethnic Diversity predicting Job Satisfaction

Model	R	R2	Adjusted R2	Std. Error of the Estimate	Change Statistics	Durbin-Watson
					R2 Change	F Change	df1	df2	Sig. F Change
1	,238b	,057	,026	,55893	,000	,049	1	152	,825
2	,238c	,057	,019	,56077	,000	,004	1	151	,947	1,951
a. Predictors: (Constant), Diverse in the organization: Religious background, Diverse in the organization: Cultural background, Diverse in the organization: Ethnic background, Diverse in the organization: Language background
b. Predictors: (Constant), Diverse in the organization: Religious background, Diverse in the organization: Cultural background, Diverse in the organization: Ethnic background, Diverse in the organization: Language background, Nationalities excepting own
c. Dependent Variable: mean Job Satisfaction

Next, we ran simple regression analysis for Job Performance variable to investigate whether the variables independently can explain employee's job performance. We measured both: Task Performance and Contextual Performance. For task performance we use 6 items describing an employee's opinion about how their boss would evaluate them.

Table 4. Regression analysis for Perceived Ethnic Diversity predicting Task Performance

Variable	в	t	у	VIF
Diverse in the organization: Ethnic background	,249	2,467	,015	1,668
Diverse in the organization: Cultural background	-,100	-1,080	,282	1,401
Diverse in the organization: Language background	-,247	-2,948	,004	1,149
Diverse in the organization: Religious background	,001	,009	,993	1,397
Nationalities excepting own	-,030	-,330	,742	1,309

Table 5 illustrates the summary for this model.

Table 5. Model summary for Perceived Ethnic Diversity predicting Task Performance

Model	R	R2	Adjusted R2	Std. Error of the Estimate	Change Statistics	Durbin-Watson
					R2 Change	F Change	df1	df2	Sig. F Change
1	,274b	,075	,044	,58994	,055	8,959	1	152	,003
2	,275c	,076	,039	,59168	,001	,109	1	151	,742	2,061
a. Predictors: (Constant), Diverse in the organization: Religious background, Diverse in the organization: Cultural background, Diverse in the organization: Ethnic background, Diverse in the organization: Language background, Group by country
b. Predictors: (Constant), Diverse in the organization: Religious background, Diverse in the organization: Cultural background, Diverse in the organization: Ethnic background, Diverse in the organization: Language background, Nationalities excepting own
d. Dependent Variable: mean Task Performance

We also ran regression analysis for another component of job performance - contextual performance. To measure this component we use 8 items regarding how likely an employee will put extra effort to do their job.

Table 6. Regression analysis for Perceived Ethnic Diversity predicting Contextual Performance

Variable	Std. Error	в	t	у
Diverse in the organization: Ethnic background	.049	.041	.504	.615
Diverse in the organization: Cultural background	.056	.131	1.667	.097
Diverse in the organization: Language background	.044	.051	.582	.561
Diverse in the organization: Religious background	.053	-.065	-.756	.450
Nationalities excepting own	.104	-.079	-1.112	.267

The model summary is in the table 7.

Table 7. Model Summary for Perceived Ethnic Diversity predicting Contextual Performance

Model	R	R2	Adjusted R2	Std. Error of the Estimate	Change Statistics	Durbin-Watson
					R2 Change	F Change	df1	df2	Sig. F Change
1	.171a	.029	.007	.52759	.029	1.318	5	218	.258	2.050
a. Predictors: (Constant), Diverse in the organization: Religious background, Group by country, Diverse in the organization: Cultural background, Diverse in the organization: Ethnic background, Diverse in the organization: Language background
b. Dependent Variable: Mean Contextual Performance ...

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