Individual-Level Performance in a Diverse Group: Field Evidence from Microfinance in Mexico

• In Event: 50205 - Big Problems, Middle-Range Theories

Abstract

This article provides evidence on the impact of workforce gender diversity on individual-level performance in a microfinance firm in Mexico. Despite increased confidence from recent research in diversity’s effects on group-level performance, direct evidence is absent on whose individual-level performance within groups increases (more) due to demographic diversity. Thus, there also is limited confidence on for whom group-level diversity is more beneficial. Leveraging the firm’s random transfer policy between branches for microfinance officers, we initially do not find evidence of the impact of gender diversity on individual officers’ loan collection performance; however, further investigation reveals substantial heterogeneity especially by loan officer gender. Male loan officers perform best in gender-balanced branches while underperforming in predominantly male or female branches. Female loan officers, by contrast, show stable performance regardless of the workforce composition. Further analyses reveal that these impacts on male officers are most salient when they likely see diversity as less threatening and thus presumably engage with diverse viewpoints more. In sum, against recent political rhetoric that positions diversity initiatives as antithetical to higher performance, these findings highlight a performance-based rationale for diversity initiatives for the majority demographic group (e.g., men), conditional on some other group characteristics.

Authors

• Minjae Kim, Yale University

• Minkyung Kim, Carnegie Mellon University