Racial diversity and task performance: the roles of formalization and goal setting in government organization

Previous studies on demographic diversity have yielded inconsistent results with respect to several individual and organizational outcomes. The current study proposes that structural characteristics can enhance the positive influence of racial diversity on employee outcomes. Specifically, this study examines the roles of formalization as a moderator and goal setting as a mediator in the relationship between racial diversity and employee task performance. Using a sample of New York state employees from 42 state agencies, this study found that (a) in organizations where tasks are formalized, the effects of racial diversity on employee perception of goal specificity and goal difficulty were positive and (b) some of the interaction effects between racial diversity and formalization were, in turn, positively related to task performance through perception of the goal difficulty. Overall, while the results confirm the complex nature of diversity effects mentioned in previous research, they contribute further evidence regarding the positive impact of racial diversity and the notion that the contextual environment of public organizations—in this case, formalization—contributes to positive performance in demographically diverse workforces.