Psychological Diversity Climate, Organizational Embeddedness, and Turnover Intentions: A Conservation of Resources Perspective

Abstract

The hospitality workforce is the most diverse in the United States. Given this fact, a growing body of research has sought to investigate the effects of employee perceptions of their organization’s climate regarding diversity, also known as psychological diversity climate. However, little is still known about whether and how diversity climate perceptions might affect hospitality employees’ intentions to leave their organizations. Adopting a Conservation of Resources Theory perspective, we argue that diversity climate represents an important resource that employees wish to preserve by continuing employment with their organizations, thus increasing employee organizational embeddedness and decreasing turnover intention. Organizational embeddedness captures why employees stay and represents a totality of forces that serve to keep an employee with his or her current organization. These forces are driven by employees’ possession or pursuit of resources derived through employment with their current organization. Drawing on samples of frontline restaurant employees (Study 1) and restaurant managers (Study 2), we found evidence that psychological diversity climate is positively associated with organizational embeddedness. However, the relationship between psychological diversity climate and turnover intentions was mediated only by the sacrifice dimension of organizational embeddedness. Our results point to the importance of developing a positive climate for diversity as a means to retain employees and also shed light on how the dimensions of organizational embeddedness can have differential effects on turnover intentions.