Made Better by Others? When Having More Diverse Colleagues Improves Individual Outcomes

Research suggests that workgroup diversity influences various group and organizational-level outcomes. However, few studies consider its impact at the individual level, particularly in knowledge-related work, where workers have considerable discretion in making decisions. Our study aims to fill this gap by examining two significant types of workgroup diversity—gender diversity, a kind of bio-demographic diversity, and specialization diversity, a kind of job-related diversity—in a healthcare setting. Using detailed data on the entire patient population of Florida hospitals (10.14 million patients), including 25,187 physicians across 240 hospitals over a period of 4 years, we find that physicians who work in departments with more diverse colleagues (in terms of gender and specialization) have better patient outcomes, for example, a shorter stay, lower cost of treatment and increased likelihood of discharge to home. We find that the impacts of colleague diversity are contingent on departmental focus. Our research shows that specialization diversity, a type of job-related and deep-level difference, especially helps physicians who work in more specialization-diverse departments perform better when their departments are less focused. In contrast, we find that physicians in more gender-diverse departments perform even better when in more focused departments. Our results are robust to alternate explanations and biases arising from patient selection, population demographics, and endogeneity in diversity measures. Our study adds to a relatively small literature in operations management that considers how workgroup diversity (beyond diversity in on-the-job experience) might influence individual performance. Our research also contributes to the emerging conversation on why hiring managers should actively work toward improving workplace diversity.