A Dynamic Capabilities Approach to Managing the Diversity-Meritocracy Paradox

Research on traditional human resource management (HRM) has ignored the dynamic whereby meritocracy cannot be fully achieved without diversity and inclusion (D&I). We expose the paradoxical relationship between diversity and meritocracy to address the research question of how organizations can enhance career advancement opportunities for historically marginalized groups in ways that all identity groups view as legitimate and fair. To achieve this goal, we offer a contemporary D&I management system that seeks to manage the diversity-meritocracy paradox with three essential D&I dynamic capabilities: building, integrating, and re-configuring. In doing so, we extend the diversity literature by embedding it within an integrative framework of not only paradox theory but also institutional theory and SHRM theory. SHRM theory has thus far been virtually silent on the question of managing institutional pressures on organizations. We extend SHRM theory to establish a D&I system that provides for vertical and horizontal integration of practices as a means of managing the institutional complexity arising from the diversity-meritocracy paradox. We leverage our theorizing with testable propositions and suggestions for empirically testing our D&I-to-performance framework.