Employee Relations-Oriented Diversity and Store Unit Effectiveness: Does Community Matter?

We examine the relationship between store unit relations-oriented diversity (i.e., racial, generational) and organizational outcomes (i.e., customer satisfaction, employee retention, and sales productivity). Consistent with social identity theory-based predictions, we find that store unit racial diversity positively impacts both customer satisfaction and employee retention when store units serve racially diverse communities but not racially homogeneous communities. Additionally, we find a three-way interaction effect revealing that the coupling of store unit racial with similar community diversity is more strongly related to sales productivity in smaller size store units than larger ones. Furthermore, while juxtaposing store unit generational diversity with community diversity is important for smaller stores in predicting sales productivity supporting our assertions, larger stores also benefit significantly from generational diversity across both low and high levels of community diversity. Portions of the...