Team diversity refers to the differences between individual members of a team that can exist on various dimensions like age, nationality, religious background, functional background, task skills or sexual and political preferences. Different types of diversity (e.g. demographic, personality and functional diversity, see Team composition) can have positive as well as negative effects on the team outcomes, such as the performance, team member satisfaction or the innovative capacity of a team (Team diversity serves as an input factor that has effects on the processes as well as on the team outputs of team work, see Input-Process-Output Model).
The demographic diversity of members of a team describes differences in observable attributes like gender, age or ethnicity. Several studies show that individuals who are different from their work team in demographic characteristics are less psychologically committed to their organizations, less satisfied and are therefore more absent from work. Also, in teams in which the age of the team members varies, people will be more likely to leave the team. Gender and culturally mixed teams tend to face intense conflict in the beginning of their working process, which diminishes team performance (see Team Conflict). However, over time, when teams learn how to integrate their differing perspectives, they show a better team performance, creativity and enhance their innovative thinking than homogenous teams.
The personality diversity of a team refers to difference in personality characteristics of the team members. Some studies found that diversity in team members’ levels of extraversion and emotional stability will lead the team to a better performance.
The functional diversity of team members refers to different functional backgrounds, skills and abilities of members of a team, which increase the pool of knowledge and skills available for completing team tasks. Especially in decision-making tasks, functionally diverse teams tend to make better decisions because of they hold a greater variety of perspectives research shows (see “Decision-making in Teams”). Even though, teams which are diverse in their functional backgrounds and skills, show greater difficulties in coordinating their efforts and in showing adequate communication patterns. When functional diversity threatens the group’s safety (seePsychological safety) and integration, creativity and the implementation of innovative ideas can suffer. Therefore, in theory, differing skills and various work-related backgrounds need to be adequately managed and integrated to be able to work together effectively (see Leading Teams).