Abstract:
Despite the adoption of the employee diversity legislation by public institutions, the impact of
the diversity programs at the organization level still need to be identified since these programs
are executed deliberately by human resource managers, and may have varied adaptations and
unintended consequences. This study therefore sought to establish the effect of employee
diversity on organizational performance of state corporations in Kenya. The study categorised
employees diversity under the categories of skills diversity, values diversity and social diversity.
The study targeted the employees of selected state corporations using multi-stage sampling
technique. The study adopted a descriptive survey design. Primary data was collected via
structured questionnaires using the “drop and pick” method. The data was analyzed using both
descriptive & inferential statistical measures. Descriptive statistics included: frequencies,
percentages, mean scores and standard deviations. Inferential statistics namely; regression,
correlation analysis and hypothesis testing were employed to determine the relationship between
the independent and dependent variables under study. Employee diversity was found to affect
customer satisfaction, market share, employee satisfaction, labour costs and employee
performance with the most significant impact being on employee performance. The study found
skills category diversity to be the most significant factor that positively affected the performance
of the selected state corporations. This was followed by values diversity that had a moderate
effect on performance. Social category diversity was found to affect performance positively and
was the third most influencing factor. The relationship between employee diversity and
organization performance of the selected state corporations was found to be moderated by the
external environment, organization management and leadership.
