Diversity management practices and employee engagement in multicultural workplaces: A moderated mediation study in Hungary’s service sector
- 
	DOIhttp://dx.doi.org/10.21511/ppm.23(4).2025.14
- 
	Article InfoVolume 23 2025, Issue #4, pp. 188-202
- 25 Views
- 
	3 Downloads
							
								 
							
							
							This work is licensed under a
							
								Creative Commons Attribution 4.0 International License
							
						
Type of the article: Research Article
Abstract
The growing diversity of Hungary’s service sector has created both opportunities and challenges for organizations in fostering employee engagement. This study aims to examine the impact of diversity management practices (DMP) on employee engagement, emphasizing the mediating role of conflict management climate (CMC) and the moderating role of leadership support. Grounded in social exchange theory and the resource-based view, the paper addresses the need to understand how DMPs influence engagement within multicultural workplaces.
Data were collected through an online self-administered questionnaire distributed via social media and email channels. Using a snowball sampling approach, 744 potential respondents were reached across different service companies. After excluding incomplete responses, 461 valid questionnaires were retained, yielding a 62% response rate. 
Well-established scales from prior research were employed to measure the constructs, and reliability and validity were confirmed through Cronbach’s alpha, AVE, CR, and CFA. Structural equation modeling (AMOS v22) and PROCESS macro (Model 8) were applied to test the hypotheses. Results indicate that DMP significantly improves employee engagement (β = 0.348, p < 0.001), with career development and performance appraisal showing the strongest effects. CMC positively predicts engagement (β = 0.193, pм < 0.01) and fully mediates the relationship between DMP and employee engagement (indirect effect: β = 0.196, p < 0.001). Leadership support significantly moderates the effects of DMP on engagement (β = 0.351, p < 0.001) but not on CMC. The model explains 29.9% of the variance in CMC and 49.2% in engagement.
- Keywords
- 
	JEL Classification (Paper profile tab)M14, M12, J71
- 
	References75
- 
	Tables8
- 
	Figures4
- 
	- Figure 1. Study model
- Figure 2. SEM results, testing models 1 and 3
- Figure 3. SEM results, testing model 2
- Figure 4. Moderation interaction effect
 
- 
	- Table 1. Personal characteristics of the study’s sample
- Table 2. Internal consistency and convergent validity
- Table 3. Discriminant validity – Fornell-Larcker criterion
- Table 4. Model fit indices
- Table 5 Descriptive statistics of study variables (N = 461)
- Table 6. SEM results
- Table 7. Moderation test results using PROCESS Macro (Model 8)
- Table A1. Measurement items
 
- 
	- Aldaibat, B. F., Alshawabkeh, Z. A. E., Al-Shalabi, F. S., Al-Momani, R. Z., Banyhamdan, K., & AlAbbadi, L. H. M. (2019). Implementation of diversity management and its relationship with organizational justice: Case of Jordan. Academy of Strategic Management Journal, 18(3).
- Alfoqahaa, S., & Jones, E. (2020). Leading at the edge of chaos: Historical perspectives on the qualities of leadership for cultural diversity and conflict resolution. International Journal of Public Leadership, 16(2), 217-248.
- Alkhodary, D. (2025). Driving workplace alignment and adaptability in Jordanian service industry: A cultural examination of managerial influence and staff engagement. Problems Perspectives in Management, 23(2), 848-861.
- Alshaabani, A., & Rudnák, I. (2022). Impact of trust on employees’ engagement: The mediating role of conflict management climate. Periodica Polytechnica Social and Management Sciences, 31(2), 153-163.
- Alshaabani, A., Hamza, K. A., & Rudnák, I. (2022). Impact of diversity management on employees’ engagement: The role of organizational trust and job insecurity. Sustainability, 14(1), Article 420.
- Alshaabani, A., Naz, F., Magda, R., & Rudnák, I. (2021). Impact of perceived organizational support on OCB in the time of COVID-19 pandemic in Hungary: Employee engagement and affective commitment as mediators. Sustainability, 13(14), Article 7800.
- Aoun, G., & Gibeily, T. (2013). Managing diversity in the workplace. SMEE Review, 5(1), 7-12.
- Armstrong, C., Flood, P. C., Guthrie, J. P., Liu, W., MacCurtain, S., & Mkamwa, T. (2010). The impact of diversity and equality management on firm performance: Beyond high performance work systems. Human Resource Management, 49(6), 977-998.
- Armstrong, M., & Taylor, S. (2017). Armstrong’s handbook of human resource management practice (14th ed.). Kogan Page.
- Ayub, N., & Jehn, K. A. (2010). The moderating influence of nationalism on the relationship between national diversity and conflict. Negotiation and Conflict Management Research, 3(3), 249-275.
- Bagozzi, R. P., & Yi, Y. (1991). Multitrait-multimethod matrices in consumer research. Journal of Consumer Research, 17(4), 426-439.
- Balay, R. (2007). Predicting conflict management based on organizational commitment and selected demographic variables. Asia Pacific Education Review, 8(2), 321-336.
- Barney, J. B., & Clark, D. N. (2007). Resource-based theory: Creating and sustaining competitive advantage. OUP Oxford.
- Besler, S., & Sezerel, H. (2012). Strategic diversity management initiatives: A descriptive study. Procedia – Social and Behavioral Sciences, 58, 624-633.
- Bisztrai, M., Kovács, E., Kováts, A., & Vadasi, V. (2020). Perpetual temporariness: Situation of migrant workers in Hungary. Friedrich-Ebert-Stiftung.
- Blau, P. M. (1964). Exchange and power in social life. Wiley.
- Blomberg, S., Rosander, M., & Einarsen, S. V. (2024). Role ambiguity as an antecedent to workplace bullying: Hostile work climate and supportive leadership as intermediate factors. Scandinavian Journal of Management, 40(2), Article 101328.
- Buengeler, C., & Den Hartog, D. N. (2015). National diversity and team performance: The moderating role of interactional justice climate. The International Journal of Human Resource Management, 26(6), 831-855.
- Buengeler, C., Leroy, H., & De Stobbeleir, K. (2018). How leaders shape the impact of HR’s diversity practices on employee inclusion. Human Resource Management Review, 28(3), 289-303.
- Carstens, J. G., & De Kock, F. S. (2017). Firm-level diversity management competencies: Development and initial validation of a measure. The International Journal of Human Resource Management, 28(15), 2109-2135.
- Choi, S., & Rainey, H. G. (2013). Organizational fairness and diversity management in public organizations: Does fairness matter in managing diversity? Review of Public Personnel Administration, 34(4), 307-331.
- Cox, T. H., & Blake, S. (1991). Managing cultural diversity: Implications for organizational competitiveness. Academy of Management Perspectives, 5(3), 45-56.
- DeNisi, A., & Griffin, R. (2015). HR3. Cengage Learning.
- D’Netto, B., Shen, J., Chelliah, J., & Monga, M. (2014). Human resource diversity management practices in the Australian manufacturing sector. The International Journal of Human Resource Management, 25(9), 1243-1266.
- Downey, S. N., van der Werff, L., Thomas, K. M., & Plaut, V. C. (2015). The role of diversity practices and inclusion in promoting trust and employee engagement. Journal of Applied Social Psychology, 45(1), 35-44.
- Edmondson, A. C., & Lei, Z. (2014). Psychological safety: The history, renaissance, and future of an interpersonal construct. Annual Review of Organizational Psychology and Organizational Behavior, 1(1), 23-43.
- Einarsen, S., Skogstad, A., Rørvik, E., Lande, Å. B., & Nielsen, M. B. (2018). Climate for conflict management, exposure to workplace bullying and work engagement: A moderated mediation analysis. The International Journal of Human Resource Management, 29(3), 549-570.
- Furnham, A., & Goodstein, L. (1997). The organizational climate questionnaire (OCQ). The 1997 Annual, 2, 163-181.
- Gera, D. (2016, November 21). Hungary: Diversity in the workplace. Schoenherr.
- Ghasempour Gangi, S. F., & Kafahpour, A. (2017). A survey of the mediating role of perceived organizational support in the relationship between ethical context and female employees’ job response. Quarterly Journal of Women and Society, 7(27), 1-18. (In Arabic).
- Gross-Gołacka, E., Kupczyk, T., & Wiktorowicz, J. (2022). Towards a better workplace environment – Empirical measurement to manage diversity in the workplace. International Journal of Environmental Research and Public Health, 19(23), Article 15851.
- Guillaume, Y. R. F., Dawson, J. F., Otaye-Ebede, L., Woods, S. A., & West, M. A. (2017). Harnessing demographic differences in organizations: What moderates the effects of workplace diversity? Journal of Organizational Behavior, 38(2), 276-303.
- Hair, J. F., Sarstedt, M., Ringle, C. M., & Gudergan, S. P. (2017). Advanced issues in partial least squares structural equation modeling. SAGE Publications.
- Hamza, K. A., Alshaabani, A., & Rudnak, I. (2024). Impact of transformational leadership on employees’ affective commitment and intention to support change: Mediation role of innovative behavior. Problems Perspectives in Management, 22(2), 325-338.
- Hayes, A. F. (2017). Introduction to mediation, moderation, and conditional process analysis, second edition: A regression-based approach. Guilford Publications.
- Hetland, J., Hetland, H., Bakker, A. B., & Demerouti, E. (2018). Daily transformational leadership and employee job crafting: The role of promotion focus. European Management Journal, 36(6), 746-756.
- Hocine, Z., & Zhang, J. (2014). Autonomy supportive leadership: A new framework for understanding effective leadership through self-determination theory. International Journal of Information Systems and Change Management, 7(2), 135-149.
- Horváthová, P., Mikušová, M., & Kashi, K. (2019). Evaluation of the employees’ engagement factors importance methodology including generation Y. Economic Research-Ekonomska Istraživanja, 32(1), 3895-3917.
- House, R. J. (1971). A path goal theory of leader effectiveness. Administrative Science Quarterly, 16(3), 321-339.
- House, R. J., & Dessler, G. (1974). The path-goal theory of leadership: Some post hoc and a priori tests. In. J. G. Hunt & L. L. Larson (Eds.), Contingency Approaches to Leadership. Carbondale, IL: Southern Illinois University Press.
- Hu, L. T., & Bentler, P. M. (1999). Cutoff criteria for fit indexes in covariance structure analysis: Conventional criteria versus new alternatives. Structural Equation Modeling: A Multidisciplinary Journal, 6(1), 1-55.
- Inegbedion, H., Sunday, E., Asaleye, A., Lawal, A., & Adebanji, A. (2020). Managing diversity for organizational efficiency. Sage Open, 10(1).
- Iqbal, S., Ehsan, S., Rizwan, M., & Noreen, M. (2014). The impact of organizational commitment, job satisfaction, job stress and leadership support on turnover intention in educational institutes. International Journal of Human Resource Studies, 4(2).
- Ivancevich, J. M., & Gilbert, J. A. (2000). Diversity management: Time for a new approach. Public Personnel Management, 29(1), 75-92.
- Jehn, K. A., & Bendersky, C. (2003). Intragroup conflict in organizations: A contingency perspective on the conflict-outcome relationship. Research in Organizational Behavior, 25, 187-242.
- Jehn, K. A., Northcraft, G. B., & Neale, M. A. (1999). Why differences make a difference: A field study of diversity, conflict and performance in workgroups. Administrative Science Quarterly, 44(4), 741-763.
- Jerónimo, H. M., Henriques, P. L., & Carvalho, S. I. (2022). Being inclusive boosts impact of diversity practices on employee engagement. Management Research: Journal of the Iberoamerican Academy of Management, 20(2), 129-147.
- Johnson, L., & Ganji, S. F. (2020). The relationship between family emotional support, psychological capital, female job satisfaction and turnover intention. International Journal of Economics Business and Management Studies, 7(1), 59-70.
- Jonsen, K., & Özbilgin, M. (2014). Models of global diversity management. In B.M. Ferdman & B.R. Deane (Eds.), Diversity at Work: The Practice of Inclusion (pp. 364-390). John Wiley & Sons.
- Kalev, A., Dobbin, F., & Kelly, E. (2006). Best practices or best guesses? Assessing the efficacy of corporate affirmative action and diversity policies. American Sociological Review, 71(4), 589-617.
- Krishna, A., Soumyaja, D., & Joseph, J. (2024). Workplace bullying and employee silence: The role of affect-based trust and climate for conflict management. International Journal of Conflict Management, 35(5), 1034-1059.
- Lakshmi, V. (2012). Diversity management in global workplace: A study. International Journal of Marketing, Finance Management Research, 54(6), 118-123.
- Magoshi, E., & Chang, E. (2009). Diversity management and the effects on employees’ organizational commitment: Evidence from Japan and Korea. Journal of World Business, 44(1), 31-40.
- McKay, P. F., Avery, D. R., & Morris, M. A. (2009). A tale of two climates: Diversity climate from subordinates and managers perspectives and their role in store unit sales performance. Personnel Psychology, 62(4), 767-791.
- Mehari, A. T., Ayenew Birbirsa, Z., & Nemera Dinber, G. (2024). The effect of workforce diversity on organizational performance with the mediation role of workplace ethics: Empirical evidence from food and beverage industry. PLOS ONE, 19(7), Article e0297765.
- Moldicz, C. (2022). Hungary social briefing: Booming labor market in Hungary. Weekly Briefing, 52(3).
- Nishii, L. H., & Mayer, D. M. (2009). Do inclusive leaders help to reduce turnover in diverse groups? The moderating role of leader–member exchange in the diversity to turnover relationship. Journal of Applied Psychology, 94(6), 1412-1426.
- Nkomo, S., & Hoobler, J. (2014). A historical perspective on diversity ideologies in the United States: Reflections on human resource management research and practice. Human Resource Management Review, 24(3), 245-257.
- Noor, N., Khan, M. M., Irfan, M., & Shah, S. M. A. (2024). Diversity management practices and inclusive work environment: A study of employees working in banking and IT sectors. International Journal of Social Science Entrepreneurship, 4(2), 298-316.
- Özbilgin, M., Ellis-Bartels, F., & Gibbs, P. (2019). Global diversity management: A fusion of ideas, stories and practice. Springer.
- Pendry, L. F., Driscoll, D. M., & Field, S. C. T. (2007). Diversity training: Putting theory into practice. Journal of Occupational and Organizational Psychology, 80(1), 27-50.
- Petts, R. J., Mize, T. D., & Kaufman, G. (2022). Organizational policies, workplace culture, and perceived job commitment of mothers and fathers who take parental leave. Social Science Research, 103, Article 102651.
- Pittman, C. (2020, September 9). Diversity & inclusion can boost employee engagement. Rewardian.
- Richard, O., McMillan, A., Chadwick, K., & Dwyer, S. (2003). Employing an innovation strategy in racially diverse workforces: Effects on firm performance. Group & Organization Management, 28(1), 107-126.
- Riyanto, S., Endri, E., & Herlisha, N. J. P. (2021). Effect of work motivation and job satisfaction on employee performance: Mediating role of employee engagement. Problems and Perspectives in Management, 19(3), 162-174.
- Rudolph, C. W., Allan, B., Clark, M., Hertel, G., Hirschi, A., Kunze, F., Shockley, K., Shoss, M., Sonnentag, S., & Zacher, H. (2021). Pandemics: Implications for research and practice in industrial and organizational psychology. Industrial and Organizational Psychology, 14(1-2), 1-35.
- Schaufeli, W. B., Salanova, M., González-romá, V., & Bakker, A. B. (2002). The measurement of engagement and burnout: A two sample confirmatory factor analytic approach. Journal of Happiness Studies, 3(1), 71-92.
- Sekaran, U., & Bougie, R. (2016). Research methods for business: A skill building approach. Wiley.
- Sharma, N., Chaudhary, N., & Singh, V. K. (2019). Management techniques for employee engagement in contemporary organizations. IGI Global.
- Shuck, B., & Wollard, K. (2009). Employee engagement and HRD: A seminal review of the foundations. Human Resource Development Review, 9(1), 89-110.
- Torres, C., & Bruxelles, M. (1992). Capitalizing on global diversity. HR Magazine, 37, 3-30.
- Yadav, S., & Lenka, U. (2020). Diversity management: A systematic review. Equality, Diversity and Inclusion: An International Journal, 39(8), 901-929.
- Yang, Y., & Konrad, A. M. (2011). Understanding diversity management practices: Implications of institutional theory and resource-based theory. Group & Organization Management, 36(1), 6-38.
- Zahlquist, L., Hetland, J., Notelaers, G., Rosander, M., & Einarsen, S. V. (2023). When the going gets tough and the environment is rough: The role of departmental level hostile work climate in the relationships between job stressors and workplace bullying. International Journal of Environmental Research and Public Health, 20(5), Article 4464.
- Zahlquist, L., Hetland, J., Skogstad, A., Bakker, A. B., & Einarsen, S. V. (2019). Job demands as risk factors of exposure to bullying at work: The moderating role of team-level conflict management climate. Frontiers in Psychology, 10.
 

 
					

