Do inclusive leaders help to reduce turnover in diverse groups? The moderating role of leader-member exchange in the diversity to turnover relationship.

This research examines leader-member exchange (LMX) at the group level as a moderator of the relationships between demographic (i.e., race, age, gender) and tenure diversity and group turnover. Drawing primarily from LMX, social categorization, and expectation states theories, we hypothesized that through the pattern of LMX relationships that they develop with followers, group managers influence inclusion and status differentials within groups such that the positive relationship between diversity and group turnover will be weaker when the group mean on LMX is high or when group differentiation on LMX is low. Results from a sample of supermarket departments (N = 348) yielded general support for the study hypotheses. We also found evidence for a 3-way interaction involving demographic diversity, LMX mean, and LMX differentiation such that the interaction between demographic diversity and LMX differentiation was only significant when LMX mean was high. These findings highlight the important role that leaders play in influencing the relationship between diversity and turnover through the patterns of inclusion that they create in their units.