Journal of Vocational Behavior 105 (2018) 147–158

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Journal of Vocational Behavior

journal homepage: www.elsevier.com/locate/jvb

Results-masked-review-article

The effects of diversity climate on the work attitudes of refugee

T
employees: The mediating role of psychological capital and
moderating role of ethnic identity
Alexander Newmana,⁎, Ingrid Nielsena, Russell Smythb, Giles Hirstc, Susan Kennedya
a
Department of Management, Deakin Business School, Deakin University, Geelong, Victoria, Australia
b
Department of Economics, Monash Business School, Monash University, Clayton, Victoria, Australia
c
Research School of Management, ANU College of Business and Economics, Canberra, Australia

AR TI CLE I NF O AB S T R A CT

Keywords: This article examines the psychological processes through which diversity climate influences the
Diversity climate work attitudes of refugee employees in Australia, and the conditional effects of ethnic identity on
Ethnic identity the relationship between diversity climate and work attitudes. Drawing on survey data from 135
Psychological capital refugees in employment in Australia, diversity climate was found to positively influence the
Refugee employees
affective organizational commitment of refugee employees through enhancing their psycholo-
Work attitudes
gical capital. The influence of diversity climate on both affective organizational commitment and
turnover intentions through psychological capital was also found to be stronger when employees
identify more with their ethnic group (ethnic identity). These findings are consistent with the
predictions of conservation of resources theory (COR) and rejection sensitivity theory.

1. Introduction

There is growing recognition that better settlement outcomes are achieved amongst refugees when they obtain meaningful
employment outcomes (Colic-Peisker, 2009; Colic-Peisker & Tilbury, 2006). Yet, in addition to facing significant barriers to finding
work (Jackson & Bauder, 2014), refugees also experience difficulties integrating into the workplace and face discrimination at work
(Colic-Peisker & Tilbury, 2006). Such discrimination is likely to lead them to identify less with their employing organization, and
increases the likelihood that they will leave their jobs.
Although researchers have begun to examine the factors that predict the transition of refugees into employment (Correa-Velez,
Barnett, & Gifford, 2015), limited research has focused on how refugee employees perceive and respond to organizational attempts to
create diversity climates in the workplace that do not tolerate discrimination, and how this can assist refugee employees maintain
positive work attitudes. Understanding the processes by which organizations can influence positive work attitudes amongst refugee
employees is important given that they have been linked to positive behavioral outcomes, such as improved job performance and the
ability to maintain continuing employment (Colic-Peisker, 2009), and also assist refugees to develop social support networks and
integrate into the workplace (Gorodnichenko & Roland, 2012a, 2012b; Hobfoll, 2001).
Unlike other migrants, refugees have often been subjected to major challenges such as discrimination due to their ethnic identity
and social status, threats to life and internal displacement, leading them to seek asylum (see Convention and protocol relating to the
status of refugees - UNHCR, 2011). Non-discrimination is one of three primary principles underlying the United Nations Convention

⁎
Corresponding author at: Department of Management, Deakin Business School, Deakin University, Geelong, Australia.
E-mail address: a.newman@deakin.edu.au (A. Newman).

http://dx.doi.org/10.1016/j.jvb.2017.09.005
Received 22 February 2017; Received in revised form 8 September 2017; Accepted 10 September 2017
Available online 11 September 2017
0001-8791/ © 2017 Elsevier Inc. All rights reserved.
A. Newman et al. Journal of Vocational Behavior 105 (2018) 147–158

Relating to the Status of Refugees (1951), the key instrument of international law which protects refugees. Employment is a crucial
strategy by which individuals adapt to new social conditions and establish social stability during resettlement (Australian Human
Rights Commission, 2012a, 2012b). Therefore, it is important for refugees to feel socially included, while obtaining and holding onto,
meaningful work.
As we have mentioned, refugees may continue to suffer from discrimination after they have acquired refugee status (Colic-
Peisker & Tilbury, 2006). These challenges can disrupt their adaptation to the workplace, flowing on to negatively affect the orga-
nizational climate and other employees. This is in spite of the fact that countries such as Australia have regulations supporting
workplace diversity that should protect them from discrimination. Discrimination faced by refugees is likely to create additional risks
for organizations, such as increased their costs due to declines in productivity, workplace conflict and stress, and exposure to liti-
gation. This study seeks to address some of these issues by helping organizations understand how they can foster refugees' positive
attitudes towards work through enhancing the extent to which refugee employees' feel the organization supports them as individuals
from often stigmatized minority ethnic groups.
In particular, we examine how perceptions of organizational climate, specifically diversity climate, influence the work attitudes of
refugee employees. We define diversity climate as the extent to which employees' perceive that the organization values diversity
through formal structures, informal values and social integration of under-represented employees (Dwertmann, Nishii, & van
Knippenberg, 2016). Drawing on the conservation of resources (COR) theory (Hobfoll, 1989, 2001), we argue that by promoting a
climate of diversity, organizations will positively influence the work attitudes of refugee employees through fostering their positive
psychological resources of hope, optimism, resilience and self-efficacy, known in the literature as psychological capital or PsyCap
(Luthans & Youssef, 2004; Luthans, Youssef, & Avolio, 2007).
In addition, drawing upon rejection sensitivity theory (Downey & Feldman, 1996), we argue that this process will be especially
important for refugees who feel a strong sense of identity with their ethnic group (ethnic identity). Such individuals will be more
sensitive to discrimination and, therefore, more attuned to whether their organization adopts policies to ensure that their ethnic
background is respected within the workplace. The proposed research model is presented in Fig. 1, below.
The study draws on data collected from 135 re-settled refugee employees in Melbourne, Australia, across two time periods.
Melbourne has a long history of absorbing a diverse range of economic and refugee migrants into its relatively resilient economy.
Workplace integration into the active labor market has historically facilitated refugee adaptation in Australia. However, the
Australian government's offshore resettlement of refugees has more recently polarized views in the general population towards
refugee arrivals, which might be expected to trickle down to influence the organizational climates in which refugee employees work.
This makes the context of this study relevant and important. The study considers the adaptation of refugees from four collectivistic
societies in the Middle East and Central Asian countries typically associated with IMAs (irregular maritime arrivals), who arrived in
Australia prior to August 13, 2012 and were around two to three years into their resettlement process after receiving work rights.
Although the majority of participants in the study were male, around 15% were female, allowing us to control for gender differences
in how refugee employees perceive and respond to different facets of the work environment, and how they develop psychological
resources. Controlling for gender differences is important given a growing consensus that the ressettlement experiences of female and
male refugees may vary considerably (Young & Chang, 2015). Given the majority of refugees in our sample come from highly tra-
ditional, male-dominated societies in the Middle East, we might expect the experiences of female refugees to be quite different from
that to males. For example, female refugees from societies such as Afghanistan have been shown to face greater distress than male
refugees when ressettling overseas, as a result of gender specific expectations that arise from traditionally-held cultural beliefs
(Alemi, Weller, Montgomery, & James, 2017). This may make it harder for females to build psychological resources and respond more
positively to climates in which diversity is supported than males.
The present study makes a number of important contributions. First, through drawing on the conservation of resources (COR)
theory (Hobfoll, 1989, 2001), the present study allows us to determine whether a contextual resource, the diversity climate of the
organization, promotes the personal psychological resources (psychological capital) of refugee employees, and, in turn, influences

Fig. 1. Research Model.

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their work attitudes. Adopting such a perspective to understand the process by which organizational policies that support refugee
integration into the workforce influence their work attitudes is salient, given that refugees typically have lower levels of psycho-
logical resources than those in the general population as a result of the challenges that they have faced in resettling in a new country.
In addition, by drawing on rejection sensitivity theory (Downey & Feldman, 1996), the present study examines the extent to which
an individual identifies with their ethnic group influences the strength of the relationship between their perceptions of the diversity
climate and their work attitudes. This is the second contribution of the study.
This study makes a third contribution by providing new insight into the employment experiences of minorities who are refugees
from collectivistic societies in the Middle East and Central Asia, which should be of interest to researchers in refugee studies and
related disciplines. People from this background represent an under-researched cohort with special relevance to existing refugee
policy in developed economies such as Australia (Fleahy, 2016).
Finally, the study also has important practical implications in that it shows how organizations, through creating and maintaining
diversity climates, can enhance the personal resources of refugee employees, which in turn promotes their positive work attitudes
such as affective organizational commitment (psychological attachment to one's organization: Meyer, Allen, & Smith, 1993), and
reduces their turnover intentions.

2. Theoretical background

2.1. Diversity climate

The diversity climate of an organization has been defined as “employees' shared perceptions of the policies and practices that
communicate the extent to which fostering diversity and eliminating discrimination is a priority in the organization” (Gelfand, Nishii,
Raver, & Schneider, 2005, p. 104). Although some researchers have operationalized employee diversity climate at the team-level, the
bulk of work on diversity climate has been conducted at the individual-level, examining how individual employees' perceptions of the
diversity climate in their organization influence their attitudes and behaviors at work (McKay & Avery, 2015). At the individual level,
diversity climate has been called psychological diversity climate, and measured as the extent to which individual employees perceive
that their organization, and representatives of the organization, value diversity and strive to create a work environment that is fair
and inclusive to all employees, irrespective of their gender, ethnicity, culture or religious background. Although there has been
limited academic research examining the importance of diversity climate to the workplace integration of refugees, refugee advocacy
groups have highlighted the need for employing organizations to foster a climate in which refugees feel welcome and their ethnic
background respected (Olliff, 2010).

2.2. Effects of diversity climate on work attitudes

There has been growing work examining the influence of employee perceptions of diversity climate on key work attitudes
(McKay & Avery, 2015). Prior empirical research has consistently found that perceptions of diversity climate are positively related to
employees' organizational commitment and negatively related to their turnover intentions (Brimhall, Lizano, & Barak, 2014; Buttner,
Lowe, & Billings-Harris, 2010; Chrobot-Mason & Aramovich, 2013; Gonzalez & DeNisi, 2009; Hopkins, Hopkins, & Mallette, 2001;
Kaplan, Wiley, & Maertz, 2011; McKay et al., 2007; Stewart, Volpone, Avery, & McKay, 2011). Although diversity climate has been
found to influence work attitudes for both majority and minority group members in organizations, (Buttner et al., 2010; Chrobot-
Mason & Aramovich, 2013; Hopkins et al., 2001; McKay et al., 2007), its effects have been found to be stronger for minority group
members (McKay et al., 2007). This reflects the relatively higher reports of discrimination from minority group members that a more
diverse workplace climate should help to address, according to McKay and Avery (2015). We might therefore expect diversity climate
to have a greater effect on the work attitudes of refugee employees than the work attitudes of migrants more generally, as they are
more likely to face discrimination from majority groups when they enter the workforce (Fozdar, 2012) due to overlapping identity
status (as both minority groups members and refugees).
The effects of diversity climates which foster inclusion are especially likely to be pronounced for refugees coming from more
collectivistic cultures such as those in the Middle East and Central Asia (from which participants in our sample had migrated), which
rank from very low (Pakistan) to moderately low (Iran) on Hofstede's (2001) individualism dimension (Ralston et al., 2012;
Ronen & Shenkar, 1985). Compared to individualistic cultures such as Australia, the Iraqi, Afghani and Pakistani cultures are
characterized by strong transnational, tribal collectivism (Nadeem, 2013). Although the Iranian culture is more metropolitan in
nature and values more individualist traits such as personal achievement, it is still regarded as a collectivistic culture, valuing
modesty, benevolence and mutual aid (Hamedani, Purvis, Glazer, & Dien, 2012). Diversity climate is likely to be important for
individuals from collectivistic cultures as they typically have strong in-group identity, seek mutual protection from one another
(Hennekam & Tahssain-Gay, 2015; Herrera, Duncan, Green, Ree, & Skaggs, 2011; Muchiri, 2011) and stress the importance of acting
altruistically to others members of the group (Nadeem, 2013; Tlaiss & Kauser, 2011; Triandis, 2001). Individuals from collectivistic
cultures are also likely to place greater value on building social ties with others and group goals (Randall, 1993), and therefore
typically have higher levels of commitment towards their employing organization (Meyer et al., 2012). It might therefore be expected
that when refugee employees feel that the organization values diversity and protects the interests of those from minority groups, they
will exhibit more positive attitudes towards the organization such as organizational commitment.
Prior work examining the effects of diversity climate on work attitudes has drawn on social identity theory or social exchange
theory to explain the process by which diversity climate influences work attitudes (McKay & Avery, 2015). For example, in line with

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the social identity perspective, researchers have found that diversity climate influences work attitudes, such as job satisfaction and
turnover intentions, through fostering organizational identification and identity freedom (Chrobot-Mason & Aramovich, 2013;
Hofhuis, van der Zee, & Otten, 2012; Stewart et al., 2011). In contrast, drawing on a social exchange perspective, researchers have
found that diversity climate influences the organizational commitment of minority group members by strengthening their psycho-
logical contract with the organization (Buttner et al., 2010; Hopkins et al., 2001). However, researchers have not yet examined
whether diversity climate influences refugee employees' work attitudes by enhancing their personal psychological resources. In the
following sections we draw on COR theory (Hobfoll, 1989, 2001, 2002) to argue that diversity climate will promote the development
of an individual's personal psychological resources of hope, resilience, optimism and self-efficacy (known as psychological capital or
PsyCap) (Luthans & Youssef, 2004).

2.3. Psychological capital

COR theory is a major theory in positive psychology due to its utility in explaining how individuals can draw on resources around
them to manage stress (Hobfoll, 2012). We argue that diversity climate will promote the development of personal psychological
resources, which in turn will positively influence attitudes, consistent with COR theory (Hobfoll, 2002). Specifically, we examine the
mediating role of PsyCap (Luthans & Youssef, 2004), a construct that captures an individual's positive psychological resources or
capabilities. We theorize that employees draw upon contextual resources inherent in the organizational context (specifically diversity
climate) to enhance their own personal psychological resources, which in turn, promotes their organizational commitment, and
reduces their intentions to leave their job.
Luthans et al. (2007), p.3 defined PsyCap as “an individual's positive psychological state of development.” Conceptually, PsyCap is
a higher order construct subsuming hope, resilience, optimism and self-efficacy. According to Luthans (2012), PsyCap is state-like in
nature, and hence has the potential to be developable. This has implications for employers, who may draw on this potential in their
workers to aid their adaptation to the workplace. Previous studies have generally found that those with high levels of PsyCap have
positive expectations about future employment outcomes (hope) and a greater belief in their ability to manage future challenges at
work (optimism) (see Newman, Ucbasaran, Zhu, & Hirst, 2014 for a review of the literature). More specifically, PsyCap has previously
been found to be negatively related to turnover intentions and positively related to organizational commitment (Luthans & Jensen,
2005).
COR theory (Hobfoll, 2002) can be used to explain why PsyCap might serve as an underlying mechanism linking diversity climate
to job attitudes. The central tenet of COR is that people are motivated to increase, and protect, their resources (Hobfoll, 2002, p.307).
While many of the resources that people strive to obtain, and protect, are objects, Hobfoll (2002) also included personal char-
acteristics within the scope of valued resources, which includes personal psychological resources as captured by the PsyCap construct.
Along with personal resources, another key group of resources are contextual resources which reside outside the individual, and
within the organizational context, include environmental conditions (ten Brummelhuis & Bakker, 2012). While there may be many
work-based environmental conditions that act as contextual resources, it is likely that diversity climate is a particularly salient one for
refugee employees given that diversity climate is positively linked to anti-discrimination practices (Gelfand et al., 2005), while
refugees tend to face discrimination from majority groups in society (Colic-Peisker & Tilbury, 2006).
A key assumption of COR is that resources can generate new resources. This assumption reflects a process called a “gain spiral”
(Hobfoll, 2002, p.307) which results in resource accumulation. Indeed, Hobfoll (2002) argued that resources come in bundles, which
he called resource caravans. The multidimensional PsyCap can be considered such a caravan in the sense that its components are
positively correlated, hence, for example, as self-efficacy grows, so does hope; as resilience grows, so does optimism, and so forth.
Personal psychological resources, such as those subsumed in the PsyCap construct, hence, help us to understand how people ap-
proach, and manage, stressors. For example, people high in optimism are more likely to approach difficult tasks with a positive
attitude and to seek support with task completion (Hardré, 2003).
Distinguishing between personal and contextual resources, ten Brummelhuis and Bakker (2012) explained how employees can use
one type of resource to preserve, or to increase, another. They use the example of job autonomy (a contextual resource), which can be
used to schedule work efficiently, thus saving time (a personal resource). In respect of refugee employees, a strong diversity climate is
likely to provide the necessary conditions for an individual's personal psychological resources (PsyCap) to flourish. For example, a
strong diversity climate (a contextual resource) is likely to foster resilience (a personal resource), as a workplace climate which
prioritizes the importance of embracing diversity and eliminating discrimination is likely to act as a contextual resource from which
individuals can draw on, and bounce back from, after setbacks. More specifically, if a refugee employee encounters discrimination in
a workplace that promotes a strong diversity climate, they can be expected to be confident that the organization will support them
through the appropriate formal procedures if they report the problem. The organization may have articulated their policy of anti-
discrimination during employee induction training, and the employee may have previously experienced this principle adhered to in
daily social interactions within their team. This prior knowledge and experience may help to reduce stress that would arise if such an
incident occurred, by reducing expectations that such a problem might occur in the first instance, acting as a buffer of positive
experiences around the event (eliciting support rather than stigmatization), and providing reassurance that the organization will
know how to respond appropriately to such a report by the employee. In such an environment individuals will feel supported by the
organization and believe they will be better able to manage and positively recover from discrimination when it does occur i.e. be
more resilient in the face of negative experiences.
As well as building their resilience, when the organization signals to refugee employees that they will be treated fairly and with
respect by others, they are likely to develop more positive attributions for negative events that happen to them at work (optimism),

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and believe they have the resources to achieve their work goals (hope). Positive attributions, in this context, refer to attributions
made by the refugee to members from the majority cultural group (in this case Australian nationals). When there is a strong diversity
climate in the organization, refugees will be more likely to make positive attributions when faced with discrimination (i.e. the
individual is a bad person) rather than consider it to be typical behavior of the majority cultural group. Through obtaining positive
feedback from others in a work climate that supports diversity, refugee employees are also likely to experience higher levels of self-
efficacy (Stajkovic & Luthans, 1998).
In contrast, when refugees work in a climate which does not respect diversity, and where discrimination against minority groups
is more common, such individuals experience a loss of psychological and social support from their organization. We might expect
their personal psychological resources of hope, optimism, self-efficacy and resilience to diminish as they have limited contextual
resources from which they can draw. In COR theory this has been described as a “loss spiral” (Hobfoll, 1989, p. 521) where loss in
resources from one domain (contextual resources provided by the organization) begets the further loss of resources from another
domain (personal resources) (Hobfoll, 2001). Thus, COR theory also highlights the awareness of employees to contextual resources
that are offered, or should be made available to them, in the workplace. For new refugees in Australian workplaces, this may include
an awareness of the norms of international human rights law and/or specific Australian workplace legislation that support workers
against discrimination.
Hobfoll (2002) argued that low-stress environments are conducive to resource building, as when one does not have to use one's
existing resources, the time is ripe for resource accumulation, which can be used to combat future stressors. As well as creating an
arsenal of resources for future combat, the accumulation of resources also enhances wellbeing, because the possession of resources is
valued. This latter argument explains why PsyCap has a generally positive relationship with work related attitudes. ten Brummelhuis
and Bakker (2012) use COR theory to propose a link between work resources and gains in personal resources that can spread into
different life domains, leading to enhanced home outcomes. Keeping these arguments within the work domain, we argue that
contextual work resources can positively influence personal psychological resources that in turn enhance work attitudes. Previous
research has demonstrated that PsyCap can explain the process by which a supportive organizational climate influences job per-
formance (Luthans, Norman, Avolio, & Avey, 2008).
We extend the literature by proposing that PsyCap (a personal resource) will act as a mediator between contextual resources in the
workplace (in this case diversity climate) and employee attitudes. Specifically, we argue that for refugees, diversity climate provides
the type of supportive and inclusive environment that by its nature, fosters PsyCap, and, hence, that PsyCap will be a key mechanism
that mediates the relationship between diversity climate and the work attitudes of affective organizational commitment and turnover
intentions. Accordingly, we hypothesize:
Hypothesis 1a. Psychological capital will mediate the positive relationship between diversity climate and affective organizational
commitment.
Hypothesis 1b. Psychological capital will mediate the negative relationship between diversity climate and turnover intentions.

2.4. Ethnic identity

Prior work on ethnic identity has typically drawn on the work of social psychologists studying group identity (Phinney & Ong,
2007). In this work, ethnic identity is considered to be one key aspect of an individual's social identity, defined by Tajfel (1981) as the
“part of an individual's self-concept which derives from [one's] knowledge of [one's] membership of a social group (or groups)
together with the value and emotional significance attached to that membership” (p. 255). Based on this definition, ethnic identity
has been conceptualized as the part of an individual's self-concept that is derived from an individual's knowledge of his/her own
ethnic group, and the value and emotional significance attached to membership of that group (Lee & Yoo, 2004). A strong ethnic
identity not only fosters an individual's sense of belonging to, and pride in, being a member of his/her ethnic group, but also leads an
individual to make a conscious effort to learn about his/her ethnic group (Yoo & Lee, 2008).
Ethnic identity is likely to be particularly strong amongst refugees from the Middle East and Central Asia (from which participants
in our sample had migrated), as such cultures are characterized by high levels of collectivism. Empirical work has shown that people
from collectivistic cultures typically have a stronger sense of ethnic identity than those from more individualistic cultures, as they feel
more belonging and connections to others with the same cultural background and beliefs (Combs, Milosevic, Jeung, & Griffith, 2012;
Hattrup, Ghorpade, & Lackritz, 2007). This ethnic identity is likely to be further exacerbated as a result of the trauma and negative
experiences that has resulted from the individual's refugee status, particularly when they have experienced discrimination.
Growing research has examined how an individual's ethnic identity shapes their responses to racial discrimination (for example,
Noh, Beiser, Kaspar, Hou, & Rummens, 1999; Yoo & Lee, 2008). Drawing on rejection sensitivity theory (Downey & Feldman, 1996),
this work has generally shown that individuals with high ethnic identity will respond more negatively to discrimination than those
with low ethnic identity. Downey and Feldman (1996) developed rejection sensitivity theory to explain the adverse effects on
wellbeing of rejection, for individuals particularly sensitive to rejection in close relationships. The same theory was applied to
migrant groups and refugees, showing that individuals with a strong sense of ethnic identity are more likely to experience adverse
implications from racial discrimination. Noh et al. (1999) found that the relationship between perceived racial discrimination and
depression for refugees living in Canada was stronger for individuals high in ethnic identity compared to those low in ethnic identity.
Yoo and Lee (2005) found that minority group members with high ethnic identity exhibited more negative responses when they
perceived high levels of racial discrimination. They found that minority group members with high ethnic identity reported lower

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positive affect compared to those with low ethnic identity, in response to racial discrimination (Yoo & Lee, 2008).
Although prior research has focused on the negative consequences of racial discrimination (Noh et al., 1999; Yoo & Lee, 2008), we
believe that increasing salience of category membership may lead to a greater receptivity of ethnic identity. Just as negative in-
teractions may have strong negative consequences if category salience is high, positive experiences may result in stronger affirmation.
As well as influencing their negative response to racial discrimination as has been shown in previous research, we could expect those
with high ethnic identity to respond more positively to organizational policies and practices that support diversity. As individuals
high in ethnic identity are more sensitive to racial discrimination, a climate in which diversity is valued and cultural differences
respected is likely to resonate more positively with those high in, as opposed to those low in, ethnic identity.
Hypothetically, increasing the likelihood that they will not be subject to discrimination at work, a strong diversity climate would
make refugee employees feel more confident and hopeful that they will be able to achieve their work goals, develop more positive
attributions for things that happen to them at work (optimism), and be better able to bounce back after failure (resilience).
This leads us to the following hypotheses:
Hypothesis 2a. Ethnic identity will moderate the positive effects of diversity climate on affective organizational commitment through
psychological capital, in such a way that the relationship will be stronger for employees with higher levels of ethnic identity.
Hypothesis 2b. Ethnic identity will moderate the negative effects of diversity climate on turnover intentions through psychological capital, in
such a way that the relationship will be stronger for employees with higher levels of ethnic identity.

3. Method

3.1. Sampling data collection procedures

Data were collected from 135 refugee participants living in metropolitan Melbourne, Australia, from four ethnic backgrounds:
Iranian, Iraqi, Afghanistani (Hazara) and Pakistani. People from these ethnic groups are regarded as hard-to-reach populations (Ellar-
Gray, Jeffrey, Choubak, & Crann, 2015) as they are refugees (Sulaiman-Hill & Thompson, 2011) and are from conflict zones or have
been exposed to high risk environments by virtue of their refugee claims. To gain access to such a hard-to-reach population, we hired
research assistants from each of the sub-groups. Each of the research assistants were former refugees themselves, spoke fluent English,
were university educated and had retained strong connections in the refugee community.
We believed that the research assistants' community membership would increase our access to the relevant population sub-
groups. Accordingly, we used a snowball sampling approach. Our research assistants accessed their own contacts in the local
community to recruit participants. The selection criteria included all of the participants having work rights related to their Australian
visa or citizenship.
Data collection was undertaken on two occasions in 2015, six months apart. The use of longitudinal data reduced the likelihood of
common method biases associated with cross-sectional data (Podsakoff, MacKenzie, & Podsakoff, 2012), and allowed for temporal
separation between the independent and dependent variables. At time one, we collected data on diversity climate, ethnic identity and
control variables. At time two we collected data on psychological capital, affective organizational commitment, job satisfaction and
turnover intentions. Prior to data collection, both sets of questionnaires were translated by professional translators from English into
each of the languages (Persian, Arabic, Hazar and Urdu) and were checked by the research assistants using the backtranslation
procedure (Brislin, 1993). Consent was obtained and confidentiality assured prior to their participation.
At time one we received completed questionnaires from 173 participants (30 Iraqi, 26 Iranian, 67 Afghanis and 50 Pakistani).
Some participants chose not to participate in the second round of data collection, leaving us a total of 135 completed questionnaires
(18 Iraqi, 26 Iranian, 44 Afghanis and 47 Pakistani). The drop out rate was just under 22%. The participants had been working in
their organizations for an average of 2.2 years. The average age of participants was just under 33 years of age. They had been living in
Australia for 4.8 years on average. 85% of the participants were male. This reflects the participant recruitment method used, which
prioritizes building up a relatively small sample of individuals amongst personal contacts who are referred by other personal contacts
using social networks, rather than seeking to obtain a sample representative of the general population (Atkinson & Flint, 2001). It is
also indicative of the high proportion of young males characteristic of the Middle East and Central Asian IMA refugee groups
(Melchior, 2015).

3.2. Measures

We drew on a number of scales widely used in previous research, including that involving ethnic minorities. The scales used to
measure each variable are highlighted below:

3.2.1. Independent variable: perceptions of the diversity climate

Employee perceptions of the diversity climate was measured using Pugh, Dietz, Brief, and Wiley's (2008) 4-item scale, one of the most
widely used tools measuring employee perceptions of the diversity climate. This scale has been validated across a wide range of cultural
and institutional contexts (Madera, Dawson, & Neal, 2013; Singh & Selvarajan, 2013). Sample items included “The organization makes it
easy for people from diverse backgrounds to fit in and be accepted” and “Where I work, employees are developed and advanced without
regard to the gender or the racial, religion, or cultural background of the individual.” The Cronbach's Alpha for this scale was 0.81.

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3.2.2. Mediator variable: psychological capital

The PCQ-12 short psychological capital scale was used to measure psychological capital, adapted from the original 24-item
psychological capital measure and validated by Luthans et al. (2007). This scale has been validated in numerous contexts
(Luthans & Youssef-Morgan, 2017). Permission to use this measure was obtained from Mind Garden (www.mindgarden.com). The
scale captures the four dimensions of PsyCap. Sample items included “I feel confident analyzing a long-term problem to find a
solution” (self-efficacy), and “I usually take stressful things at work in my stride” (resilience). The Cronbach's Alpha for this scale was
0.91.

3.2.3. Outcome variable: affective organizational commitment

Affective organizational commitment was measured using 5-items from the 6-item scale developed by Meyer et al.'s (1993). This
scale has been widely validated across a range of cultural and institutional contexts (Meyer et al., 2012). Sample items included “I
have a strong sense of belonging to my organisation” and “My job activities are personally meaningful to me.” One item (an outlier)
was excluded from analysis. The Cronbach's Alpha for this scale was 0.90.

3.2.4. Outcome variable: turnover intention

Turnover intentions were measured using 3 items from Farh, Tsui, Xin, and Cheung (1998). This scale has been widely validated
in previous research (Chen & Francesco, 2000; Newman, Thanacoody, & Hui, 2011). Sample items included “I may leave this com-
pany and work for another company in the next year” and “I feel that I have too few options to leave this organization.” The
Cronbach's Alpha for this scale was 0.77.

3.2.5. Moderator variable: ethnic identity

Six-items from the revised multigroup ethnic identity measure (MEIM-R) developed by Phinney and Ong (2007), to measure
ethnic identity, accounting for cultural, race, language and kinship identity and positive self-attribution of identity (Helms, 2007).
The MEIM-R is the most widely validated measure of ethnic identity in existence as highlighted in meta-analytical work
(Smith & Sylva, 2011). Sample items included “I have a strong sense of belonging to my own ethnic group” and “I feel a strong sense
of attachment to my ethnic group.” The Cronbach's Alpha for this scale was 0.91.

3.2.6. Control variables

Although we collected data on a number of demographic variables in our survey such as age and gender, we did not include all of
them in our analysis due to missing data. We therefore only decided to include a dummy variable for gender (0 = female, 1 = male)
as this was the only control variable which was positively correlated to our dependent variables. We also decided to control for
gender as previous research has found significant differences between males and females experiences in resettling into a new culture
(Young & Chang, 2015). This may influence the extent to which individuals of different genders build personal psychological re-
sources and respond to a climate thet supports diversity.

4. Analysis

Our hypotheses were tested using ordinary least squares (OLS) regression with the conditional process modeling (PROCESS)
program for SPSS (Hayes, 2013). The PROCESS Macro enabled us to conduct bootstrapping tests for moderation and moderated
mediation to assess the indirect effects of employee perpcetions of diversity climate on their work attitudes through the mediating
mechanisms of psychological capital, at diferent levels of ethnic identity. Prior to analysis all variables were z-standardized to reduce
problems associated with multicollinearity in moderated regression (Tabachnick & Fidell, 2013). Evaluation of regression assump-
tions of normality, homoscedasticity, linearity, and the absence of multicollinearity were satisfactory.

5. Results

The means, standard deviations, and intercorrelations amongst the study variables are presented in Table 1.

5.1. Construct validity

Prior to testing the hypotheses, a confirmatory factor analysis (CFA) using LISREL 9.2 was conducted to examine the construct
validity of the key variables used in the study. The hypothesized five-factor model (diversity climate, psychological capital, affective
organizational commitment, turnover intentions and ethnic identity) yielded an acceptable fit to the data χ2 (df = 199) = 385.29,
IFI = 0.89, CFI = 0.89, RMSEA = 0.08, SRMR = 0.07. The fit of alternative models presented in Table 2 were inferior to that of the
hypothesized five-factor model (see Table 2).

5.2. Mediation

To test our mediation hypotheses, we used model 4 of the PROCESS macro devised by Hayes (2013) in SPSS. As can be seen in
Table 3 below, there was a positive relationship between diversity climate and PsyCap (β = 0.20, p < 0.05), and between both
PsyCap and organizational commitment (β = 0.63, p < 0.01) and PsyCap and turnover intentions (β = 0.21, p < 0.05). This

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Table 1
Means, standard deviations, and correlations amongst the study variables.

Variable M SD 1 2 3 4 5 6 7

1 Gender 0.85 0.36

2 Tenure 2.20 1.48 0.06
3 Age 32.71 8.45 0.070 0.13
4 Diversity climate 3.84 0.80 0.15 0.06 0.24⁎⁎
5 PsyCap 3.67 0.73 0.22⁎ 0.23⁎ 0.11 0.33⁎⁎
6 AOC 3.35 0.97 0.36⁎⁎ 0.12 0.01 0.17 0.64⁎⁎
7 Turnover intentions 3.13 1.00 − 0.14 −0.16 − 0.14 − 0.10 −0.23⁎⁎ − 0.22⁎
8 Ethnic identity 3.96 0.82 0.39⁎⁎ −0.02 0.12 0.27⁎⁎ 0.26⁎⁎ 0.22⁎ 0.06

AOC is affective organizational commitment, Gender is coded as 1 = male and 0 = female.

⁎
p < 0.05.
⁎⁎
p < 0.01.

Table 2
Results of Confirmatory Factor Analysis.

Model ×2 df IFI CFI RMSEA SRMR

Hypothesized five-factor model 385.29 199 0.89 0.89 0.08 0.07

Four factor model: diversity climate and ethnic identity combined into one factor 547.22 203 0.80 0.80 0.11 0.11
Four-factor model: affective organizational commitment and tunrover intentions combined into one factor 492.39 203 0.84 0.83 0.10 0.09
One-factor model 1319.09 209 0.37 0.36 0.20 0.20

IFI is the incremental fit index; CFI, the comparative fit index; RMSEA, the root-mean-square error of approximation; and SRMR, the standardized root mean square
residual.

Table 3
Results of mediation and moderated mediation regression analyses.

Variables Model 1PsyCap Model 2 Model 3

Affective organizational commitment Turnover intentions

Gender 0.03 0.06

Diversity climate 0.20⁎ − 0.12 − 0.03
PsyCap 0.63⁎⁎ − 0.21⁎
Ethnic identity − 0.14
Diversity climate × Ethnic identity 0.17⁎
R2 0.58 0.75 0.06

Note. Standardized fixed-effects regression coefficients reported.

Gender is coded 0 = female, 1 = male.
⁎
p < 0.05.
⁎⁎
p < 0.01.

provides preliminary support for hypotheses 1a and 1b. To confirm the existence of mediation we used bias-corrected bootstrapping
to examine the significance of indirect effects based on the recommendations of Preacher and Hayes (2008). The results of boot-
strapping analysis are presented in Table 4, below. As can be seen, a bias-corrected bootstrap of 1000 resamples revealed that the
indirect effect of diversity climate on affective organizational commitment through PsyCap was 0.12 (95% CI = 0.001 to 0.25). As
zero is not contained in the 95% confidence interval for the indirect effect, Hypothesis 1a was supported.
We then tested whether PsyCap fully or partially mediated the relationship between diversity climate and affective organizational
commitment by examining whether the direct effect of diversity climate on affective organizational commitment (controlling for

Table 4
Conditional Indirect Effects of Diversity Climate on Affective Organizational Commitment and Turnover Intentions through PsyCap.

Outcome Value of moderator (ethnic identity) Indirect effect 95% CI Lower limit 95% CI Upper limit

Affective organizational commitment − 1 s.d. 0.01 − 0.17 0.22

Mean 0.12⁎ 0.001 0.25
+ 1 s.d. 0.23⁎ 0.09 0.41
Turnover intentions − 1 s.d. − 0.01 − 0.11 0.06
Mean − 0.04 − 0.16 0.01
+ 1 s.d. − 0.08⁎ − 0.24 − 0.003

⁎
p < 0.05. Bias-corrected bootstrap using 1000 resamples. SE = bootstrapped standard error. CI = confidence interval.

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PsyCap) was statistically significant. As can be seen in Model 2 of Table 2, the direct effect of diversity climate on affective orga-
nizational commitment was not statistically significant when the mediator was included (β = − 0.12, p > 0.05), supporting an
inference of full mediation.
In contrast, no support was found for Hypothesis 1b. As can be seen in Table 4 (below), a bias-corrected bootstrap of 1000
resamples revealed that the indirect effects of diversity climate on turnover intentions through PsyCap was − 0.04 (95% CI = − 0.16
to 0.01). As zero is contained in the 95% confidence interval for the indirect effect, Hypothesis 1b was not supported, in spite of the
significant relationships between diversity climate and PsyCap and PsyCap and turnover intentions.

5.3. Moderated mediation

To test the moderated mediation relationships in hypotheses 2a and 2b, we followed the approach suggested by Hayes (2013).
Consistent with our theoretical arguments ethnic identity moderated the path from diversity climate to PsyCap, that is, at the first
stage (independent variable to mediator) of the mediation model (Edwards & Lambert, 2007). As shown in Table 3, the diversity
climate/ethnic identity interaction was statistically significant for PsyCap (β = 0.17, p < 0.05).
Model 7 of the PROCESS Macro was then used to calculate the conditional (simple) indirect effects of diversity climate on both
affective organizational commitment and turnover intentions through PsyCap. The conditional indirect effect measures the strength
of the indirect effect at different values of the moderator (ethnic identity). As recommended by Hayes (2013), we examined the
statistical significance of the conditional indirect effect at one SD below and one SD above the mean for ethnic identity (see Table 4,
above).
A bias-corrected bootstrap using 1000 resamples found that the conditional indirect effect of diversity climate on affective or-
ganizational commitment through PsyCap was weakest (non-significant) at one SD below the mean value for ethnic identity
(bootstrapped indirect effect = 0.01; 95% CI −0.17 to 0.22) and strongest (highly significant) at one SD above the mean value for
ethnic identity (bootstrapped indirect effect = 0.12; 95% CI 0.09 to 0.41). Similarly, a bias-corrected bootstrap using 1000 resamples
found that the conditional indirect effect of diversity climate on turnover intentions through PsyCap was weakest (non significant) at
one SD below the mean value for ethnic identity (bootstrapped indirect effect = − 0.01; 95% CI −0.11 to 0.06) and strongest
(highly significant) at one SD above the mean value for ethnic identity (bootstrapped indirect effect = 0.08; 95% CI −0.24 to
−0.003). Overall, these results are supportive of Hypothesis 2a and 2b. The influence of diversity climate on both affective orga-
nizational commitment and turnover intentions through PsyCap is stronger for individuals high in ethnic identity.

6. Discussion

In the present study we found that diversity climate influenced the organizational commitment of refugee employees by en-
hancing their psychological capital, the personal psychological resources of hope, optimism, self-efficacy and resilience. However, we
did not find evidence of the mediated effects of psychological capital on the relationship between diversity climate and turnover
intentions. Rather, the effects of diversity climate were conditional on the extent to which refugees identified with their ethnic group.
Our findings make a significant contribution to the fields of organizational psychology and refugee studies. First, the research
supports the assertions of COR theory by illustrating that refugee employees' access to contextual resources from the work en-
vironment, in the form of a climate that values diversity and discourages discrimination against minority groups, promotes their
personal psychological resources of hope, optimism, self-efficacy and resilience. In turn, this has a positive effect on their organi-
zational commitment. In identifying the psychological processes by which refugee employees perceptions of the diversity climate in
their organizations influence their positive work attitudesin the form of organizational commitment, these findings contribute to a
growing literature (Ortlieb & Sieben, 2013; Peretz, Levi, & Fried, 2015; Youssef-Morgan & Hardy, 2014) which highlights the benefits
to organizations of introducing strategies aimed at heightening diversity climate. However, we did not find significant effects of
diversity climate on the turnover intentions through the mediating mechanism of PsyCap. Although we are cautious about discussing
non-significant results, it may be explained by the fact that refugee employees find it difficult to obtain work (Jackson & Bauder,
2014), and, as such, may strive to maintain employment even when they are not treated with respect at work and have diminished
personal psychological resources.
Our second contribution is that we identified an important boundary condition of the relationships between diversity climate and
work attitudes of refugee employees through the mediating mechanism of PsyCap. In particular, we found that the mediated effects of
diversity climate on both affective organizational commitment and turnover intentions were significantly stronger for those with
higher levels of ethnic identity. In highlighting the importance of ethnic identity as a self-concept variable which influences how
employees from a minority group interpret and respond to the diversity climate within their organization, our findings are supportive
of rejection sensitivity theory (Downey & Feldman, 1996) and the findings from recent work that suggests that employees with high
levels of ethnic idenity are more sensitive to racial discrimination (Noh et al., 1999; Yoo & Lee, 2008). While prior research has
predominantly focused on the negative consequences of discrimination for individuals with high levels of ethnic identity, the present
study suggests that such employees will benefit more when working in a climate that values diversity. It therefore shows that
organizations can benefit from ethnic diversity through investing in strategies aimed at strengthening the diversity climate.
Our third contribution was to study how a difficult-to-access and under-researched population (i.e. refugees) adapt to working in
a new culture (Fleahy, 2016). In particular, our study provides detail on the factors which enhance the work attitudes of refugees
from Afghanistan, Iran, Iraq, and Pakistan, who have typically arrived as IMAs when seeking refuge in Australia, (arrivals prior to
August 13, 2012) and have been subsequently granted work rights (Australian Human Rights Commission, 2012a, 2012b). Their

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adaptation to Australian life has continuing relevance to refugee policy development since the government has prohibited IMAs
arriving after this date from living and working in Australia. Our findings indicate that such individuals, especially those with high
levels of ethnic identity, are more likely to be committed to organizations which they believe value diversity through formal
structures, informal values and social integration of under-represented employees, and less likely to leave the organization.
The study makes a forth and final contribution by highlighting how organizations can foster positive work attitudes amongst
refugee employees through enhancing their personal psychological resources. The findings of this study have implications for or-
ganizations who employ, or who are looking to employ, staff members with a refugee background. First, as our findings revealed
strong effects of diversity climate on refugee employees' PsyCap and affective organizational commitment, they highlight the need for
organizations to develop organizational policies and practices that fully integrate refugees into the workplace and prevent dis-
crimination against them in order to support refugee integration at work. Second, our finding that refugee employees with high levels
of ethnic identity respond more positively to a climate in which diversity is valued, highlights the need for organizations to un-
derstand how employees may respond differently to their diversity policies and practices.
Organizations should consider adopting a number of strategies to enhance their perceptions of the diversity climate in the or-
ganization with the aim of fostering positive attitudes towards the organization. Beyond undertaking basic cultural awareness
training to increase refugees' awareness of Australian work culture, organizations who have a multicultural workforce that may
include those from a refugee background, should consider introducing team-building activities which focus on developing rapour and
trust between employees from different ethnic and cultural backgrounds. These activities will allow refugees to share knowledge of
their culture with employees from other cultural groups which is likely to counteract negative sterotyping and discrimination against
them. In addition, organizations should consider working with third-party agencies that assist refugees in the community to develop
support mechanisms that are appropriate for refugees such as career counseling, mentoring and 360-degree feedback sessions to assist
them to adapt to work in a new cultural context (Hsieh, 2012). These strategies are collectively likely to enhance refugee employees'
perceptions of the diversity climate in their organization, and in turn enhance their commitment and reduce their turnover intentions
through fostering higher levels of PsyCap.

7. Limitations and suggestions for future research

This study has some limitations that need to be taken into account when interpreting its findings. First, as the mediating and
dependent variables were collected at the same time point, the relationships between these variables should not be interpreted as
being causal. In future these variables can be collected across multiple time points to determine causality. Second, the use of self-
report data from a single source resulted in the potential for common method bias. Confirmatory factor analysis indicated adequate
discriminant validity between study variables in this study, such that common method bias was not a major problem. In order to
eliminate such concerns in future, researchers may consider other-rated measures of variables such as PsyCap (Newman et al., 2014)
in their research design.
Given that respondents were not working together in the same organization we utilized a perceptual variable to capture diversity
climate. It was not possible to ascertain whether others in the organization shared the refugee's perceptions of diversity climate. In
future, ratings of diversity climate could be collected from a number of employees and aggregated together to provide a stronger
measure of diversity climate.
Another limitation of the study relates to the fact that we did not control for the industry in which the employees worked or their
position in the organization. This information was not collected in order to ensure high response rates amongst participants from a
refugee background by not provoking their vulnerability or mistrust through asking them to provide detailed information that could
potentially identify them and their employer. In light of this limitation future research might investigate whether the effects of
diversity climate on psychological capital and job attitudes are stronger in certain industries and for individuals at different levels of
the organizational hierarchy.
Other avenues for future research include examining the usefulness of different strategies aimed at strengthening refugee em-
ployees' perceptions of the diversity climate within their organizations as this was not specifically investigated in the present study.
For example, organizations might see whether the introduction of cultural awareness programmes, team building programmes and
mentoring/counseling programmes for refugees and employees from other cultural groups in the organization are likely to foster
their perceptions of the diversity climate.
We have also suggested that COR (Hobfoll, 1989, 2001) theory provides a perspective on refugees' awareness of their rights in the
workplace linked to their expression of ethnic identity and personal histories (invoking the developmental history concept, in
Hobfoll, 1989), which may contribute to explaining the link between strong ethnic identity and sensitivity to discrimination beyond
rejection sensitivity theory (Downey & Feldman, 1996). This has implications for the conceptualization of refugees as passive actors
regarding discrimination in the workplace, where Australian regulations support anti-discrimination.

8. Conclusion

The present study contributes to our understanding as to how organizations can elicit positive work attitudes amongst refugee
employees. Consistent with the tenets of COR theory (Hobfoll, 2001), we found that the diversity climate of the organization elicited
higher levels of organizational commitment amongst refugee employees through enhancing their psychological capital. However,
diversity climate had no significant effects on their turnover intentions, perhaps due to other contextual factors. The findings were
also supportive of rejection sensitivity theory (Downey & Feldman, 1996) in that they showed the effects of diversity climate on both

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organizational commitment and turnover intentions were stronger for refugee employees with a strong sense of identity with their
ethnic group (ethnic identity). We hope that our findings contribute to providing a platform from which further research can be
developed that helps us understand how organizations can support refugee employees at work and how ethnic diversity can benefit
organizations.

Acknowledgements

This research was supported by a discovery project research grant (DP140100774) from the Australian Research Council.

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