When diversity leads to divided teams: A multi-level moderated mediation model of team faultlines and employee engagement

Team faultlines are hypothetical dividing lines that split a team into two or more subgroups based on individual (diversity) attributes, which negatively influence team process and outcomes. Linking with diversity literature and building on social identity and optimal distinctiveness theories, our study examined a multilevel moderated mediation model on whether, how, and when team faultlines would affect hotel frontline employees’ work engagement using data from 337 Chinese hotel employees nested in 102 work groups, collected at multiple times. The results indicated that team faultlines negatively influenced hotel frontline employees’ work engagement, and that individual perceived psychological safety played a mediating role. Inclusive leadership moderated the indirect relationship between team faultlines and employees’ work engagement via psychological safety, thus providing a more optimistic view that measures can indeed be taken to mitigate the negative impacts of team faultlines.