The Effect of DEI on Workforce Outcomes Mediation by VRIO in Employee Performance: A PLS-SEM Approach
DOI:
https://doi.org/10.66635/pxnx0509Keywords:
DEI, equity, inclusion, VRIO, employee performance, human capital, PLS-SEMAbstract
This study examined the effect of diversity, equity, and inclusion (DEI) practices on employee performance, with a focus on the mediating role of VRIO-based human capital attributes, using a partial least squares structural equation modeling (PLS-SEM) approach. Data were collected from 500 employees through structured questionnaires measuring equity, inclusion, VRIO dimensions (valuable, rare, inimitable, organized), and employee performance outcomes including moral engagement, productivity/innovation, and retention commitment. Measurement model results demonstrated high reliability and convergent validity, with Cronbach's alpha and composite reliability exceeding 0.9 and average variance extracted (AVE) values above 0.5. Discriminant validity was confirmed through heterotrait-monotrait (HTMT) and Fornell-Larcker criteria. Structural model analysis revealed that equity and inclusion practices had significant positive effects on employee performance, with the interactive effect further enhancing these outcomes. Mediation analysis showed that VRIO-based human capital partially mediated the relationships between DEI initiatives and performance outcomes, emphasizing the strategic role of human capital in translating fair and inclusive practices into tangible workforce effectiveness. The findings highlight that DEI practices not only promote fairness and inclusion but also serve as strategic levers to improve engagement, innovation, and retention, consistent with the Resource-Based View (RBV). Future research could explore longitudinal effects and moderating variables to deepen understanding of VRIO-driven performance outcomes.
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