This study examines the role of diversity management practices (DMP) in employee engagement
in Hungary’s service sector. It also studies the mediating role of trust climate in
this relationship. Using a self-administered questionnaire completed by 461 foreign
employees, the researchers employed structural equation modelling (SEM) to test this
model. The results show that trust climate fully mediates the relationship between
DMP and employee engagement. Among the studied DMP, diversity training and performance
appraisal had the strongest positive impact on trust climate and employee engagement
accordingly, while career development had no significant effect. The findings highlight
the critical role of trust climate in enhancing the effectiveness of DMP in fostering
positive employee outcomes, particularly in multicultural workplaces. This study advances
diversity management literature by providing evidence from Hungary, and by emphasizing
the strategic importance of trust in enhancing employee engagement through inclusive
HRM practices.
