The paradox of meritocracy

Posted by Carlo Marques on 5 Dec, 2018 1:08 pm

Managers face the challenge of turn their companies into a meritocracy-based organisation. Assessment and reward systems are created, but the problem is way more complex. The Magazine-Review provides an insight into the paradox of meritocracy with the conclusions of experiments conducted by Emilio J. Castilla, MIT Sloan’s Academic Director for The Lisbon MBA.

Grab a dictionary and open it to find the word “meritocracy”. Probably the result is something like “a social system, society, or organisation in which people get success or power because of their abilities”. The definition fits on our common perception that jobs should go not to people who have connections, but to those best qualified for them, regardless of their background.

Companies are investing more on transparency, but, even with a meritocracy-based system, there are issues. That’s why Emilio J. Castilla, MIT Sloan’s Academic Director for The Lisbon MBA, and sociologist Stephen Benard did a study involving more than 400 individuals with managerial experience. They were asked to make bonus, promotion, and termination recommendations for several hypothetical employee profiles based on their annual performance.

In an article, Emilio J. Castilla explains: “We manipulated the gender of the employees being evaluated and altered whether the core values of the company (a hypothetical ‘ServiceOne’) emphasised meritocracy in evaluations and compensation. For the meritocratic version of ServiceOne, the core values were described with statements such as ‘raises and bonuses are based entirely on the performance of the employee’ and ‘ServiceOne’s goal is to reward all employees equitably every year’. For the nonmeritocratic version, the core values of

ServiceOne instead emphasised managerial autonomy and the regularity of evaluation, using statements such as ‘raises and bonuses are to be given based on the discretion of the manager’ and

‘ServiceOne’s goal is to evaluate all employees every year’. To ensure that the study participants had read and considered each of the core value statements carefully, we asked them to indicate whether they agreed with each value by placing a checkmark on a line next to each statement”.

The results showed that, when ServiceOne was explicitly presented as meritocratic, the managers “ tended to favour a male employee over an equally qualified female individual in the same job, with the same supervisor and the same performance evaluation scores”.

“This bias resulted in larger monetary rewards for men. In one set of experiments, we found that managers who were told that their valued organisation merit tended to award men with bonuses that were about 12% higher, on average, than they awarded to equally performing women”, Emilio J. Castilla points out.

In the other case, ServiceOne was not explicitly presented as meritocratic. In the end, the researchers found out that the managers “awarded the female employees with higher bonuses than they gave to male employees”.

“A plausible explanation for that result is that the managers may have been self-compensating for an assumed bias in the performance evaluation scores, given the language about manager discretion used in this nonmeritocratic condition that they thought might favour male employees”.

The good news

 Emilio J. Castilla calls this practice the paradox of meritocracy at organisations. He argues that managers become “less vigilant” when they believe their company is a meritocracy, leading them to “unintentionally” biased decisions. However, it’s not all bad news. MIT Sloan’s Academic Director for The Lisbon MBA says that establishing a more meritocratic workplace doesn’t require an “inordinate amount of time or resources”.

It is all about transparency and criteria. For that reason, managers should create “clear processes” for the hiring and evaluation of employees. “It is also a matter of monitoring and evaluating the outcomes of such company processes, and of bestowing an individual or group within the organisation with the responsibility, ability, and authority to ensure that those formal processes are fair”, Emilio J. Castilla says.

“The collection and analysis of data on people-related processes and outcomes — what is referred to as ‘people analytics’ — are key here, enabling companies to identify and correct workplace biases”, he concludes.

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