Men in merit-based organizations received higher bonuses than women, despite identical job performance evaluations. This bias did not surface in organizations that did not emphasize merit.

By Leah Eichler (Contributing Writer, Femme-O-Nomics)

Imagine a business environment where the best performers garner the highest wages and receive the most appropriate promotions. Sounds like your average, everyday workplace, right? Think again.

The idea that compensation, job allocation and even business opportunities correspond with merit seems almost ubiquitous in the workplace and in an ideal world, it should even out discriminatory practices. In fact, some well-known business leaders tout the meritocracy as the de-facto approach and any discrepancy between men’s and women’s roles and salaries can be explained according to those principals.

For example, Jack Welch, the former head of General Electric, told a group of female executives at an event held by the Wall Street Journal in early May that the key to getting ahead is outperformance — end of story. More recently, at a TechCrunch Disrupt Conference in New York, Greg McAdoo, a partner at Sequoia Capital, called the venture capital business a meritocracy, while admitting that pockets of sexism likely exist.

Although the idea of a meritocracy sounds logical, even reasonable, it unfortunately doesn’t correspond with the realities of the business world. And the notion that women would get further ahead if only they tried harder, or so I interpret Mr. Welch’s comments, ignores plenty of research and evidence indicating otherwise.

“The idea that, if women are underrepresented at the high echelons of corporations, it must be because they are less qualified, ignores one of the basic facts of life: gender stereotyping,” asserted Dr. Leonard Mlodinow, a physicist at the California Institute of Technology (Caltech) and the author of Subliminal: How Your Unconscious Mind Rules your Behavior. Unconscious prejudices remain so powerful that people even apply gender stereotypes to a computer, judging those with a female voice to be less competent in explaining technology issues than a male one, he explained.

Dr. Mlodinow cites another study in which physics students, after being given a lecture, were asked to judge their professor’s competence. Half saw a man deliver a lecture and the other half saw a woman but both were actors delivering the identical script. Despite this, the students judged the male actor as being significantly more qualified.

In fact, companies that actively promote meritocracy may be at risk of introducing greater bias than those that don’t, according to a 2010 study titled the The Paradox of Meritocracy in Organizations published by Administrative Science Quarterly. In this experimental study, Professor Emilio J. Castilla, at the MIT Sloan School of Management and Professor Stephen Benard, at Indiana University, created a fictitious company and asked male and female participants with managerial experience to evaluate small groups of employees based on their performance.

The results showed that men in merit-based organizational environments received higher bonuses than women, despite identical job performance evaluations. This bias did not surface in organizational environments that did not emphasize merit.

The finding that managers in organizations that promote meritocracy show greater bias in favor of men, while it may seem counter-intuitive, remains consistent with broader scholarship on the topic, explained Dr. Castilla.

“For example, studies on cognitive bias have found that in contexts where individuals are lead to feel unbiased, fair, or objective, they are more likely to then behave in biased ways,” he related, adding that “drawing on the culture and cognitive tradition, organizations promoting meritocracy as a cultural value can ironically yield unintended behaviors, in part by leading managers to feel unbiased, fair, or objective, and as a result to become more likely to express individual bias toward women and racial minorities when making employment decisions.”

To counter-balance the “paradox of meritocracy” effect, Dr. Castilla suggests that companies focus on introducing organizational practices and structures aimed at increasing transparency and accountability, and also limiting discretion for managers to exert strong influences in determining bonuses.

“My work serves a cautionary lesson about potential unintended adverse efforts to reward merit in the workplace,” Dr. Castilla said. And he encourages companies to better design and employ programs so that potential opportunities for bias are eliminated.

Although the notion of meritocracy suffers from some serious holes in its logic, those who disagree with the concept risk going against a very strong tide. “It’s like disagreeing with ‘motherhood and apple pie’ and the ‘American way’ of rugged individualism and self achievement,” admitted Atlanta-based Frank McCloskey, who served as the first vice-president of diversity for Georgia Power.

Despite this, Mr. McCloskey, who now blogs for the site Men Advocating Real Change (MARC), feels many men and women don’t believe that a meritocracy is possible and employee surveys often show that mistrust in management remains a challenge. Mr. McCloskey noted that the perception of unfairness in corporate work environments predates the diversity issue. Back then, if “Joe” received a promotion “Frank” felt he deserved, the perception was that Joe knew someone Frank didn’t, he illustrated.

As the workplace demographic evolved, some white males may claim they didn’t get a job they thought they deserved because of “diversity”. Alternatively, if a white male secures a promotion, it appears to suggest that the old boy’s network remains alive and well.

“The root cause of this workplace challenge is that managers generally have not developed competencies to give individual employees meaningful, on-going job performance and career feedback,” asserted Mr. McCloskey. As a result, “employees are putting their own answer into the vacuum created.”

This post was originally posted at Femme-O-Nomics.

About the guest blogger: Leah Eichler is the Co-Founder of Femme-O-Nomics, a networking application and content portal for professional women. She is also a well-known columnist on issues surrounding women in the workplace. Follow her on Twitter at @femmeonomics.