The Paradox of Meritocracy in Organizations

Participants were asked to take on managerial roles, review profiles of fictional employees (male and female) and make compensation decisions. Participants were randomly assigned to receive different information on the core values of the organization they pretended to be working for – one set of values emphasized meritocracy and the other did not. When merit was emphasized, research participants provided, on average, higher rewards to a male employee over an equally qualified female employee (in the same job, with the same supervisor, and with equivalent performance evaluations).

• Participants who were assigned to play the role of a manager in the company that emphasized meritocracy, rewarded male employees a bonus that was $46 higher, on average, than equally performing females (mean bonus of $418.8 vs. $372.4).
• Participants, who were assigned to the set of core values that emphasized managers’ discretion (the non-meritocratic condition) rewarded female employees  a bonus that was $51 higher, on average, to that of an equally performing male employee (mean bonus of $419.7 vs. $368.2). The authors speculate that this effect might be driven by the fact that managerial discretion was emphasized in the non-meritocratic condition and this might have signaled that the evaluations were biased against women. Participants may have felt the need to correct for this bias by favoring females.
• In an additional experiment, when the language emphasizing managerial discretion was removed from the non-meritocratic condition, participants no longer favored female employees over male employees and there was no significant difference in the bonuses assigned.
• The gender bias displayed on the merit condition was most salient in participants’ decisions to assign bonuses, and smaller (and not statistically significant) in other measures of their assessment of employees such as hires, promotions, and terminations.

In short, emphasizing meritocratic values at the organizational level had a counterintuitive effect, which strengthened biases in favor of men over equally performing women. This is the "paradox of meritocracy", a situation where people can show greater levels of gender bias when they are in a context that emphasizes meritocracy. Ironically, working in an environment that highlights meritocracy might make individuals believe that they are fair and objective, and as a result, make them more likely to display their biases. The authors suggest that promoting less managerial discretion, more accountability, and transparency in the workplace can mitigate these negative effects. 

Three studies were conducted at a business school in a private university in the northeastern United States.  A total of 445 masters of business administration (MBA) students participated across the three studies. MBA students, with managerial experience, were asked to play the role of manager in a hypothetical organization. The participants were randomly assigned to receive one of two different sets of organizational core values - one that emphasized meritocracy (emphasizing fairness of compensation based on employee performance), and another set that did not emphasize meritocracy (emphasizing regularity of evaluation and managerial autonomy). All participants were given three employee profiles to examine - two profiles included one male and one female employee with similar performance evaluations, which formed the basis of the analysis. Based on the performance reviews, the participants were asked to decide the amount of bonus each employee should receive and to evaluate the employee on other measures (including promotion, retention, and termination recommendations).

The first experiment had 229 participants (163 male, 64 female, and 2 unknown) and was divided into three sessions. In this study, the third employee profile was male and had a lower performance score. The second experiment included 115 participants (70 male and 45 female) and the procedure was identical to the first experiment, except that the third ‘filler’ employee profile was always female. The second experiment was designed to counterbalance the findings of experiment one, where the third profile being male could have influenced the participants' assessments. The third experiment tested the effects of emphasizing managerial discretion in the non-meritocratic condition. A new non-meritocratic condition was designed to signal that managers had less discretion than the non-meritocratic condition used in experiments one and two. The third experiment included 101 participants (62 men and 39 women) and the procedure was identical to that of experiment one, except with the updated non-meritocratic condition that signaled reduced managerial discretion.