Managers who believe themselves to be fair and objective judges of ability often overlook women and minorities who are deserving of job offers and pay increases.
But Castilla’s analysis revealed some very non-meritocratic outcomes. Women, ethnic minorities, and non-U.S.-born employees received a smaller increase in compensation compared with white men, despite holding the same jobs, working in the same units, having the same supervisors, the same human capital, and importantly, receiving the same performance score. Despite stating that “performance is the primary bases for all salary increases,” the reality was that women, minorities, and those born outside the U.S. needed “to work harder and obtain higher performance scores in order to receive similar salary increases to white men.”
These findings led Castilla to wonder if organizational cultures and practices designed to promote meritocracy actually accomplished the opposite. Could it be that the pursuit of meritocracy somehow triggered bias? Along with his colleague, the Indiana University sociology professor Stephen Bernard, they designed a series of lab experiments to find out. Each experiment had the same outcome. When a company’s core values emphasized meritocratic values, those in managerial positions awarded a larger monetary reward to the male employee than to an equally performing female employee. Castilla and Bernard termed their counter intuitive result “the paradox of meritocracy.”
“Our biases lead to sub-optimal talent selection decisions when evaluating resumes,” says GapJumpers cofounder Kédar Iyer. “By scaling the successful and proven method of blind performance auditions, GapJumpers’ results show that real work performance trumps labels on a resume.”
In addition to blind auditions, transparency and accountability also support more meritocratic outcomes. Recently, Castilla published the results from a longitudinal study he conducted with the same large service-sector company that he had studied years earlier. After learning from Castilla’s analysis that there were pay disparities in their organization (white men received more compensation than equally performing women, minorities, and non-U.S.-born individuals) the company asked Castilla to recommend practices to close the pay gap.
Drawing on research showing that transparency and accountability reduce bias because, among other things, transparency provides the information needed to track inequity and accountability puts people on notice that their decisions will be monitored, Castilla counseled the company on actions they could take.
The company then made many changes such as creating a performance-reward committee to monitor compensation increases and sharing information with top management about pay broken down by gender, race, and foreign nationality. When Castilla analyzed the data five years after these changes were introduced he found that the demographic pay gap had disappeared.
American beliefs about the rightness of meritocratic ideals often leads to the belief that those ideals are what guides society. But research shows that a real commitment to meritocracy requires understanding that America hasn’t gotten there—at least not yet. It is this insight that leads to the adoption of practices that will ultimately result in a society where merit truly does equal ability + effort.
