By Emilio J. Castilla
Meritocracy has recently become an increasingly popular term in corporate communications. But simply calling your organization a meritocracy doesn’t make it one. In fact, research suggests that telling employees that their organization is meritocratic can increase the odds of bias in people-related decisions.
Writing in the Financial Times earlier this year, journalist Emma Jacobs called merit “the word of the moment.” She quoted several corporate statements, such as ExxonMobil saying that it was focused “on building an engaged, global workforce grounded in meritocracy” and the global chair of Boston Consulting Group saying the company wanted to build a “meritocracy where everyone has the opportunity to succeed,” to illustrate how corporations have responded to U.S. President Trump’s executive orders that purport to “restore equality of opportunity and meritocracy.”
At the same time, many major companies, including Meta, IBM, Goldman Sachs, Blackrock, Citigroup, Disney, Pepsi, and Paramount, have recently scaled back or scrapped their diversity, equity, and inclusion efforts. Some business leaders have begun promoting an alternative focus on merit, excellence and intelligence, or “MEI,” an acronym popularized by Alexandr Wang, the CEO of Scale AI. The sheer vigor with which many corporations now emphasize meritocracy—while some silently remove diversity statements and reports from their websites—is problematic, especially in light of my own research into talent management practices and policies.
Having spent decades studying merit-based practices in organizations’ people-management processes, especially those focused on hiring, compensation, promotion, and retention, I worry greatly about companies’ current energetic promotion of meritocratic ideals. This is not because I think meritocracy is a bad thing—in fact, I believe quite the opposite—but because of an observed effect that I have termed the paradox of meritocracy. In a series of experiments, a research colleague and I explored whether emphasizing meritocracy might unintentionally heighten bias. When participants were asked to make bonus decisions for a company that explicitly valued meritocracy, they consistently awarded higher bonuses to men than to equally well-performing women. This gender gap was smaller among participants making decisions for a company that did not promote meritocracy as a core value (Castilla & Benard, 2010).
How could this happen? Surely, managers reminded of their company’s meritocratic ethos should reward equally all employees who performed at the same level? In reality, our research shows that managers can be most biased in their decision-making precisely at the moment they believe their company to be meritocratic. One possible explanation is that the very idea of a meritocratic system may give managers a false sense of confidence that they are being objective and impartial, and consequently become less vigilant about their own biases. This paradox of meritocracy is thus consistent with what researchers have called moral credentialing—or the act of establishing oneself as moral and virtuous—which other research has shown can produce prejudiced, selfish, and other kinds of ethically dubious behavior. For example, a lab study found that participants were more likely to purchase a luxury item if they had recently imagined themselves donating to charity (Khan and Dhar, 2006). Another study found that participants were more willing to prefer a man for a stereotypically male job if they had already been given the opportunity to disagree with sexist statements (Monin and Miller, 2001).
Women, racial minorities, immigrant workers, members of the LGBTQ+ community, and other historically disadvantaged groups thus may face an ominous situation as more companies vocally declare their commitment to meritocracy while abandoning their previously stated commitment to diversity and inclusion. The paradox of meritocracy suggests that the more managers and others in decision-making positions are reassured of their companies’ meritocratic ethos, the less likely they are to reflect on their own biases, often leading to decisions that may disproportionately affect marginalized employees. This is harmful to employees—but it is also harmful to companies. After all, any biases interfering with the implementation of your organization’s talent management strategies can create inefficiencies and impede the organization’s ability to attract, reward, and retain the best talent.
To avoid this, it is vital that leaders rigorously monitor data on their hiring, performance, compensation, promotion, and retention processes/outcomes to ensure that biases and inefficiencies do not undermine their ability to identify, advance, and reward their talent. A talent analytics approach can help organizations do just that—ensuring that everyone, regardless of background, has an equal chance to thrive if they are talented, motivated, and hardworking. That, to me, is the essence of a true meritocracy.
Emilio J. Castilla
