Research Findings

How Managers Understand and Apply Merit in the Workplace

June 23, 2020

Most executives today understand that if their companies are to thrive in an increasingly competitive and dynamic marketplace, they must hire and retain the most talented employees. This has created imperatives to recruit job candidates solely on the basis of merit, and reward and promote employees based on their work performance.

Adding to these increasingly competitive pressures, companies are now at the center of intensely charged debates about racial and gender inequality. Facing a greater need than ever to demonstrate a commitment to diversity, inclusion, and racial justice, corporate executives, even those with openly progressive ethos, have struggled to rectify demographic imbalances in their organizations. For example, Google’s US workforce is just 32.0 percent female and only 3.7 percent Black, per the Google Diversity Annual Report 2020. To improve the recruitment and retention of underrepresented employees — and, importantly, to show that their decisions about whom to hire, reward, and promote are based on objective, fair, unbiased criteria — some companies have become eager to dismantle any role that bias might play in employment decisions and outcomes.

In my research over the past ten years, I have focused on the role that merit and merit-based work practices play in shaping employees’ careers in today’s workplace. In particular, I have focused on understanding under which conditions the practice of merit-based evaluation can reduce bias around factors such as gender, race, and national origin. I have found that there is variation in how managers make merit-based employment decisions, depending on the organizational context they work in as well as the characteristics of the individuals they evaluate. While my research established that meritocracy was clearly associated with biases in favor of white male employees, it was unclear why exactly that was the case.

My most recent article with Aruna Ranganathan adds complexity to this body of research by studying how managers, through their own work history as employees, come to understand the concept of merit and how they apply that understanding while evaluating their own employees. The key here is to look at how managers, in the act of evaluating merit, depend crucially on their own experience to determine what they look at — as well as what they don’t look at — as part of the process of evaluating employees.

Why take such an approach? Surely everyone can agree on what “merit” is, right? In reality, merit is such a multifaceted and complex concept that we cannot assume that a consensus exists around what it is or how to evaluate it. Even among managers in the same company, wide disparities can exist around what managers look at and how they evaluate merit. This creates a pressing problem for organizations. At a time when they have a greater need than ever for clear, objective, and trustworthy assessments of merit, what constitutes merit still remains highly ambiguous and subjective.

To deepen our understanding of this problem, Aruna Ranganathan and I set out to explore how managers themselves come to understand merit during the early stages of their careers, and how their formative work experiences affect how they make decisions about hiring, promoting, and compensating employees after their promotion into management. We believe that this approach can offer valuable insights to organizations seeking to implement or improve merit-based processes when making manager and employee evaluations.

To carry out our study, we interviewed managers, across a wide variety of industries, who are experienced in evaluating employees. We also interviewed managers at a large US technology company and analyzed reviews pertaining to employment-related decision-making, written and posted online by managers at this company. Our findings were striking: We found that a manager’s understanding of merit hinges crucially on their own prior experiences of having been evaluated as an employee, which vary along three dimensions: 1) content (what is being evaluated), b) metric (how the evaluation is being conducted), and 3) unit (who is being evaluated) of evaluation.

Significantly, managers with mostly positive evaluation outcomes seek to reproduce the fairness that they perceive to have experienced in their own evaluations, whereas managers with mostly negative evaluation outcomes seek to rectify the unfairness that they described experiencing themselves. In this way, managers’ approaches to merit are reflections of their different experiences being evaluated as employees.

Most striking, when we aggregated managerial understandings of merit in our data, we also discovered that managers typically took one of two distinctive approaches to evaluating merit — what we call a focused approach (whereby managers evaluate employees as individuals, focusing quantitatively on their work actions and performance) or a diffuse approach (whereby managers assess employees both as individuals and contributors to teams, focusing both on their work actions/performance and on their personal qualities).

While neither approach is ex ante better than the other, as we note in our article, the two can have very different career implications for employees. In line with other research findings that women and racial minorities experience different appraisal criteria in the workforce than white males, we found that female and minority managers in our study, as a result of describing more negative evaluation experiences themselves as employees, tended to exclude factors that they perceived as contributing to those negative past evaluations. This led them to adopt focused criteria for evaluating merit when promoted to management. Meanwhile, white male managers, who described having experienced more positive evaluation outcomes as employees, tended to include factors into their understanding of merit, and adopted a diffuse approach to evaluating merit. This has important implications given that the demographic composition of the workforce and management is changing in today’s occupations and organizations.

People’s personal understandings of merit evolve throughout their careers. Indeed individuals likely begin making sense of merit-based evaluation long before they enter the workforce — and we suggest that future research could examine how people’ experiences of being evaluated by teachers, sports coaches, professors, and others shape their understanding of “merit” long before they begin their professional careers. In practice, our work stresses how imperative it is for organizations to develop a clear, fair definition of “merit” when implementing performance-based initiatives, especially when aiming to promote meritocracy and create equal opportunity for all in their workplaces. Only when employees, managers, and executives all share a common understanding of what “merit” actually is (and how to measure it) can we hope that the same standards will be applied consistently to all employees, regardless of demographic factors. This can help make the evaluation process more meritocratic, and the workplace more fair and diverse.

Read more

Emilio J. Castilla and Aruna Ranganathan. “The Production of Merit: How Managers Understand and Apply Merit in the Workplace.” Organization Science 2020.

Image: Gerd Altmann via Pixabay


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