Inclusion, Inc.. Sara Sanford

a male or female name, both male and female hiring managers rated the male applicant as significantly more competent and hirable than the woman with identical application materials.²¹ A similar 2014 study found that both men and women working in tech fields were twice as likely to hire a man for a job that required math, even when presented with female applicants who were equally qualified.²²

The “pipeline problem” is a common excuse used to explain away the underrepresentation of tech workers of color. The numbers tell a different story. According to a USA Today study, Black and Hispanic computer science and computer engineering students graduate from top universities at three times the rate that top tech companies hire them.²³ Even when Black and Hispanic graduates each made up 9 percent of computer science degrees earned, the sector continued to hire only 2 percent Black and 3 percent Hispanic tech workers.

      If they do manage to get hired, underestimated employees face promotion processes that are framed as meritocratic, but actually lead to biased outcomes. Many tech companies have jettisoned long-standing traditions of managers choosing who gets promoted. Instead, they've embraced a more crowd-sourced approach: Those who self-nominate and receive the most peer accolades are chosen to advance.

      As we learned in the previous chapter, when women and minorities advocate for themselves, they can disrupt unconscious expectations of how they should behave, triggering negative reactions from their peers. The self-nominating phase of the tech promotions process puts these employees in a double bind. They can self-nominate and risk retaliation, or say nothing and risk being passed over for promotions.

      The second stage of the promotion process—peer approval—triggers in-group favoritism, an implicit bias in which people are more likely to support others who remind them of themselves. In the largely white and male world of tech, this phenomenon scales to a widespread advantage for other white men.

      The inherently biased dynamics of self-nomination and peer approval put underestimated groups at a disadvantage. Returning decision-making power to the masses may have been seen as promoting fairness and performance-based competition, but it has actually tilted the playing field in favor of bias, not merit.

      Tech isn't the only industry suffering from this mismatch of meritocratic beliefs and favoritism-fueled outcomes. Across the US we treasure the idea that we are a meritocracy, and this belief that we reward people for their efforts and abilities actually keeps us from hiring the “best person for the job.”

The Meritocracy Paradox

Pay-for-performance schemes are supposed to foster workplace meritocracies. To study how they actually play out in organizations, MIT's Sloan School of Management observed a 9,000-employee service sector company that had implemented a “merit-driven compensation system.” This employer emphatically communicated to all their employees that they were implementing this program to ensure workers were rewarded equitably, based on their performance.

      The study revealed counter-meritocratic outcomes: Women, ethnic minorities, and employees born outside the US received smaller increases in compensation for the same performance scores as those made by white men. These findings controlled for whether or not employees held similar jobs, worked in the same units, and had the same supervisors. Women, minorities, and those not born in the US had to “work harder and obtain higher performance scores than white men to receive similar salary increases.”

      Emilio J. Castilla, one of the study's lead researchers, wondered if telling employees that they worked in a company that rewards merit impacted employees' behaviors. In partnership with Indiana University Sociology Professor Stephen Bernard, he conducted a series of lab experiments that all led to the same outcome: When companies emphasized “meritocratic values” to employees as part of their core identity, managers were more likely to award larger “performance-based” bonuses to male employees than to equally performing female employees.

      Much in the same way that attending a training could make employees feel they had gained moral capital, being told they worked for a meritocracy made them more likely to believe they were making merit-based decisions. They felt their decisions were impartial and correct, by proxy. Taking fairness for granted, though, actually allowed bias to dilute merit, rather than enhance it. Castilla and Bernard named this phenomenon the “Paradox of Meritocracy.”

      When businesses put processes in place, however, to ensure that they don't overlook valuable individuals, the benefits compound in a surprising way. Underestimated employees don't just add their own talents to the workplace—they amplify the talents of their co-workers. We can look to the 2002 Oakland Athletics for an example of how this plays out.

Baseball Biases and the Power of the Collective

      In the Athletics' year of Moneyball fame, Billy Beane made a $44 million ball club competitive with the $125 million New York Yankees. The key to Beane's success? He saw the value in players that the market had traditionally undervalued, and he brought complementary players together to bring out one another's strengths.

For decades, baseball franchises had been relying on a narrow set of metrics—stolen bases, home run averages, and batting averages—for scouting valuable players. Beane decided to widen the scope of what could be considered valuable. He and his scouts searched for players who performed well against metrics that typically go unnoticed, such as on-base percentage and slugging percentage (the number of bases a player gains each time he's at bat). These methods of player evaluation flew in the face of conventional scouting wisdom, but Beane's strategy proved successful.

      Having players with higher on-base percentages meant that when a home run hitter came to bat, the odds were greater that another player would already be on base. This meant that hitting a home run would knock in two runs instead of one. Players with high slugging percentages were more likely to be on second base, rather than first, increasing the odds that they would make it home if the next batter hit a single.

      The underestimated strengths that these players brought to the team amplified the benefits of more traditionally valued players. If you evaluated the team as an average of the players' metrics, it didn't look good, but the players' complementary strengths reinforced each other, creating a team that was greater than the sum of its affordable parts.

      Beane fielded a team with a diversity of skills that was as powerful, collectively, as teams that were spending three times as much on traditional all-star players. This once controversial approach has now become widespread; historically undervalued metrics, such as on-base percentage, are now accepted as statistically strong indicators of a team's overall offensive success. These undervalued talents just needed to be given a chance.

      Any business leader would jump at the opportunity to unlock the same rewards as their competition at a third of the price. But does this method translate? Carnegie Mellon Organizational Psychology Professor Anita Williams Woolley wanted to find out.

From Baseball to Business

      In her research, Woolley had seen that managers tended to think of team performance as the average of each individual member's performance. Just as baseball clubs had historically depended on a narrow definition of what “success” looked like, though, managers only seemed to recognize and select the same kinds of all-stars, over and over again. Traits such as extroversion or public speaking were easily recognized as desirable, while other traits, such as emotional intelligence or long-term thinking, tended to go unnoticed. This often led managers to build teams with strengths that were redundant, rather than complementary.

Woolley wanted to test how groups stacked with these traditionally recognized all-stars performed as a collective, compared to teams with more diverse skill sets.²⁴