Meritocratic pay systems, in which superior performers are supposed to receive higher raises and bonuses than mediocre workers, are standard in well-managed companies. Differentiated pay is thought to increase workers’ effort and boost retention of top employees.
But such pay-for-performance systems may have an unrecognized downside. Research I codirected suggests that, paradoxically, managers in explicit meritocracies may be less likely than others to award pay fairly and more apt to act on their biases instead. One result: They consistently give women smaller amounts. The phenomenon may help account for the persistence of gender-associated pay disparities—and race-associated disparities, for that matter.
The idea that gender- and race-based pay disparities are not only resistant to merit systems but might actually be exacerbated by them has been around for a while. But testing the hypothesis has been problematic: Most empirical studies of the effects of pay-for-performance systems have been conducted after the programs were in place, with no prior period for comparison.
To better understand these disparities, my collaborator, Emilio J. Castilla of MIT’s Sloan School, and I designed a controlled experiment involving people whose attitudes and behaviors track those of managers in the real world. We chose as our participants more than 400 MBA students with substantial career experience: Their mean age was nearly 30, and they had an average of almost six years of work behind them, including more than two years as managers. We asked them to imagine that they were managers in a service company and needed to allocate $1,000 in bonuses among several employees on the basis of performance reviews turned in by another manager. This reflects the practice in many companies: One manager evaluates performance and another determines the financial consequences.The Bonus Contradiction
When participants in an experiment were told that their company emphasized merit, they gave bigger bonuses to men.
We found that participants who were told that their organization emphasized merit tended to favor men, giving them $46 more, on average, than they gave to comparably performing women. The bias was exhibited by male and female managers alike. Participants who thought that the emphasis was simply on conducting evaluations regularly—say, every year—treated men and women virtually the same.
We suspect that an organization’s championing of meritocracy serves to reassure managers tasked with decisions about pay, making them less likely to view their behavior as biased and leading them to believe that, in any case, there’s little risk that their actions will be seen as prejudiced. They may consequently relax their vigilance and allow their biases greater sway. Those biases need not be consciously held: A large body of research shows that widespread stereotypes—for example, the notion that women are less productive than men—often shape behavior unconsciously, even in people who disagree with them.
That doesn’t mean companies should give up meritocratic values, which are a touchstone for progressive leadership. Instead, they should take steps to counter the meritocracy paradox by increasing the accountability and transparency of the process by which raises and bonuses are awarded and limiting managers’ discretion regarding the pay of their direct reports.
we’re innately prejudiced and without explicit anti-discrimination measures inequality is bound to arise…
In other words this is not a happy game, but a radically boring one. It should be telling that there is no music, but only the sound of sitting in an airplane: a dim roar of atmospheric pressure coursing outside an aluminum cabin pumped with compressed air. You can almost smell the reheated chicken breast.
Many people I know have abandoned Pocket Planes because it seems to go nowhere forever, and the dark joke of the game is that we spend forever taking fake people everywhere. For me, playing the game involves a feeling of resignation—to the hard rules of a built world, to the apparent lack of a better thing to do, to the knowledge that time will never move any faster or slower than it does. And you are certainly running toward nothing; and the program is running there with you.
You could run your airline into the ground with very poor decisions and the little people would still look at you the same way.
This is why I appreciate Pocket Planes. It is a series of entirely banal decisions with no special meaning. I took a person to one city and made some money. I took two packages to another city and made slightly less money. But the first trip took a little longer than the second one. These are merely results that differ from one another.
OONO, Japan — One afternoon last October, Akio Tanii staggered into his laboratory at the agricultural experiment station outside this small farming village. He was bleary-eyed and distraught.
His colleagues were relieved to see him safe because his family had reported him missing overnight and Tanii had been under great stress. The 53-year-old scientist was sent home to rest.
Once there, he grew short of breath and fell seriously ill. He was rushed by ambulance to the hospital, where he died that night. He left a wife and two grown children.
Police determined that Tanii had committed suicide by drinking pesticide.
His death passed without public notice. But according to Japanese officials, police, close associates and relatives interviewed in Tokyo and here on the island of Hokkaido, Tanii took his life after his research had placed him in the cross-fire of a heated agricultural trade dispute between Japan and the United States.
Just two months earlier, Tanii had been listed as co-author of a paper presented by an American professor that concluded that a distinct strain of the bacterium Erwinia amylovora–which causes a devastating disease called fire blight in apple and pear trees–was present in Japan.
In the world of apples and trade diplomacy, that was a damning disclosure. Japan’s bureaucrats long had insisted that the archipelago was free from the disease. And they had used fear of its spread as a cornerstone of a trade policy that effectively barred apples imported from the United States, where the disease is endemic.
That claim began to crumble with the publication of the paper by Cornell University professor Steven Beer. Tanii’s collaboration with U.S. scientists made him a target for angry Japanese farmers and bureaucrats. A record of solid scientific research and a life’s work of trying to help farmers was transformed into the grist for a twisted political drama.