Addressing the merit

Over the last decade, more business leaders have publicly recognised the need to address gender inequality in business and in society more broadly. During this period, we have loudly celebrated incremental increases in the number of women on boards, welcomed the ASX Corporate Governance Principles on Diversity and celebrated the establishment of the ‘Male Champions of Change’. Despite these ‘wins’, women remain seriously marginalised in our workforce, especially when it comes to leadership positions.

Leaders will often remark that while they are committed to diversity, decisions in their organisations are based on merit, not on gender. While that makes sense on face value, it is critical to unpack the subjective concept of ‘merit’ to understand its impact on perpetuating gender inequality.

Merit is some combination of past performance and future potential and is in large part a subjective measure.

There are many examples which demonstrate the ‘merit myth’ including the widely cited Heidi vs Howard study, which has now been replicated across business schools and workplaces. The study saw participants ranking the same resumé more favourably when Howard Roizen was the candidate rather than when Heidi Roizen was the name on the resumé. Participants acknowledged that Heidi was obviously well-accomplished and highly competent, but were less likely to want to work with her or for her.

The introduction of blind auditions for major symphony orchestras in the US, where the player is hidden from the judges by a screen, increased women’s chance of advancing through preliminary rounds by 50 percent. The New York Philharmonic, for example, saw the proportion of women rise from 10 percent to 45 percent of new hires once blind auditions were implemented, ensuring judgment was based on sound, not gender.

Without targets and accountability measures for the employment of women, it is very unlikely that real progress will be made.

For companies that are serious about affecting transformative change with regard to diversity and inclusion, the idea that we can rely on some objective merit process needs to be fundamentally challenged. Some examples of how to overcome the merit myth include introducing unconscious bias training for all promotion and selection panels, reporting the statistics about the number of women applying for roles, the number being shortlisted and ultimately selected, and designing strategies to increase the number of women in the pipeline.

The ASX Corporate Governance Principles sought to engage companies in setting measurable objectives for achieving gender diversity, presumably with the intent that these would be used to hold leaders accountable for outcomes. KPMG’s recent analysis of 2015 ASX disclosures demonstrate that while efforts have been made to articulate ‘objectives’, they are rarely measurable or included in leadership KPIs.

I have never heard an ASX executive say that profit margins or risk management should be excluded from a leader’s accountability framework. Yet proposals to include diversity KPIs have been resisted very strongly indeed.

At their most basic, KPIs might measure the percentage of women in a manager’s team. More mature approaches look at not only the numbers of women in different roles but also at who leaders are currently mentoring, what events the leader is actively supporting, separation rates for men and women, and the ratio of women shortlisted for roles compared to hires.

Without targets and accountability measures for the employment of women, the number of women in senior leadership and on boards, and for pay equity, it is very unlikely that real progress will be made.

Leaders need to reshape the conversation we have about merit to ensure that women do not face a backlash when they are promoted, with claims that they only got there because they were women.

Overcoming the myth of merit requires leaders to step up and acknowledge that the current process is impacted by bias and that ‘cultural fit’ often disadvantages diverse candidates.