Merit is the word of the moment. In its annual report last week, oil company ExxonMobil said that it was focused “on building an engaged, global workforce; grounded in meritocracy”. Rich Lesser, global chair of Boston Consulting Group, spoke last month about creating a “meritocracy where everyone has the opportunity to succeed”. Accenture’s Julie Sweet wrote in a memo: “We are and always have been a meritocracy.”
Merit’s rise up the corporate agenda has been fuelled by a powerful cheerleader: Donald Trump. As the US president took office, he said he sought to build a “society that is colour blind and merit-based”, through executive orders that restore “merit-based opportunity”.
At another time, mentions of meritocracy — hiring and advancing staff based purely on their capability and performance — may have been innocuous. But in an increasingly anti-woke political climate, as businesses, from Meta to McDonald’s and Citi to Target roll back diversity policies — the term has become “weaponised”, says Joan Williams, a professor at UC Law San Francisco and author.
Leslie Feinzaig, founder and chief executive of venture capital fund Graham & Walker, observes that meritocracy is foundational to the American ethos. What has changed is “juxtaposing meritocracy [with] DEI. That is something that has surged in the last couple of years as maybe a reaction to a lot of initiatives.”
When Trump outlawed DEI — or diversity, equity and inclusion — policies, part of his justification was that such schemes were antithetical to people getting ahead on the basis of their own ability. DEI, he said, diminished “the importance of individual merit, aptitude, hard work, and determination when selecting people for jobs and services”.
Business leaders have also placed merit over diversity: Sweet’s memo championing merit also contained news of “sunsetting” diversity initiatives. Disney replaced diversity with talent in its executive pay scheme.
The supposed conflict between diversity and meritocracy was crystallised last year by Alexandr Wang, founder of artificial intelligence start-up Scale. In a LinkedIn post outlining his hiring policy, Wang coined the term “MEI: merit, excellence, and intelligence”, explaining it means hiring “only the best person for the job”, rather than selecting “winners and losers based on someone being the ‘right’ or ‘wrong’ race, gender, and so on”. MEI was lauded by Elon Musk, Trump’s ally and chief executive of Tesla, and Brian Armstrong, founder of Coinbase, the cryptocurrency platform.
But the pursuit of a meritocracy requires transparency and effort from employers, and can risk returning to old biases.
Employers have a poor record of defining and evaluating performance, particularly in white-collar jobs. Anton Roe, chief executive at HR, payroll and finance provider, MHR, identifies a “stark disconnect between how employers and employees define [it]. Employees see the drivers of high performance as a highly skilled team or workforce; effective, stable leadership and financial success. Whereas for leaders, the important factors comprise operational excellence; moving fast and making decisions quickly and attracting and retaining the best talent.”
If organisations are to be genuinely meritocratic, while also encouraging a diverse staff base, employers will need to make career progression explicit and open rather than relying on informal sponsorship and favouritism. Performance assessments should provide clear objectives. Opportunities that might lead to promotions should be advertised. The Equality Action Center, a project of the University of California Law San Francisco, recommends employers have objective criteria for hiring by making sure “the skills and abilities are clearly defined for new positions. List them in the job ad and [use them] to evaluate candidates.”
Companies that commit to transparency and data-driven decision making around pay “will be the ones that uphold both fairness and true meritocracy”, says Maria Colacurcio, chief executive of pay software company Syndio.
Critics warn that one risk of ending diversity policies in favour of a meritocracy is that biases can resurface. They argue DEI initiatives mitigate affinity biases — when people are drawn to those who remind them of themselves — and thus ensure decisions are genuinely meritocratic.
Emilio Castilla, professor of management at the MIT Sloan School of Management, warns that pursuing meritocracy “may have unintended negative consequences for organisations and their employees if not carefully designed and implemented by leaders”. Almost 10 years ago, he co-authored a paper identifying the “meritocracy paradox”, which found that when leaders explicitly promote meritocratic values in an organisation, managers tend to favour male employees over equally performing female employees, awarding them higher merit-based rewards — even when both genders achieve identical performance levels.
This was underlined in an Equality Action Center report that highlighted one case of a technology company offering more jobs to white male candidates with lower ratings than those of any other demographic group. “The cut-off below which candidates were rejected was also lower for white men than any other group,” the report added. “This meant the company was not offering jobs to the best candidates.” In an engineering company, more men (51 per cent) were given opportunities to do career-enhancing core projects than women (38 per cent).
Daniela Lup, professor of organisational behaviour and human relations at ESCP Business School, says: “Companies risk reinforcing the same biases that made DEI necessary. Stripping away these policies doesn’t create a level playing field — it just makes the rules invisible.”
Because of this, pitting DEI against MEI is a false binary, says David Glasgow, executive director at the Meltzer Center for Diversity, Inclusion, and Belonging. Instead, he says, they should be “paired”.
“There’s risks in all directions here,” adds Glasgow. Companies fear legal action from conservative activists who claim minorities and women receive preferential treatment, as well as traditional discrimination suits. They also risk boycotts from consumers who either oppose or support DEI initiatives.
But scrapping DEI policies can make it harder to create a diverse workforce.
Citigroup recently ditched the requirement for diverse slates of candidates and interviewers, as well as goals to increase representation. Wang said Scale’s merit-based decisions would create a diverse workforce, although he did not set out how he planned to do this.
One diversity expert, who asked to remain anonymous, says the tension between merit and diversity may have been exacerbated by DEI consultants who were detached from the core business, pursuing social justice rather than evidence-based initiatives. Colacurcio says DEI gave “the perception of making identity the sole priority, eroded trust and provided opponents with the opportunity to kill it”.
Williams agrees one problem is that diversity practitioners have failed to make the case that they were “trying to create a meritocracy”.
Some employers are trying to strike a middle ground.
A recent memo by McKinsey’s global managing partner, Bob Sternfels, stated his belief in a “diverse meritocracy” — a commitment of the consultancy that predates the present US administration. “We don’t guarantee equity in outcomes, but we do strive to ensure everyone has a fair shot to succeed in our meritocracy . . . Diverse teams are better at solving problems, better at skill transfer, better at raising ambitions and better at ensuring impact is realised.” At Davos, BCG’s Lesser acknowledged language was changing, while underlining that the US was “a very diverse country and we need to create an environment where people feel included”.
Williams says some employers are being pragmatic by emphasising meritocracy. “You use the rhetoric that motivates your audience.” Some companies are trying to “pursue DEI goals” without “putting a target on their back” for the Trump administration.
The irony, adds Feinzaig of Graham & Walker, “is that most of us have the same goal — to have great workplaces where people can work so your company can succeed”.
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