Failing the Fairness Test

We were raised in a generation of sexual prejudice, where it was common to hear that “a woman’s place is in the home”. Business was for men; the home and PTA were for women.

But in the United States today, we have become enlightened. Women now run major corporations and have joined the ranks of self-made millionaires. True to a certain extent, but that’s not the whole truth.

Just beneath the surface of our “modern” society, lie reminders that sexual inequality is still alive.

The Masters, Augusta National & IBM’s CEO

The Masters’ Golf tournament returns to the Augusta National Golf Club this week and with it, a blatant reminder that Augusta National does not admit women as members.

Opened in 1932, Augusta’s most famous golf club has among its members, some of the powerful men from industry and finance, including Bill Gates and Warren Buffett. Women are allowed to play the course if invited by a member but cannot themselves, become members . The club only admitted its first black member in 1990. (Tiger Woods first won The Masters at Augusta just 7 years later.)

Augusta National is a private, obviously conservative club that we hear about just once a year, when The Masters rolls into town. Ms. Virginia “Ginni” Rometty is the new chief executive officer of IBM, one of the tournament’s longtime sponsors. The past four IBM CEOs had been granted membership to Augusta National, but Ms. Rometty has not been. Is that really such a big deal?

In my honest opinion, the Augusta National Golf Club is making a statement to the rest of the country (my translation of their actions into words):

Men are the leaders of business and finance with certain rights and privileges, but we are good and generous men. We invite some women to play at our golf club … on occasion.

I could be misinterpreting their actions, but I think Augusta’s actions are a sign that discrimination against women in the workplace not only continues today, but it is openly accepted as a reality. It is saying that men and women are not equal.

Women’s vs. Men’s Merit Compensation

The April 2012 issue of the Harvard Business Review includes an article entitled, “Why His Merit Raise Is Bigger Than Hers“. In it, Stephen Benard, a co-director of the original 2010 research study, describes how merit raise assignments reflect inequalities between male and female worker compensation.

Merit rate pay systems (Meritocracies) are based on the framework that larger annual raises and bonuses should go to superior performers instead of average performing workers. Merit pay system advocates stress that everyone has an equal chance to advance and obtain rewards based on their individual merits and efforts, regardless of their gender, race, or class. According to other researchers, most Americans believe that meritocracy is not only the way the system should work, but it is also the way the system does work.

The research performed by Stephen Benard and his collaborator, Emilio J. Castilla of MIT’s Sloan School instead showed that

… 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.

This, in itself, might not be much of a surprise as we all are subject to some level of bias or preconception. What was striking was that the 445 test “managers” weren’t rating the performance of the workers in the research tests. They were just assigning the merit amounts based on the reviews that they read. They were doing “supposedly” subjective assignments of compensation.

The research results:

when an organization is explicitly presented as meritocratic, individuals in managerial positions favor a male employee over an equally qualified female employee by awarding him a larger monetary reward.

The larger monetary reward (about 12% more on average) was consistently assigned by both male and female managers. The test managers thought that they were treating men and women the same, but in reality, they were exhibiting a consistent bias toward men.

An Unconscious Bias Against Women

The researchers suggested that because the managers’ corporate organizational structures reinforced the pay-for-performance system as being fundamentally  unbiased, the managers

relax[ed] their vigilance and allow[ed] 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.

Similar results have been reported by other researchers in 2006 & 2008. (See the 2010 Benard – Castilla research paper for more information.) To offset this unconscious gender bias, the researchers recommend that managers increase the transparency and accountability of their compensation/merit review processes.

“Just Say No” to Augusta National

In my opinion, the researchers clearly stated that we (male and female managers) are not as unbiased and are not as fair as we thought we were. Is the decision to allow/not allow Ms. Rometty to join the Augusta National Golf Club bigger than the incident itself?

I contend that it is. When one is harmed by discrimination or bias, we are all harmed. Discrimination or bias existing in one area reinforces its existence and expression in another.

It may be a small statement, but I won’t be watching The Masters this year. I just cannot support the (in)actions of the Augusta National Golf Club and their treatment of women. I’m sure that neither the PGA nor its TV sponsors will miss me, but I will feel a little better. I will also feel stronger the next time I am asked to rate a female coworker or direct report.

It’s long past the time when we should have been standing up for what’s right and what’s fair for women in the workplace, but we still need to do it!

+++++++++++++++++++++++

Why His Merit Raise Is Bigger Than Hers, by Stephen Benard, Harvard Business Review – April 2012, http://hbr.org/2012/04/why-his-merit-raise-is-bigger-than-hers/ar/1

The Paradox of Meritocracy in Organizations, by Emilio J. Castilla and Stephen Benard, Published in the Administrative Science Quarterly 2010 55: 543, http://asq.sagepub.com/content/55/4/543

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3 responses to “Failing the Fairness Test

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