Merit-Based Pay Comes With Hidden Gender Discrimination

While controversial, a new study finds that when managers are asked to dole out pay based on performance, they often favor men, even when candidate performance is nearly identical.

Human Resource Executive Online reports that in the study performed by MIT and Indiana University professors, survey participants asked to hand out bonuses to fake employees of a fictional company typically gave men $50 more when they were told that “job performance ranked above all else.” This despite the fact that the fake employees had nearly identical job performance.

Female study participants were just as likely to favor men as the men were.

Emilio Castilla, the MIT Sloan School of Management who co-created the study, has a simple explanation for the discrepancy.

“It could be [that] people are just racist or sexist,” he told HRE Online.

Industry consultants admit that merit-based pay has some unfortunate side effects.

“Unfortunately, no matter how much we like to believe we’re rational beings, we’re just not that good at it,” Stephen Balzac, president of a management consulting firm, told HRE Online. “Our subjective view of merit is heavily colored by how well someone dresses, how charming they can be, how eloquently they speak and how skilled they are at building a strong, friendly relationship with us.”