Wednesday, September 24, 2008

On the Merits

Merit-based pay plans often aim to distribute rewards without bias. But the results can still favor white men, a Massachusetts Institute of Technology professor's research shows.

Women and minorities received less pay than white men even when their performance scores were equal, and the bias occurred in many departments of the large service organization he studied, according to MIT's Emilio J. Castilla. He analyzed raises at the organization and found what he called "performance reward bias" -- even when the system of measuring worker contributions was fair.

The biases were introduced when a supervisor recommended raises or when the human resources department approved them, he said.

Castilla studies social networks and organizational influences on employment. His research, published in the latest issue of the American Journal of Sociology, found that minorities and women had starting salaries similar to those of white men. Biases crept in over time, creating a pay gap. Even though merit-based systems create the appearance of meritocracy, he said, they need more transparency and accountability to live up to it.

-- Vickie Elmer