“I always say that talent and capability is everywhere, all it needs is  opportunity.” 

Kathrine Switzer

Once you have built a diverse team, the last thing you want is to lose  them. Unfortunately, this happens at many companies. The “leaky  pipeline” is a challenge across all industries. Multiple research studies  have shown starkly higher attrition rates among underrepresented  groups, especially as you progress up the hierarchy. It is also the  primary cause of the many pay gaps that persist. If we cannot secure  our most talented, diverse talent into senior executive positions,  with the highest compensation packages, then we will never close  the gaps. Part of the solution is to ensure frequent, objective and  transparent review practices. In addition, equal access to information  and resources, with a recognition of the full range of employee  contributions supports higher retention. The combination means  glass ceilings can be broken and leaky pipelines can be fixed.

Shatter the Ceiling 

‘The glass ceiling’ is a term most frequently applied to women  unable to achieve promotions and fair pay because of a biased  occupational system. In reality, a ceiling exists whenever someone  is unfairly kept from advancement and fair pay because of sex, race,  age, religion, or sexual orientation. The glass ceiling is a reality  faced by millions of professionals every day: qualified people who, for arbitrary reasons, do not gain the pay and promotions they  deserve.

Pay inequities occur on many different fronts: from unequal pay for  equal work; to opportunity gaps preventing people from attaining  leadership roles; and unequal wage growth widening pay gaps at  higher age groups and job levels. Throughout all of these metrics,  white, well-educated, able-bodied, heterosexual men maintain an  edge over other groups. According to a study conducted by the  Kapor Center for Social Impact in 2017, women of colour face the  starkest pay disparities, with professional women of colour earning  nearly half of the salary of White and Asian males.64 Factors  including: a lack of transparency; individual biases; and lack of  preventative laws and policies, contribute to the persistent pay gap

 

Acknowledge the Ambition 

One pernicious myth that continues to exist in the business world is  that there is a lack of diversity at the top due to a lack of ambition to  be there. However, when you look at the underlying evidence, there  is no shortage of career ambition among underrepresented groups.  Women, ethnic minorities, LGBTQ+ employees all share a deep  drive to reach the top of organisations.  

According to a study by Equality Group, 59 percent of ethnic minority professionals in the UK aspire to senior management and board  level positions in their future. This is significantly higher than the  14 percent of white professionals with a similar ambition. In the US,  a study by SurveyMonkey in 2020 showed that 89 percent of women  are ambitious to succeed in their careers, with only ten percent  stating they were “not so ambitious” or “not ambitious at all”.

This challenges the thesis of Facebook COO Sheryl Sandberg  who wrote the book: Lean In: Women, Work, and the Will to Lead.  A key concept in the book is the Women’s Leadership Ambition  Gap, which are the inner obstacles women must overcome to reach  higher levels of executive management. From Sandberg’s perspective,  this is what accounts for the poor representation of women in top  leadership positions. She explains that; “when jobs are described as  powerful, challenging and involving high levels of responsibility,  they appeal to more men than women”.67 However, as we have seen  in Chapter 3, inclusive language is critical to attracting diverse  talent. In 2021, why do we need to describe senior leadership roles  as powerful and challenging? Why couldn’t we describe them as  collaborative and enabling?  

With the growing need for inclusive leadership across industries,  what we need to be seeking in our leaders is greater empathy,  courage, humility and collaboration. If they were the qualities that  are valued, rewarded and achieve promotions in companies, then  maybe women wouldn’t need to do as much of the inner work as  previously thought. If companies can do their inner work, then they  will save individual minorities having to do it for them. 

 

Fix the System 

Despite the focus on the inner work of success, the outer work  of the system is arguably more important. Great progress has been  made in documenting how review and promotion best practice  can improve workplace equality. In performance reviews, an increase  in transparency and visibility has shown several benefits. A  longitudinal study looked at performance-based reward decisions  before and after a firm introduced accountability and transparency  procedures.68 Before the procedures were introduced there was a  significantly different gap in merit-based pay by gender, race and  foreign nationality compared with white men receiving the same  performance evaluation. After the policy, once managers realised  that their decisions would be compared to other divisions, there  was a reduction in this pay gap. Transparency in reporting can  make disparities easier to spot and to correct. The use of data and auditing can also encourage managers themselves, to review how  they allocate resources within the team and encourage self-correction.

 

 

Consider the Biases 

As with the hiring process, there are a number of biases that operate  throughout traditional review and promotion practices. Iris  Bohnet at Harvard has shown that there is a strong bias towards  overestimating men’s future potential and underestimating women’s  future potential. Women and minorities are often assessed on  historic performance and are underestimated for future potential.  This is especially true in male-dominated industries, such as  financial services.  

Emilio Castilla at MIT has studied performance reward bias for  many years. His research shows that even when employees achieve  the same evaluation score, white men will be paid more than women  or other minority groups. When giving feedback, individuals tend  to focus more on the personality and attitudes of women. Contrarily,  they focus more on the behaviours and accomplishments of men.  Janice Fanning Maden at Wharton has built on this point to show  that men are often staffed on higher-value accounts and projects  than women, which contributes to a widening gender pay gap.69 This exacerbates gender bias, promotion opportunities, as well as  the pay gap. 

One of the most unfortunate biases that comes into effect during  reviews is the Idiosyncratic Rater Effect. A 1998 study in Personnel  Psychology found that more than 60 percent of a manager’s rating  was actually a reflection of the individual manager, not the employee  being rated.70 In addition, they found that more than half of the  variance associated with ratings had more to do with the quirks of  the person giving the rating than the person being rated. Rater bias  was the biggest predictor. It held more weight than actual performance,  the performance dimension being rated, the rater’s perspective, and even measurement error. This suggests that a review tells us  more about the reviewer than the person being reviewed. A further  study in the Journal of Applied Psychology in 2000 demonstrated  

that managers rate people higher in skills where they are not as  proficient themselves.71 Conversely, they rate other people lower  in activities they have excelled at. In other words, managers weigh  their performance evaluations toward personal eccentricities, rather  than objective measures.

 

“Idiosyncratic rater effect: a review tells us more about the reviewer  than the person being reviewed.” 

 


Hephzi Pemberton, Founder and CEO

"It is concerning to see there has been a decrease in the number of ethnic minority CEOs since the report by INvolve was published in 2018. After three years, one would also hope to see more female CEOs appointed, but we have only moved by one percent. When so many companies talk about valuing DEI, it’s disappointing to see the lack of visible results at the most senior levels of leadership."