Gender, Race, and Meritocracy in Organizational Careers.

Younger supervisors, older subordinates: An organizational-level study of age differences, emotions, and performance

“…The neglect of age in promotion decisions has been heralded as being inherently positive—it supposedly prevents the negative feelings that age‐based discrimination had created in the traditional workplace (Kunze, Boehm, & Bruch ), and it motivates, through the emphasis on merit rather than seniority, high levels of company performance (Cadsby, Song, & Tapon ; Dobson ; Lazear ). Most companies in industrialized countries now adhere to policies that consider age as irrelevant for promotion decisions (Castilla ). However, empirical evidence demonstrating the alleged benefits of these policies is mixed (Phelan & Lin ).…”

Output‐Based Performance Pay, Performance‐Support Bias, and the Racial Pay Gap within a Large Retail Stock Brokerage

“…On the other hand, because performance pay increases wage variance, it could potentially also lead to larger wage gaps by race (Blau and Kahn ). Also, biases may appear at other stages of the pay decision, so that racial inequality is not decreased by the use of performance pay (Castilla ).…”

“…Performance pay may be based on a manager's evaluation of performance or on direct observations of output produced. If performance pay is based on performance evaluations, racial compensation disparities arise if performance evaluations differ by race or the relationship of performance evaluation to compensation differs by race (Castilla ). If performance pay is based on counts of output, such as piece rates in manufacturing or sales commissions, the effects on racial wage disparity may differ from performance pay based on performance evaluations.…”

“…Research also finds that members of minority groups are affected by other management decisions that sustain inequality in pay, even in the presence of racially equivalent performance reviews. Castilla () found that positive evaluations have subsequently greater compensation payoffs for nonminority workers, a phenomenon that he labels performance‐reward bias. Castilla () concluded that formalization of performance‐management systems may introduce new mechanisms, such as the pay or promotion decisions following performance evaluations, which can continue to produce biased and discriminatory outcomes.…”

“…Although the firm sets compensation as a function of sales‐production credits, and the same algorithms translating sales into compensation apply to all brokers, bias still occurs if the firm supports brokers' sales by providing different opportunities to sell by race. Just as Castilla () established performance‐reward bias in a large service industry organization where the potentially equalizing effects of performance evaluations were undermined by racially disparate effects of performance evaluations on pay, Madden () showed that other management decisions may result in differences in sales, and, therefore, create disparities in commissions.…”