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Women are less likely than men to be promoted. Here’s one reason why

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Since they first entered the workforce, women have been dogged by persistent gender bias in their quest for career advancement.

Now, a study from MIT Sloan associate professorfinds that female employees are less likely to be promoted than their male counterparts, despite outperforming them and being less likely to quit. And her research points to at least one reason why.

In the paper, “’Potential’ and the Gender Promotion Gap,” Li found that on average, women received higher performance ratings than male employees, but received 8.3% lower ratings for potential than men. The result was that female employees on average were 14% less likely to be promoted than their male colleagues.

To determine whether women and men were assessed the same in terms of their potential, Li and co-researchers Alan Benson and Kelly Shue studied data on 30,000 management-track employees at a large North American retail chain between February 2009 and October 2015. Women made up about 56% of entry-level workers at the company. Rising through the ranks, women made up 48% of department managers, 35% of store managers, and 14% of district managers.

The company uses the Nine Box rating system — a numerical talent assessment tool that compares performance and potential using a 3x3 square grid and a low, medium, and high scale. The researchers used the Nine Box data for comparing male and female employees.

At the firm, “potential ratings strongly predict promotions,” Li writes.

An employee moving from medium to high potential in a Nine Box assessment corresponds to a 75% increase in the likelihood of promotion, compared to only a 27% increase in the likelihood of promotion when moving from a medium to high performance rating.

“Taken together, we find that gender differences in potential ratings can explain up to 50% of the overall gender promotion gap,” according to the paper.

What’s more, relative to men with the same scores for potential, women outperformed their previous year’s score. Yet they were still given lower potential ratings heading into the next year.

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According to research on a large North American retail chain, female employees on average were 14% less likely to be promoted than their male colleagues.

“The result I found most depressing in the paper is the result in which women outperform their stated potential,” Li said in an interview. “Women have to hit a higher threshold of future performance in order to justify the same potential score.”

Along with potential and performance ratings, the researchers examined stereotypes around women supporting women, and women’s decisions to remain with a company.

While there’s a belief that a female manager might be better at mentoring women and providing unbiased evaluation of female employees, Li’s research found that female managers “give everyone lower scores.”

“As a result, it's not obvious that assigning women to be managed by other women would solve this problem,” she said.

Li also found that men who were passed over for a promotion were 35% – 40% more likely to leave than female employees, and male employees with the highest performance ratings who weren’t promoted were 40% –50% more likely to leave. Women with the highest performance ratings were only 10% more likely to leave after being passed over for a promotion. 

The firm realized this likelihood of attrition, Li writes in the paper, but rather than viewing this risk of loss as a sign that a male employee is more likely to leave his job, the retail chain “appears to reward at-risk workers with higher potential ratings, pay, and promotions.”

“Taken together, it appears that the firm grants higher potential scores to men who are less likely to perform well in the future and more likely to leave the firm altogether,” Li writes.

Ways to close the promotions gap

The problem with evaluating potential is that it’s poorly defined, which leaves a lot of room for interpretation, Li said. While it does make sense to evaluate people on performance and potential, and the Nine Box does provide a metric for those evaluations, the problems start when a manager’s imagination comes into play to help predict potential.

“You're trying to figure out how well would someone do if we gave them an opportunity that they haven't previously had,” Li said. “The moment you veer off metrics, that's where people’s stereotypes and perceptions now have room to exist.”

For example, the stereotypes associated with leadership are traditionally associated with stereotypes around male qualities (ex. outspoken, dominant, aggressive), and a manager might struggle to visualize a woman in a leadership role. Or there’s the belief that “diversity is fundamentally seen as the enemy of performance,” Li said, which can prompt organizations to resist diversity-related efforts.

Since predictions around employee potential do require a mix of intuitiveness and insight into the unknown, there’s no way to get around imagination. But there are ways to mitigate stereotypes and perceptions, whether an organization uses Nine Box or another method for evaluating employees.

One thing managers can do is define potential and what they’re trying to measure.

“When you end up with scoring systems that are essentially the number that you attach to the ‘vibe’ that someone gives, if there's not some accountability in that it allows things to go wild,” Li said. “Defining the thing that you're trying to measure is forcing some amount of accountability in how people measure it.”

Another way to address the potential gap is to update how managers provide feedback, Li said. A manager should be able to define what they’re trying to measure when considering potential, but they should also be able to justify the score they give an employee.

Accepting that there might be some noisy data — thanks to preconceptions and imagination — defining potential, and keeping track of the relationship between what managers measure and how employees ultimately fare in their work performance, will help with the accuracy of promotion potential.

More accurate projections mean improved organizational performance because managers are elevating workers best suited to handle more responsibility and leadership. And as shown in the case of the retail chain, those best workers are women.

So all those organizations that say they only want the highest performers — they can keep those goals, Li said. But be aware of that misallocation of talent that’s likely happening between male and female employees.

“If you’re an organization and you just want to do well and you don't care about gender equality, you should measure people’s future performance and you should promote more women,” Li said, “because you are leaving talent on the table.”

Read: What these 9 female leaders learned from their allies

For more info Meredith Somers News Writer (617) 715-4216