A new book by MIT Sloan professor Emilio J. Castilla offers managers and leaders a practical, data-driven roadmap for building fairer and more effective talent management systems
CAMBRIDGE, Mass., September 9, 2025 – Merit has long been considered the gold standard for hiring, evaluating, and promoting within Fortune 500 companies, government agencies, and academic institutions — rewarding people’s talent and hard work above all else. Yet when not done right, meritocratic systems can actually reinforce inequality while giving the illusion of fairness and efficiency.
In his new book, "The Meritocracy Paradox”, professor of management and co-director of the Institute for Work and Employment Research at MIT Sloan School of Management, bv harnesses decades of research — his own and others’ — to propose a five-step, data-driven approach for building a truly meritocratic organization, one that actively addresses biases and inequities, while ensuring efficient, fair, and meritocratic decision-making. To level the playing field, leaders should:
- Define Merit Clearly: Identify, develop, and clearly communicate the key criteria that determine merit
- Measure Outcomes: Track critical indicators and employment results consistently over time
- Analyze the Data: Identify patterns and uncover inequities and inefficiencies in both processes and outcomes
- Intervene Strategically: Implement targeted, evidence-based solutions to address identified issues, and,
- Monitor Continuously: Evaluate progress regularly to ensure that fairness and effectiveness are sustained
“From big-company bonus plans to university admissions, research shows that even well-meaning talent management practices aren’t immune to bias and inefficiencies,” Castilla said. “Those biases and inefficiencies can skew recruitment and hiring, performance evaluations, promotions, and pay, undermining the very meritocracy they’re trying to build. Leaders, therefore, need a clear, practical roadmap to better meritocracy.”
Why Meritocracy Fails
Truly objective merit-based evaluations are extremely difficult — perhaps even impossible — to achieve. Most organizations that self-identify as meritocratic could be anything but, and part of the problem is that definitions of merit are often vague and subjective. Even within the same organization, managers may hold a wide variety of views on what merit means and how to evaluate it. Their own past experiences of being evaluated as employees shape their understanding of merit, and how they put it into practice.
“It’s inherently challenging to define merit consistently across an organization,” Castilla noted. “Merit-based decisions are therefore often subjective and inconsistent, which then undermines the promise of fairness and efficiency that’s at the heart of meritocracy.”
When companies recruit and promote, hidden biases and social barriers, such as paying women or minority employees less, can also easily become embedded in meritocratic talent management systems, making them difficult to detect and even harder to undo. In a study of a large U.S. service organization, Castilla found that women and racially disadvantaged individuals consistently received smaller merit-based bonuses than white men, even with equal performance scores.
“Your reward allocation and promotion processes might look structured and fair on the surface,” he explained, “but some people may have hit roadblocks long before they even got there — like not being picked for high-profile projects or not having someone in their corner to champion them.”
A Smarter Path Forward
Too often, leaders who sense their so-called meritocratic systems aren’t working jump into quick fixes borrowed from other companies — often labeled “best practices.” Examples include tweaking the language in job postings or masking job applicants’ demographic details. While these steps may appear promising, they often fail to address the organization’s specific issues. Instead, Castilla argued, leaders need to take the time and effort to scrutinize their own systems and confront their unique challenges carefully. That requires moving beyond gut feelings, intuition, and charisma-based judgments, and instead committing to investing in a thoughtful, data-driven analytical approach to meritocracy.
“To create effective merit-based talent systems, leaders have to turn the lens on themselves, collecting and analyzing employment-relevant data, and listening closely to managers and employees,” Castilla said. “Only then can they craft strategies tailored to their organization’s needs and ensure every employee has an equal chance to succeed.”
The Payoff
Meritocracy should always be a work in progress, and sustaining it requires constant effort and vigilance. However, the payoff is significant: Organizations that move closer to a true meritocracy are fairer, more efficient, more competitive, and better positioned to attract and retain the very best talent.
“True meritocracy is never a finished product; it requires vigilance, data collection and analysis, and a willingness to confront bias and unfairness head-on. But organizations that make this commitment — ensuring everyone has an equal shot at success — will not only be fairer and more inclusive, they will also be stronger, more dynamic, and ultimately better positioned to thrive,” Castilla said.
“The Meritocracy Paradox” is now available from Columbia University Press and other outlets.
About the MIT Sloan School of Management
The MIT Sloan School of Management is where smart, independent leaders come together to solve problems, create new organizations, and improve the world. Learn more at mitsloan.mit.edu.
