Following up on my previous post, Merit, Excellence And Intelligence: An Anti-DEI Approach Catches On In Companies — Is Higher Ed Next?: Wall Street Journal Op-Ed: The Economics of DEI and Merit, by Roland Fryer (Harvard):
A hiring approach that maximizes talent and rewards performance is the antidote to bias.
DEI is dying. MEI is the new corporate rage.
Standing for “merit, excellence, and intelligence”—in contrast to “diversity, equity, and inclusion”—MEI involves hiring solely on merit, without consideration of demographic factors. Labor economists have preached the gospel of meritocracy for decades. It’s refreshing to see it become fashionable.
Companies that broaden their talent searches and eliminate biases in hiring can make efficient employment decisions. As Glenn Loury and I once demonstrated mathematically, meritocratic policies maximize productivity and insure against bias. When the right people are placed in the right jobs, and people with talent are appropriately rewarded for developing their skills, the economy runs more efficiently.
In 2020, I co-founded Sigma Squared to help businesses supercharge meritocracy. The idea is simple: Any company that is maximizing talent, by definition, has no bias. If there is bias, then moving toward meritocracy will rid the company of that bias and increase productivity at the same time. …
Some say that diversity in and of itself is good for business. Consulting firms and activists have advised that adding women and minorities to a company, especially its board, will magically cause profits to grow. Credible research has always shown this was wishful thinking.
Frequently cited McKinsey studies have found a strong link between firms’ earnings and the racial and ethnic diversity of their executives. The consulting firm doesn’t make its data public, but in 2024 business researchers Jeremiah Green and John R.M. Hand were unable to replicate the results with data from S&P 500 companies. In 2020, Robin J. Ely and David A. Thomas further debunked the “add diversity and stir” approach in Harvard Business Review: “We know of no evidence to suggest that replacing, say, two or three white male directors with people from underrepresented groups is likely to enhance the profits of a Fortune 500 company.” …
Emphasizing meritocracy offers an opportunity to bring rigor, transparency, and cutting-edge data analytics to all talent decisions, unlocking the untapped potential of the vast data companies already collect. Companies embracing meritocracy will have to take seriously the need to find hidden talent and eliminate bias from their hiring processes.
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