Merit-Based Management Demands DEI

Recent harsh backlash against diversity, equity, and inclusion (DEI) practices marks a pivotal moment for organizations worldwide. Once seen as essential to social progress and organizational success, these programs now face intensified scrutiny, with critics challenging their fairness and many seeking to dismantle them entirely. In this contentious climate, organizations must grapple with addressing challenges to DEI efforts while fostering workplaces that are fair for everyone.

Although “diversity” includes gender, ability, religion, veteran status, and other identities, much criticism of DEI focuses almost exclusively on race. Seeking an alternative to what they describe as racial quota-based DEI programs, critics have called for a return to so-called merit-based systems that award opportunities solely based on individual performance and qualifications rather than identity.

At face value, meritocracy may seem like a neutral and fair approach to managing talent. Ideally, decisions about hiring, promotion, and recognition would be based solely on individual skills, qualifications, and performance. However, research has consistently shown that meritocracy is more of an aspiration than it is a reality. Specifically, the “paradox of meritocracy” reveals that when managers believe that their organization strongly values merit, they tend to see themselves as objective and unbiased. This self-perception can make them less likely to scrutinize their own biases. As a result, they may unknowingly favor those who fit traditional norms — such as White, male, or U.S.-born individuals — while disadvantaging others, including people of color, women, and non-U.S. citizens, all while believing that they are being fair.

Studies have found that job-irrelevant factors — such as gender, age, physical attractiveness, veteran status, and religion — can compound the issue by significantly shaping managers’ perceptions and influencing hiring and promotion outcomes. These implicit and explicit biases undermine fair evaluations, preventing qualified individuals from being appropriately recognized or rewarded.

DEI Practices Bolster Merit-Based Approaches

Bias is not a new problem. Civil rights legislation and executive orders from the 1960s were intended to address the historical reality that “merit” has often been defined in ways that favor a privileged few — especially those already in power. Today, many of those protections are under threat, and some have been rolled back entirely, making it even more important to critically examine how merit is defined and applied.

This ongoing tension between the ideal and reality reflects the persistent myth of meritocracy — a narrative that celebrates individual effort while overlooking the systemic barriers that distort how merit is identified and rewarded. These barriers include favoritism (also known as cronyism), unequal access to education and professional development, and pervasive biases within organizations.

Therefore, while some argue that eliminating DEI practices will lead to greater fairness, academic research shows that these aims cannot be achieved without many of the same practices that DEI critics seek to dismantle. Building a workplace where all individuals are fairly recognized and rewarded for their contributions and excellence requires actively reducing the impact of factors unrelated to individual performance.

Two DEI strategies that are grounded in academic research and widely used in organizations today can strengthen merit-based systems for all employees, regardless of their background: giving meritorious candidates greater access to potential job opportunities and retaining a meritorious workforce.

Greater Access to Job Opportunities

Critics of DEI practices typically advocate for identity-blind approaches to hiring, while those focused on addressing systemic bias against historically marginalized groups support more identity-conscious strategies.

But hiring-related challenges transcend these concerns. Research consistently shows that social stratification can perpetuate societal inequities, leading to significant differences in people’s access to individuals and channels that highlight potential job opportunities. For example, while Black and White job seekers utilize their networks at the same rate, Black job seekers find fewer viable job leads from their networks. No matter how qualified or deserving candidates are, they cannot apply for opportunities of which they are unaware.

Further, because of a range of factors — such as budgetary constraints, proximity, prestige, and alumni affinity — companies often restrict recruitment efforts to a narrow set of organizations, populations, and degree programs. DEI practices can help to broaden outreach, expanding the pool of meritorious candidates who would otherwise be unaware of opportunities or not be encouraged to apply for them.

Organizations can’t interview those who don’t apply. DEI practices can encourage qualified yet reluctant candidates to apply for posted opportunities whether or not they believe they meet all of the stated qualifications. This encouragement can come from talent recruiters, application screeners, or personal mentors. First-generation and low-income college students often have limited exposure to professional networks and reduced access to higher education and career opportunities, making them less likely to apply without active support.

DEI practices can also help managers rethink and reframe job descriptions to refine or broaden the knowledge, skills, abilities, and other characteristics considered meritorious. This practice includes recognizing transferable skills and expertise gained in one role that can qualify a candidate for another role. Another increasingly common approach involves omitting degree requirements in order to consider candidates with vocational training or educational certificates for positions traditionally held by individuals with four-year degrees.

Retaining a Meritorious Workforce

Attracting and hiring qualified workers is one challenge. Retaining them is another. Organizations often struggle to keep top talent, and retention depends on more than just good intentions. Factors such as pay growth and the quality of relationships with supervisors and coworkers, among others, influence whether employees stay. When supported by DEI practices, merit-based systems can help ensure that retention decisions are made fairly using objective criteria and minimizing bias in human judgment.

While individual managers have significant discretion in evaluating employees, their assessments are often shaped by their own biases. Specifically, managers tend to interpret “merit” in different ways, frequently using their own personal characteristics as benchmarks for evaluation. This problematic approach means that employees might be judged based on their similarity to the manager and on the manager’s instincts rather than on their actual achievements measured against objective and agreed-upon organizational standards.

This subjectivity in evaluating merit can lead to broader systemic issues within organizations. Persistent pay inequity among disabled workers, for example, illustrates how misalignment between employee qualifications, managerial decisions, and HR practices can negatively affect outcomes like retention. Social norms discourage — and legal mandates prohibit — employment discrimination against people with disabilities. Yet research has shown that disabled employees whose impairments have no impact on their performance often receive lower pay than their nondisabled peers, a disparity linked to the influence of personal biases on employment decisions. When decisions about pay or promotions lack objectivity, organizations risk losing qualified and valuable talent.

DEI practices can help to protect everyone against such situations and outcomes. For example, to reduce bias in performance evaluations, organizations can implement and sustain evidence-based approaches that train managers to make fairer decisions about pay and promotions. These practices include using structured tools like checklists and rubrics to ensure that evaluations are based on consistent, job-related criteria. Additionally, because managers often rely on subjective impressions, organizations can encourage the use of bias interrupters — individuals who monitor performance discussions or senior-level decision-making meetings for biased language. By addressing these issues proactively, DEI practices not only promote fairness but also support employee retention.

Transparency and accountability further strengthen these efforts. Workplace policies such as publicly sharing salary ranges for different roles and reporting aggregated and anonymized data on pay and promotions according to demographic categories can help build trust and reinforce perceptions of fairness throughout the organization.

Finally, research has shown that mentoring programs also play a critical role in supporting meritocracy and employee retention. By expanding access to guidance, professional networks, and growth opportunities — resources that are often unevenly distributed — mentoring helps employees from all backgrounds develop their skills and advance their careers.

Toward True Meritocracy

The growing backlash against DEI is often accompanied by passionate calls for a return to meritocracy, with critics frequently portraying the two as fundamentally at odds. But this framing overlooks a critical point: The belief in a level playing field within organizations is largely a myth. DEI initiatives exist precisely because equitable opportunity is not guaranteed. Eliminating these programs risks weakening fairness for everyone — not just those from historically marginalized groups — by eroding a core principle of true meritocracy: equal access to opportunity.

In fact, we argue that realizing any meaningful version of meritocracy depends on many practices currently classified as DEI — practices that are often wrongly labeled as “discriminatory” or “unfair.” Our position is that organizations should recognize and reward true merit rather than arbitrary attributes like race, social status, or personal networks. But to do that, they must avoid the “meritocracy mirage” — the illusion that merit naturally elevates the best employees to the top in the absence of intentional effort.

Accurately identifying and rewarding merit requires equitable access to opportunities for skill-building, growth, and performance. Without such conditions, organizations risk upholding the language of meritocracy while failing to dismantle the structural barriers and individual biases that distort it. The path forward lies in expanding DEI beyond hiring practices and into the core systems that shape the employee experience — such as onboarding, performance evaluation, compensation, and engagement — ensuring that equity is embedded at every stage.