Scrutiny, visibility, and social norms motivate organizations to meet – but not exceed – diversity thresholds

Introduction

As institutional Diversity, Equity, Inclusion and Justice (DEIJ) efforts have become increasingly prevalent, public scrutiny (critical attention paid to particular behaviors) has increasingly been recognized as an effective tool to encourage such efforts. The #OscarSoWhite critique of the Academy of Motion Picture Arts and Sciences is one such example. Although previous scholarship has shown that “diversity” is interpreted differently across individuals and contexts, this study aims to understand how groups concerned with diversity-related reputational threat identify thresholds for “sufficient” diversity and respond to external scrutiny.

The authors theorize that when forming “diverse” groups, individuals aim to match the average levels of diversity among peer groups to avoid associated scrutiny – particularly for highly visible groups. Additionally, the authors highlight findings that individuals find lofty goals highly motivating but pause their efforts once salient goal thresholds are reached, suggesting that peer groups will coalesce around a similar threshold. Thus, intuitively, additional underrepresented members within the group will be added at lower rates once the peer group diversity threshold is met. Further, groups will not act on their diversity goals unless there is risk of scrutiny and visibility. If these hypotheses are accurate, there should be an overabundance of highly visible peer groups with identical levels of diversity. To test these hypotheses, the authors conduct six analyses. This study demonstrates the significance of external factors such as peer group social norms and external scrutiny in setting – and expanding – expectations for diversity in hiring and group composition. In a time of increasing DEIJ investment, this study offers critical insight into implicit barriers and potential accelerators to this effort.

Dr. Edward H. Chang, PhD, is an Assistant Professor of Business Administration in the Negotiation, Organizations, and Markets Unit at Harvard Business School. Dr. Katherine L. Milkman, PhD, is the James G. Dinan Professor of Operations, Information, and Decisions at the Wharton School and Professor of Medical Ethics and Health Policy at the Perelman School of Medicine of the University of Pennsylvania. Dr. Dolly Chugh, PhD, is an Associate Professor of Management and Organization at New York University Stern School of Business. Dr. Modupe Akinola, PhD, is an Associate Professor of Management and Faculty Director of the Sanford C. Bernstein & Co. Center for Leadership and Ethics at Columbia Business School.

Methods and Findings

The authors first test the hypothesis that group diversity levels will coalesce around the peer group average (the descriptive social norm), and that this effect will increase for high visibility companies, by examining gender diversity among companies boards within the S&P 1500 and higher profile S&P 500 companies in 2013. This analysis found that there were significantly more (+12%) boards with exactly two women and significantly fewer (-8%) boards with no women than would be expected if gender diversity was randomly distributed across all boards. This pattern of statistically significant cluster of boards around the contemporary descriptive social norm held true across 12 years of historical data. Among higher visibility S&P 500 companies this effect was exaggerated, with 45% more boards with two women and 45% fewer boards with zero women than would be expected in a random distribution. More specifically, an ordinary least squares regression showed that the level of media attention received among S&P 1500 companies in 2012 significantly predicted the overabundance of exactly two female board members in 2013. Notably, the authors did not see any clustering effect for race – a diversity trait not publicly scrutinized during this time period.

Second, the authors test the hypothesis that additional diverse members would be added to groups at a slower rate once the group has reached the peer group diversity threshold, and whether this varied based on the visibility of the group, by analyzing additions to company boards among the S&P 1500 from 2004 to 2013. The authors found that company boards that already included at least 2 women were less likely to add an additional female member – and this trait was the primary predictor for that behavior. This pattern was exaggerated among the more visible S&P 500 companies and those that received greater media attention in the previous year. Notably, the authors did not find a clustering effect for racial diversity – a diversity trait that was not scrutinized – in this time period. The authors also created an online experiment (N=479) to replicate the conditions of this study in a controlled setting, where they could vary the number of women already on a board and control for the quality of potential new candidates. They found that individuals were less likely to add additional female candidates to boards with two existing female members, regardless of the quality of the candidate.

Next, the authors created an experiment among 556 business students to test the salience of social norm thresholds and threat of scrutiny in a controlled setting. They asked students to select an additional speaker for a hypothetical conference and experimentally varied the gender diversity threshold and level of scrutiny. When gender was scrutinized, participants significantly preferred female candidates if they believed they had not met the social norm for gender diversity. However, when gender was not scrutinized, participants displayed no preference for female candidates, regardless of whether they had achieved the social norm for gender diversity. The authors also replicated this experiment in an online setting (N=200) and added monetary stakes for participants. They found that the online results mirrored the in-person study: when gender was scrutinized, participants significantly preferred female candidates if they were below the diversity threshold, even though the female candidate was more expensive to recruit. When gender was not scrutinized, participants displayed no preference for female candidates, regardless of the social norm.

Finally, the authors created an online experiment (N=603) to test whether diversity thresholds also applied to race and group visibility had a similar effect as scrutiny. Participants were significantly more likely to prefer Black candidates if they believed they were below the diversity threshold, even though they received lesser financial compensation for selecting the Black candidate. Further, participants were significantly more likely to prefer Black candidates if they believed their decision was highly visible.

Conclusions

This study demonstrates the relevance of peer-defined diversity thresholds,  visibility, and anticipated scrutiny to realize group diversity. These findings explain the clustering of group diversity around diversity thresholds (a phenomenon they term “twokenism”) and variance in the degree of clustering by group visibility and threat of scrutiny. Practically, this research identifies conditions in which minoritized individuals are more or less likely to be selected for groups and points toward potential strategies to encourage continued diversification. 

These strategies could include employing public scrutiny or idealized social norms to motivate group diversification as an alternative to emphasizing individual behaviors like hiring bias. However, the authors also note several important caveats to their proposed strategies, such as the greater effectiveness of positive attention for high performing groups rather than punitive reinforcements for poor performers. To overcome the tendency to stall diversification once the peer-defined threshold is met, scrutiny should be maintained until more ambitious goals are reached. Relevant social norms should also be shifted from peer group averages (descriptive norms) to ideals (injunctive norms) in order to establish more ambitious diversity targets. 

The authors point to two limitations of this study. First, they only examined the behavior of individuals, and it’s reasonable to expect that group decision-making is more complex. Secondly, it is possible that their findings do not translate to all external settings. The authors also identify several potential areas for further research to extend the current study, including: investigations about ways in which diversity-related norms (including processes for shifting descriptive norms)can hurt rather than help minoritized groups; relevance of these findings for other organizational contexts; the specific psychological mechanisms underlying the effect of descriptive norms and scrutiny; and interventions that decrease the salience of descriptive norms in favor of injunctive norms.

The Adverse Impact of Diversity-Valuing Behavior on the Career Prospects of Historically Underrepresented Employees

Introduction

Despite the gains in representation that non-white people and women have attained in the
workplace, they remain considerably underrepresented in leadership roles at large companies.
These gaps in representation are particularly jarring in light of the absence of significant
disparities in performance ratings between men and women (Joshi et al., 2015). Growing
evidence also shows women are often perceived to be more effective leaders than men (Paustian-
Underdahl, Walker, & Woehr, 2014). When non-white or non-male professionals attain
leadership positions, they have been found to actively oppose the advancement of other
underrepresented employees. While one explanation for this phenomenon is that these leaders do
so to protect their position in the organization, the authors of this study propose that
underrepresented leaders are also penalized through performance ratings for engaging in
“diversity-valuing behavior.” This penalty for promoting demographic balance reinforces the
glass ceiling in many predominately white organizations. It also highlights the various dynamics
that restrict the ability of non-white and female employees to achieve leadership positions.

As in most contexts in the United States, white men hold a disproportionate amount of power
and status in corporate settings. Despite the extent of their underrepresentation, there remains a
perception that non-white and female leaders that hire and promote other minority members are
nepotistic or socially competitive. Additionally, the visibility of these diversity-valuing behaviors
increases the salience of their identity for others in the corporate setting and may activate
negative stereotypes associated with their demographic. In contrast, white and male leaders who
engage in the same types of diversity-valuing behaviors may benefit from increased perceptions
of their interpersonal warmth and competence because they are not vulnerable to the same
presumptions of nepotism, social threat, or negative stereotyping.

David R. Hekman and Stefanie K. Johnson are both Associate Professors of Organizational
Leadership and Information Analytics at the University of Colorado at Boulder. Maw-Der Foo
serves on the faculty of the National University of Singapore in the Division of Engineering and
Technology Management. Wei Yang is an Assistant Professor of Management at George Mason
University.

Methods and Findings

The authors conducted two experiments to analyze the impact of diversity-valuing behavior on
perceptions of non-white and female employees’ competence and performance ratings. First,
they tested the hypothesis that non-white and female leaders who exhibit diversity-valuing behavior would be penalized in their performance ratings. They next tested the hypothesis that
the demographics of leaders engaging in diversity-valuing behavior on performance ratings
would impact their perceived competence.

Data from the first study indicated that non-white and female employee evaluations are adversely
impacted when they engage in diversity-valuing behavior. This dynamic may be rooted in the
activation of subtle and unconscious stereotypes that perceive non-white people and women as
less competent. When diversity-valuing activities increase, so does the relevance of
underrepresented leaders’ identities in the eyes of their peers or evaluators. Activation of these
stereotypes may then manifest in lower performance ratings. The authors also acknowledge
potential alternative explanations for these findings, including the possibility that the negative
ratings are a function of more direct collusion by white male superiors to protect their
organizational status by negatively rating underrepresented colleagues who seek to promote
more demographic balance.

In the second study, the authors hone in on the mediating function of perceived competence in
this dynamic by asking study participants to read materials about a senior hiring official’s
decision between equally qualified candidates and rate the hiring manager’s performance and
competence as a leader. This analysis found that non-white and female managers who advocated
for hiring non-white or female candidates were perceived to be significantly less competent than
those that did not. Contrastingly, male managers who valued diversity received the same
performance and competency rating as those who did not value diversity. White managers were
similarly not penalized for valuing diversity. This study suggests that lower performance ratings
for non-white and female leaders that advocate for similarly underrepresented candidates are a
consequence of lower perceived leadership competence.

Conclusions

These studies provide evidence that non-white and female employees who engage in diversity-
valuing behavior are likely to be perceived as less competent than those who do not and to be
materially penalized in their performance reviews that often influence promotions and pay.
Because white men are not similarly punished and retain a majority of leadership positions in
many organizations, the authors propose shifting the narrative to promote “demographic-
unselfishness behavior” and incentivize white male leaders to use their status and power to
remedy these disparities in representation.

The authors also propose placing a white man in a spokesman role of organizations’ diversity
offices. Because this study’s findings indicate that white men are taken more seriously when
advocating for underrepresented employees, involving them in diversity offices, which are
frequently staffed and led by minority employees, could advance diversity objectives. There are
several precedents for this strategy among large corporations using the placement of white men
to signal the operational integration of their organization’s diversity efforts. This strategy has
some risks, including continued reliance on white men as sources of legitimacy, potential
perceptions that these white men are condescending to current and prospective minority
employees, and the challenge of ensuring that white men in these roles are qualified to be
unbiased advocates themselves.

Overall, this study indicates that tokenizing non-white and female leaders may reinforce the glass
ceiling by disincentivizing those leaders from promoting similarly underrepresented employees.
This reality perpetuates non-white and female employees’ reliance on white men for career
opportunities; a vicious cycle that highlights the difficult position facing many predominately
white organizations as they strive to achieve demographic balance.