How To Have More Women In Leadership Roles

Even though many companies are increasingly committed to removing gender discrimination, systemic barriers and outdated processes still hold women back.

Colleen Ammerman and Boris Groysberg have surveyed 150 female executives in a wide variety of businesses across the US, UK, Australia, and New Zealand and found a strong agreement that hidden biases and structural disadvantages are still making it more difficult for women to succeed. The survey asked how much are women disadvantaged in organizational processes. When it came to attracting candidates, 76% of respondents indicated that women are disadvantaged a great deal or somewhat. In hiring, 84% of respondents gave a great deal or somewhat answers. In integrating employees, it was 65%, developing employees 74%, assessing performance 72%, and managing compensation and promotion 89%. 69% of respondents also indicated that companies in their field or industry don’t do enough to engage and retain women employees.

“Hidden biases and structural disadvantages are still making it more difficult for women to succeed.”

1. De-bias how you measure “potential”

Kelly Shue, Alan Benson, and Danielle Li researched the topic of women’s career advancement using data from 29,809 employees at a large retail chain gathered between 2009 and 2015. Though women were 56% of the entry-level workers, their percentage diminished in the higher roles. Women comprised 48% of department managers, 35% of store managers, and only 14% of district managers. The team found that women received lower “potential ratings” despite receiving higher “job performance ratings” than men. Moreover, the lower “potential rating” didn’t align with future performance. Women outperformed men who got the same “potential rating.”

“Women receive lower ‘potential ratings’ than men. The lower ‘potential rating’ doesn’t align with future performance as women outperform men who get the same ‘potential rating.’”

The tool used for collecting the ratings was the popular 9-Box Matrix. It is a three-by-three grid where one dimension shows current performance (low, medium, and high) and the other future potential (again low, medium, high). While the current performance can often be more easily measured as it deals with known outcomes, the future potential is inherently subjective. Since future potential plays a significant role in promotion decisions, it shouldn’t be surprising that the study showed women being 14% less likely to be promoted even though they received higher performance ratings on average.

Curiously enough, this future potential gap can’t be explained even by the worry that women may leave the company earlier than men. In fact, the opposite was true. The evidence suggests that high-performing men are 40%-50% more likely to leave the company when skipped for promotion, while women are only 10% more likely to leave. Men may receive higher future potential ratings specifically because they are more likely to leave the company faster than women if they are passed over for promotions or receive low potential ratings. It would mean that giving men a high future potential rating is essentially a retention strategy. Unfortunately, that would also mean that lower-performing men get promoted because of the threat of them leaving while the higher-performing women are passed over. The high potential ratings and promotions are essentially given to men who are less likely to perform well and more likely to leave the company.

“The high potential ratings and promotions are given to men who are less likely to perform well and more likely to leave the company.”

Shue, Benson, and Li showed that ignoring future potential rating scores and gender during decision-making almost eliminated the gender promotion gap. However, it also decreased the average future performance of those promoted. It seems that a better approach is to increase the potential ratings for those women who received the highest performance ratings. This adjustment is meant to account for gender bias. Then the decrease in the future performance of those promoted doesn’t happen. Of course, when generally known in the organization, this bias adjustment may lead managers to lower scores for women in anticipation that they will get their bias adjustment later in the process, which may lead to an even bigger bias from the front-line managers. Some other de-biasing strategies might be therefore preferred.

It is almost comparable to having the current performance on both axes of the matrix. That may lead to a danger of running into the Peter Principle.

2. Avoid the Peter Principle

The Peter Principle is a term coined by Laurence J. Peter. It postulates that employees are being promoted until they reach their level of incompetence, meaning that all levels of the company are, over time, managed by people who are over their heads.

Alan Benson, Danielle Li, and Kelly Shue examined data from 53,035 sales workers from 214 companies to see whether the Peter Principle is real. They found that companies tend to prioritize current job performance when making decisions about promotions at the expense of clear characteristics that predict good managerial performance.

“Companies prioritize current job performance when making promotion decisions, at the expense of clear characteristics that predict good managerial performance.”

This most likely applies not only to sales but to any roles where the skills needed to succeed at one level differ from the skills required to succeed at the next level. Promotions to management shouldn’t be used as an incentive to increase performance. It is a different role, a different career path, and not a reward. It can undoubtedly have a motivational effect and improve the performance of individual contributors who aspire to get into management, but there are other ways to incentivize them. Pay for performance is a better approach to reward individual contributors than promoting them to a role they may not be equipped to handle.

“Promotions based on current performance remove biases and lead to more diverse and inclusive management teams. Trying to predict future managerial potential is much more tricky.”

On the other hand, promotions based on current performance can remove biases and lead to more diverse and inclusive management teams. Trying to predict future managerial potential is much more tricky. Thus promoting the best performers may still be a good way to create a feeling of fairness within the organization. It needs to be followed by clear expectations that promotion is a start of a new career. Both the organization and the promoted individual need to understand it. An outsized focus on continuous leadership development is then required and can help with mitigating poor performance.

3. When making promotion decisions, consider everyone

Researchers Joyce C. He, Sonia K. Kang, Nicola Lacetera showed that women are less likely to enter competition than men when given a choice.

In one of the studies, when using the opt-in conditions, fewer women than men chose tournament-based compensation (46% versus 72%). When using the opt-out condition, men chose the tournament 76% of the time compared to 75% of women.

This was confirmed by another study when in the absence of gender differences in performance on the task, there was a gender gap in competition in the opt-in condition (52% of women choosing a tournament versus 72% of men). Again, this gap shrank in the opt-out condition (73% of women versus 78% of men).

This research has clear implications for the way organizations promote people and is one of the contributing factors to the lack of women in leadership roles. When companies expect internal candidates to apply and ask for promotions, they are more likely to increase the gender gap in managerial positions. Various admissions, awards, and promotions processes require this self-nomination. This process limits the pool of candidates to those who don’t mind self-promoting, are overconfident, and are more likely to take risks. Extroverted and often narcissistic men will apply significantly more than introverted men and women.

“Admissions, awards, and promotions processes that require self-nomination limit the pool of candidates to those who don’t mind self-promoting and are overconfident. Extroverted and often narcissistic men will apply significantly more than introverted men and women.”

This situation can be remedied when replacing the opt-in process with opt-out. Having an opt-out promotion process when everyone qualified is considered, not only those who applied. This opt-out process ultimately leads to more women in leadership. More importantly, it doesn’t have any adverse effects on the performance or well-being of future leaders. The only thing that happens is having an increased talent pool from which the leaders get selected.

Putting it all together

The hurdles women face when trying to climb the career ladder are real. They have to fight many biases that hold them back. When building your performance management system and promotion criteria, stop relying on “future potential” as a reliable metric, or at least try to make it as objective as possible.

When making promotion decisions, don’t get seduced into promoting the loudest ones who ask for it or those who threaten to quit. Include everyone who performs well. Then focus on strengths they have that will help them succeed in leadership.

What is your take on the topic? Is there an imbalance in leadership roles at your company? What steps are being taken to remedy the situation? Where do you believe the real problem is? Is the problem systemic, and is it the processes that disadvantage women? How would you design a promotion process that would be truly inclusive?

Photo: Tumisu /

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Categories: Diversity, Leadership

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