The concept of “meritocracy” has recently gained popularity. Its promise to ensure the rise of the best and most deserving talents paints an ideal business world. Yet, what exactly is meritocracy?
Meritocracy is considered “a social system in which merit or talent is the basis for sorting people into positions and distributing rewards… everyone has an equal chance to advance … regardless of their gender, race, class, or other nonmerit factors” (Castilla & Benard, 2010). In other words, meritocracy is an organizational system where decisions around the employee lifecycle (hiring, evaluation, advancement, and rewards) are intended to be based on individual merit – typically defined as performance, talent, or potential.
However, in practice, “merit” is not an objective or universal standard, but a socially constructed and interpretative concept shaped by cultural norms, systemic biases and managers’ experiences. If merit is not an objective standard, there is much room for subjectivity. Most companies interpret merit based on quantitative and qualitative performance, personal qualities, and potential (Castilla & Ranganathan, 2020). Individual biases about match, aptitude, and potential will likely skew evaluation and cloud judgment.
Indeed, managers often apply either focused (quantitative, performance-based) or diffuse (qualitative, personal qualities and team-based) interpretations of merit (Castilla, 2020). This subjectivity means that without deliberate effort, meritocratic systems can reinforce existing inequalities rather than eliminate them. In fact, research from the Massachusetts Institute of Technology clearly finds that organizations with meritocratic values are often the worst offenders of bias, specifically as related to gender (that is, prioritizing white men in their people decisions).
Why does this happen? When managers operate within quasi-meritocratic organizations, they tend to believe they are more impartial, which can (often unknowingly) give them license to act on their biases. Moreover, when people see themselves as unbiased, they become less inclined to scrutinize their own actions. Castilla and Benard refer to this as “the paradox of meritocracy” (Castilla & Benard, 2010).
Without deliberate effort to remove inherent subjectivity and bias, so-called meritocratic systems can reinforce privilege and existing biases rather than eliminate them. This is also where DEI becomes a vital ingredient for change. True meritocracy requires high objectivity and transparency, fair and equitable access, and opportunity – inclusion is the enabler that makes it happen.
A true meritocracy requires organizations to:
As such, meritocracy is not a fixed state but a goal to be continually refined. Only through inclusive practices – valid measurement systems, awareness of bias, and equal opportunity – organizations can truly create environments where fairness thrives. “Inclusive merit is designing systems that recognize and reward talent in all its forms” (Praslova, 2025).
Sensitizing and training leaders and recruiters to reduce bias is not enough, as Iris Bohnet and Siri Chilazi compellingly show in Make Work Fair (2025). What works? A strategic, unbiased, and transparent system where merit contributes to the overall success of the organization, based on a shared understanding of what constitutes performance and inclusive behaviors. Perceptual and structural barriers must be eliminated to ensure that the best and most deserving talents can rise. Otherwise, too many potential candidates can be overlooked at every stage of the talent cycle: They need access to be considered for recruitment, be fairly evaluated as talents even if they don’t “look like” or fit the image of the typical manager and be treated fairly and respectfully to maintain their loyalty.
Inclusive leadership offers proven tools and practices to ensure everyone has what they need to succeed. Companies committed to DEI likely already have the transparent processes and equitable structures required for a meritocratic system.