“Potential” and the Gender Promotion Gap Summary

Significance 

This study from MIT examines one of the most widely used talent assessment methods, the Nine Box, and reviews its use through a gender lens. Analysing its impact on women’s progress provides evidence of significant bias. Regardless of the exact method, there are implications for all assessments of women’s ‘potential’ because the Nine Box is similar to models for talent assessment and promotion used in organisations across the globe.

Summary and Methodology 

This 68-page paper unpacks the frequently used Nine Box talent assessment method for analysing employee performance and their future potential, reporting that it contributes to the gender pay and promotion gap. The study looks at data from 29,809 North American retail chain employees who are on track for management between 2011 and 2015. It concludes that organisations are overlooking and failing to galvanise the potential of the women they employ.

Context 

A Nine Box evaluation is a tool for managers to assess an employee’s performance against targets, alongside their potential to grow and contribute to the organisation in the future (either in the same or different roles). Assessing ‘potential’ is left to managers’ discretion, this research evidences how this subjectivity leaves significant room for bias. The study references previous research on the possible reasons for this bias, including; the evidence that people find it difficult to imagine women as leaders, that women lack access to influential networks and that they can also be ‘hoarded’ by self-interested managers. 

Key Findings 

• Women receive higher performance ratings but lower potential ratings than men. They are 33% more likely than their male colleagues to simultaneously have the highest performance and lowest ‘potential’ ratings.  
• The low potential ratings account for around half of the gender promotion gap. 
• In a secondary rating following a promotion, women are more likely to be rated higher in performance than their initial potential ratings than men in the same ‘potential’ category. This evidence shows that women ‘outperform’ their initial ‘potential’ rating, which indicates that it was inaccurate. The potential ratings are a significant predictor for promotion, so this study shows how organisations hold women to a higher standard than men for promotion. 
• Men are more likely to leave an organisation; therefore, they are a greater risk to managers, and because of this concern, managers give higher potential ratings. There is a loyalty penalty for women.
• Women are 13x less likely to be promoted than men.

Proposed Solutions 

• Changing the managers who provide ratings? there is no substantial evidence that women would benefit from being rated by different managers (by differing their gender, age, performance/potential rating). 
• Not having ‘potential’ ratings’ at all? The ‘potential’ rating methodology is still helpful, even necessary, but is subjective and open to significant bias. 

An organisation-wide approach to tackling the bias in how managers conduct their ratings is necessary to reduce the discrimination women face.