Follow Mint Lounge

Latest Issue

Home > News> Talking Point > Why discrimination forms the foundation of management

Why discrimination forms the foundation of management

Performance management systems are an official exercise in identifying and discriminating between people at different levels as defined by the organization

Companies discriminate at every stage, from hiring to compensation. 
Companies discriminate at every stage, from hiring to compensation.  (iStock)

This idea might seem preposterous on the face of it. However, a close look into how organizations discriminate at every stage will establish that far from being preposterous, this is actually a fact we all accept and live by. In many job posts, we find organizations outrightly mention ‘Tier I (or Ivy League) schools/colleges only’, denying anyone outside the bucket to even try. That’s discrimination. But it’s also a hiring strategy which is considered normal. For example, top investment banks only hire the top students of top colleges. Others don’t even get a chance to try. Who is to say that someone with a lower score in those top colleges or one studying in a lower-rung college will not make a top I-banker?

Also read: A gripping tale of Elon Musk, Tesla and a massive gamble

Compensation is another form of discrimination. A premier college graduate is offered a higher pay than his colleague from a lower-rung college for the same job. That’s discrimination. And it’s not only accepted but also becomes the reason for aspiration of millions of youngsters and their parents slogging to make the cut into these premier colleges. The entire performance management system is an official exercise in identifying and discriminating between people at different levels of performance as defined by the organization.

Businesses discriminate among customers as well. Be it airlines or banks, select customers get to stand on the red carpet, get quick service, while others wait in long queues…. Giving preferential treatment to customers based on their lifetime value of business is an established business practice.

One might argue that these are examples of ‘differentiation’, more than ‘discrimination’. There’s only a fine line between the two. The startup world is rife with murmurs of entrepreneurs anguished about investors having a pedigree bias; that an IIT-ian may find initial funding easier than someone outside the Ivy League. During inside conversations, many investors may agree to it, their rationale being that the initial bet is made on the entrepreneur. They opine that while pedigree may not be the only decider, it’s considered a proxy indicator for capability and ability. To some, this may seem like a case of differentiation. To others, it may be education-based discrimination. Giving differential treatment to customers based on their buying capacity could be termed as economic discrimination. Hence, getting lost in semantics is both futile and non-productive to our goal. What’s necessary is to acknowledge that while discrimination has become a bad word, it’s the very algorithm by which people, whether employees or customers, are managed….

Organizations are increasingly being put in the dock for seeking to hire certain demographic profiles, pay differentially. In other words, they are expected to practise ‘equality’. Differentiating between the need for organizations to be equal, as opposed to being fair, becomes critical. We cannot expect organizations to be equal. But we can expect them to be fair. And here lies the key to dealing with discrimination in organizations. Organizations cannot be non-discriminatory. What they must strive for is, to discriminate using fair and transparent principles….

This brings us to the critical question—what about the inequity that exists today? How do we ignore the fact that certain sections of the society are lagging? How do we bridge the gap? Take the example of pay parity between men and women.

A case in point is Grand Slam prize money for male and female tennis players. Over the years, major Grand Slams have transitioned to equal prize money for male and female players.… A sexism debate in startup world is why a small fraction of venture funding goes to female founders as compared to male founders…. How do we deal with this never-ending debate, in every sector? First and foremost, we need to define the context of such debates, clearly…. in a business context, the root causes of discriminatory practices need to be addressed, taking a practical view instead of expecting utopian scenarios.

Another key aspect to consider while dealing with discrimination in remuneration, is that the decision variables are not shared transparently. Whether it is actor’s pay or chief experience officer (CXO) salary or tennis players’ earnings—the parameter should be defined and made public by decision-making authorities…. This radical truthfulness will lead to multiple outcomes. The very need to publish their decision parameters will put greater accountability on decision-makers to examine whether they have defined clear, fair criteria and have a systematic decision process in place. Making the criteria public also helps in fruitful discussions, instead of endless rhetoric….

The final piece of reducing the gap caused by historic discrimination is capability development including government-industry-academia collaboration…. there needs to be real investment in increasing the talent pool of women [and other protected groups] to bridge the wide gap that exists because of historic discrimination. Merely promoting protected groups will not help in the long run; however, preparing them will.…

The alternative to discrimination isn’t equal pay for equal work. True equity, especially in high-stake roles, will come from equal pay for equal outcomes.

Excerpt with permission from Diversity Beyond Tokenism: Why Being Politically Correct Doesn’t Help Anyone, published by Sage Publications India.

Also read: A Mumbai thriller reveals the murky reality of police work


Next Story