A PROBLEM OF PERCEPTION It is not a clash of values that leads people to pit meritocracy against DEI, but a clash of perspectives. Paolo Gaudiano and Cynthia Overton explain why we need to measure merit and inclusion together to turn an ideological standoff into an opportunity for better talent management
I f you ask a room of business leaders whether people should be hired, promoted and compensated based on their skills and contributions – rather than on irrelevant factors such as demographics, personal connections or social status – you will get close to unanimous agreement. That belief is the definition of a meritocracy. It is also what most people working on diversity, equity and inclusion (DEI) are trying to achieve. Yet, over the past few years, these two ideas have been cast as opponents, with each side convinced the other is arguing in bad faith. We believe both camps want the same thing and that what they disagree about is not the goal, it is the diagnosis. explanations: the differences may reflect real differences in skills and contributions, or they may reflect differences in opportunity. People tend to hold one or the other of these views based on their personal experiences, but the underlying assumptions often go unstated. For instance, a manager who has advanced steadily and has never seen a capable colleague stall for reasons unrelated to performance, will conclude that the system works. On the other hand, someone who was passed over for the assignments that would have led CIRCLE OR RECTANGLE? When employees in the same organisation enjoy different levels of success, there are two possible
to promotion will conclude that it does not. Both reach their conclusions honestly, based on what they have seen. Looking for disparities in outcomes will not resolve the issue, because each person can see the data as simply reinforcing their view. In our book, we use a simple cartoon to make the point ( see page 37 ). Two people look at the same object. One says it is a circle, the other a rectangle and they argue, each certain the other is wrong. The missing context resolves the issue instantly: both are looking at a street lamp, but one stands in the street looking up while the other looks out from a second‑floor window. From their respective viewpoints, both are right and neither can be talked out of what they see. Many arguments about meritocracy and DEI have the same issue. The way out is not to press harder on the conclusion, it is to replace “how can you not see that this is a rectangle?” with a better question, such as: “Is it possible that, from where they stand, a circle is a reasonable thing to see?” That takes honesty and awareness, recognising not only that the other person is down in the street, but also that we are looking out from a higher floor. Making the frames of reference explicit is likely to reveal more shared ground than either side expected. However, two habits keep the frames hidden and perpetuate the tension between merit and DEI. The first is loose language: terms such as “equity” have
been defined inconsistently, so that two people can use the word sincerely and mean quite different things. The second is an outsized focus on hiring, which is only the opening step of a long journey: most of the differences in outcomes are due to project assignments, development opportunities, performance evaluations, promotions, pay and all the other processes, policies and resources that An organisation has only two levers to impact the success of its employees: it can control how it recognises, reviews and rewards contributions; and it can control the workplace experiences that determine whether employees are able to contribute in the first place. The only way to “widen the frame” is to measure whether either of these levers depends on personal traits that in principle should be irrelevant, such as demographics, personal connections or social status. We refer to the first lever as “merit” and the second as “inclusion”. And the only way for an organisation to tell whether it is, in fact, a meritocracy, is to measure both. enable employees to succeed. TWO MEASUREMENTS Inclusion, as we use the term, is not a sense of belonging or a score on an engagement survey: it is how well an organisation ensures that workplace experiences do not depend on individual traits that ought to be irrelevant. Merit, as we use the term, is not about someone’s SAT score or which school they attended:
36 Business Impact • ISSUE 5 • 2026
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