A new study by scholars at the University of Minnesota, MIT, and Yale University finds that women fail to get promoted on an equal basis as men because managers tend to underestimate their potential.
In a study of 30,000 employees at a large retail chain, researchers found that more than half of entry-level workers — 56 percent were women. But at each rung up the ladder, there are fewer and fewer women: women were 48 percent of department managers, 35 percent of store managers, and 14 percent of district managers. The analysis found that women are 14 percent less likely to be promoted at the company in each year, and that a major factor preventing women from being promoted is that they are consistently judged as having lower leadership potential than men. In a two-part annual assessment, according to the records, women’s performance at the company is rated higher than men’s, on average. But their potential is rated lower — a pattern that continues even when women exceed those expectations.
“What is commonly talked about in terms of management and potential are characteristics such as assertiveness, execution skills, charisma, leadership, ambition,” said co-author Kelly Shue, a professor of finance at the Yale School of Management and in the university’s department of economics. “These are, I believe, real traits. They’re also highly subjective and stereotypically associated with male leaders. And what we saw in the data is a pretty strong bias against women in assessments of potential.”
Could managers be correct in their assessment that women at the company are excellent performers in their current roles but lack the skills to be successful at a higher level? To the contrary, the researchers found that managers consistently underestimate women’s ability to perform in the future. They identified women and men with similar performance and potential scores for a given evaluation period, then looked forward to the next period and found that women tended to have higher performance scores than men, whether or not they had been promoted into a more senior role.
Professor Shue holds a bachelor’s degree and a Ph.D. from Harvard University.
The study, “Potential and the Gender Promotion Gap,” may be viewed here.