When Salesforce CEO Marc Benioff was approached by two of his executives and told that the company was paying men and women unequally, Benioff’s response was typical of many managers: that’s not possible.
“It’s impossible because we have a great culture here,” he recalled saying, when asked about the exchange during a 60 Minutes interview with Lesley Stahl. “We’re—we’re a ‘best place to work.’ And we don’t do that kind of thing. We don’t play shenanigans paying people—paying people unequally. It’s unheard of. It’s crazy.”
Even as diversity, equity, and inclusion (DEI) initiatives ramp up in industry—the global market for DEI is expected to more than double to $24 billion by 2030—they often face roadblocks from managers who believe that, while inequity is pervasive, it is simply not a problem within their own institution.
Previous research attributes that denial to the fact that managers often belong to a demographic majority (white or male) or have conservative views that oppose such initiatives. But Maryam Kouchaki, a professor of management and organizations at Kellogg, thought this explanation was incomplete.
Instead, Kouchaki and her collaborators found that managers are blind to these problems because they align their own self-worth with how they feel about their organization. Maintaining this positive view of their company (and therefore themselves) prevents them from recognizing problems in their own organization, even if they can plainly see them in other companies.
“Inequity is present everywhere,” says Kouchaki, who conducted the research with Christopher To of Rutgers University and Elad Sherf of the University of North Carolina. “But people who are in powerful positions have a sense of ownership over the organization, and they cannot see this inequity within their own context. Their role (in addition to their individual identities) can lead them to think this way.”
Still, the research team found there is one way to open managers’ eyes to the issue—and to help them keep their own biases in check.
The Problem of Structural Power
Organizations often champion the equitable treatment of employees, defined here as having fair and impartial processes in hiring, retention, treatment and evaluation that allow for equal access to opportunities while acknowledging structural inequalities.
Still, these processes must ultimately be put into practice by individual people, and DEI initiatives often face resistance from managers.
Kouchaki and her team wondered if the resistance was related to their role and the amount of power, or control over others, these managers tended to have in their organizations. Previous research suggests that having more power leads people to feel a greater sense of responsibility for the organization and its members. And while this causes managers to want to act in ways that are fair and equitable, it also leads them to feel a greater sense of organizational identification. That is, their self-worth is tied to the worth of the organization.
Kouchaki and her team wondered if that organizational identification blinded managers from noticing potential negative issues within their team—including inequity. Perhaps managers want to believe their organization is good and equitable and therefore cannot see the inequities that lie within their own unit.
To study the issue and test their hypothesis, the research team first looked to surveys of federal employees that gather information on a range of workplace attitudes and prohibited practices. The team found seven surveys (taken in total by more than 60,000 participants between 1993 and 2016) that contained questions on structural power and perceptions of inequity. Survey participants indicated whether or not they were supervisors and also answered questions like, “In my experience within my organization, men and women are respected equally,” with a 1 to 5 rating.
The research team found that those in positions of power reported less inequity in their organizations. This was true across years and organizations, and held even when the research team controlled for age, race, gender, experience, and education.
Managers Not Blind to the Problem
To investigate whether this blindness was the result of organizational identification, the team recruited nearly 1,000 participants to take a survey about their workplace. Participants were asked whether they supervised or managed others, and then rated how much they identified with their organization in response to questions like, “How much do you value being a member of your workplace?” They also rated the level of inequity in their organizations, responding to statements like, “In my workplace, men and women are treated equally.”
Again, people in managerial positions reported less gender and racial inequity in their organizations, with managers reporting 13% less inequities in their organization than non-managers. Critically, managers also reported identifying more with their organization than did non-managers.
Importantly, this doesn’t mean managers are incapable of seeing inequality. In a separate study, some participants rated their own workplace, while others rated other workplaces. Managers and non-managers similarly rated inequity in other workplaces. But when rating inequity in their own organization, managers rated it 17% lower than non-managers.
“It shows that managers are not blind to the problem,” Kouchaki says. “They just cannot see it within their own organization.”
Biases Affect Budget Allocations, Too
This perceptual tunnel vision could lead firms to disinvest in areas they might otherwise not.
The research team recruited more than 350 participants for an online survey. Respondents were asked to allocate $50,000 in their workplace budget to one of six taskforces: technology and IT, finance and operations, marketing and sales, accounting, ethics and legal and diversity. Participants read about the objectives for each taskforce and how that taskforce implemented programs to meet objectives. The diversity taskforce aimed to review and improve practices to reduce discrimination and prejudice with programs like seminars for diversity training and minority mentoring programs.
Participants also answered the same sorts of questions about structural power, perceived inequity and organizational identification from previous surveys.
The team found that those higher up in an organization were less likely to support the diversity taskforce and its programming. Managers were 19% less supportive than non-managers of diversity initiatives.
“We wanted to see how this effect translates into action, into allocation of resources,” Kouchaki says. “And it shows that this bias is consequential.”
To Remove Bias, Show Proof of Inequity
But there is a way to get managers to see their own biases.
In a final study, more than 700 participants took a survey in which they answered the same questions about inequity and structural power. They were also given the same budget-allocation exercise. But this time, before allocating resources, some respondents were asked to recall an occasion when an individual at their workplace experienced bias or inequity.
The effect was notable. Managers who were asked to recall these inequities allocated 30% more funding to diversity initiatives than those who weren’t asked about them.
“Exposure to this idea of inequity in their own workplace immediately reduced the bias,” Kouchaki says. “Then managers were more likely to support diversity initiatives.”
The same was true for Salesforce CEO Marc Benioff. When he was shown the evidence that women in his organization were underpaid, he used millions of dollars to help alleviate the problem.
“A lot of times, we can see systemic problems, but we think we are different than other people,” Kouchaki says. “We are not being intentionally mindful and recognizing that these problems could happen anywhere.”
Taking Notice of Potential Inequities
Managers, take heed: your teams may see inequity in your organization, even if you don’t.
Kouchaki advises looking actively for processes that could be perpetuating inequalities. Pay might be equal for both men and women, for example, but perhaps bonuses aren’t.
“Make sure you are being intentional and gathering information about potential inequities,” Kouchaki says.
This article orginally appeared in Kellogg Insight, a publication of Northwestern University's Kellogg School of Management. It is used with permission.
