Should you hire the best-qualified candidate for a job? The answer is: not necessarily, as a new paper points out.
The reason for this is simple.It's to do with induced reciprocity.If you hire a duffer, he'll feel grateful to you and will exert more effort or honesty. The best-qualified candidate, by contrast, will feel entitled to the job and so might not try so hard.And it's possible that what you gain from his greater ability you lose from his lesser diligence. The authors show that, under experimental conditions, a big minority (30%) of principals choose a mediocre agent for just this reason.
I suspect this is a classic case of economists seeing something in practice and wondering how it can happen in theory. We've all seen second-rate people get jobs because the boss trusts them; we might even have been that second-rater ourselves.
This is not the only reason why rational bosses might hire lacklustre people. Marko Tervio has shown that, when talent can only be revealed by working with expensive assets, bosses will prefer a known mediocrity to potentially better but unknown workers.And Dan Bernhardt, Edward Kutsoati and Eric Hughson have shown how managers prefer to hire people like themselves whose skills they can more easily evaluate.
And this is not to mention plain nepotism, Adler superstars, the demand for quacks or survival of the stupidest effects.
Hayek, then, was correct when he said that "the return to people’s efforts do not correspond to recognizable merit."
The point here is related to one Will makes. Meritocracy, at least as normally understood, does not exist and probably cannot exist in a free market with rational people.You cannot therefore justify inequalities by claiming that they reflect differences in ability - though there are, of course, less bad justifications.
The claim that successful people often lack talent is not just envy-tinted casual empiricism. It is entirely consistent with economic theory.
"You cannot therefore justify inequalities by claiming that they reflect differences in ability "
but you start by talking about a mediocre talent who works with "more effort or honesty" - aren't effort and honesty "merit"? Meritocracy does not mean rewarding people according to some notion of ability, without regard to how that ability is applied.
I don't really understand this approach - if you are for meritocracy, this doesn't mean you need to see a system in which reward is a function solely of merit with no other factors ever mattering, and anything less mean you must abandon your support for meritocracy. You seem to be identifying deviations from perfect meritocracy and concluding that meritocracy is a chimera.
But it's quite possible to be more flexible about what meritocracy means, and take it to mean that a system in which the basic underlying principle is that rewards or status or whatever reflect merit, as far as it is possible, but accepting that other things are going to matter too in practise, and still make a meaningful distinction between meritocracy a systems that allocate rewards according to who your parents are or whether you are a member of the Party.
Suppose some people do well because managers find their ability easier to verify than some other higher ability people. So what? That's just an addendum, not a negation.
Posted by: Luis Enrique | September 26, 2012 at 01:31 PM
@Luis
Your flexible definition of merit results in a tautology. Under your definition all recruitment decisions will be deemed correct because they will have selected the best person for a job, even though the successful candidate may be incompetent.
For example, the boss failing in their job may select a complete idiot as their assistant so as to have a scapegoat and to deflect blame from their own performance. Would you say this is an example of a meritocratic decision?
Meritocracy, if it means anything, requires
1. Valid person specifications that accurately reflect the skills, abilities, and other personal characteristics required to competently discharge the prescribed tasks.
2. Selection of candidates that most closely match the person specification.
I suggest distortion may occur in both requirements and that superfluous criteria may be used, either explicitly or implicitly. The best candidate may not get selected or be identified as a consequence.
Posted by: Anonymous | September 26, 2012 at 02:39 PM
hiring somebody as a scapegoat might not be "meritocratic" but the fact that this kind of thing sometimes occurs does not mean meritocracy is impossible. It's still meaningful to talk of a meritocratic system that contains frequent deviations from meritocracy. If this post was entitled "on the impossibility of a perfect meritocracy" then who would argue with that, but who would care either?
we are not talking about a formal mathematical property in which all members of set A must display properties 1. & 2. otherwise we do not have meritocracy.
dullards love to point out "there's no such thing as a free market" which is of course true but does not mean it makes no sense to label some systems "free-market" or talk about the advantages of such systems, because some economies are more free-market-like than other economies.
Posted by: Luis Enrique | September 26, 2012 at 02:57 PM
If you really want to oppose meritocracy, you should advocate hiring the duffer...because he would perform worse. As long as you aim at best performance, you are still in favour of meritocracy and just changing the hiring rules.
Posted by: ortega | September 26, 2012 at 03:55 PM
I agree that this doesn't seem to directly point to meritocracy being impossible. That there are multiple dimensions involved -- both for qualities of the candidates and of the jobs -- that there may be observational errors in observing the qualities of the candidates and the jobs, and that the fit function between candidates and jobs may not be linear in the quantities doesn't change the basic ideas of trying to select people who best fit the job at hand, and rewarding people based on how they perform.
Posted by: dBonar | September 26, 2012 at 05:54 PM
@ Luis - yes, honesty and effort are meritorious, buth the point here is that they are not so much exogenous character features as endogenous to the hiring decision. If the mediocre candidate were to get a job for which he was the most able candidate, he might subsquently shirk. In this sense, the merit is a quality of the job match, not the individual.
Posted by: chris | September 26, 2012 at 06:48 PM
"merit is a quality of the job match, not the individual."
agreed. Perhaps this isn't appreciated, but I reckon it's always the case.
Posted by: Luis Enrique | September 26, 2012 at 07:17 PM
Have empire, superficial twerps, fear, and the desire for a warm feeling between the cheeks been analysed?
Posted by: Sally | September 27, 2012 at 10:51 AM
Two related organizational phenomena:
"FUMU" = Foul Up, Move Up. Example: Unmeritorious person ("UP") produces noticeably feculent results in key operational management role. Solution: promote UP to middle-management where feculent results do not show up so quickly (or noticeably) ... maybe ever. Getting entirely rid of UP may not be a pragmatic choice (e.g., friends in high places, etc.). QED, FUMU is a logical strategic choice for senior management.
"Loyalty is more important than competence:" uttered by fabulously wealthy person ("FWP") to a senior manager. QED, the organization in question will become optimized to do the bidding of FWP, but the organization may not survive the departure of FWP from the scene.
Posted by: Dave | September 27, 2012 at 06:43 PM
smart people are seen as working less hard because they work more efficiently. the slow worker is seen as the "hard worker"...
Posted by: donna | September 27, 2012 at 06:47 PM
Sigh. This is bogus at the hypothesis. No hiring manager would ever advocate hiring the most qualified. You hire the best fit for the job and the organization. You also imply that the best qualified is also the most capable, which is another falsehood.
Your argument presupposes these characteristics are the same, so you have to reach the conclusion you did. But you don't define your terms, because if you did, you simply can't make the logical chain that you poorly attempted.
Posted by: Curmudgeon | September 27, 2012 at 07:27 PM
Your overarching conclusion may be correct (I think it's a lot more muddied than that), but you can't get there from here. Success = skill + luck, and we have no reasonable way of measuring any of the variables, including the result.
Posted by: Curmudgeon | September 27, 2012 at 08:27 PM
Democracy find its roots in a popularity contest which leads to so many leaders with psychopathic abnormality to hedge their way to powers using deceit and lies. Meritocracy on the other hand, as an ideology at least, aims to ensure our leaders, public and corporate, are truly entitled to the position they fill which democracy has long failed to achieved.
Posted by: Jean D | September 28, 2012 at 12:46 AM
Above and beyond the question of how relevant 'experiments' with undergraduates playing for pieces of chocolate and $1 bills are r.e. explaining general phenomena, the Montinari, et al. results, all else equal, are driven by their assumptions in what is a rather trivial way, i.e., with more effort, the 'duffer' effectively ceases to be a duffer. Suppose, however, that try as hard as she can, the duffer's marginal product is arbitrarily close to 0 (it's enough for it to always be significantly below that of the non-duffer). She can work so terribly hard conditional on receiving a 'message' from the principal; but poor duffer, well, she just can't do it (and will always be outperformed by the non-duffer, assuming some positive work effort).
Posted by: GlibFighter | September 28, 2012 at 07:09 AM
Most people confuse merit with degrees from "prestigious" institutions or other highly imperfect proxies. I use quotes because graduating from such a place does not guarantee great ability, and prestige itself is a highly imperfect stand-in for merit.
Its exceedingly difficult to pick the worker with the most merit when hiring, assuming that is the goal in the first place. Certain fields are easier to judge based on some form of testing than others, but this is rarely the case because performing a job is very different from performing well on tests. Software engineering is a great example of this. Interviewers use all sorts of puzzle questions to weed out the "dumb" programmer. The problem is that 99% of software development has almost nothing to do with puzzles, and often, those who love puzzles (and are good at answering them, and hence get the job) wind up making puzzles out of software tasks that would be better performed with simplicity and directness. Ability to write well should be a prerequisite for software coding, because writing code is writing a language. There are expressions, sentences, paragraphs, and the whole has an architectural logic to it that closely matches long form writing. Software devs are notoriously bad writers. Go figure.
So what is a conscientious interviewer to do? Have the developer bring some samples of code they have written. Sure you can't be positive the candidate actually wrote the code, but if they can explain it and the decisions they made in writing it, what's the difference? You learn a lot about someone from such an exercise. Yet barely anyone does this. Instead they rely on proxies such as puzzle questions and quiz questions from the internet. Sad.
The point being that there are (admittedly imperfect) ways to practically judge, on the merits, someone's ability to do the job. But there is no way to judge how someone will do the job when you aren't watching, or after three or four months when the novelty of the new position or atmosphere has worn off. You just have to take a chance on this stuff.
And that's assuming one is even hiring based on merit, and not on some other more ethically questionable basis -- such as political hiring where loyalty and toeing the line is prized above all else. In fact, I would argue that in corporate America (and probably everywhere else) loyalty is prized above all. That is one reason why nepotism and inside hiring are so popular -- known quantities that have been "tested" in the qualities most desired.
And we've barely scratched the surface of integrity and ethical grounding in hiring decisions. Let's face it, meritocracy, when it can even be decently defined, only exists as an accident -- either when someone creates something on their own and forms a company around it (and I mean truly creates the thing, not steals it from a trusting colleague, etc. - a la Thomas Edison), or when the job in question just happens to have the correct dynamics surrounding it such that being effective at the job is a measurable affair. Certain fields qualify on that score -- e.g., fields with easily measurable outcomes that are clearly reproducible and clearly the result of the effort made by the candidate. Lion tamer for instance. But 90%+ of jobs do not lends themselves well to such metrics. And some rather large percentage of hiring decisions are made based on factors other than merit completely, either because the job is actually quite different from the description, or there is some CYA going on (as one commenter put it above), or the obtaining of the job is so competitive that he/she who actually gets the job has only displayed their knack for the getting of the job, and not the doing of the job (Obama, W... almost every boss I've ever had... etc.), or one of any other number of reasons.
Therefore, we can safely say that meritocracy is an ideal that is rarely if ever achieved even imperfectly. In most cases someone gets the job, and hopefully (or not) they are good at it. In any given field there are incompetents, super-competents and those who get the job done adequately to varying degrees. As an aside, this is why the education "reform" movement is such a joke -- pretending that we can do away with all mediocre or terrible teachers is a standard that is not pursued in any other field of endeavor, so why try to apply it to teachers? -- oh yes! To avoid the real problems and destroy the teachers' unions. Duh.
I mean, seriously, watch "Generation Kill" if you don't believe me. In the case of warfare one would think the military would've come up with the most consistent and best ways to promote the competent over the incompetent. Lives are at stake after all. And yet, watching that series (which is confirmed by many ex-military as extremely accurate -- and why shouldn't it be? We've all experienced incompetence in management before, unless we've never held a job) we see incompetence promoted and competence punished at a rate that is arguably the rule as much as the exception. If the military can't get it right no one can. But then again, the military, like everything else that we are discussing, is a human endeavor. And human endeavors are inevitably imperfect, and often downright disastrous.
Meritocracy is fun to discuss, but as a culture we have bought into the idea way beyond any representation it actually has in reality. And this has led not only to great suffering and false judgment against a large percentage of the populace, but to too many "best and brightest" moments where a healthy dose of common sense could save a lot of mess and misery but we deferred to the "best and brightest" who inevitably are anything but, and look where our society is because of it.
On a related note, money has a way of confirming merit where it is not deserved. It may be controversial but it shouldn't be that 90% of those who have had success in business owe their "success" solely the whims of chance. Somebody has to win. Just look at a guy like Mitt Romney. What was most striking about his little speech before the $50k per plate dinner audience was that his comments betrayed massive ignorance and confusion as to who actually makes up the electorate, and how the demographics are actually distributed. The other striking thing was that the audience lapped it up, and were ready to spoon feed him self-serving lies about dependency, etc., amongst the electorate that allowed him to opine blindly in the direction they all wanted the conversation to go in.
If monetary success was due to intelligence or the ability to grasp the reality of situations, these dunces would be on the soup kitchen line. Most millionaires are more dependent on government than the most welfared-up queen in the ghetto or the trailer park. I mean think about it -- lets say the "typical" (mythical) welfare queen (why not king? misogynist much?) gets $10-20k per year from the government. How much money did Romney get in tax savings alone from the government last year? Millions, easy. And that's just scratching the surface of his dependency. Private equity as a business only exists because of the massive loopholes that have magically appeared over the past 40 years in the tax code that make such endeavors economically viable at all (don't believe me, hop on over to NakedCapitalism.com and read the series on private equity as told by private equity professionals).
And PE is hardly the only industry that is reliant for its profits on government giveaways. In fact, of all the millionaires in that room with Romney, I bet there was barely one that made it on their own without either massive government aid of one form or another, or without breaking the law in various ways that never get punished because those carrying out the heists are wearing white collars (Romney's wealth is a result of both government largesse and skirting the law -- he was no turnaround specialist -- he was what is known in criminal circles as a bust-out operator. A bust-out is a term of art that refers to the taking of a solvent and profitable business, piling debt on it in order to pay that debt to yourself in one way or another (performance bonuses for Romney!), and leaving the stinking carcass for the carrion crows. Fully one quarter of all the companies Bain took over under Romney's tenure went bankrupt as a result of Bain's benign stewardship.).
And yet there they sit, unreflective as ever, begging to hear about the big bad welfare queen sapping the vitality of the free market from the deserving millionaires. And you still want to talk about meritocracy?
Posted by: YankeeFrank | September 28, 2012 at 08:06 PM
You know why on-line dating works? Because if people are REALLY honest about who they are and want they want, then they get EXACTLY that. In that sense, in the job market the same is true. The trouble is many are convinced that bosses are not being honest about their motivations, or have pressure from above to not be honest. All this to say that the job market is nothing like meritocracy, it's more like a dating site - and you can have a six-pack and a giant cock and girls still won't like you if you're a jerk (except Chris Brown I guess...)
Posted by: CDN_Rebel | September 28, 2012 at 11:30 PM
Put very simply, the authors of the stude seem to not take into account outside forces, eg, peer pressure, types of problems being solved, environment, team dynamics, etc. Secondly, as a seasoned turnaround specialist, I fix the problems left by incompetent owners, execs, and managers every day. Hire poorly, you pay the price.
Posted by: Jack Skwat | September 29, 2012 at 03:46 AM
""there's no such thing as a free market" which is of course true."
"the advantages of such systems"!
Posted by: BenP | September 29, 2012 at 07:37 AM
This article must have been a big hit at MacDonalds or overseas where all our jobs went. Hiring (yeah, as if) - don't make me choke from laughing so hard. It looks like the authors wrote a piece that the corporate sector HR people would like.
F The Corporate Sector!!
Posted by: Tom | September 29, 2012 at 12:38 PM
I have been working now for 30 years as a lawyer and have risen from lowly associate to owning my own firm. I have absolutely no idea what "merit" means or could possibly mean.
I certainly understand what "trust" means and how important it is to my business and the business of my clients. It means being able to depend upon someone to not screw you over.(or at least to tell you that they need to do so).
"Work" is also ambiguous. Most of it is perception. Someone can seem to be working hard but is just spinning their wheels.
I do know what "responsibility" means. It is also crucial to my success and the success of my clients. It means to try to get a job done and not shift the blame when it goes wrong.
"Luck" is also ambiguous. Someone who sits at his/her desk and never tries to create opportunities is not "unlucky" they are just lazy. But likewise someone can seem to be "lucky" when in fact they are squandering opportunities.
I do know what "perseverance" is. It is also crucial to my succes and the success of my clients. It means to keep trying even when it appears that you have no luck. It means to take responsibility for your failures and share responsibility for your successes. It means to
try to be a trustworthy person that others can rely upon.
"Talent" means merely the ability to bring all of this together. And none of this makes you a better person than others. At best it means that you had a "good" upbringing that "taught" you things that others missed. or maybe it was a good mentor early in your career. None of it really justifies the kind of hideous inequality we have now. At best it might entitle you to a few more comforts but not at the cost of others living in deadly poverty.
Posted by: GeorgeNYC | September 29, 2012 at 07:21 PM
@ GeorgeNYC's
Just wanted to say that I found both the article and several comments here provocative. But nothing compared to the clear truth and human decency of your comment -- simply outstanding my friend.
Posted by: pedro | September 30, 2012 at 04:22 AM
Success is definitely skill + luck. Some of that luck is about doing the activities that gets you noticed ("the harder I work, the luckier I get") but there's also plain luck. If IBM hadn't messed up the PC, Bill Gates would not be a multi-billionaire. He probably still would have had a successful software business, but Microsoft probably wouldn't be a household name.
Posted by: Tim Almond | September 30, 2012 at 09:05 PM
To find true success, one should be able to keep in touch with his inner self, know of his strengths and weaknesses and what he really wants to do and what he is good at, have visions of him in the future and make a big step in fulfilling his dream. He can undergo Disc personality testing to do this.
http://www.success-insights.co.uk
Posted by: Dean S | October 15, 2012 at 06:03 AM