Successfully Managing Demographic Similarity

by Vincent J. Natoli, Jr.

Employers must manage their workforces efficiently to succeed in our competitive world. Employers differ on their levels of authoritarianism and authoritarianism is important because it is associated with many organizational performance outcomes including productivity, quality, absenteeism and turnover. There are many biases in the decision-making process such as the halo effect, leniency, severity and central tendency but this article will delve into the issue of demographic similarity (DS) which is the grouping of employees similar on such factors as: age, gender, race, religion, nationality, occupational status, organizational affiliation, income level, marital status and educational level. DS biases are increasing, as indicated by the number of complaints filed with the Equal Employment Opportunity Commission, despite efforts to eliminate them, at least in some demographic groupings, through the equal employment opportunity laws.

Authoritarianism & Demographic Similarity

Authoritarianism theory was developed in decades of extensive research by now-retired psychology professor Bob Altemeyer and defines authoritarianism as a co-variation of 3 attitudinal clusters: aggression, conventionalism and submission. Conventionalism is a high degree of adherence to the social conventions which are perceived to be endorsed by society and its established authorities. Submission is a high degree of submission to the authorities who are perceived to be established and legitimate in the society in which one lives, and aggression is a general aggressiveness directed against various persons which is perceived to be sanctioned by established authorities. Professor Altemeyer found low authoritarians to be more open-minded, less dogmatic and biased, and more independent than high authoritarians. While both high and low authoritarians feel more comfortable with people like themselves, i.e., birds of a feather flock together, the highs, because of their narrow conventions, are less likely to accept different people. Highs are more likely to aggress against others, particularly unconventional targets, due to feelings of self-righteousness and just-world beliefs, and the aggression is triggered by perceptions of the world as a dangerous place. Highs usually do not realize they are high on authoritarianism.

The Theory of Employee Survival states that an employee’s acceptance into and success in an organization is based on an authoritarianism congruence between the employer and employee. Starting in the recruitment phase, before an employee is hired, through separation, there is an assessment of each other’s authoritarianism and whether the parties will be congruent. The employer uses organizational socialization techniques, and rewards and punishments to mold the employee to its conventions and those refusing to submit separate from the organization. Over time, the employer’s workforce becomes more congruent with the employer’s authoritarianism so that a high authoritarianism employer probably is more likely to have a high authoritarianism workforce than a low authoritarianism employer and vice-versa. The next section of this article will show how authoritarianism and the Theory of Employee Survival affect DS in various employment functions and, thereby, organizational performance.

Employment Functions

Interviews

Interviews are probably the most pervasive employee selection technique and, generally, there are 3 types. In an unstructured interview, the interviewer can delve into any topic with the applicant. In a semi-structured interview, the interviewer prepares some questions in advance and delves into other topics he deems to be important. In a structured interview, the interviewer’s questions are prepared in advance.

Evidence suggests that interviewers try to make decisions as soon as possible in order to conserve energy, thereby not obtaining all of the information needed to make an accurate assessment and implying a relatively high susceptibility to bias.

Further evidence of bias in the interviewing process is shown by the bases interviewers use to assess applicants. Interviewers tend to assess applicants based on their job competence and value to the organization. Evidence suggests that assessments of applicants’ competence is relatively consistent between organizations but varies for organizational fit and, once the threshold of minimum competency is crossed, the fit judgements become important. The Theory of Employee Survival suggests that employer authoritarianism is manifested in interview assessments to determine which applicants are more likely to submit to its conventions. The higher the level of employer authoritarianism, the higher the DS bias may be.

DS biases may be reduced through the use of structured interviews, which have been shown to have higher performance validities than unstructured interviews. Even if structured interviews are used successfully, however, subsequent bias in the hiring process can lead to poor hiring decisions.

Performance Appraisals

Performance appraisals evaluate employee performance based on standards and communicate the results to employees. There essentially are 2 uses of performance appraisals: administrative, e.g., compensation, lay-offs, promotions; and developmental, e.g., training, career planning. Because of the extensive uses of performance appraisals, it is important they be accurate.

DS has generally been shown to affect people’s liking of each other and a supervisor’s liking of a subordinate has been associated with higher performance appraisal ratings, a lower likelihood to punish the subordinate and increased bias in the rating. A supervisor’s performance appraisal rating, furthermore, may be predicted months in advance based on the perceived similarity between the supervisor and subordinate. The demographic composition of the work group, interestingly, may affect the rating bias with the bias possibly eliminated when the percentage of dissimilar employees in the work group exceeds 50.

The Theory of Employee Survival suggests that the high authoritarianism employer is more likely to have supervisors who perceive demographically dissimilar subordinates as unconventional and negatively, and demographically similar subordinates as conventional and positively and, thereby, aggress against the dissimilar employee by giving him a lower performance appraisal rating than the demographically similar employee. When the dissimilar demographic composition of the work group exceeds 50% of those dissimilar to the rater, however, the dissimilar employees may no longer be unconventional targets so the negative ratings may cease.

Employee Development

Employee development is important because it increases human capital thereby making the employee more productive to the employer and the additional skills an employee gains can provide a basis for increased compensation and/or a promotion for the employee.

Demographic dissimilarity on the basis of gender and nationality has been shown to negatively impact the mentoring of proteges in international internships. The lower level of mentoring is associated with lower levels of learning about international business and lower rates of permanent job offers from employers and acceptances of those job offers.

CEO Hiring & Compensation

There is evidence showing the relationship between boards of directors and CEOs is affected by DS. New directors are more likely to be demographically similar to the CEO when the CEO is more powerful than the board but more likely to be demographically similar to the board when the board is more powerful than the CEO. Increased DS between the CEO and board has been shown to be more likely to result in higher CEO pay and lower performance-contingent compensation.

Benefits of DS

While the article, to this point, has focused on the negative employment outcomes of DS, DS, like many things in life, is more complicated than it appears. DS has advantages, as well as disadvantages. DS has been shown to improve communications; increase organizational commitment and tenure; and decrease turnover. Demographic dissimilarity, furthermore, while being shown to increase creativity, has been shown to increase conflict and employee role ambiguity; and to decrease social integration; and demographically dissimilar teams have been shown to have lower levels of consensus than demographically similar teams.

Conclusion

Authoritarianism is based on aggression, conventionalism and submission, and the Theory of Employee Survival states that an employee’s acceptance into an organization and success in an organization is based on an authoritarianism congruence between the employer and employee.

Demographically dissimilar employees may be unconventional targets of authoritarian aggression. High authoritarianism employers can change formal employment processes such as unstructured interviews to structured interviews, which can reduce aggression against unconventional targets in the interviewing process, but the aggression may appear later in the hiring process.

DS, like employer authoritarianism, has its positive and negative aspects, and also appears to have an optimal level for maximizing organizational performance.

October 14, 2012