POV: Elon Musk thinks MEI is great. I think it’s B.S.

In one of my first career assignments in Corporate America, I was excited to be on the hiring committee to bring in Assistant Brand Managers (ABM). The company I worked for was hoping to hire a class of ABMs to place in various brands across various divisions of the business. All of the candidates were students at business schools across the country. And they were all applying for one of the limited, and coveted, spots in our program. In the kick-off meeting, my team and I were handed a giant stack of résumés.

I started to study the first page of the first résumé when one of my leaders walked over. He motioned for me to hand him the résumé. “Flip straight to the back, or the second page,” he instructed. “Scan the education section. If it’s a top ten U.S. business school, it goes in the yes pile here. If it’s not a top school, toss it in the no pile over there. Recruiting will handle the automated rejections.”

“Shouldn’t I read the entire résumé?” I asked, confused.

“No, we hire based on merit here,” he responded. “Where they went to school saves us time and helps us weed everyone else out.”

That would not be the last time I would hear a leader reference “merit-based” hiring. Many leaders believe that candidates should be hired based on their track record of knowledge, skills, and ability to succeed in a job—and that this is best reflected by a résumé. However, in this case it was clear we were simply scanning résumés in order to hire candidates based on them earning degrees from certain colleges. We made quick judgements and decisions about what was considered worthy of “merit.” The irony is that not many of us could actually define merit without relying on a candidate’s previous opportunities.

What is MEI?

Recently, Alexandr Wang, CEO of Scale AI stoked the backlash against diversity, equity and inclusion (DEI) when he shared a blog post about his company’s hiring principle: MEI, which stands for merit, excellence, and intelligence. Elon Musk applauded the policy, calling it “great.”

Now, MEI is quickly becoming the preferred acronym among anti-DEI leaders. However, I would argue that this MEI philosophy is already pervasive among white men in power who believe they deserve their privilege. For instance, I have heard leaders like Wang and Musk exclaim the following kinds of statements about diversity and merit in the workplace:

• “We are all about the best person for the job.”
• “I’m all for diverse talent, as long as they are good. It’s all about merit.”
• “Everyone has a chance to succeed here if they just put in the effort!”
• “I got to where I am in my career simply based on merit. Fair and square.”
• “We promote, reward, and compensate based on merit. It’s as simple as that.”

Of course, in an ideal world we would all be rewarded based on merit. But unfortunately, any critical look at the inequities in our society would show you that wealth, power, and jobs are simply not always distributed to the most deserving person.

As leaders, here are three questions leaders we need to ask ourselves before scrambling to embrace merit as the new way to build fair and equitable workplaces:

How do you define merit?

When we think of a merit-based system in our workplaces, we may think of a system where hiring and promotions are based on abilities, knowledge, skills, experience, and education. Ideally, merit helps determine who is considered the best candidate for the job. And yet many of us who want to use this term don’t have a definition we can all apply when evaluating talent. When you don’t have an agreed upon definition, merit can become whatever the decision maker in that particular situation says it means.

For instance, if you seek out and demand excellence, do you care what schools candidates graduate from? Or do you ignore where they went to school and evaluate the details of the rest of their candidacy?

And if you are looking for people who are smart, do you care what they scored on standardized tests? Or do you give everyone an opportunity to participate in an industry-agnostic case study as part of the interview process? And preferably, this is done without extracting free ideas from these case studies.

If you are judging applicants based on their work ethic, would it matter to you if you found out the final and best candidate was a mother? What about if it was a father? How would you define and judge their work ethic and commitment to their careers?

If you don’t have a definition of what merit means in your organization, the idea of MEI as a talent philosophy will quickly fall apart.

How can you ensure you only consider merit?

If you can come up with a detailed definition of what merit means in your workplace, the next question would be whether or not this definition can be used for all of your hiring and promotion practices. And if so, how are you going to ensure that merit is the only factor considered?

As I discuss in my book, ​​Reimagine Inclusion, we can often lean on cultural fit as an acceptable term to reject candidates. And this is more likely to occur if the individual we are evaluating doesn’t look, act, or think like us.

Now, I fear that this idea of “merit” will be used to replace coded language like “cultural fit.” We may start to see bias creeping in quickly, where whether we realize it or not. We often lean into hiring people who look like us, act like us, think like us, and have very similar lived experiences.

It is natural to want to believe that you have earned what you have. So by this same line of thinking, why not hire someone who is similar to you?

How do you evaluate if merit-based hiring is working?

Finally, if we believe in MEI—and have fair and equitable workplace processes that support this—it’s time to study the data. As Wang said in his post, an MEI philosophy aims to “treat everyone as an individual. We do not unfairly stereotype, tokenize, or otherwise treat anyone as a member of a demographic group rather than as an individual.” And yet, the paradox of meritocracy exists.

MIT Sloan Professor Emilio Castilla coined the term the “paradox of meritocracy.” Castilla shares that those companies who have embraced the MEI philosophy assume they don’t have biases around hiring, retention, promotion, and compensation practices. However, his research shows true meritocracies don’t exist and don’t have any protection against demographic bias.

“When managers believe their company is a meritocracy because formal evaluative and distributive mechanisms are in place, they are in fact more likely to exhibit the very biases that those systems seek to prevent,” writes Castilla. The research he conducted with his colleagues showed that “when an organizational culture promotes meritocracy (compared with when it does not), managers in that organization may ironically show greater bias in favor of men over equally performing women in translating employee performance evaluations into rewards and other key career outcomes.”

In order to evaluate if merit-based hiring is working for your organization, ask yourself what kinds of background your executive team comes from? What do hiring rates and promotion rates look like across workers of different demographics? Do you notice any patterns?

Leaders should also assess what performance ratings and reviews look like across different groups of workers. Similarly, what are the attrition rates across your company?

And lastly, leaders can review exit interview data to study what employees are sharing on why they chose to leave and conduct a pay equity analysis across your organization. By partnering with your human resources and legal teams, you can ensure team members are being paid fairly and equitably for their efforts.

In many ways, MEI seems like the ultimate American dream—that anyone, regardless of who they are and where they come from, can realize their professional dreams and unlock their potential.

But the reality is we still have a long way to go in order to create a level playing field for all individuals in our workplaces. Only then will any kind of MEI philosophy be truly possible.