So You Want a Meritocracy, Huh?
Meritocracy—the idea that talent and hard work alone should determine success—has recently dominated corporate talent discourse. It’s been widely framed as the antidote to DEI efforts, with the assumption that diversity initiatives and merit-based decisions are at odds.
But here’s the reality: most organizations that claim to operate as meritocracies… don’t. In the absence of well-designed and monitored processes, meritocracy doesn’t just happen organically. Promotions and rewards can tend to favor those who are the most visible, the best at self-promotion or those with the strongest connections—rather than those who are truly the most capable and contributing to organizational success.
A real meritocracy requires deliberate design and disciplined execution. If your company is ready to recognize and reward great work fairly and effectively, here are five critical practices to put in place.
1. Define What "Great" Looks Like
A meritocracy rewards high performers—but first, we have to agree on what high performance actually looks like. That may be easy in startups, for example, where teams are smaller and contributions are often clear and directly tied to results. But as organizations scale, functions are added and roles become specialized; defining excellence becomes complex.
For example, one manager may define “exceptional” based on raw output, while another focuses on innovation or collaboration. Perceptions of expected performance at certain career level can vary dramatically depending on the manager’s own career path or employment history. Without clear standards, what gets rewarded can vary wildly across teams.
Solution: Define and communicate skills and competencies for every role and level, with clear examples of what top performance looks like. This removes ambiguity and ensures that high performers are recognized based on their contributions—not just their visibility. It also provides a clear blueprint for career development and promotion.
2. Create a Level Playing Field
For a meritocracy to work, everyone must have an equal opportunity to succeed. Goal-setting plays a big role here. This annual exercise can often be informal and inconsistent, making it challenging to ensure that all employees are taking on an equivalent scope of work, professional development or other activities that can help them achieve the highest levels of performance.
For example, one employee might receive clear, measurable goals from their manager, while another gets vague expectations or unrealistic stretch goals. At the end of the year, the first employee’s success is easily quantified—while the other two may be open to interpretation. That’s not meritocracy; that’s chance.
Solution: Standardized goal-setting frameworks ensure all employees are working toward goals that optimize their opportunities for career excellence and growth. This creates clarity and consistency, making it easier to distinguish truly exceptional work from baseline performance.
3. Evaluate Performance Objectively
Even in companies that believe they operate on merit, bias creeps in—often in ways that are hard to detect.
One common example? Calibration meetings. Many organizations use these meetings to ensure fairness in performance ratings, but in reality, the loudest, most senior voices often dominate the discussion. That means a high performer with a quiet advocate may not get the same recognition as a mediocre performer whose boss speaks up the most.
Solution: Structured, data-driven performance evaluations that go beyond manager opinions. AI-powered tools, peer reviews, and project-based assessments can provide a fuller, more objective picture of individual contributions.
4. Set Cultural Expectations Around Ratings
Rating inflation—when virtually all employees get high ratings—dilutes the value of performance ratings altogether. If a meritocracy is going to work, a “Meets” rating should be celebrated as a strong outcome. An “Exceeds” should be reserved for only the most extraordinary performers.
Sounds simple, right? But it presents some real-life challenges for people managers. One is “ratings disappointment,” where employee perceptions of their performance doesn’t match actual results. Sometimes, it’s easier to assign the higher rating than have the tough conversation. Managers can also be uncomfortable with true performance differentiation because assigning a lower score can have big impacts on variable compensation, career opportunities and even employment.
Solution: Transparently define how performance rating decisions are made and cascade that framework through the organization. Get leaders regularly talking about how the culture of meritocracy works and how it supports the business. As these messages are shared across the organization over time, acceptance of true performance differentiation will become normalized. Training managers to evaluate performance consistently—and equipping them to have tough but fair conversations about differentiation—is also essential to preserving the integrity of a merit-based system against rating inflation.
5. Monitor the Meritocracy
Even with the best intentions, a meritocracy that isn’t actively measured will drift off course. Over time, biases can creep in, ratings can become inflated, and other process safeguards can be weakened—often unintentionally.
Employees may start to lose trust if they see inconsistencies in how top performers are recognized, which can lead top performers to exit.
Solution: Regularly audit performance and promotion data to ensure fairness, consistency, and alignment with stated meritocratic principles. Key actions include:
Tracking patterns in promotions and rewards to identify potential undesirable patterns or inconsistencies.
Using employee surveys to gauge whether employees believe the system is truly fair (and please, follow up!).
If gaps are found, adjusting policies and processes and retraining leaders and managers to ensure the meritocracy functions as intended.
Meritocracy: Let’s Go for It
Meritocracy has become a rather polarizing concept in corporate discourse. For some, it represents a pure, fair system where only the best performers are promoted and receive the highest rewards. For others, it’s a myth—a convenient excuse for companies to ignore systemic barriers that influence career advancement.
The reality? Meritocracy isn’t inherently good or bad—it’s only as effective as the systems that support it.
What’s often overlooked in the debate is that a well-functioning meritocracy and a well-designed talent strategy that focuses on diversity are not at odds. In fact, they rely on many of the same principles:
✅ Clear, structured criteria for evaluating performance
✅ Consistent goal setting and accountability
✅ Fair, unbiased performance assessments
✅ Transparency in career growth and promotions
When done right, meritocracy isn’t the Wild West of talent management—it’s a structured, intentional system that rewards true excellence and supports enhanced business outcomes. The dark side of meritocracy can arise when companies tout it without doing the work to ensure it actually functions.
To embrace meritocracy as your corporate talent philosophy, be prepared to actively manage it—through rigorous and transparent actions that ensure exceptional contributions are fairly and consistently recognized and rewarded.