"Potential" and the Gender Promotions Gap

87 Pages Posted: 2 Apr 2024 Last revised: 19 Apr 2024

See all articles by Alan Benson

Alan Benson

University of Minnesota - Twin Cities - Carlson School of Management

Danielle Li

Massachusetts Institute of Technology (MIT)

Kelly Shue

Yale School of Management; National Bureau of Economic Research (NBER)

Date Written: March 4, 2024

Abstract

We show that widely-used subjective assessments of employee "potential" contribute to gender gaps in promotion and pay. Using data on 29,809 management-track employees from a large North American retail chain, we find that women receive substantially lower potential ratings despite receiving higher job performance ratings. Differences in potential ratings account for approximately half of the gender promotion gap. Women's lower potential ratings do not appear to be based on accurate forecasts of future performance or attrition: women subsequently outperform male colleagues with the same potential ratings, both on average and on the margin of promotion. Despite this, subsequent potential ratings for women remain low, suggesting that firms persistently underestimate the potential of their female employees.

Keywords: Promotions, performance evaluations, glass ceiling, gender bias, leadership, compensation, wage differentials, role congruity theory, Peter Principle

JEL Classification: M51, J31, D84

Suggested Citation

Benson, Alan and Li, Danielle and Shue, Kelly, "Potential" and the Gender Promotions Gap (March 4, 2024). Available at SSRN: https://ssrn.com/abstract=4747175 or http://dx.doi.org/10.2139/ssrn.4747175

Alan Benson (Contact Author)

University of Minnesota - Twin Cities - Carlson School of Management ( email )

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HOME PAGE: http://https://www.alanmbenson.com/

Danielle Li

Massachusetts Institute of Technology (MIT) ( email )

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Kelly Shue

Yale School of Management ( email )

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United States

National Bureau of Economic Research (NBER) ( email )

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Cambridge, MA 02138
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