Favouring top stars enables misbehaviour
Some experts believe firms with extreme pay and power differentials could set up blind-eye mentality
These days, no industry, no workplace, no pocket of North American life seems to be immune from the long reach of sexual harassment. From Washington to Hollywood, higher education to hotel housekeeping, women — and men — are coming forward to tell their stories.
But certain industries seem to be popping up with particular frequency: Media. Venture capital and finance. Entertainment. And if there’s one thing these industries and others have in common, it’s an organizational culture that rewards stars and bestows power not just on the chief executive or president at the top of an official hierarchy, but to those who are star performers on screen, behind the scenes or when it comes to the bottom line.
“I believe industries that have a paradigm of absolute power brokering at the top may be more susceptible to these issues,” said Sukhinder Singh Cassidy, founder of the BoardList, which manages a directory of female board members.
“My sense is that industries that have kingmaking environments can breed this kind of behaviour.”
Harassment certainly seems more common in industries that favour such kingmakers, rainmakers or stars.
Or those are the stories that draw the big headlines, at least. Women in other industries may feel unwilling — or unable — to come forward. But as companies wrestle with how to prevent more allegations, the potential downsides of a star-driven system, particularly as that mentality grows more common, shouldn’t be forgotten.
In recent months, organizations have reckoned with this watershed moment of victims coming forward. They’re sending thousands of employees to new or expanded harassment-prevention training programs. They’re adding implicit bias workshops, outside vendors for employees to report complaints, and boardlevel committees or councils to improve workplace civility and professionalism. Some are even banning open bars at the holiday party to help avoid further trouble.
But some believe employers should be paying attention to something more deeply rooted in their culture: the extent to which they have a star system in place that rewards some employees exponentially higher than others, setting up a power differential that can overlook or excuse bad behaviour. There’s a chance that companies that have extreme differentials between employees in incentive pay, that are highly focused on individuals rather than team-based work or that don’t consider workers’ behaviour enough in performance evaluations, could be more at risk.
“Those firms today that are so focused on the ‘star’ employee, where it’s all about productivity — that’s an enabling environment,” said Dylan Minor, an assistant professor at Northwestern University’s Kellogg School of Management who has studied toxic workers. In systems where the focus is solely on performance metrics, “people can have less than favourable evaluations and it doesn’t matter. All that matters is the numbers.”
The Equal Employment Opportunity Commission raised this issue in its task force report on sexual harassment last year, calling them “superstar harassers.”
“Think of the high-earning trader at an investment bank, the law firm partner who brings in lucrative clients, or the renowned professor or surgeon,” the report’s authors wrote. Because superstars are privileged in terms of income, accommodations and expectations, they wrote, “that privilege can lead to a self-view that they are above the rules, which can foster mistreatment.”
Indeed, said Stanford professor Robert Sutton, author of The A--hole Survival Guide: How to Deal with People who Treat You Like Dirt, there are “hundreds” of studies detailing how power can change the way people treat others. “They’re less focused on their needs, less good at stifling their own impulses and they see other people more as objects toward an end,” he said.
Given those studies, Kellogg’s Minor said, the link between the high compensation that stars receive and the way such power could change their behaviour is concerning.
“If you feel like you’re really elevated versus someone else, sometimes you feel like you’re more justified in your actions,” he said. If pay is “really distorted,” he said, “where a few are making massive amounts of money, that definitely could help further this problem of behaviour, because they feel they’re able to do that.”
That link may seem most obvious in high-profile examples such as former Today Show host Matt Lauer, who made a reported annual salary of $25 million (U.S.), but the workplace overall has become more focused on performance-based pay. The increasing priority placed on winning the “war for talent” has resulted in companies paying a greater and greater slice of their payroll budget over the past 30 years in the form of bonuses, with more focus than ever on “differentiating” the rewards paid to top and average performers.
“If I have a mindset that stars are crucial for the success of the business, then I’m more likely to do two things,” said Jeffrey Pfeffer, a Stanford professor who has written widely about power in organizations. “I’m more likely to put up with bad behaviour and I’m more likely to pay proportionately.”
While tying pay to performance and rewarding high performers may be important, taking it too far could also be misguided. Minor’s research has shown that it can actually be more costly for an employer to retain a toxic employee, even if they’re a star worker, as the profits they provide don’t offset the damage they do.
To lessen potential issues with a star-based system, Minor said it’s important to make sure factors besides sales or productivity — things such as good corporate citizenship, collaboration skills and collegiality — are part of performance reviews.
If there are stars in the firm, make sure plenty of women are in positions of power, too, Sutton said: “I do believe that the more high-status powerful women these guys need to deal with, the more they will have empathy for women in general.”