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Emilio J. Castilla

Accounting for the Gap: A Field Experiment Manipulating Organizational Accountability in Pay Decisions

 Organizational accountability has become an increasingly central strategy discussed in the literature for solving workplace inequality. According to the accountability mechanism formulated and experimentally tested by Philip Tetlock and his colleagues, when organizational decision makers know they will be held accountable for making fair decisions, less bias is likely to occur. The present paper reports the results of a field experiment specifically designed to test whether introducing organizational accountability reduces the gap in rewards by gender, race, and country of origin. In the context of a longitudinal analysis of a large service organization in the United States, I studied the pay decisions made by over 2,600 managers concerning almost 9,000 employees before and after high-level management decided to implement a set of organizational procedures aimed at increasing accountability and transparency in the company’s performance-reward system. Before such procedures were introduced, there was a gap in the distribution of performance-based bonuses, where women, ethnic minorities, and non-U.S. born employees were rewarded lower monetary bonuses when compared with white men with the same performance evaluation scores, in the same job and work unit, with the same supervisor, and the same human capital characteristics. Analyses of the data after the organizational measures were introduced show that the introduction of organizational accountability procedures reduced this pay gap and other disparities in key career outcomes such as promotions and terminations in the organization. I conclude with a broad discussion of organizational strategies for eliminating gender and race disparities in employment outcomes.
 
Emilio J. Castilla is currently an associate professor of management at the MIT Sloan School of Management. He joined MIT after being a faculty member in the Management Department at the Wharton School of Business, University of Pennsylvania.  He is a faculty member of the Institute for Work and Employment Research (IWER) and the Economic Sociology PhD Program. He is also a research fellow at the Center for Human Resources at the Wharton School. His research primarily focuses on the areas of organizations, social networks, and inequality, with special emphasis on the social aspects of work and employment. Recent work has been published in the American Journal of Sociology, Administrative Science Quarterly, and American Sociological Review. He received his doctorate in sociology from Stanford University. For more information, visit: http://web.mit.edu/ecastill/www/.