When Wharton operations and information management professor Katherine L. Milkman was earning her doctorate at Harvard University in business and computer science, it became clear that she would pursue a career as a professor. As she started looking around at job prospects, it also became evident that academia (particularly in her chosen field) was awash with white males. That’s when inspiration struck.
Milkman wanted to know how race and gender affect career mobility for young professionals, especially those entering career fields where they must be promoted to remain (e.g., law firms, universities, consulting firms). Looking for more than anecdotal evidence, Milkman collaborated with her graduate school mentor, Harvard Business School professor Kathleen L. McGinn, to co-author a research paper titled, “Looking Up and Looking Out: Career Mobility Effects of Demographic Similarity Among Professionals” (forthcoming in Organization Science).
“Most of my research is very selfish,” Milkman says. “My own experiences tend to lead to questions I find interesting. You observe the world around you, and it generates hypotheses. I started this work when I was a student. Kathleen and I were really interested in the phenomenon whereby people look for a role model who resembles them and how that search influences the decisions they make.”
Using five years of personnel data and employee interviews from a large national law firm, the professors were able to document what many in the working world already believe is true and what other past research has also suggested — the higher the number of female supervisors, the higher the probability of promotion for junior-level female employees. (There were too few minority supervisors to explore this pattern as a function of race.) Their research showed the same notion holds true for the probability of exit for junior-level women. That is, social cohesion between demographically similar junior and senior colleagues helps organizations retain young, upwardly mobile professionals.
While there are obvious benefits associated with placing junior employees in work groups with senior mentors with whom they can identify, the professors found a perplexing side effect of clustering demographically similar junior lawyers. When work groups contained a high number of same-gender or same-race underrepresented minorities all hoping to become partners at the firm, these employees tended to leave in higher numbers because they perceived that the competition reduced their chances for promotion.
“Our hypotheses pertaining to the benefits of mentoring are pretty straightforward,” Milkman notes. “What’s a bit more counter-intuitive and what we think is the big contribution of this work is this third hypothesis. Previous work suggested that you want [this type of work group] because it creates social cohesion, but there may actually be harmful effects to having more people who look like you demographically at the same level competing for a promotion.”
Grouping too many underrepresented employees (women and underrepresented minorities) often leads to structural marginalization, or “ghettoes” of low-power minority groups, according to the research. Underrepresented employees may begin asking themselves, “Am I the best woman or am I the best minority in the group, or should I just cut and run?” Milkman says.
“They may feel there are implicit quotas. There’s anxiety about that,” she adds. “Even if that’s not the case and the organization is not acting that way, if employees have that perception, it can lead to the same result.”
It’s interesting to note that the effect is also present when the pool of associates is composed largely of men. Male employees, like women and minorities, perceive that their chances of success are hampered by the presence of numerous other men, and they tend to leave the organization in larger numbers, Milkman states. “We really thought this was going to be the case only for minorities and women,” she says, referring to the third hypothesis. “We didn’t predict this would be such a strong phenomenon for men, but it affects them too.” However, the exit decisions of white and Asian employees are not impacted by working in groups with other white and Asian employees, whereas underrepresented minorities are significantly more likely to exit the firm if they work in groups with many other same-race minorities.
‘Up or Out’
Milkman and McGinn believe professional service organizations — such as law, accounting and consulting firms, and academic institutions — shape some of society’s most vital resources and are important domains for examining issues of diversity. Despite their importance, inequalities by sex and race in the senior ranks of these organizations “remain rampant.” The professors point to a 2009 study that showed women made up 46% of associates but 19% of partners across U.S. law firms. Racial minorities fared worse, representing 20% of the lawyers across the country but only 6% of partners.
Milkman and McGinn focused their research on a law firm because of the “up or out” structure of such organizations. Within the firm they studied, junior associates had, on average, a nine-year window for promotion. By the 10th year, if an associate had not been promoted to partner, he or she left the firm. The professors analyzed five years of personnel data, including notes from exit interviews, on more than 600 employees. The data was released to them by the firm under a confidentiality agreement. The professors also followed up their quantitative analyses by interviewing some of the firm’s employees.