This CEO reveals the two biggest problems behind Australia's meritocracy

Australians seem to like the idea of meritocracy and the notion that rewards should be synonymous with fairness, equality, or objectivity rather than luck or privilege.

It’s been labelled a part of our national character with the notion of giving all Australians a “fair go” at the heart of it all.

But while the concept of meritocracy may sound great in theory, CEO of PwC Australia Luke Sayers, says that the merit process is flawed and is not “doing justice to the richly diverse tapestry the Australian community has to offer”.

In a recent post on LinkedIn, Sayers points to the two biggest problems behind meritocracy in the business world:

Firstly, it assumes that everyone has equal access to attaining whatever quality is defined as ‘merit’. A meritocracy depends on a level playing field. Past leadership experience in the same or nearby sector is often an aspect of merit considered for directorships. With so few women in leadership positions across key sectors currently, this means women who are otherwise qualified for these positions are excluded.

The second problem with the merit process is that people must only be assessed on criteria that predict performance potential. We know women aren’t assessed on this criterion – studies like this McKinsey report have shown that men are often hired or promoted based on their potential, women for their experience and track record.

In 2014, it was revealed that 40% of the boards of ASX listed companies didn’t include women with females making up only 3.5% of Australian CEOs with a significant gender pay gap.

“You can look at any institution whether it be a parliament, a corporate board a judicial bench, a military hierarchy and if you aren’t seeing basically 50% men and 50% women then that means women of merit, who should have been in that position, missed out,” said former prime minister Julia Guillard.

More recently, the notion of merit has become a front-page issue especially with the recent appointment by Prime Minister Malcolm Turnbull of five women in Cabinet including Australia’s first female defence minister, Marise Payne.

Turnbull argued that his new 21st century line-up was assembled entirely on the basis of merit and not of any factional deals.

“Clearly it’s not a level playing field for women, people from diverse cultural backgrounds or anyone else who doesn’t fit the mould of a leader that is ingrained in our cultures, or institutions, our systems and our processes,” writes Sayers.

“To overcome the merit problem in hiring and promotions we need to stop clinging to the belief that the merit process is bias free. Instead, we need to address the merit process as a barrier to diversity.”

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.