We, like others, begin with the observation that now most goods and services are provided through organisations, more so than at any time in history. Prior to the industrial revolution agriculture was dominant over manufacturing and people worked and lived in the same communities, primarily in family groups or collections of family groups. We have discussed different types of social organisations in Chapter 5 emphasising the particular nature of a meritocracy.

Organisations beget bureaucracy, but the phenomenon of bureaucracy is not new in itself. In pre-industrial times bureaucracies were more limited to government or religious spheres (see, for example, Shafritz and Ott, 1996). Although in China, Assyria, Egypt and Rome they were for a time quite effective, they did not have all the characteristics of what we think of today as bureaucracy. They were more patriarchal or patrimonial, rather than the legal-rational organisations they became in the nineteenth century, continuing up to the present time (Weber, 1921–22b; 1978). Weber wrote largely in the nineteenth century, though a compilation of his work was published posthumously. Most of the writings on organisation became significant as the industrial revolution led to large non-governmental institutions, and most of the writings are products of the twentieth century Taylor (1997; 1911), Weber (Gerth and Mills, 1946; 1922), Fayol (1930), Gulick (1937), Barnard (1938), Roethlisberger and Dickson (1939), Blau (1956), Emery and Trist (1960), Burns and Stalker (1966), Drucker (1954, 1969), Mouzelis (1967) Jaques (1976), Mintzberg (1989). Bureaucracies and organisations on this scale then are a relatively recent development. As a widespread social phenomenon, they have come to dominate in most developed human societies.

We argue throughout this book that a meritocracy is the most efficient way of producing goods and services. We do not say that a meritocracy has to be large, international or publicly owned. We are not confusing it with a bureaucracy, which may or may not have some of the characteristics of a meritocracy (see Box 7.1).

In a meritocracy, people are rewarded on the basis of merit and people can ask, without irony, ‘what have I done to deserve this recognition?’ A meritocracy is possible when the organisation has:

• the right people

• in the right roles

• doing the right work.

This may seem obvious, but true meritocracies are quite rare. Most organisations, in spite of what they claim, are hybrids involving other systems that are not based on merit.

Tony Dunlop, a psychologist who has contributed to these ideas and was a Principal of Macdonald Associates, clearly expressed the significance of a meritocracy and the difficulty in creating and sustaining it when he wrote:

For a meritocracy to function effectively the key requirements are quite specific. Meeting these requirements is difficult, in that it requires good system design and implementation, and consistent and effective leadership behaviour.

(Dunlop, 1999)

See Table 7.1 for a clear explanation of Dunlop’s theory of meritocracy.

When people are employed in a meritocracy, they need a clear explanation of how their work fits into the overall purpose of the business. They need the opportunity to appreciate the business goals and believe that the organisation is worth working for. They must be clear about what they need to do in order to be judged to be performing work successfully, and must trust that the processes in place to determine merit will actually reflect the contribution they are making through their work, taking into account their opportunity to do so from where they are placed in the organisation.

Ambiguity of purpose and multiple purposes about which there are political conflicts, must be dealt with. The disputes and conflicting political demands make working in public agencies often more challenging than in businesses, although no organisation is free from politics.

Whether in business or government, employees must be given work that is within their capability, which is sufficiently challenging to provide an opportunity for them to add value by contributing. They must be clear about what is specifically expected of them, be given feedback on how they are doing, in a timely manner, so that any problems can be addressed, and receive recognition and reward that is related to their contribution to success. Over the longer term they must see that the organisation is willing to support them and provide opportunities for them to develop the potential they have, so they may make an even greater contribution in the future.

In cases where the person is not performing well-assigned tasks to the required standard, where they are not meeting the manager’s reasonable expectations of the role, the organisation must address this in an effective way. Systems must be available to order and control the activity required to resolve issues of unacceptable performance fairly with respect for human dignity. In a meritocracy, based as it is on the merit of work performed, it is untenable to accept poor work performance. Such acceptance gives the lie to the concept of meritocracy. It is unfair to other employees not to take action to redress it, even if this does require the dismissal of an employee from the organisation.

Leadership in itself will not build and maintain a meritocracy. Irrespective of an individual leader’s ability, humans are prone to error and, in every organisation, leaders change over time. Good performance may vanish when people change roles unless leadership is underpinned by sound systems. Each factor that contributes to a credible meritocracy places specific requirement on leaders, and these requirements should be supported and reinforced by effective systems. The appropriate systems need to be in place to drive and support the appropriate leadership behaviour. The system designs need to include control and audit processes, which provide a flow of data on the behaviour of leaders, and on the effectiveness of systems in achieving the business goals (Dunlop, 1999).

Dunlop goes on to explain the critical nature of specific systems and organisation structure, including the need for a fair treatment system (to appeal against felt poor judgement), systems for correct task assignment and review, clear performance indicators, differential reward, potential assessment and development and systems to deal with unacceptable performance (all of which are discussed in Parts 3 and 4 of this book). Perhaps most importantly Dunlop emphasises the role of leadership in a meritocracy. He writes:

The implications of a meritocracy for leadership capability and performance are enormous. As most outcomes for individuals in a meritocracy depend on leadership judgement, all employees need to have leaders whose judgement they can trust. This means that all leaders must be capable of their role, and must be appropriate in their behaviour. They must be able to understand their manager’s work and their own context, so as to add value and provide the context for their teams’ work. They must have a good understanding of their individual team members’ capability, effective task assignment skills, and pay appropriate attention to monitoring and coaching. They must demonstrate the standards themselves, that they wish others to meet, so must be effective schedulers, and meet the reasonable expectations of all team members.

All leaders need to have adequate coaching, counselling and confronting skills in order to deal with issues that arise. They also need to be able to manage social processes within the team, so that the teams’ capabilities are harnessed effectively, for problem solving and in taking action to achieve objectives.

(Dunlop, 1999)

We argue that a meritocracy, if built properly, is the most effective way to deliver goods and services. In order to do this we must distinguish appointment and reward and recognition based on merit from other approaches such as seniority or nepotism. We must also be clear about the differences between a meritocracy, a democracy, and other sorts of human organisation like a gerontocracy or even a theocracy as we have discussed in Chapter 5.

This is not to say there is no room in a meritocracy for acknowledging birthdays, religious holidays or years of service; merely that these are distinguished from the work of the role and recognition for that work. Meritocracies are difficult to build and maintain since they require robust structure and systems and, perhaps most importantly, good judgement by the leadership. Output measures are not sufficient; the measures must be related to how people achieved the output: their work performance (see Box 7.2).

While many people complain of hierarchy as ‘bureaucratic and slow’, in fact, if capable people are in the right roles and they have clear and accepted authority, such an organisation can, because of the clarity about authority, make decisions without long processes of discussion, voting, consensus and so on. Similarly, authority can be given in a moment to redistribute resources to where they are needed. Clearly the quality of the decisions will depend upon the capability of the people in every role. An organisation with incapable people in roles with ambiguous authority can very quickly implode, especially in a highly competitive environment.

Capability is important because an organisation can so quickly either advance or go backwards. An obvious example of the need for fast distribution of resources and decision-making is an army in combat (a very rigorous form of direct competition). The huge territorial gains made initially by the German army in World War II were based upon clear authority at every level, which allowed for competent fast decision-making whilst the context was changing. It took the Allies several years to match this (Van Crevald, 1982; 2007).

One frequent mistake in organisational theory is to confuse authority and decision-making with information. The explosion of information technology and systems has seduced some people to think it is enough just to give people information. Without clear purpose, authority and capability, however, this flood of data may overload people or simply allow poor decisions to be made by the wrong people.

Information systems (including information technology) can be a major help to a meritocracy but only if the information is used at the right level, because it is organised on the basis of work complexity, and has a clear and fast operating authority structure. A meritocracy has the best chance of recognising the importance of specific and pertinent data from the information systems and utilising it to inform sound decisions.

Note: We believe it is helpful to recognise that what are referred to widely as information systems, are in fact, data systems. Information is generated by human capability being applied to work with the data.

Finally, a further danger lies in the very strength of meritocracies as they interact and sometimes compete with other forms of organisations. If a large multinational corporation is a meritocracy and does not have to worry about specified terms of office as does an elected government, the leadership has the potential to plan well into the future and to commit huge resources to achieve its objectives. This can bring it into conflict with governments and other forms of civil structure.

Often these same civil systems, by their nature, appropriately take significant amounts of time to arrive at decisions – understanding opinion, canvassing, discussing, voting, reviewing and so on – and they may take even longer to deploy resources. It is the lack of appreciation of the relative time horizons of the two different forms of organisation, both functioning as they were designed to function, that can lead to frustration, and at times, muted conflict.

Indigenous groups that Macdonald and Stewart worked with needed to combine a system of family relationship with consensus decision-making which could take weeks, months or even years depending upon the issue in question. It is a current concern that organisations of very different types need to develop and improve ways of interrelating with each other. There is a general social concern that ‘globalisation’, in the form of large international and multinational companies, has led to unfair and uncontrolled distribution of wealth. That such organisations have made the rich richer and have politicians in their pockets. This is producing a nationalistic backlash.

The process has been for businesses to lobby politicians in order to cause the democratically elected governments to change the rules in their favour, under the guise of building a more productive and fairer economic environment for the electors. Modern communication technology has aided and abetted this process but is not the cause of it.

The realisation that the economic circumstances for the majority of electors are not improving is leading to the current backlash and the understandable, if very unfortunate, belief in the simplistic ‘solutions’ of false prophets. These ‘solutions’ are in the emotive language of the myths of the oppressed electors but, nonetheless, provide no real or lasting solution.

Piketty’s book Capital in the Twenty First Century (2013 Éditions du Seuil, 2014, President and Fellows of Harvard College) has a chilling articulation of the numbers.

While meritocracies can be described we have never found one in its pure form. That is where everyone has been selected, appointed and promoted on merit. We have already seen in Chapter 5 there are different types of social organisation appropriate to different purposes. When looking at organisations that are not pure meritocracies we have found that they include one or more organisational principles that are different.

Organisational Principles Alternative to Merit

Conclusion

We are saying that a meritocracy is potentially the most efficient and effective way to organise to produce goods and services. We also note that it requires considered effort and courage to build one and that often other forms of organisation are woven into meritocracies making them hybrids (nepotism, seniority, democracy). This muddle makes the establishment of a meritocracy doubly difficult because the ‘others’ are a constant demonstration that the claim to be a meritocracy is a lie.