Male colleagues whispering behind the back of unhappy businesswoman spreading rumors and gossip standing in modern office.Sexism and bullying problem in workplace concept.Selective Focus Work hard, produce stellar results, get a top performance rating, and a promotion on the horizon. That's how it should work, but that process doesn't happen consistently. According to a study from MIT Sloan, which looked at 30,000 employees at a large retail chain, women, on average, are better than their male counterparts. received higher performance ratings – yet still marked as having less potential than their aforementioned counterparts. This resulted in women being 14% less likely to be promoted than their male counterparts. This raises the bigger question of how we decide who to promote. What biases are driving us to make the wrong decisions? And more importantly, how does this lack of promotion increase gender pay? How we make promotional decisions Promotional decisions are often based on a mix of evaluating past performance and predicting future performance. Past performance, while easier to measure, has a level of subjectivity. However, when it comes time for a manager to evaluate future performance, things get more problematic. Potential is largely defined as an individual's ability to contribute to the company in the future. Unfortunately, potential cannot be directly observed like past performance. This leaves room for bias to creep in. Workplace behaviors and biases that reinforce potential stereotypes A very outdated mindset that hinders a woman's ability to be flagged for promotion is that some find it difficult to see a woman as a leader. This is because the qualities that are stereotypically associated with being a strong leader - such as assertiveness or ambition - are often associated with men. This is because women are successful at work. This is in line with research at the London School of Economics that found that when they are, their success is attributed to being lucky, a man's success. Women are more often tasked with "female tasks" such as taking notes or a coffee run. Increasingly, women are still being asked to take heavier ventures sometimes seen through a softer lens, and this extra work is not recognized. McKinsey's women in the Workplace 2022, 40% of female leaders She states that . There are also gender-based differences in networking and connectivity that can affect a woman's ability to be encouraged in the workplace. For example, research from Harvard found that men who report to other men are promoted faster than other groups. A Long Way to Close the Gender Pay Gap PWC published a reflection on six years of mandatory gender pay reporting in the UK, and the effect was disappointing. Their analysis found that the reduction in the median gap was only 0.7%. At this rate, it would take 50 years to reach pay parity. Given that salaries are closely tied to job levels, women are not as easily promoted as men and are a driving factor in the gender pay gap. According to the MIT Sloan paper, they find that gender differences in potential ratings can explain almost half of the gender promotion gap. The key takeaway is that potential ratings are important to both promotions and pay, and firms continue to misvalue the potential of their female employees.