LEADER OVERSIGHT BIAS (SUBMISSION ID: 10253)

The Leader Oversight Bias in Justice and Hypocrisy Evaluations of Organisational Diversity

Practices.

Abstract

Misalignment in diversity and inclusion (D&I) occurs when organisations make claims that they do not uphold through their practices. In the present study, we probed a leader oversight bias which may lead to ignorance of misalignment and, consequently, lower perceptions of organisational hypocrisy. Through an online experiment, we randomly allocated 198 participants to the role of either a leader or non-leader in a fictional organisation. T-tests showed that leaders perceived their organisation as less hypocritical than non-leaders. This effect was sequentially mediated by anticipated justice following exposure to a gender diversity statement, and perceived justice following exposure to organisational practices.

Contrary to our predictions, gender did not moderate this effect. Our results demonstrate that leaders may perceive their organisations as more just and less hypocritical even when this may not be the case, because they attempt to confirm their prior, more favourable justice anticipations. This research calls for establishing better cross-hierarchical communication structures in organisations and for more effective management of leadership oversights.

Future studies can examine this bias in field settings and isolate its driving mechanisms.

Keywords: Organisational justice, Organisational hypocrisy, Diversity and inclusion

Abstract word count: 186

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Introduction

Increasing diversity within organisations is viewed as a crucial step in addressing societal inequalities (Zanoni, Janssens, Benschop, & Nkomo, 2010). Recently, van Dijk, van

Engen, and Paauwe (2012) have called for integrating commitment to diversity into organisational values. In this way, diversity can also evoke positive organisational outcomes

(Miller, 1995) such as innovation (Bell, Villado, Lukasik, Belau, & Briggs, 2011), workforce productivity brought about by stronger organisational identification (Roh & Kim, 2016), and increased employee wellbeing (Jaiswal & Dyaram, 2019).

More and more organisations now attempt to show their commitment to diversity through their statements, which are often generic and can come across as ingenuine window- dressing (Singh & Point, 2006). This is because genericisms relating to workforce diversity may downplay its intricacies. Without appropriate management and integration of a diverse workforce, differences between people of different backgrounds may lead to team disruption, infighting, and higher turnover intentions (Cunningham & Sagas, 2004; Hobman, Bordia, &

Gallois, 2005; van Knippenberg, van Ginkel, & Homan, 2013).

Focusing only on surface-level diversity, which is concerned with demographic metrics, and neglecting integration of different groups of people, may also negatively relate to organisational wellbeing (Jaiswal & Dyaram, 2019). Instead, beneficial effects of employee wellbeing stemming from deep-level diversity are manifested when there is a sense of inclusion for all; that is, when organisational structures are such that they do not hinder people from underrepresented groups (Jaiswal & Dyaram, 2019; van Knippenberg et al.,

2013). While ‘diversity and inclusion’ (D&I) has become somewhat of a catchphrase collapsed into a single term, Dwertmann, Nishii, and van Knippenberg (2016) stress that diversity does not automatically result in an inclusive organisational culture. Indeed, many LEADER OVERSIGHT BIAS 2

D&I initiatives such as unconscious bias training are often ineffective in turning diversity into genuine inclusion (Hays-Thomas & Bendick, 2013; Kalev, Dobbin, & Kelly, 2006).

Organisations may therefore overlook the need for more integrative diversity practices, as evidenced by frequent gaps in the intention of a policy and how it is eventually experienced (MacIntosh & Doherty, 2005; Soldan & Nankervis, 2014). In the literature, such gaps are often ascribed to organisational hypocrisy, as they create a misalignment between an organisation’s espoused words and realised actions (Fortin & Fellenz, 2008; Gentile, Wetzel,

& Wolf, 2015; Goswami, Ha-Brookshire, & Bonifay, 2018; Kılıcoğlu, 2017). However, this hypocrisy postulate presents some challenges, since the degree of misalignment may well be in the eye of the beholder. If there also exist perceptual differences in appraising D&I practices, then stakeholders may perceive less misalignment and, by extension, lower organisational hypocrisy. At the same time, onlookers may believe that misalignment is an intentionally deceitful attempt to improve organisational perceptions (Rosset, 2008), and thus attribute higher accountability and hypocrisy to the misaligning organisation (Knobe, 2003;

2010; Monroe, Reeder, & James, 2015; Ohtsubo, 2007).

Following empirical work by Alicke, Gordon, and Rose (2013) on the lay conceptions of hypocrisy, we define organisational hypocrisy as the degree of perceived word-action misalignment with an element of intent to deceive. It logically follows that perceived misalignment is conditional upon how efficacious the actions or practices of an organisation are thought to be. Therefore, in a gender D&I context, we operationalise the subjective efficacy of practices as their perceived justice. Drawing especially from social exchange fairness heuristic theory (van den Bos, Lind, & Wilke, 1997), we posit that leaders will perceive their organisation’s D&I practices as more just than non-leaders, and thus discern lower misalignment. By extension, leaders will ascribe lower hypocrisy to their organisations.

Because D&I is closely related to demographic characteristics, we also expect that LEADER OVERSIGHT BIAS 3

perceptions of D&I misalignment will be higher for women, as they are likely to feel less included than men (Buelenger, Leroy, & de Stobbeleir, 2018).

Misalignment and impact on organisational perceptions

Word-action misalignment in D&I has been shown to create organisational perceptions resembling hypocrisy in employees and outsiders. For example, Windscheid et al.

(2016) showed that organisations which claim commitment to diversity, yet have male- dominated boards, are thought to lack behavioural integrity. This consequently damages their attractiveness as potential employers. Behavioural integrity measures the extent to which an organisation is thought to stay true to its word (Simons, 2002), and thus captures the perceived misalignment aspect of hypocrisy. Furthermore, Smith, Morgan, King, Hebl, and

Peddie (2015) have demonstrated that, when employee statements do not match the statements made by an organisation’s spokesperson such that the organisation engages in window-dressing, the organisation is considered to be inauthentic. This suggests that, in line with our definition of hypocrisy, word-action misalignment may also create perceptions of deceit. Our focus on hypocrisy as the focal construct of interest is based on this prior work, as it captures both the perceived lack of behavioural integrity, but also the degree to which the organisation erodes trust by being perceived as inauthentic and deceitful.

However, as previously mentioned, the impacts of a policy may be vastly different from initial management intentions during its implementation, leading some employees to reason that their organisations do not ‘practice what they preach’ (Soldan & Nankervis,

2014). In this case, lack of trust towards an organisation seems to play a key role. For example, Marcinko (2020) found that organisations which commit to diversity while lacking a diverse workforce are perceived as less hypocritical when they admit that they have not yet LEADER OVERSIGHT BIAS 4

reached their diversity goals. This is possibly due to the organisation signalling that they do not intend to deceive the onlooker through their diversity commitment.

Nonetheless, it is likely that employees at more junior levels are more likely to distrust their organisation by default. This is because an organisation’s practices are not normatively assessed and may be anchored to things such as an employee’s prior experiences with organisational hypocrisy (Jordan, Ferris, & Lamont, 2019). By virtue of holding more precarious positions that are more reliant upon organisational justice, non-leaders may thus be more likely to scrutinise diversity initiatives due to scepticism and a gap between what they intend and how they are eventually experienced (Nishii & Wright, 2008). If this is true, then leaders are likely to overlook justice issues with their organisation’s policies, and therefore see their organisation as less hypocritical.

The case for biased perceptions of justice

The idea that employees at lower organisational levels are more likely to closely scrutinise D&I practices is tied to how fair these practices are perceived to be. Central to this is fairness heuristic theory (van den Bos et al., 1997), which posits that fairness judgments are used to determine whether a figure of authority can be trusted or not, especially when one has no prior experience or other sources of information on said authority. This is likely to expose leaders to an oversight bias towards their D&I practices. Given that senior leaders are the figures of authority in an organisation, they do not need to make any assessments on whether they can trust themselves. Conversely, employees will still need to rely on fairness judgments in order to determine whether they can trust the authority, as a defence mechanism against potential exploitation. This leads us to theorise that employees will scrutinise, and thus be able to discern, potential injustices in D&I practices more attentively than leaders. LEADER OVERSIGHT BIAS 5

Empirical support for the notion that powerful groups will overlook the actual fairness of D&I practices relative to underrepresented groups is ample. Across five experiments,

Kaiser et al. (2013) demonstrated that the mere presence of a diversity structure, such as a diversity statement, is enough to evoke perceptions of procedural justice in majority groups

(e.g. whites, men) even in the face of evidence to the contrary, such as discrepancies in promotions and hiring of marginalised groups. Such illusory justice perceptions may then lead majority groups to delegitimise discrimination claims by minorities (Kaiser et al., 2013).

Furthermore, people belonging to minority groups for which they advocate are thought to be more self-interested, resulting in more negative D&I perceptions by majorities (Gardner &

Ryan, 2020), whereas ascriptions of hypocrisy are more likely on the part of marginalized groups, such as women, since they are more likely to perceive discrimination in ambiguous

D&I practices (Crocker, Voelkl, Testa, & Major, 1991). Overall, historically underrepresented groups such as women tend to be more comfortable with D&I practices than majorities (Mor Barak, Cherin, & Berkman, 1998).

Majority groups often exhibit oversights in interpreting D&I practices, which leaders should emulate if they can also be conceptualised as a powerful group. When they believe that discrimination is not a prominent issue, majorities may show reactance and defensibility towards D&I initiatives (Brannon, Carter, Murdock-Perriera, & Higginbotham, 2018; Gebert,

Buelenger, & Heinitz, 2017; Kaiser et al., 2013). This indicates that they interpret practices on a more surface level without dissecting their intentions or implications, whereas minorities are more invested and, indeed, more reliant on them. For example, women will use gender diversity to a higher extent than men in shaping their organisational fairness perceptions, which also drive women’s, but not men’s, attraction towards an organisation (Madera, Ng,

Sundermann, & Hebl, 2019). Therefore, it is reasonable to expect that lower-level employees, too, will perceive less justice in an organisation’s D&I practices than its leaders. LEADER OVERSIGHT BIAS 6

The biasing effect of anticipated justice

Given the theorised role of perceived justice in driving hypocrisy perceptions, it is worth addressing what precedes such justice perceptions themselves. When making justice judgments and subsequent hypocrisy judgments, the observer’s prior anticipation of justice seems to carry significant weight (Shapiro & Kirkman, 1999). For example, when experimentally manipulating espoused values, misaligning leaders who undermine their employees despite having previously espoused respect towards others, are considered to be hypocritical. No such hypocrisy perceptions exist when the leader previously says that they do not value respect (Greenbaum, Mawritz, & Piccolo, 2015). Crucially, this effect seems to be triggered by anticipatory justice. When an employee believes their leader values respect, their justice anticipations are high. As such, hypocrisy is ascribed when these justice anticipations are not met with corresponding action.

A question that remains is what the role of anticipatory justice is when there is room for biased perceptions of organisational practices. It has already been mentioned that majority groups are likely to anchor their justice perceptions on the mere presence of diversity structures even when there exists obvious evidence of injustices (Kaiser et al., 2013), suggesting that the impact of misalignment is conditional upon situational and dispositional factors. At a basic level, Shapiro and Kirkman (1999) propose that anticipatory justice can manifest itself as concern over uncertainty, such as a fear of being made redundant. In such cases, anticipatory justice tends to be low, thus possibly evoking more defensibility and inspection of fairness and trust cues (van den Bos et al., 1997).

Indeed, Bell, Ryan, and Wiechmann (2004) argue that justice anticipations may stem from fears of exploitation. As a result, those with more to lose, such as minority groups in diversity issues, will set their justice anticipations lower as a defence mechanism.

Furthermore, Jordan et al. (2019) suggest that one of the ways in which past employee LEADER OVERSIGHT BIAS 7

experience with organisational justice can impact their subsequent perceptions of their organisation’s practices, is the anticipatory justice that these past experiences evoke.

In turn, perceptions of justice may be anchored to such justice anticipations, making anticipatory formulations crucial to the study of hypocrisy. Anticipatory justice may impact upon perceived justice via means of a confirmation bias (Snyder & Swann, 1978), where prior beliefs are corroborated through selective information search (Wason, 1960; 1968). As

Shapiro and Kirkman (2001) suggest, people are likely to perceive what they anticipate. In selection scenarios for example, applicants who anticipate more justice in the selection process are also more likely to perceive the organisation administering the tests as more just

(Bell, Wiechmann, & Ryan, 2006). Consistent with this, Rodell and Colquitt (2009) report that anticipatory justice following an announcement of an upcoming change in the workplace can significantly predict experienced justice once the change occurs, with this relationship being stronger for people who experience uncertainty as a result of the change.

This makes anticipatory justice a crucial construct, because it must be kept high to prevent turnover intentions and increase employee commitment (Shapiro & Kirkman, 1999).

Nonetheless, when it is high, it must be met with congruent action to prevent disillusionment and subsequent perceptions of hypocrisy (Greenbaum et al., 2015). Thus, the ideal path for organisations seems to be addressing their workforce’s concerns but making sure that these addresses are followed up with action. However, the increased concern for exploitation that marginalised groups may experience can lead to lower anticipatory justice (Bell et al., 2004).

This could also explain the majority-group bias in evaluating the fairness of D&I practices.

Following our postulated leader oversight bias, which we argue is an emulation of majority group perceptions of D&I, as well as the potential role of anticipated and perceived justice in this process, we hypothesize the following: LEADER OVERSIGHT BIAS 8

H1: Leaders perceive their organisation as less hypocritical than employees.

H2: The relationship between organisational role and perceived hypocrisy is

sequentially mediated by anticipatory justice and perceived justice.

H3: Gender moderates the relationship between anticipatory justice and perceived

justice such that, when exposed to their organisation’s D&I practices, perceived

justice deviates from anticipatory justice more so for women than for men.

Study outline

To test our hypotheses, we conducted an online experiment where participants were randomly assigned to the role of either a senior leader or a junior employee (non-leader) for a fictional organisation. The full hypothesized model is shown in Figure 1. To our knowledge, this is the first study to examine discrepancies in perceptions of D&I practices between organisational leaders and non-leaders.

Gender

Anticipatory Perceived

justice justice

Organisational Perceived

role hypocrisy

Figure 1. The proposed moderated serial mediation model of leadership bias, following modelling recommendations by Hayes (2015).

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Method

Design

The study was an online experiment, with organisational role (leader vs. non-leader) as a systematically manipulated independent variable with random allocation. The key dependent variable was organisational hypocrisy. Anticipatory justice following the display of a fictional organisation’s diversity statement, and perceived justice following subsequent exposure to the same organisation’s D&I practices, were measured as sequential mediators.

Both anticipatory and perceived justice were measured at different points in the study to explicitly test for a bias in confirming justice anticipations with subsequent perceptions

(Shapiro & Kirkman, 2001). The gender quasi-variable (male vs. female) was treated as a moderator in the analysis. Other than role and gender, all variables were operationalised using scales.

Participants

To avoid potential cross-cultural confounds in diversity perceptions (Mor Barak et al.,

1998), a sample of 198 UK-only nationals was recruited via Prolific. Our sample excluded students to respond to calls to decrease reliance on student samples in psychological research

(Arnett, 2016; Landers & Behrend, 2015; Shen et al., 2011) and to increase manipulation salience. Thirty participants failed attention check questions and were excluded in order to improve data quality (Abbey & Meloy, 2017), leaving a final sample size of 168 for analysis.

Retaining the excluded cases did not alter the results.

Ages in the sample retained for analysis ranged from 18-69 (M = 37.22, SD = 11.08), with the majority being women (64.9%). One participant did not identify as either male or LEADER OVERSIGHT BIAS 10

female and was excluded from any gender-based analyses to preserve statistical power. Most

participants held office-based jobs (45.8%), with the rest being manual workers (11.3%),

unemployed (14.3%), or other (28.6%). Of the 45.8% who were currently employed in an

office, 39.5% held support jobs, 27.6% were junior managers, 18.4% were middle managers,

9.2% were senior managers, and 5.3% held “other” seniorities. Of the people who did not

hold an office-based job, 74.7% reported having worked in an office in the past.

Apparatus and materials

Organisational description. A text describing the fictional organisation named

ReachNode Marketing was displayed to situate the study. This gave some generic

information about the organisation, such as its history and scope (Appendix A). An image of

the fictitious organisation’s website was also used, displaying ReachNode’s diversity

statement (Figure 2).

Figure 2. The fictional organisation’s diversity statement.

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Organisational role manipulation. To increase the strength of the role manipulation, participants were led to believe that their actions determined the role they would be allocated to (Blau, 1964). Four dummy questions were taken from the Big Five personality inventory

(Costa & McCrae, 1992), which ostensibly determined the participant’s organisational role.

In reality, these items were irrelevant and were not considered in any analyses.

The role manipulation itself stated the participant’s role, depending on whether they were assigned to the leader or non-leader position. Non-leaders were assigned to an administrative assistant position and received a brief job description which specified tasks such as proofreading policies. The manipulation also specified their supervisor, and that the participant had little influence over the company’s decisions. Leaders were assigned to a chief relationship officer position. Their job description specified duties such as overseeing policies and included a specification of the leader’s subordinates as well as the large amount of influence they had over organisational decisions. In both cases, the manipulation displayed an organisational chart with the respective role circled in red (Appendix B).

Anticipatory and perceived justice scales. Although prior research has distinguished between procedural, distributive, interpersonal, and informational justice (Colquitt, 2001), some authors have made the case that there is also value in considering justice as a single- factor overall measure, especially in situations where the aim is to capture more general, rather than specific, sentiments (Ambrose & Schminke, 2009).

For the present study, given that we were testing for a novel bias which merits a more generalised approach, the nine most relevant items to the context of our study were taken from Colquitt’s (2001) organisational justice scale and adapted into a single measure.

Specifically, three were taken from the procedural (e.g. “To what extent are Reachnode’s procedures free of bias?”), three from the interpersonal (e.g. “To what extent does LEADER OVERSIGHT BIAS 12

ReachNode treat its employees with respect?”), and three from the informational (e.g. “To what extent are ReachNode’s explanations regarding their procedures reasonable?”) justice subscales, measured on a five-point Likert scale. These questions were framed anticipatorily for the anticipatory justice measure (e.g. “To what extent do you expect ReachNode’s procedures to be free of bias?”), and retrospectively for the perceived justice measure. Both measures showed sufficient internal consistency (anticipatory justice α = .92; perceived justice α = .95). The full scales, along with items excluded from the original justice scale due to low relevance to the study setting, can be found in Appendix C.

Perceived hypocrisy scale. To assess hypocrisy perceptions, Goswami et al.’s (2018) perceived corporate hypocrisy scale was used (Appendix D). This consisted of nine items capturing both perceived misalignment (ReachNode does not practice what it preaches) and intent to deceive (ReachNode pretends to appear moral), measured on a four-point Likert scale (strongly disagree to strongly agree) (α = .94).

Manipulation and attention checks. As a manipulation check, the item “Please indicate how much decision-making power you feel you have in the company”, measured on a slider scale from 0 to 100, was used. This was successful, as leaders reported significantly higher decision-making power than non-leaders (p < .001). Two attention check questions assessed whether participants knew ReachNode’s industry (marketing), and whether they understood the respective roles they were assigned to.

Organisational D&I practices. To give a basis for justice perceptions, five D&I incidents concerning gender diversity that the fictional organisation was called to address were developed. These were designed to be as ambiguous as possible, such that they could be interpreted in either a positive or a negative light. For example, one of the practices was as follows: LEADER OVERSIGHT BIAS 13

During last year's review, some employees expressed the opinion that your

company should have a systematic way of reviewing their diversity and

inclusion practices. Senior management took this forward, and they now hold

a one-hour meeting every month dedicated to discussing diversity and

inclusion issues.

In this example, an observer could reason that the company acted well in establishing the meetings, however another line of reasoning could be that one hour per month is insufficient.

All five ambiguous incidents can be seen in Appendix E.

Procedure

Participants first answered some demographic questions regarding their gender, age, and employment status. They were then presented with the vignette introducing ReachNode’s background. Following this, the dummy questions were presented, after which participants were allocated into either a leader or a non-leader, ostensibly based on their answers. At this point, they received the attention and manipulation checks.

After answering these questions, participants viewed ReachNode’s diversity statement and answered the anticipatory justice questions. Afterwards, they were presented with

ReachNode’s handling of the D&I incidents, and then given the perceived justice scale.

Finally, participants were asked to rate how hypocritical they perceived the organisation to be, before being debriefed.

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Results

Simple effects analyses

Descriptive statistics following exclusions are shown in Table 1. A non-significant chi-square test with gender and role showed that role randomisation was effective, as women and men were proportionally allocated, χ2 (1) = .54, p = .462.

For inferential testing, an independent-samples t-test was conducted with organisational role as the independent variable and perceived hypocrisy as the dependent variable. A significant Shapiro-Wilks test showed that the assumption of normality was violated, W (168) = .98, p = .004. However, this violation of normality was due to a bi-modal, and not a long-tailed distribution, making the t-test a robust analytical technique to use

(Rasch, Teuscher, & Guiard, 2007). Supporting H1, leaders (M = 2.26, SD = .56) perceived significantly less organisational hypocrisy than non-leaders (M = 2.45, SD = .68), t (166) = -

2.02, p = .045 (equal variances assumed; F = 3.39, p = .067). Given the violation of normality, a Mann-Whitney U test was conducted and demonstrated significance, thus LEADER OVERSIGHT BIAS 15

corroborating this finding (U = 2827.00, p = .031). In two further t-tests, leaders also showed significantly higher anticipatory justice (p < .001) and perceived justice (p < .01) than non- leaders (both non-parametrically corroborated).

Preliminary tests for the moderated sequential mediation model

Before testing the hypothesised moderated sequential mediation model, each model component was tested individually to check whether they should be included in the final model. Gender as a moderator was tested in a simple moderation analysis between anticipatory and perceived justice. Hayes’ (2013) PROCESS macro (Model 1) with 10000 bootstrapped simulations for bias correction was used, with a 95% confidence interval and the Davidson-MacKinnon heteroscedasticity-consistent influence. PROCESS derives its simulations through random sub-samples taken from the overall dataset and provides an advantage to alternative methods in that it does not rely on parametric assumptions. The interaction term between gender and anticipated justice was not significant as the confidence interval included zero, b = -.21, 95% CI [-.53, .11]. Therefore, gender was not a significant moderator in this relationship, and H3 was not supported, suggesting that the strength of the relationship between anticipated and perceived justice was relatively equal for men and women (Figure 2).

We then used a variable entry hierarchical multiple regression with anticipated justice in the first, and perceived justice in the second step to test for their ability to predict perceived hypocrisy. Anticipated justice explained 9.2% of the variance in perceived hypocrisy, which was a significant amount, F (1, 166) = 16.77, p < .001, R2 = .092. Adding perceived justice in the second step explained an additional 57.3% of this variance, bringing the total variance to

66.5%, ΔF (1, 165) = 282.36, p < .001, ΔR2 = .573. Full model coefficients can be seen in

Table 2. The hierarchical regression analysis demonstrated that both anticipated and LEADER OVERSIGHT BIAS 16

perceived justice were good predictors of perceived hypocrisy in their own merit and were

thus included as mediators.

Figure 2. Regression slopes for the relationship between anticipatory and perceived justice, split by gender as arising from the moderation analysis.

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Although no multicollinearity problems were immediately evident (all VIFs < 10, all tolerances > 0.2), the correlation between perceived justice and perceived hypocrisy exceeded r = .8, raising potential issues (Table 3). Therefore, a confirmatory factor analysis was undertaken to verify whether these two constructs provided discriminant validity.

The confirmatory factor analysis was conducted through the AMOS software for

SPSS, using Oblimin rotations which allowed for factor inter-correlations. A two-factor model which kept hypocrisy and perceived justice as two distinct constructs was compared to a single-factor model. Model fit was assessed using the χ2 statistic (lower χ2 indicating better fit), comparative fit index (CFI), normed fit index (NFI), Tucker-Lewis index (TLI) (all of these ideally above .95, but above .90 acceptable), and the root mean square error of approximation (RMSEA; ideally below .06, but below .08 acceptable) (Kline, 2011;

Schreiber, Nora, Stage, Barlow, & King, 2006).

The correlated two-factor model had a lower χ2 and RMSEA, and a higher CFI, NFI, and TLI than the single-factor model (Table 4). Although the RMSEA was slightly higher than what is conventionally accepted, and the NFI slightly lower, the two-factor model was a better fit than the single-factor model by all accounts, which showed a poor model fit in all LEADER OVERSIGHT BIAS 18

indices. A correlated four-factor model, which retained the original justice sub-components

as separate factors (procedural, informational, interpersonal), was also tested and found to

provide the best model fit out of all three. However, because there was no significant increase

in the χ2 value of the two-factor model relative to the four-factor model, and because our

study design benefited from an overall justice measure (Ambrose & Schminke, 2009),

perceived justice was retained as a single construct, distinct from perceived hypocrisy.

Table 4

Confirmatory factor analysis and model fit

Model χ2 df CFI NFI TLI RMSEA (p) Δχ2

Four-factor 180.11* 129 .981 .938 .975 .049 (.536) -

Two-factor 313.10** 134 .935 .893 .917 .089 (< .001) 132.99

Single factor 553.16** 135 .848 .811 .808 .136 (< .001) 240.06**

Note. *p < .01. **p < .001. The p-value for RMSEA refers to the probability that the RMSEA is higher than .05 (higher p-values are desirable as they express higher confidence that no error has been made in calculating the RMSEA, and thus higher confidence in the RMSEA being sufficiently low).

Exploratory gender analysis

Following the non-significant moderation analysis, the role of gender was explored in

more depth since means demonstrated that women anticipated higher justice but ended up

perceiving less justice than men (Table 1). Treating justice evaluation time as a repeated

measures independent variable (anticipatory vs. perceived), a 2x2 mixed ANOVA

demonstrated that there was, in fact, a significant interaction between gender and evaluation

2 time on justice scores, F (1, 165) = 6.85, p = .010, ηp = .040 (Figure 3).

Although this seemingly contradicts the lack of a gender moderation between

anticipatory justice and perceived justice, it should be noted that the interaction and LEADER OVERSIGHT BIAS 19

moderation are distinct tests. Moderation analysis tests for significant differences between the

regression slopes of men and women for the anticipatory-perceived justice relationship and

thus retains anticipatory and perceived justice as two separate constructs, whereas the

ANOVA interaction demonstrates that the mean difference between anticipatory and

perceived justice is significantly greater for women than for men (Fritz & Arthur, 2017;

Vosgerau & Gatignon, 2007), treating justice as a single construct measured at different

times. This is addressed further in the discussion.

Figure 3. A graphical representation of the interaction between justice evaluation time and gender. The decrease from anticipatory justice to perceived justice was significantly higher for women compared to men.

Test for the sequential mediation model

Following our preliminary analyses, gender as a moderator was not included in the

mediation analysis. A model testing for the relationship between organisational role and LEADER OVERSIGHT BIAS 20

hypocrisy, sequentially mediated by anticipatory justice and perceived justice as outlined in

H2, was tested using Hayes’ (2013) PROCESS macro (Model 6).

Using 10000 bootstrapped samples to achieve a 95% confidence interval, the sequential mediation demonstrated a very good model fit which explained 66.6% of the variance in perceived hypocrisy, F (3, 164) = 108.75, p < .001, R2 = .666. The total effect of role on perceived hypocrisy was significant as the 95% confidence interval did not include zero, b = .20 [.005, .39], and explained 2.4% of its variance (model fit: F (1, 166) = 4.09, p =

.045, R2 = .024). All direct effects except for those of role on perceived justice and hypocrisy were significant, with anticipated justice positively affecting hypocrisy when perceived justice was controlled for (Table 5). The hypothesized sequential mediation model showed the highest effect, and thus the best fit for the data, b = .24 [.11, .38], compared to simple mediations with only perceived justice (b = .11 [-.12, .36]) or only anticipatory justice (b = -

.09 [-.18, -.91]) as mediators. Thus, the analysis demonstrated a full sequential mediation

(Figure 4) and H2 was supported.

Anticipated .55*** Perceived

justice justice -.41** -.67***

.13** -.10

Perceived Role hypocrisy .20* (.03)

Figure 4. The resulting serial mediation model. *p < .05. **p < .01. ***p < .001. For the relationship between role and perceived hypocrisy, .20 denotes the total effect, and .03 denotes the direct effect. Total indirect effect B = .17 [.01, .32]. Codes for organisational role: 1 = leader; 2 = non-leader.

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Discussion

Whereas much of previous research has investigated employee (Greenbaum et al.,

2015; Jaiswal & Dyaram, 2019; Rodell & Colquitt, 2009) or outsider (Smith et al., 2012;

Windscheid et al., 2016) justice and hypocrisy perceptions, the present study demonstrated the potential biasing mechanisms of organisational leadership. Consistent with H1, leaders perceived their organisations as less hypocritical than non-leaders. A test for the mechanisms of this effect found that it was sequentially mediated by anticipatory and perceived justice, supporting H2. Contrary to H3, the relationship between anticipatory and perceived justice was not moderated by gender. The existence of serious gaps between words and actions, or LEADER OVERSIGHT BIAS 22

espousals and implementations in D&I has been a prominent issue in the literature

(Macintosh & Doherty, 2005; Soldan & Nankervis, 2014), and this research is an attempt towards reconciling those gaps by better understanding the perceptions of leaders who are often the policy makers.

Study inferences and theoretical implications

Using an experimental paradigm in which our participants had no prior affiliation with the focal company, we were able to demonstrate that the mere placement of someone in a leadership position can create an oversight bias. Specifically, after viewing their organisation’s diversity statement, leaders anticipated their organisation to be more just than non-leaders. They then seemed to confirm this anticipation by perceiving more justice than non-leaders after viewing the organisation’s actual D&I practices in a gender context, thus perceiving their organisation as less hypocritical. To this end, leadership seems to play a role akin to that of being in a majority group in D&I perceptions (Crocker et al., 1991; Mor Barak et al., 1998). This can create a vicious circle. For example, if leaders delegitimise discrimination claims by minorities as a result of their higher justice perceptions (Kaiser et al.

2013), then the necessity for better, more effective D&I practices can be downplayed by the very people who are best placed to implement them.

We theorise that leaders expect their organisation to be more just than non-leaders because, whereas non-leaders may be alarmed at the potential of their organisation exploiting them, leaders do not share such scepticisms (Bell et al., 2004). As a result, they may trust their organisation more (van den Bos et al., 1997), and take their diversity claims at face value. Once justice anticipations are set, what follows is a confirmation bias (Shapiro &

Kirkman 2001; Snyder & Swann, 1978). Our participants seemed to confirm their anticipations by anchoring their perceptions of justice to them, as shown by the strong LEADER OVERSIGHT BIAS 23

positive relationship between anticipatory justice and perceived justice. Perceiving justice implied that the organisation remained true to its word and did not misalign, thus strongly and negatively predicting perceived hypocrisy. This explains why leaders perceived the focal organisation as less hypocritical than non-leaders.

Contrary to H3, gender did not moderate the relationship between anticipatory and perceived justice. This suggests that women did not anchor their justice perceptions to anticipatory justice to a lesser extent than men and is inconsistent with prior research on perceptions of D&I practices by marginalised groups (Crocker et al., 1991; Mor Barak et al.,

1998). The lack of moderation shows something akin to the ‘queen bee’ effect, where women who rise to positions of power may then adopt behaviours which disfavour women below them (Derks, van Laar, & Ellemers, 2016). In this sense, female leaders may not share the same perceptions as their non-leader counterparts, perhaps by virtue of being exclusive beneficiaries of the organisation’s D&I practices and not sharing the same discrimination concerns (Buelenger et al., 2018).

However, because “absence of evidence is not evidence of absence” (Alderson, 2004, p. 476), we advise trepidation in interpreting this finding. An exploratory gender analysis demonstrated that women, although initially anticipating more justice than men after reading the organisation’s diversity statement, perceived less justice upon seeing its enacted D&I practices. We believe this can be explained by Greenbaum et al.’s (2015) findings, in that marginalized groups with high justice anticipations experience disillusionment after witnessing sub-par practices. Therefore, although women and men anchored their justice perceptions to their initial anticipations to a similar degree, the general pattern arising from this exploratory analysis calls the ‘queen bee’ phenomenon into question and suggests that gender warrants further research to clarify its role in this leader oversight bias (Arvate,

Galilea, & Todescat, 2018). LEADER OVERSIGHT BIAS 24

Practical applications for organisations

There often exist gaps between a policy’s intention and its implementation (Kaley et al., 2006; Soldan & Nankervis, 2014). Furthermore, perceptions of D&I practices are often anchored on things such as previous experiences with organisational dishonesty, which are not normatively grounded on the practice itself (Jordan et al., 2019). This shows that there are important differences in policy perceptions across organisational levels. While many authors have made the case that inclusion is crucial to the effectiveness of diversity policies

(Dwertmann et al., 2016; Jaiswal & Dyaram, 2019; van Knippenberg et al., 2013), how to best attain this inclusion is becoming an increasingly pressing matter, especially given the recent surge of literature outlining problems with popular practices such as unconscious bias training (Noon, 2018; Williamson & Foley, 2018).

The leader oversight bias shown here may be a call for the establishment of better communication structures between the senior and junior levels of an organisation. Based on our theorising, there may be differences in trust and security needs (van den Bos, 1997) between leaders and non-leaders. As such, leaders may overlook their employees’ concerns and mistakenly assume acceptability in their organisation’s policies (Buelenger et al., 2018).

Organisations, therefore, may find it worthwhile to separate their commitment to D&I from their realised practice. Anchoring leadership perceptions to actual practices rather than espoused values may assist in managing leaders’ anticipatory justice, and thus reduce their confirmation biases when it comes to perceiving justice in their workplace. A potential way of doing this would be to formally assess the efficacy of D&I practices based predominantly on quantification of their impacts and employee feedback, rather than HR or management evaluations. Furthermore, espoused organisational values may need to be made as non-salient LEADER OVERSIGHT BIAS 25

as possible during such evaluations, to ensure that perceptions of efficacy are not anchored to them.

Limitations and directions for future research

Although our randomisation of organisational role allowed us to isolate the effects of a leadership-induced bias, the effect size was quite modest, and we recognise that such effects in the real world would be largely conditional on various organisational characteristics such as its culture or industry. As such, they could either be diminished due to inclusive organisational climates or amplified due to potential uncertainty that non-leaders experience around phenomena such as job precarity (Lind, Greenberg, Scott, & Welchans, 2000; Lind & van den Bos, 2002). Large-scale field studies attempting to detect similar leader oversights in ecologically valid settings, by attaining organisational evaluations from real leaders and non- leaders across various industries while controlling for confounding variables such as tenure, would be valuable in further contextualising this effect.

Furthermore, while we only recruited UK nationals who are predominantly white

(Office for National Statistics, 2019) and studied diversity only within a gendered context to control for cultural and racial confounds (Mor Barak et al., 1998), some of our participants possibly still came from other ethnic backgrounds, which was not statistically accounted for here due to our restricted sample. Future research should further examine the potential for leadership biases in other diversity contexts, such as ethnicity and sexuality.

Moreover, the measurement of all constructs within a single experiment potentially introduced some common method bias (Kock, 2015). While we attempted to control for this as much as possible, by following up suspicions of multicollinearity with confirmatory factor analyses, isolating effects with simple analyses prior to incorporating them in our study model, and making explicit, pre-registered, theory-driven hypotheses (Cramer et al., 2015), it LEADER OVERSIGHT BIAS 26

would be prudent for future research to attempt to corroborate the findings presented here, as this is, to our knowledge, the first study which has postulated and probed the leader oversight bias.

The scope of the present research was to make the case for this bias and attempt to experimentally detect it. Further dissecting the driving forces behind it is an exciting research avenue. Regarding the fairness heuristic postulate, future studies could examine whether non- leaders continue to ascribe more hypocrisy to organisations when their misalignment is presented as an honest mistake, which would clarify whether trust considerations are implicated in this bias. This could involve eliminating the perception of an intent to deceive, by, for example, having organisations admit that they have not yet met their diversity goals

(Marcinko, 2020).

Other theories which may play a role in this bias could also be isolated. For example, following social identity theory (Tajfel & Turner, 2004), future research could manipulate employees’ organisational identification and test whether high-identifying non-leaders are also subject to the same biases as leaders. Similarly, future studies could also explicitly test social exchange theory (Blau, 1964) by examining whether non-leaders who achieve promotions will show similar oversights to leaders. This could demonstrate that the leadership bias carries an exchange component, whereby leaders unconsciously preserve favourable impressions of their organisation as a reward for being granted their position.

Another promising research avenue regards role theory (Biddle, 1986). Because leaders’ effectiveness orientation may often clash with their diversity orientation (Pratt &

Foreman, 2000), this can introduce unique role considerations in organisations and cause leaders to deny responsibility over a lack of inclusion (Kvalnes, 2014). In line with this, examining the degree to which policies are viewed more favourably by policymakers simply LEADER OVERSIGHT BIAS 27

because these policies are their own creations, akin to the so-called ‘IKEA effect’ (Norton,

Mochon, & Ariely, 2012), would also provide useful insights for policymaking management.

Finally, examining the leader oversight bias through the lens of social dominance may be worthwhile (Malle, Stallworth, Sidanius, & Pratto, 1994). Our manipulation checks demonstrated that leaders perceived more decision-making power than their employees.

Based on research showing that power-holders, such as leaders in our case, often favour maintaining the status quo as a means of retaining their power (Sidanius & Pratto, 1999;

Stamkou, van Kleef, Homan, & Galinsky, 2016), the leader oversight bias could be a manifestation of leaders justifying ineffective D&I practices to protect the setting which gave rise to their status.

Conclusion

The present study has shown that leaders are biased towards anticipating, and subsequently perceiving more justice in their organisation’s D&I practices. This leads them to view their organisation as less hypocritical. Our findings could have important implications for research in D&I, particularly insofar as the consideration of organisational hierarchies and the bridging of statement-action misalignment are concerned. The present research highlights the need for the establishment of more effective communication structures across organisational levels. The demonstration of a leader oversight bias in justice and hypocrisy judgments opens up various exciting research avenues, especially with regards to better understanding the mechanisms that cause it.

LEADER OVERSIGHT BIAS 28

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LEADER OVERSIGHT BIAS 33

Appendices

Appendix A – Organisational description

You are about to read some information regarding a company called "ReachNode

Marketing". You will be asked to imagine that you are part of this organisation and will be asked some questions regarding your perceptions of it.

Please review this information carefully, as you may be unable to proceed through the survey if you do not.

ReachNode Marketing is a growing marketing agency which currently employs 850 people, with offices in Europe and the United States. The company was established in 2008 and has seen rapid market growth. With the competitive industry it is part of, as well as its rapidly expanding scope, ReachNode Marketing has had to undergo multiple structural changes and frequently review its policies to ensure it continues to grow.

Appendix B – Organisational role manipulation

Dummy questions from the BFI.

Please respond to the following questions. Based on your answers, you will be placed into a certain job in the organisation.

1. I see myself as someone who is talkative.

2. I see myself as someone who is inventive.

3. I see myself as someone who is generally trusting.

4. I see myself as someone who does things efficiently.

Role description.

The words in italics were used in the leader manipulation, whereas words in brackets were used in the employee manipulation: LEADER OVERSIGHT BIAS 34

You have been assigned to a role in the Senior Leadership Team (the role of administrative assistant) at ReachNode Marketing.

As a key leader (an employee) in the organisation, you are responsible for overseeing and signing off on (proofreading and circulating) organisational policies. Your duties also include ensuring that the organisation is perceived positively (supporting other staff in your department to deliver projects). You are entrusted (tasked) with handling corporate relationships (communicating with your superiors efficiently and timely) in a way that maintains the company's image.

You are the direct superior of two company directors who must answer to you (subordinate of a Public Relations specialist who you must answer to). You have significant influence over many major decisions in the company (relatively little influence over the company’s decisions).

The red circle shows your relative position in the organisational chart below.

LEADER OVERSIGHT BIAS 35

Appendix C – Justice scale

Items included in the scale.

As a ReachNode leader/employee, to what extent do you believe your company…

[Procedural justice sub-scale]

1. Allows its employees to express their views and feelings?

2. [Your company’s] procedures are free of bias?

3. [Your company’s] procedures uphold ethical and moral standards?

[Interpersonal justice sub-scale]

4. Treats its employees in a polite manner?

5. Treats its employees with dignity?

6. Treats its employees with respect?

LEADER OVERSIGHT BIAS 36

[Informational justice sub-scale]

7. Is honest in its communications to its employees?

8. [Your company’s] explanations regarding their procedures are reasonable?

9. Tailors their communications to individuals’ specific needs?

Note that these questions were merged and presented (and analysed) as a single scale.

Items excluded from the scale.

To what extent…

[Procedural justice sub-scale]

1. Have you had influence over the outcome arrived at by those procedures?

2. Have those procedures been applied consistently?

3. Have those procedures been based on accurate information?

4. Have you been able to appeal the outcome arrived at by those procedures?

[Distributive justice sub-scale]

5. Does your outcome reflect the effort you have put into your work?

6. Is your outcome appropriate for the work you have completed?

7. Does your outcome reflect what you have contributed to the organisation?

8. Is your outcome justified, given your performance?

[Interpersonal justice sub-scale]

9. Has (the figure of authority) refrained from improper remarks or comments?

[Informational justice sub-scale]

10. Has (the figure of authority) been candid in their communications with you?

11. Has (the figure of authority) communicated details in a timely manner? LEADER OVERSIGHT BIAS 37

Explanations for why these items were excluded from the scale prior to running the study are as follows:

1 & 4-9: The study was not interactive, therefore these items were not relevant as the participants had no input towards these practices and had no way of altering or having input on them.

2-3 & 10-11: The study did not provide the necessary information for participants to be able to answer these questions.

Appendix D – Perceived corporate hypocrisy scale

1. ReachNode’s policies do not match with the promises made to employees.

2. ReachNode is unfair to its employees.

3. ReachNode does not care for its employees, but money.

4. ReachNode pretends to appear moral.

5. ReachNode engages in morally wrong acts when it can get away with them.

6. ReachNode’s values often change when it comes to getting things done.

7. ReachNode does not practice what it preaches.

8. ReachNode does not hold everyone at all levels equally accountable for their

mistakes.

9. The values ReachNode communicates to the public are not consistent with employee

experiences at work.

LEADER OVERSIGHT BIAS 38

Appendix E – Diversity practices presented to participants

As part of your role, you have recently reviewed several diversity and inclusion related events that have occurred at ReachNode. Please review the following information about five of these incidents.

1. In one case, a key departmental manager in your company was accused of a making a

sexist statement toward a female employee. He allegedly questioned the employee's

competence based on her gender. While the complaint was being reviewed, the

employee stated that she felt uncomfortable having to work with this manager. She

was re-allocated to another manager in the same department until the dispute was

resolved.

2. ReachNode recently released their gender diversity figures for positions within the

higher pay grades. There was an even male to female ratio. However, it was also

noted that these figures pooled together both senior management and middle

management. In middle management alone, there were slightly more female (58%)

than male (42%) departmental heads. However, in senior management alone, there

was an overwhelming number of men (80%).

The company released the following statement to shareholders: "We hire or promote

senior managers based on a number of factors. These include industry experience,

management knowledge, and track record. We do not consider gender at all in our

hiring decisions."

3. While there is an even gender split across your company's workforce, there seem to be

significantly more men in the higher-paying departments such as Finance or Logistics

& Operations. On the contrary, there seem to be more women in Human Resources

and in Public Relations. LEADER OVERSIGHT BIAS 39

In a letter to shareholders, the CEO stated: "We recognise that this is an issue, but it

boils down to the demographics that apply to these positions to begin with. We have

far more women applying for HR roles, while the majority of applications for finance

and operations roles are from men. It's not a question of gender, it's really more about

what the job is, who applies for it, and who is qualified for it".

4. During last year's review, some employees expressed the opinion that your company

should have a systematic way of reviewing their diversity and inclusion practices.

Senior management took this forward, and they now hold a one-hour meeting every

month dedicated to discussing diversity and inclusion issues.

5. Any hires made by ReachNode include a 3-month probation period. If new hires

perform to standard in these 3 months, they are offered a permanent contract. While

ReachNode provides anti-harassment training to all its employees, such training is not

provided to employees under probation.

In a recent meeting, a senior employee said, "I'm all for preventing harassment, but

we also need be realistic. We can't be spending thousands on training an employee

that could be gone within a couple of months. That's just irresponsible."