NEWS & ANALYSIS

McDonald's Plans to Replace "McMerit" with "McQuotas" on Organization Menu


McDonald’s will be implementing diversity hiring quotas, including a goal of achieving gender parity in leadership roles by 2030. While the concept is not a new one, its implementation at one of the world’s largest and most popular companies raises questions about the validity of the practice.

“[F]or the first time in our history, we’re implementing policies that hold our leaders directly accountable for making tangible progress on our DEI goals,” the world’s favorite burger chain announced Thursday.

The company is introducing “quantitative human capital management-related metrics” (or diversity quotas) as determinants for VP compensation. Executives will be evaluated based on ability to “improve representation within leadership roles for both women and historically underrepresented groups.”

Stated goals include 35% of leadership roles filled by members of “underrepresented groups,” and over 45% filled by females by 2025. Full gender parity is to be achieved by 2030.

“As a world-leading brand that considers inclusion one of our core values, we will accept nothing less than real, measurable progress in our efforts to lead with empathy, treat people with dignity and respect, and seek out diverse points of view to drive better decision-making,” President and CEO Chris Kempczinski said. “Today, I would like to share two goals we have set as we continue to build the strong foundation we need to fully realize our ambition.”

But even those who place value in the concepts of “diversity, equity, and inclusion” have repeatedly pointed out that these types of hiring quotas are misguided at best, and empty performances at worst, with unintended negative consequences.

Even the progressive corporate giants at the World Economic Forum have warned that diversity hiring quotas are often a “quick fix,” and are often simply a sort of easy way out for companies looking to check the “diversity” box that society has bestowed upon them.

“Quotas may be a quick fix to boosting female representation on boards, but they do nothing in and of themselves to remove barriers preventing many women from rising up the corporate ladder in the first place. We are in need of a broader, more comprehensive approach,” Moelis & Company Vice-Chairman and Managing Director wrote for the Forum in 2020.

“Ultimately, to achieve greater gender diversity in leadership, company leadership must focus on the entirety of their talent pipeline, recognizing the problems are likely different at each rung of the ladder,” he added. “Although this approach is harder than the quick fix of a quota, there is little doubt that it is more likely to result in success both for the cause of diversity and for the cause of improving business performance.”

A study from the University of Toronto’s Rotman School of management that analyzed the arguments for and against such programs pointed out similar issues, as well as multiple negative unforeseen consequences of quotas. Particularly compelling is the study’s warning that such policies may backfire, causing other employees to view women and minorities negatively.

“There is a possibility that they will be seen as less qualified and only on the board because of the quotas,” the researchers warned. This may hurt their ability to contribute to board discussions and undermine their effectiveness.

“This is particularly true if women are added to boards at token levels. Evidence suggests that a single woman on a board will likely be marginalized or delegitimized.”

Similarly, the study warned that employees may begin to resent diversity initiatives all together, once the moral goal of inclusion is mandated by authority.

“Psychological research has consistently shown that when someone else forces or rewards people for doing something, they become less motivated about the task: they attribute their motivation to coercion,” the study notes. “In the case of quotas, even if employees personally believe in working toward gender diversity, imposed quotas can make them believe that they only care about diversity because the company wants them to not because they do personally.”

There is also the inevitable result of otherwise open-minded employees developing adverse attitudes to the concept of diversity in general, after experiencing a quota that adversely impacts them personally.

“Perceptions of unfairness can trigger unintended negative consequences. Employers who impose quotas may become less attractive to male job applicants. Quotas may also lead to low engagement and negative job attitudes among male employees. Furthermore, this perception of unfairness may cause men to become less supportive of diversity policies than they were prior to implementing quotas.”

And of course, in many cases, these policies are just downright illegal, as acknowledged by the same study:

“In some jurisdictions, quotas may violate legislation. In the United States, for example, constitutional law would likely present insurmountable obstacles to the promulgation of a quota-based regime. Even where quotas are legal, people may interpret quotas as a violation of perceptions of justice at the individual level, even if they are creating more fairness in terms of gender distribution at the societal level.”

While many argue that such quotas are clearly unconstitutional, many have implemented them anyway, often in the face of massive discrimination lawsuits. YouTube, Google, and Starbucks have seen related suits in recent years.

But Big Business is merely following in the footsteps of the American university system, as is often the case when it comes to issues of social perception. For the past several years, diversity initiatives, including quotas have become the norm on American college campuses, not only with hiring processes, but within the student admission process as well.

Harvard University is currently embroiled in a years-long legal battle against a group that claims its diversity based admissions processes discriminate against Asian students by holding them to a higher standard than other applicants. A federal court ruled in favor of Harvard in November, but plaintiff group Students for Fair Admissions has expressed intent to take the case to the Supreme Court.

Harvard’s is perhaps the most widely-known case of this nature, but top universities have been tallying up race and gender of students and employees to earn diversity points for years, often with no challenge or consequence.