How perceived riskiness influences the selection of women and men as senior leaders

• Author: Margaret M. Hopkins,Diana Bilimoria,Chantal van Esch,Deborah A. O'Neil
• DOI: http://doi.org/10.1002/hrm.21902
• Date: 01 July 2018
• Published date: 01 July 2018

SPECIAL ISSUE ARTICLE

How perceived riskiness influences the selection of women

and men as senior leaders

Chantal van Esch

1

| Margaret M. Hopkins

2

| Deborah A. O'Neil

3

| Diana Bilimoria

4

1

California State Polytechnic University,

Pomona, California

2

University of Toledo, Ohio

3

Bowling Green State University, Bowling

Green, Ohio

4

Case Western Reserve University,

Cleveland, Ohio

Correspondence

Chantal van Esch, 11119 Bellflower Road,

Cleveland, Ohio 44106.

Email: cxv77@case.edu

This study investigates the role of perceived riskiness in senior leadership selection decisions.

Perceived riskiness is defined as the degree of uncertainty and the significance of the outcomes

from the selection decision. Hypotheses that perceived riskiness is a mediator between a candi-

date's qualifications and selection as well as salary offer, and that gender moderates those rela-

tionships, were examined through structural equation modeling and logistic regression. A

sample of 253 individuals with prior experience in hiring and promotion decisions responded to

an online survey where they read a job description and candidate profile summary of one of

the following: a highly qualified female, a highly qualified male, a moderately qualified female,

or a moderately qualified male. The results demonstrated a complementary mediating effect of

perceived riskiness between a candidate's qualifications and their selection, and between a can-

didate's qualifications and their salary offer. In addition, gender moderates the pathway from

qualifications to perceived riskiness in that highly qualified women were perceived as less risky

for senior leadership than highly qualified men, while moderately qualified women were seen

as riskier for senior leadership than moderately qualified men. We offer recommendations for

human resource professionals and hiring managers to recognize and mitigate the perceived

riskiness of women in the selection process for senior leadership roles.

KEYWORDS

gender, perceived riskiness, selection decisions, women and leadership

1|INTRODUCTION

Bias against women in leadership or aspiring to leadership roles has

been well documented (e.g., Eagly & Carli, 2007; O'Neil, Hopkins, &

Bilimoria, 2008), and leaders, organizations, and researchers remain

concerned about the impact of gender in the ascent to leadership.

Previous research has focused on outcomes and has not yet come to

a consensus in the explanation for women’s slow rise to senior lead-

ership positions. We examine the construct of perceived riskiness as

a mediating factor between qualifications and selection/salary for

senior leadership candidates, as well as investigate how gender mod-

erates the relationships among those variables. Perceived riskiness is

the degree of uncertainty of an outcome as well as the significance

of the outcome (Harris, Jenkins, & Glaser, 2006). We propose that

there is a greater degree of uncertainty about women in senior lead-

ership roles as well as an operating belief that there will be question-

able outcomes for women in those roles, thus resulting in women

being perceived as risky hires. Our study contributes to the extant lit-

erature by identifying this novel explanation for the persistent dearth

of women being selected for senior leadership positions, as a result

of gender differences in the perceived riskiness of candidates for

these roles.

2|CANDIDATE QUALIFICATIONS,

SELECTION DECISIONS, AND STARTING

SALARY

Organizations invest an enormous amount of money, time, and other

resources intoemployee selection. Employeeselection is the process of

“collecting and evaluating information about an individual in order to

extend an offerof employment”(Gatewood& Field, 2001). In particular,

the selectionof senior leaders has a significant impact onorganizational

success. A survey by the Society for Human Resource Management

DOI: 10.1002/hrm.21902

Hum Resour Manage. 2018;57:915–930. wileyonlinelibrary.com/journal/hrm © 2018 Wiley Periodicals, Inc. 915

found that 75% of top executives cited succession planning as their

most significant challenge for the future, and over two thirds named

recruiting, selecting, and retaining talented employees as among their

next most important challenges (Society for Human Resource Manage-

ment, 2007). One study of companies that experienced 15 years of

below-average growth followed by 15 years of above-average growth

discovered that the first step in moving from “good to great”was the

selectionof the right senior leaders (Collins,2001).

Job qualifications, the credentials and experience that are stated

as required or preferred for a position, are the standard used to ini-

tially screen applicants for selection (Rynes, Colbert, & Brown, 2002).

Selection qualifications typically focus on five areas: education, knowl-

edge, skills, abilities,and personal attributes (e.g., the ability to interact

with a wide range of people) (Sessa, Kaiser, Taylor,& Campbell, 1998).

A well-established principle is that the optimal predictor of future per-

formance is past performance (Schmidt & Hunter, 1998). Prior work

experience enhances an individual’s job knowledge and job capabili-

ties, which has a great deal of influence on job performance (Schmidt,

Hunter, & Outerbridge, 1986). For decades, research has supported

the argument that work experience is an important predictor of selec-

tion (e.g., Cascio, 1987;Hakel, Dobmeyer, & Dunnette, 1970; Singer &

Bruhns, 1991). When evaluating senior-level candidates, the most

common selection methodsused to assess past achievements and per-

formance are resumes and references (Bernthal & Erker, 2005; Sessa

et al., 1998). A track record of outstanding performance is especially

germane for selecting senior-level positions in organizations, given the

criticality of these roles for organizational success. Thus, based on the

importance of qualificationsfor selection, we hypothesize:

Hypothesis 1a: A candidate with higher qualifications

will be more likely to be selected for a senior leader-

ship role.

In addition to the critical decision of selecting an individual for a

senior leader role, salary recommendations for people hired into

those positions also have to be made. Intuitively, we would expect

that a person with higher credentials (i.e., good performance in prior

work with relevant skills and experiences) would be offered a higher

starting salary. There is also empirical evidence to support this expec-

tation; for example, a study of managers making selection and salary

decisions for the two positions of vice president of sales and regional

sales manager found that work experience was an important predic-

tor of salary recommendations (Hitt & Barr, 1989). Therefore, as a

foundation for our study, we also hypothesize that:

Hypothesis 1b: A candidate with higher qualifications

will be more likely to be offered a higher starting salary

for a senior leadership role.

2.1 |Perceived riskiness and its relationship to

candidate qualifications, selection decisions, and

salary offers

The use of past trends to predict future performance encompasses

some level of uncertainty (Barone & DeCarlo, 2012). Candidates for

senior leadership roles vary to some degree in selection assessments

of their future potential and their perceived riskiness. Perceived riski-

ness takes into account the likelihood of something happening and

the subjective valuation of that outcome (Harris et al., 2006). The

perceived riskiness of a candidate, or certainty or uncertainty of all

potential outcomes as well as the importance of those outcomes and

their consequences, is considered when evaluating them for a senior

leadership job. There are considerable stakes in the outcome of the

selection for senior-level positions, as these roles are responsible for

shaping the strategic direction of the organization. If a candidate is

perceived as risky, there is more uncertainty about the outcome of

their selection as well as a greater potential for adverse conse-

quences due to their selection (Thaler, 1991). In a study of the rela-

tionships between perceived risk and five areas of consequences,

performance risk was the consequence that best predicted perceived

risk, followed by financial risk (Kaplan, Szybillo & Jacoby, 1974).

The results of a simulated hiring scenario study with student par-

ticipants that tested the mediation effects of perceived riskiness

between the quality of a candidate and the likelihood to hire showed

mediation effects; that is, if the candidate was perceived to be a risky

hire, they were less likely to be hired (Cabrera, 2010). This study

showed that the risk of a candidate was perceived to be higher for

moderate than for highly qualified candidates, and that risk partially

mediated the relationship between candidate quality and the likeli-

hood of hiring the candidate (Cabrera, 2010). The potential negative

consequence of the perceived riskiness of a senior leadership candi-

date is something that likely concerns selection decision makers.

Based on these arguments, we hypothesize that perceived riskiness

plays a significant mediating role in the relationship between a candi-

date's qualifications for a senior leadership role and the selection

decision.

Hypothesis 2a: Perceived riskiness will mediate the rela-

tionship between a candidate’s qualifications and their

selection for a senior leadership role.

Similar to selection decisions for senior leadership positions,

determining starting salaries for these leadership roles is a discretion-

ary process. Employers typically determine the value of the position

by first researching the data on pay practices for comparable jobs at

comparable companies (Burke, 2008), and then make adjustments to

reflect the employee’s background and experience. As stated previ-

ously, we believe that qualifications will have a negative relationship

with perceived riskiness, so that more qualified candidates will be

seen as less risky. Additionally, research has shown that people

respond to situations perceived as riskier by taking less risk

(Kahneman & Tversky, 1979). Logically, this confirms the idea that

the riskier a proposition is, the less one is likely to invest in that prop-

osition. If a prospective candidate for a senior leadership position is

perceived to be a risky hire, there is more uncertainty about the pro-

spective hire, and the starting salary offer will be smaller. Additionally,

we posit the reverse is true as well; the less risky a candidate is per-

ceived to be, the higher their starting salary offer will be. Therefore,

we propose that the perceived riskiness of a potential hire for a

senior-level position will mediate the relationship between that candi-

date’s qualifications and their starting salary offer.

916 VAN ESCH ET AL.