One of the reasons I left my job at Credit Suisse was that I no longer felt I was being paid based on merit. After the global financial crisis, the firm—like many others—faced tough times, and overall compensation steadily declined for years.
As a top-three ranked producer, I expected to be compensated accordingly. But I often wasn’t, due to the structural decline of the institutional equities business. Management always had an excuse—whether it was subsidizing the struggling fixed-income department or funding aggressive expansion in India with guaranteed pay packages for new hires.
At first, I did what any rational employee would do: I argued my case. That worked, especially after a senior colleague left, giving me more leverage. Years later, a competitor offered me a lucrative raise, and while I didn’t want to move back to New York City, I used the offer to negotiate a matching pay bump from my firm.
Then, the following year, despite strong performance, the firm goose-egged me—offering no bonus at all. The excuse didn’t matter; I knew the real reason. They wanted to “normalize” my pay after giving me a raise the year before.
Rather than complain, I negotiated a severance package and walked away. I knew that if I stayed, I would never truly be paid based on merit again. The writing was on the wall. 11 years later, in March 2023, Credit Suisse group went under.
Why Getting Paid Based on Merit Is Harder Than It Sounds
During Trump’s inauguration speech, he spoke about returning to a merit-based system. The idea sounds great—being rewarded based on hard work, knowledge, and skills. What standup person wouldn’t want that? But in reality, meritocracy is rarely that simple because human nature is full of biases. And no matter how much bias training class you have, you cannot fully be neutral.
Most of us work within organizations, and if you examine any leadership team, you’ll often find an overrepresentation of certain demographics compared to the general population. Why? Because people tend to favor others who share their backgrounds, experiences, or worldviews. And as a result, there grew an effort to create DEI policies, to provide more opportunities to those who historically never had a chance. Now these policies are being dismantled everywhere.
A classic example of bias can be seen in the intern selections for past presidents. If you look at the White House intern photos for Obama and Trump, you’ll notice clear demographic preferences. The interns are all likely bright and capable, but with limited spots available, some candidates will always be favored over others.
If the next U.S. president happens to have Taiwanese ancestry, you can bet there will be an overrepresentation of Taiwanese American and East Asian interns. That’s just the way things go. The sooner we accept that bias plays a role in every decision—whether in hiring, promotions, or pay—the better we can navigate the realities of the workplace.
Simple Steps to Getting Paid More on Merit
All most of us want is a clear correlation between performance and reward. Earning what we truly deserve is one of the most satisfying feelings. Conversely, being rewarded for reasons other than our efforts and abilities can leave us feeling like impostors who haven’t earned our success.
Do you really want to be rewarded based on your looks instead of your talent, your ethnicity instead of your performance, or your connections instead of your creativity? I don’t, but I also understand not everybody thinks this way.
If you want to get paid more on merit, here are four steps to take.
Step 1: Accept That Merit Alone Won’t Determine Your Pay
The first step is understanding that you will never be fully rewarded based purely on merit. Instead, your goal should be to increase the correlation between performance and compensation.
Shoot for merit being 80% or higher the reason why you are being rewarded. The sooner you accept that life isn’t completely fair, the better off you’ll be mentally.
Step 2: Assess Your True Value
Be brutally honest about your abilities. Are you truly making a difference, or are you benefiting from a strong product, brand, or team? Make sure you’re not falling into the Dunning-Kruger trap—the false belief that you’re better than you actually are. Self-awareness is key.
Step 3: Leave If You’re Undervalued
If you believe your employer is underpaying you despite strong performance, stop complaining and take action. Either negotiate for better compensation or move on.
Staying in a job where you are undervalued will only lead to resentment and wasted potential. If you don’t make a change, you deserve what you get.
Step 4: Work Where Merit Matters More
Join a smaller company, startup, or organization where your contributions have a greater impact. The smaller the team, the harder it is to hide. If you’re truly confident in your abilities, consider starting your own business or becoming a solopreneur. In smaller environments, performance is more directly tied to reward.
Why We Admire Athletes and Entrepreneurs: The Illusion of Pure Merit
Athletes are revered for their strength, skill, speed, and agility. We see the countless hours they put into their craft and witness their performance in real time. If they win, they become legends. If they lose, they fade into obscurity.
However, even in sports, raw talent plays a significant role. Being born coordinated with a 6’9” frame isn’t merit—it’s winning the genetic lottery. Of course, if that height isn’t put to good use, some might argue it’s more of a burden than a blessing (good luck fitting into an economy-class seat).
Entrepreneurs, on the other hand, are often admired—or at least less vilified than rich corporate CEOs—because they take an idea, go all in, and risk everything to build something from scratch. They work relentless hours for years before seeing meaningful results.
Yet even among successful entrepreneurs, privilege plays a role. Some are born into wealthy families, which gives them the financial cushion to take big risks. Others had powerful and well-connected parents who helped them access elite universities, influential networks, and startup capital. Bill Gates comes to mind.
In the end, merit is rarely the whole story—but without hard work, even the most privileged won’t get far. Here's my conversation with my friend, Shaun Livingston, 4X NBA champion with the Golden State Warriors about the importance of making the most of what you got. “You don't want to have to coach effort.”
Drill Down Deeper To Face Your Impostor Syndrome
As a professional athlete, you may still experience impostor syndrome, unsure of how much of your team's success was truly due to you. With a teammate like Michael Jordan, for example, it’s hard to feel great about winning six championships without even stepping onto the court.
To feel the glory of a high correlation between performance and reward, you may want to shy away from team sports. Instead, focus on individual sports with minimal external bias, such as: tennis, golf, track & field, swimming, wrestling, boxing, MMA, weightlifting, cycling or some Esports.
While these sports emphasize merit, external factors like financial backing, coaching, and access to elite training can still provide an edge. However, once the competition starts, it’s all on the individual.
Nowhere To Hide As a Solopreneur
If you truly want to get paid based on merit, leave behind the safety net of an established firm and build something of your own. The Googles, Metas, Apples, Goldmans, McKinseys, and Sullivan & Cromwells of the world will go on just fine without you.
Becoming a solopreneur is the ultimate test of merit. Unlike in a corporation, where promotions and raises are often dictated by office politics, favoritism, or shifting budgets, solopreneurship ensures you earn exactly what you're worth. Your income is directly tied to the value you create, with no gatekeepers deciding your fate. The harder and smarter you work, the greater your rewards most of the time.
As a solopreneur, there’s no room for impostor syndrome—your results speak for themselves. Every client you land, every product you sell, and every service you deliver is proof of your capabilities. You’re no longer at the mercy of performance reviews or corporate restructuring. Instead, you are more in control your own destiny.
More importantly, solopreneurship provides financial and psychological freedom. You reap the rewards of your innovation and effort, without worrying about layoffs or office politics. The independence is both exhilarating and humbling—because when success or failure rests entirely on you, there’s nowhere to hide.
But then again, who can truly afford to become a solopreneur except those with resources or nothing to lose? Walking away from a stable paycheck, healthcare, and retirement benefits is a privilege not everyone can afford. In the end, even solopreneurship may not be as purely meritocratic as it seems.
Public Market Investing Is Great for Meritocracy
If you're looking for another way to be rewarded more on merit, becoming an investor is one of the best paths. Thanks to commission-free trading and easy access to financial markets, practically anyone with a little capital can participate.
The beauty of investing is that the market doesn’t care about your background, where you went to school, or who you know. It is one of the few true meritocracies left. If you can analyze businesses well, identify long-term trends, and manage risk effectively, you’ll most likely be rewarded. If you make poor investment decisions, you’ll lose money. The results are immediate and undeniable, regardless of who you are or what you look like.
Unlike in a corporate job, where pay raises are capped by HR policies and office politics, your financial success as an investor is limited only by your ability to make smart decisions.
However, simply performing in line with the S&P 500 or any respective indices you follow is not worthy of praise. To be an outstanding investor, you need to consistently outperform the market over time. Your background—whether you're an elite university grad, a pretty person, or have a large number of TikTok followers—has no bearing on how well you outperform.
But even great investing is influenced by circumstance. If you happened to come into some money in 2010 and invested it all, you've likely seen nothing but upside since then. If you come from a wealthy family, you can take more risk more frequently to potentially hit that home-run investment. As the saying goes, “don't confuse brains with a bull market.”
Depends on What Playing Field You Are Competing In
The final reason why getting rewarded solely based on merit can be difficult lies in the different playing fields people are competing on.
For example, according to the World Health Organization, roughly 16% of the world's population (1 in 6, or 1.3 billion people), live with some sort of disability. However, it is the majority, the roughly 84% of the world’s population who live without a disability that sets the standards for everything. And that is a problem.
If most people can see 20/20 after wearing corrective lenses, establishing a 12-point font size might seem perfectly reasonable. But what about those with visual impairments, those who can only achieve a visual acuity of 20/100 or higher, even with corrective lenses? Should they be left at a disadvantage, or should larger print be offered to level the playing field and give them the same opportunity to read?
What about those born into poverty or broken families? Instead of coming home to a supportive environment and focusing on their homework after dinner, they might have to take on a parental role for their younger sibling while their single mom works the night shift. How can they realistically compete with a kid who gets to prioritize academics, supported by a stay-at-home parent and another who’s always home for dinner?
The Bank Of Mom & Dad is more prevalent for adult children than you think! Merit alone isn’t likely buying a 26-years old a $1.5 million condo in New York City.
It’s clear that helping those with different abilities and difficult financial circumstance should be a priority, as we cannot control how we’re born or the challenges we face. All anybody ever wants is the ability to compete as fairly as possible.
Lack Of Awareness Drives Conflict
If we are part of the majority and unaware of the many differences others face, we may unknowingly act in ways that are discriminatory or offensive. After all, who determines that one person’s way of doing things should be the standard for everyone?
This is where ableism comes into play—discrimination and prejudice against individuals with disabilities. Ableism can manifest in various ways, including inaccessible environments, lack of accommodations, and exclusion. It’s rooted in the assumption that people without disabilities are superior, and those with disabilities are less capable.
A truly merit-based society recognizes these disparities and strives to create equal opportunities for everyone, regardless of ability.
I don't believe most people are intentionally discriminatory; rather, it's often a matter of being unaware of the many differences we all have. The more we can get to know people from different backgrounds the better.
Getting Rewarded Purely Based On Merit Is Unlikely
If you’ve been an ardent believer that getting rewarded purely based on merit is the ultimate path to success, I hope this article has given you some food for thought—it's not that simple. There are both known and unknown forces at play that influence how “successful” someone can be.
Not only should we be aware of our own advantages and disadvantages, but we must also recognize how luck plays a significant role in getting ahead. Some of us are fortunate enough to be born in places like America, where we aren't facing bombs and turmoil. Others might be born with genetic advantages that make certain tasks easier than average.
If you believe your success is solely due to merit, then you're overlooking the many factors that contribute to success in life. Not everyone has had the same opportunities as you. And if you’re fortunate enough to get ahead, consider using your good fortune to help others find their path forward as well.
The only things we can truly control are our attitude and our work ethic. If we give our best in both, everything will usually turn out just fine. If someone can get rewarded 80% based on merit, that should be a worthwhile goal.
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Thanks so much for your newsletters, they are so helpful! I wanted to comment on today’s info and share something. Relative to being rewarded for being rewarded based on what you derserve has been a learned experience for me over the years. I’ve experienced much in the way of upward movement based on both my own opportunities and then mine based on political opportunity. I was in retail customer service for several years and then my husband was in law enforcement (a career path for 20 years) and his group was going to be let go due to politics. I and others worked hard to save the jobs, we did and I then volunteered in the legislative office that helped us. I stayed there several years on staff in charge of constituent services and then was able to move on to state gov’t. I was fortunate to have a worthwhile career and retire 4 years ago. While knowing people helped me, I know my abilities spoke for themselves over all the years of opportunities. I have to say, I have been very emotional lately with so many on the federal level losing their jobs and the SERIOUS monetary, emotional and life changing sudden impact they all feel. Our situation only applied to 26 men/women and our families. So I can”t even imagine this horrible situation for thousands. I am very concerned for all of them and the emotional repercussions that have already begun.
Great article.
What I always find interesting about this topic is how everyone assumes that bias is inherent in human nature. I would argue the opposite – you don’t see babies or young kids discriminating against each other – they don’t see colour (or anything else) in people the way adults do. So, true human nature, ie what you were born with, is not inherently racist, or any other “ist”. True human nature is actually welcoming and accepting. It gets twisted as we get older for various reasons.
Capitalist economic systems never reward based on talent and merit alone. They reward people that lie, cheat and steal. Most technological innovations don’t benefit their creators, instead they benefit people that steal those innovations, modify them slightly and market them to the masses. Microsoft, Apple etc got big and powerful by stealing ideas from others and monetizing them. Hell the US economy was built on massive IP theft from Britain before and after the Revolution. China is doing the same to the US now and it will not stop.
Capitalism rewards greed over everything else and does not produce an economy based on talent and skill at the end of the day. Capitalism is not efficient in its use of capital. Capitalism is very inefficient and results in massive waste of resources. The US has excess capacity for various things. That is wasteful and destructive to the planet, but no one cares.
No companies that I worked ever promoted people based on merit. Never, the people that generated ideas always had them stolen and used by higher ups for the glory and the money. Employees are often robbed of ideas and money by people who do nothing. That is the American way and has been for a long time.
Time to be an entrepreneur Will!
I generate my own income now. I took my own advice years ago. Life is good Sam. Capitalism however is sometimes very corrupt and bad. We need a mixed system that benefits everyone.
Yes, capitalism is not perfect nor is anything. It does allow a free market and the ability for anyone to compete and be successful. Every system has its downfalls but capitalism has led to great innovations and increased the standard of living for those that have embraced. Should capitalism be replaced? If so, please let us know!
Wow – that intern photo is one of the most powerful visual indications of institutional racism (intentional or no) I have ever seen.
Another great read! One comment, markets get manipulated all the time, think Flash Boys, GS Aluminum price rigging, etc. Is it really where you can find some sort of meritocracy?
If Merit alone defined college admissions, the university’s would be full of Asians and that ain’t happening.
At my previous employer, we were hiring a replacement lab tech and the choice for the job was narrowed down between two candidates. My manager held a meeting with all of his employees who would interact with this lab tech. My manager was unsure of who to hire and asked each of us, in turn, which candidate we liked best and we each gave our opinion. The vote for best hire was mostly a tie and I was the last person asked to opine. I said we should try to hire both candidates (my private reasoning was that we were overworked—one of the techs would eventually quit!) Of course there was no budget for this. So, my next suggestion was to base the decision on a coin flip. My manager was appalled by my suggestion (my first encounter with career risk) We could not come to a decision in that meeting. I think that my randomized choice was objectively the best method, but my manager felt he could make a better decision. And I am confident that his choice was filled with personal bias and influenced by how others would view his choice. After all, he wanted to keep his management position, and managers make decisions.
I say, if you want a fair hiring process, eliminate the unqualified candidates and then use a random number generator to make the choice.
I completely agree that reward on merit alone isn’t always the reality. All too often factors like timing, relationships, or even luck play a significant role in recognition and advancement. I agree it’s so important to know your worth and seek out places and groups where your efforts and skills are truly valued and rewarded. Finding work and outlets where merit is recognized can make all the difference in feeling fulfilled and motivated. The ultimate goal is to go where your value aligns with the opportunities you pursue.
This is a bit of a straw man. “Merit based” does not mean “merit alone” as stated in the title. Loyalty, retention, and I imagine other factors can come it. That doesn’t suddenly justify skin color based hiring. The fact that you were screwed out of a bonus reflects that your work is a product the employer is buying. The fact that they screw you out of bonus is part of what they think the market will bear for a price.
But picking people based on skin color or people with most similar backgrounds is what most people can’t help but do. So if you don’t happen to be part of the group that’s in the majority, you may be at a disadvantage.
Everything is rational. If we’re not changing, we’re choosing.
Have you always been rewarded based on merit? If so, what is your current financial situation and are you happy with where you are?
Feel free to make a non strawman argument. Thx!
This is a popular narrative but it is not based in fact. If it was true then diversity never would have happened in the first place. It would still be white males everywhere.
I don’t think so, if a company was founded by a non-white person. The natural favoritism will go to people who look like that person as well.
People are biased at the margin. Not completely biased.
Just look at any company management team. Most are from similar backgrounds. Here’s Meta’s for example. https://about.meta.com/media-gallery/executives/
Isn’t it an interesting view of human nature: people who were absolutely opposed to “discrimination” when they were the victims of it and who claimed loudly that they opposed ALL discrimination for anyone, suddenly find discrimination perfectly acceptable and moral when they are the beneficiaries of it? You don’t fix discrimination with discrimination. DEI is justified discrimination!
I checked Meta’s management team. Indian, Asian, Black, White, and Israeli people are represented. These are people with high IQs who do the job. Although I agree that you can’t achieve a 100% merit-based system, but IQ matters. I witnessed it many times in my life. Prove if I am wrong. Now, we need to discuss why IQ keeps declining among new generations. Exposure to phones and social media? Junk food? Environment?