The Impact of Gender Information on Hiring Decisions Based on Self-Set Performance Targets

Gender-anonymous hiring practices have been widely advocated as a means to reduce labor market inequalities, such as the gender wage gap and the underrepresentation of women in leadership. However, their effectiveness remains debated. This paper studies an experimental labor market where employee candidates set their own performance targets for a real-effort task and employers hire based on these self-set targets. In many professional settings, such targets serve as performance indicators and influence hiring and promotion decisions. In an online experiment with 4,674 participants, we vary in a 2 × 2 design (1) whether employers know the candidates’ genders and (2) the severity of the payoff consequences if the hired employee misses their target. This allows us to examine the interaction effects of gender anonymity in hiring and the performance target’s payoff relevance. We find that given equal ability, women set lower targets than men. Higher targets increase the likelihood of being hired, whereas a larger expected target-performance gap reduces hiring chances, particularly when missing the target has severe consequences for the employer. Importantly, our findings suggest that gender-anonymous applications may have unintended consequences. When gender is revealed, employers appear to adjust for gender differences in target setting, expecting a smaller target-performance gap for women than for men. As a result, women are more likely to be hired and receive higher payoffs when their gender is known. These results indicate that gender-anonymous hiring may backfire for women by preventing employers from accounting for behavioral gender differences (e.g., in self-promotion), ultimately reducing women’s hiring prospects. This paper was accepted by Dorothea Kübler, behavioral economics and decision analysis. Funding: This work was supported by the Deutsche Forschungsgemeinschaft (DFG, German Research Foundation) under Germany’s Excellence Strategy [Grant EXC 2126/1–390838866]. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2024.07050 .