When Meritocracy Starts to Feel Like Favoritism

At The Workshop, nobody said it aloud. But everyone felt it. It wasn’t a policy. It wasn’t a memo. It was a pattern. The founder, Rohit, had a rhythm … a gravitational pull toward certain people. The ones he brainstormed with, called into client meetings, turned to for “quick feedback”.

It didn’t look like favoritism. But it didn’t feel like meritocracy either. And that’s where the distortion begins … not in what leaders intend, but in what teams observe. Two months after the grand town hall, the strategy wasn't what people were trying to decode anymore.

They were decoding proximity:

Who does Rohit trust? Who gets access without asking? Whose mistakes are overlooked? Whose ideas make it to execution?

There were no formal rules for this. But everyone was learning them. And Rohit? He had no idea. Because in his mind, he was just moving with speed while leaning on the people who “got it” fastest. But what the team saw was something else: A quiet hierarchy of influence. One built not on titles, but on closeness.

That moment

It happened during a Friday sprint retro. Aman proposed a workflow change. Bold, unconventional … the kind of idea Rohit usually encouraged. But instead of responding, Rohit turned to Meera: “Let’s hold that thought. Meera, what do you think?”

Meera had worked with him the longest. Her judgment was sharp. Trusted. But to everyone else in the room: Aman felt dismissed. The interns updated their playbook: “Run bold ideas through Meera.” The ops lead made a mental note: “Pitch safely, not directly.”

Rohit hadn’t intended to promote a gatekeeper. But in that moment, the team had just created one.

Favoritism before leaders

Because leaders operate from intention. Teams live with impact. Rohit didn’t like Meera more. He simply trusted her process. She could take his half-sentence and turn it into action without much translation. He wasn’t rewarding loyalty. He was rewarding ease. But that distinction doesn’t matter when the team sees the same voices dominate every meeting. Familiarity starts looking like favoritism. And culture quietly reshapes around that perception.

Echo chamber

Most founders don’t wake up wanting to build echo chambers. They just gravitate … toward the people who mirror their speed, their style, their language.

Here’s what happens:

The founder starts ideating more with “trusted” voices. Those voices gain unofficial influence. Everyone else speaks less – not from fear, but from futility. Decision quality drops. Alignment fractures. Initiative dies.

Before you know it, you’re not building a meritocracy. You’re building a familiarity loop.

And in fast-growth companies, loops are sticky.

Real case

In a national sales team we worked with, the VP insisted decisions were data-driven. Until we ran a blind assessment. A top performer was barely visible. A mid-level player got promoted … not because of results, but because she was always in the VP’s orbit. A high-potential new joiner was overlooked because he didn’t “sound confident”.

When we showed the gap, the VP was stunned. What he thought was merit… was actually compatibility.

In a factory setup, a supervisor promoted the wrong person for three cycles in a row.

Not due to bias. Due to comfort. He chose: The one who never challenged him. The one who echoed his thinking. The one who felt “safe.”

Meanwhile, the real performers watched quietly. One line worker summed it up best: “Performance is for the reports. Promotions are for the familiar.”

Team effect

The damage isn’t instant. It’s cumulative. First, people stop pitching bold ideas.

Then, they stop asking questions. Eventually, they stop trying to compete at all.

Because the game feels rigged… even if it’s not.

And that’s the real cost of the Power Paradox. The leader thinks they’re being objective. The team experiences a hierarchy of trust.

Real paradox

Founders say, “We’re a meritocracy.” The team replies, “Then why does the same inner circle always win?” They’re not wrong. Neither is the founder. Because power isn’t about what you say.

It’s about how often you say it to the same people.

And when that circle goes unexamined, it quietly shapes a culture where: Familiarity outruns contribution, access outranks talent, and initiative dies before it begins.

Meritocracy is not just what you believe. It’s what your team can see.

(Rahul Kulkarni is Co-founder at PPS Consulting. He writes about the human mechanics of growth where systems evolve, and emotions learn to keep up. Views personal. Write to rahul@ppsconsulting.biz)