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We used a large field sample (N = 32,854) to test popular press claims and propositions from relational demography theory that the ethnic congruence of the supervisor–subordinate dyad is associated with positive employee outcomes. Results indicate that ethnic congruence was positively associated with subordinates’ level in the organization and salary. These relationships were moderated by type of compensation system, such that the effects were stronger in merit-based than in tenure-based systems. In addition, the ex¬tent of the relationship between supervisor–subordinate congruence differed by ethnic group, supporting previous research that suggests examining unique outcomes by ethnicity. However, although statistically significant, effect sizes were generally smaller than anticipated and implied in the popular press. Practical implications of these findings are discussed.