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AbstractThis article discusses rankings that evaluate diversity and inclusion programs for lesbian, gay, bisexual, and transgender (LGBT) employees. Rankings promote LGBT issues and reward organizations who work towards "best practice" with a high rating. However, rankings only legitimize one set of practices and often fail to give small organizations a clear path towards inclusion. Corporations are warned against checklist‐based diversity where rankings reward superficial rather than substantive change. Within new institutional theory, the concept of "distorted institutional fit" is introduced to explain distortions preventing "optimal institutional fit." This article recommends a reprioritization of diversity program evaluations to reward only substantive change by evaluating the impact on the lived experiences of employees. Copyright © 2017 ASAC. Published by John Wiley & Sons, Ltd.