["Journal of Organizational Behavior, EarlyView. ", "\nABSTRACT\nEmpathy is increasingly valued at workplaces as it facilitates interpersonal relationships, collaboration, and team functioning. Accordingly, organizations increasingly observe and recognize employees' emotional understanding (EU) ability—a key foundation of empathy—as an important dimension of individual merit in performance evaluations. We note that, however, supervisors' gender stereotypes may constrain whether EU ability is recognized properly, particularly for female employees. Drawing on dual‐process models of social cognition, we theorized that the female empathy stereotype—the belief that women are inherently more empathetic than men—leads supervisors to attribute female employees' EU ability to gender‐typical traits rather than to individual merit. As a result, the supervisors' female empathy stereotype weakens the link between observed emotional intelligence (EI) ability and job performance ratings. Across a video vignette experiment (Study 1) and a field study (Study 2), we found that the relationship between supervisors' perceptions of EU ability and their ratings of job performance was consistently weaker for female than for male employees. We conducted another vignette experiment (Study 3) to test three‐way interactions with two moderators (i.e., employee gender and raters' female empathy stereotype) and found that supervisors' female empathy stereotype attenuated the relationship for female employees but not for males. Our findings extend research on gender stereotypes, empathy, and EI by demonstrating how a widely shared gender stereotype can discount female employees' valuable emotional abilities.\n"]