This is a "frame challenge" answer.

• 
  You have: two races, one of whom is, in your own words, "better than the other in every way".


• 
  You want: a system in which people are employed purely based on their skill level but does not discriminate against the weaker race.

These two concepts are fundamentally incompatible. If I'm hiring purely based on skill, and an elf is always more skilled than a human, I'm going to hire the elf every single time. The only way I'd hire a human at all is if:

a) there is some sort of "affirmative action" policy, either voluntary or mandatory, that forces me to;

b) humans are easier to employ - there's more of them, and/or they command lower wages.

But in either of those cases, I wouldn't be hiring purely based on skill, and your meritocracy would quickly fall apart.

It is impossible for your society, with its two races of mismatched skill levels, to be meritocratic and non-discriminatory. It can be meritocratic, or it can be non-discriminatory, but it cannot be both.

Internal politics If the elves are not all unified then they might be more likely to discriminate against each other than humans. Internal conflict means they aren't unified enough to discriminate against humans and in fact prefer humans to other kinds of elves.

Only better at average If the elves are only usually better than humans discrimination doesn't make as much sense. So if the average elf is a faster thinker than the average human there still might be humans out there that are faster thinkers than most elves. And if they are a lot more humans than elves there might in fact be a lot of humans that think faster than elves.

Culture In the past the elves did discriminate against humans. Then something happened, maybe a war, maybe a civil rights movement. The end result was that the elves realized it was a bad(and if it was a war possible a dangerous) idea to discriminate.

Lack of interest Possibly elves long life spans lead them to feel a lot less urgency about things. Sure they are stronger than a person but a human worker still carries more widgets from point A to point B because he works harder while the elf is writing poetry because he thinks he can put off the work till later.

Leave the Culture to the Greeks

While Elves are Superior on measured statistics, this does not lead to total domination in every field. Elf culture is rather limited in scope and thoughts are limited by strict ideological codes that are blinded by superiority. But in the dark places where no one can see, Elves crave the diversity of thinking that only exists in the much more freer human culture. Humans argue with the best of elves and often win by twisting the elf logic in ways they did not consider. If the elves are for cultural purposes vegetarians and hate humans because they will eat meat, the first human to point out that at least humans eat what they kill... elves leave humans to die on the field because they just don't like them... and don't kill them for meat or fuel or anything useful other than they exist wins not just this war, but every war.

Human arts are dedicated works that elves never even attempt to reproduce. Human literature sees its heights with Shakespeare... Elves with a fairy tale that is a mediocre version of "The Boy Who Cried Wolf". The Humans have pantheons of Gods and Goddesses who wield awesome powers and assisted epic heroes. If in a modern setting, Elves are absolutely addicted to human TV shows. All of them... and yes, they keep up with the Kardasians.

Elves may be physically superior, but a book on note worthy elvish cultural contributions to society is a 3x5 index card.

I ain't got time for this

One of the weaknesses that I personally build into long lived races, is that they have no sense of urgency. An elf may live to 500 years is going to perceive long-term time in different ways. Elves will take far longer to take an action than humans because they think they have time to think this through... where as humans had already committed to the action and may even have completed it, The Elf is finished in multiple rounds of evaluating the correct action for any flaws. Elves working with humans will be given a suggestion and consider the courses of the actions very thoroughly... tactically, strategically, the risk vs. reward, the ethics, the metaphysical consequences, the likelihood of success, and is midway through the likely punishments of not taking into account a hither-too unknown third party when the human thrusts the McGuffin to the Elf, and explains the Elf didn't raise any concerns so he went through with his plan. Humans are dead sooner, so they do things quicker... often with little regard for finesse or safety, even by his fellow human's standards, to say nothing of the elves' opinion this is the craziest lucky person he's ever met.

Poor incentive to fight fair

One of my favorite lines in a movie comes from a conversation between Orlando Bloom's character Will Turner and Johnny Depp's Jack Sparrow in the first Pirates of the Caribbean film. Will tells Jack that he is a superior swords man, and Jack counters that in their last fight, he won. When Will points out that Jack only won because he cheated and if the fight was fair, Will would have killed Jack. Which of course prompts Jack to point out that the statement was "Hardly incentive to fight fair."

Like Will, the elves are perfectionists and expect the humans, an inferior enemy, to fight fair and within the bounds of the rules. The humans, like Jack, realize that this means their own death and elect fight dirty. If the humans are in a defender's position, they could really come in handy as they're content with getting the enemy to win. So long as there is no capitualation, a defender in native land has better command Gurilla Tactics are historically very effective against a superior foe. Consider the U.S. Revolutionary War, in which one of the world's superpowers surrendered to a rag tag army that rushing through the woods to take cheap shots while they marched in formation. This was also instramental into the U.S.S.R's retreat from Afganistan (a country whose terrain is so terrible, it's called the "Graveyard of Empires" having been a problem for the British Empire, the U.S.S.R., the United States, and even the Mongol Empire) and (Ironically) Vietnam, which was the only time in it's history the United States lost a war. It's dirty fighting against a superior foe that believes you'll fight like them: Fair. This is the kind of mentality that was the reason so many ships were lost to submarines in World War 1... many naval powers thought that Submarines were dishonorable war machines and didn't field them... and then watch as their enemies that did slaughtered.

Hegemony

One likely way for the empire to form is that humans and elves would be united under a hegemonic empire rather than a traditional one. Hegemonies rely not on forcing people to join your empire, they request to join because of strong cultural ties and respect. The United States is an example of a modern Hegemony where every one of the 50 states requested to join, rather than were conquered. The modern U.S. is often accused of having a cultural empire as there are very few people in the world that don't know Mickey Mouse or Superman or the global phenomena of the Marvel Movies. If humans have better cultural development than elves, it could be that elves would rather partner with humans out of admiration and respect for where they are recognizably week. This isn't the only time two species with seemingly better skills teamed up. In real life, early humans were considered to be "Persistent Predators" and much of our physiology was built to hunt in this manner. The core concept of this method is distance hunting is that you don't have to be stronger or faster than your prey, you just have to out last them for a run. If a human was hunting a rabbit and the rabbit out ran the human until and took a rest, thinking it was safely away from the predator... fifteen minutes later it awakes to the same group of humans getting close... and runs again... and each time the same story happens... The Rabbit runs, the human follows, the rabbit thinks it's safe and wakes up way to early to rest to the human encroachment. The first creature to collapse from exhaustion is the loser... and humans have the best endurance of any animal on the planet. The only speed record among animals held by humans is the fastest Ultra-Marathon... a 100 mile run.

Of course, there is an inferior creature on this world that hunts like humans did, the wolves. As the theory of evolution states, two life forms can not occupy the same niche in the same environment. However this particular competition ended in a rather unique way. Wolves were given the offer to unite or fight. Those that united with humans today are the domesticated dogs, and earned the title of "Man's Best Friend" and in many families are given status as honorary humans and members of families. Those that did not were outmatched and nearly became extinct if not for the mercy of humans out of respect for their allies. It comes to my mind that if two species with very different physiological differences can become allies rather than natural enemies in a war for a niche condition, perhaps it's not that unlikely that two races that are similar in physiological nature in all but ear shapes could do the same. Perhaps your empire isn't one of elves conquering men or men conquering elves, but one of an alliance of elves and man against the elves and men that refused the alliance.

Hiring people with more skills is expensive. If elves are good at everything due to their long life, It would stand to reason that they might fall into 2 traps.

Jack of All Trades, Master of None

Some elves might not stick with a singular job for very long because their long lifespan lends them to experiment and explore to keep from becoming bored. This makes Humans by comparison more specialized and more reliable.

"I think I might leave this company, they want to increase production again and I don't feel like working as hard as I did 130 years ago when this company started. I might go try being a librarian for a few years. Reading books and having some peace and quiet might be a nice way to live for a while. I have 20 million dollars saved up so I can afford to quit for a while." - disgruntled Elf

Superiority Costs

Much in the same way that you can hire high school dropouts for minimum wage, if you want to cut costs you don't hire the aloof, expensive elves you hire the hard working, dependable Humans. Elves are worth more simply by virtue of having more experience. Humans may require more breaks but, they more than cover the time lost by being cheaper.

Elves would also look at things in the long term. "If we use this known method it will only take 50 years to complete!". Meanwhile, Humans would not be willing to wait that long and find newer faster methods.

While Elves have the advantage in just about everything, too much of a good thing is a bad thing. Humans will fill the gap for everything that requires short term thinking because they are better geared towards it. Combining the strengths of the two will ensure that all business as usual will advance at remarkable paces.

You've stated that there's no racism and people are employed purely based on skill. You have not stated that there is racial parity in employment for any given type of job. You have also not addressed the skill ranges. The average elf is better than the average human. Let's assume that leaves room for a superior human to be better than below-average, and even average elves.

To me, all this means that jobs are tested for, rather than interviewed for.

Because of their natural superiority, most elves will beat most humans most of the time. But not always. So you will see a very few humans in the most desirable jobs. As you slide down the scale of desirability, you'll find that the elf:human ratio of applicants drops, so the employee ratio will shift to human.

I.e. you'll have only humans in the lowest tier jobs (the way immigrants usually fill the easiest-to-get jobs in 1st world countries) and probably only elves in the highest tier jobs, with a mix in between.

Elves have long lives. A consequence is that they have lower population numbers as their birthrate is lower to compensate. This means that even if all Elves always get Jobs that humans still get to do their Jobs.

But thats still a type of discrimination as Elves would always get a job. But you allowed us almost infinite resources and complete control over the politics of the continent. So we make it a controlled communism type of continent. Jobs are created based on people's skills and capabilities. It doesnt matter if there's humans or Elves around you get a job designed for you. Some humans might be pushed into menial Jobs they dont want to do to shore up shortages in a particular field, but some Elves might be pushed into Jobs they dont want as well. So there's no real racism, only "skillism" or whatever you want to call it. Usain bolt wont be doing Stephen Hawkings job or vice versa.

One approach I haven't seen addressed could be appeal to love and pity.

If the elves are significantly better than humans in every way, the fact that they do not see humans as their equals also means that they don't also see them as a threat. In fact, if elves decided so, they could have easily eliminated the entire human race.

But also consider that it would be pretty unnecessary and unfitting for what elves believe.

When it comes to the criteria that you listed, you could argue that humans are in every way better than dogs. But we don't try to fight dogs, and we don't 'discriminate' against them. In fact, because dogs are so vulnerable against humans, our impulse is not to see them as a rival species, but childish and goofy creatures that need to be loved and cared for.

Elves may come to realise that even though humans are boasting about their technology, their civilization and their advanced weaponry, they are still childish (and frankly harmless) compared to the might of the elves, and treat them as innocent little beings that deserve love. They would slowly come to this realisation through seeing some of the better qualities of humans, up to the point that they would classify violence and cruelty as isolated incidents (like a rabid dog), and not as an indicative of human behavior in general.

In any case, although I don't think such a non-discriminatory society is impossible, the change should come from within the elven society. It cannot be imposed upon them by humans, who should be pretty much miserable in this situation.

With unlimited resources, there shouldn't be any real need to work. Employment can simply be how people employ their time, without any thought to how that time might be valued in a financial sense. There are always things to do, and many require skills or attributes which are more difficult to measure. Without the need to compete for limited resources, people are free to find their place in the world based on their personal interests or what they find meaningful. You don't need to be the strongest or smartest person in order to sit with elderly people and hear their stories, for instance.

Soft skills matter

There is a whole range of reasons why a very talented person may not actually be the best person for a job. Here are a few of them to potentially apply to your elves to even things out.

They are assholes

Plenty of talented people are also, unfortunately, jerks. Confrontational, inconsiderate, egotistical, working with them is a pain in the ass and this is a legitimate problem. The “genius asshole” thing may work for Tony Stark or Dr. House, but the truth is, in most jobs, it doesn’t fly. To make this work really well, make sure that elves also think elves are assholes. If even elves prefer to work with humans because they’re easier to work with, more humans will get hired.

They are bad communicators

Some people just can’t communicate for shit. Their emails are incomprehensible tangles of ideas. They forget to update you when something important changes. They’re focused on their own work and don’t bother to check and see if they’re even still doing what they should be. If your elves have these tendencies, they are going to heavily rely on humans to make things work, and plenty of organizations are going to default to employing the supposedly ‘inferior’ group because projects go more smoothly if they do.

They suck at executive function

Plenty of incredibly smart people are wild underachievers because of what we call ‘not applying themselves’, and is often in reality an executive dysfunction. Maybe your elves are wildly distractible, and can’t stay focused on a task for long enough to get it done properly. Maybe because of their intelligence, they tend to favor analysis over action, and end up simply not acting. Maybe your elves are terrible procrastinators, who struggle with initiating tasks they know they need to get done. In any of these cases, their ability to apply their superior skills simply isn’t consistent, and is often absent entirely. Humans are employable because you can rely on them to actually get the job done, get the right job done, and get it done in time.

While F1Krazy's answer is sufficient, I think there is a shortcut that makes your scenario impossible on a deeper level: the premises are an unstable situation by nature.

One of two things is true: either elves and humans can intermarry, either they can not. If they can intermarry and are perfectly not racist, the two races will blend into one if one waits long enough, because otherwise what would keep the two races separate? On the contrary, if they can't intermarry, racism will resurface eventually because tensions between clearly identifiable groups are commonplace.

Two different races means different traits. Even though elves are better than humans in every way, there will be more suitable jobs for human and more suitable jobs for elves.

Religion

If they worship the same god then it could be that humans are considered as descendant of the gods and so they are respected.

Outnumbered

Try to find a balance between the number of humans and the number of elves. There should be more human so that they outnumber elves, but a fair number so that elves could handle them in case of war.
Example: if an elf is considered to be 2 times efficent than a human, there should be a 33% of elves and a 66% of humans.

There is a massive labor shortage due to war. Every employer is so desperate that they will hire any skilled candidate and often unskilled candidates. The humans leverage this temporary condition and political power to enact strong anti-discrimination laws.

Job applications must be anonymous. Interview questions are administered through a governmental employment agency with answers forwarded in writing. Employment history is limited to five years to prevent a 120 year employment history from revealing race.

This condition is temporary. Wage cap laws limit pay discrimination, but do not eliminate it. The wage gap leads to a growing wealth gap. In combination with the elves' lifespan, this leads to the elves becoming a class of wealthy investors. A hundred years on, humans outnumber elves ten-to-one, but hold only 10% of the wealth. The elves don't discriminate against humans, but only because they employ humans exclusively.

The neighboring lands foment a growing unrest between humans and elves. They secretly provide financial support to racist human organizations. Over the next couple decades, the cultural rift rapidly widens between humans and elves.

Many humans look back to the halcyon days of the war, when humans and elves were equal, forgetting all the trouble and struggles that they never lived through. The elves remember the decades of struggle and change. They make their plans, and depart across the sea in growing numbers until only a few are left in the land inherited by men.

Very few actual jobs really benefit from more than few years of experience or more than average intelligence. Management and leadership positions are not an exception.

So even if we assume that the elves are vastly superior to humans, the humans would still do just as well for most positions. If there is a shortage of work, the humans would probably get the short straw but assuming healthy economy, the elves being superior makes no difference.

There are few caveats.

First, your meritocracy has to understand the difference between being qualified and being over-qualified for the position. With longer life span and superior intellect the elves will have an abundance of qualifications not relevant to the position. They will also outperform humans in ways that make no actual difference but would show up in a test.

This has a hidden requirement of needing to know in advance what the job requires. If the responsibilities of a position are not well defined it comes impossible to tell what qualifications matter and which are superfluous.

Second, you want lots of mobility. The empire needs to have low threshold to firing people and rapidly replacing them with somebody else instead of trying to accurately grade people when hiring. Getting fired needs to be normal and acceptable and not something that stops your career.

Competence is measured by performance on the job, not estimated in advance. You want people to focus on doing a good job, not on doing well on the selection process. So you want to give as many as possible a chance to succeed or fail. Just make sure that success and failure actually exist and you are not just recycling mediocrity.

If you try to get the best person for the job that will favor the elves due to superior intellect. If there is high job security and continuity that will favor elves due to longer life span.

And the jobs where more experience and intelligence really makes a difference? Just define them as technical specialist positions off the chain of command and not as positions of authority.

An example:

Elves are generally assumed to be better archers than humans. So an unit of archers would have bunch of normal archers who shoot in the correct direction and are a mix of humans and elves. Elves will be better but it won't make much practical difference.

In addition, the unit will have archery instructors, technical specialists who know all about archery and how to teach it but with no extra authority when not instructing. This will probably an elf but humans might be very good at teaching and know all that the army wants to teach.

It will also have designated marksmen, technical specialists with very high skill and probably better bows, who will actually aim on an enemy when they shoot. Again probably elves but being a good marksman is more than just skill. Again they will have no more authority than any other soldier.

This is the general pattern. Specialize the skill to the point where it is too narrow for the position to come with implicit authority and where being better at everything does not matter enough for it to be exclusive to elves.

Note that discrimination does not actually derive from being better or from having more authority. Although letting a group monopolize authority will make the problem much harder to get rid of. But I am assuming you wanted to know how a meritocratic empire can avoid having elven superiority worsen the issue, not a general solution to avoiding social injustice. To be honest the reason I am making this assumption is because I do not know the answer to the wider question. Not sure anyone does.