What's the problem with company plans for compensating people during parental leave? That often there is no plan. At least that's what the Wall Street Journal posits in this piece about the financial losses some women (and presumably men) are being hit with when they take time to be with their newborns.
In the Journal's work/family blog the Juggle, Sue Shellenbarger asks whether some women on maternity leave are being cheated out of part of their pay -- and says that based on her e-mail and complaints to the advocacy and research organization Catalyst Inc. in New York, they are. For example: New mothers sometimes lose out on annual bonuses, even if their performance during the time they were at work would have warranted one, because performance targets haven't been prorated for employees on leave. (Shellenbarger asserts that compensation consultants say this should be common practice, since it avoids "discouraging people from continuing to work hard while they aren't on leave.") Another example: A female salesperson at a Fortune 100 company was told she wouldn't get commissions on sales she'd made before she left. Instead, her deals would be taken over by a fill-in if she took a long leave, with all commissions paid to her substitute. The result? She rushed back to work five and a half weeks after giving birth.
Now, of course there are other people besides new moms who need to take time off from work. And yes, the two cases I mentioned above are dealing with commissions and bonuses, not salaries. But the point is not that employers should fork over undeserved incentive pay. It's that they should have plans in place for how to fairly compensate people for the work they have performed while in the office. To me, at least, a fair system would be one in which employees who had to take time off would receive prorated incentive pay, based on their performance during the time they were in the office. Most important, though, companies should have a plan so that employees know ahead of time what they're getting into. Unfortunately, though, according to Shellenbarger, many don't.
"At many companies, these moves aren't so much a deliberate swipe against women as a sign of neglect," she writes. "At the saleswoman's Fortune 100 company, 'each time a woman gets pregnant she's told something different, based on her individual manager's preference' -- a clear sign that nobody's paying attention."
According to Michael Carter, a compensation consultant for the Hay Group interviewed by Shellenbarger, there's "increasing interest" in the issue among employers. I see that as a good thing -- regardless of what policy employers decide on, setting consistent standards would at least allow women (and stay-at-home dads) to know ahead of time what they were getting into.
At the end of her post, Shellenbarger poses a few questions to her readers -- how does your company handle bonuses and commissions for people taking parental leave? Have you seen examples of unfair practices toward people who took time off for childbirth? How far should employers be expected to go for new parents? Or do you think that parents should just suck it up? I think they're good questions. Thoughts?