Job performance and parental leave in Covid-19

Working from home has created all manner of challenges as has the Covid-19 crisis itself. How should employers react in terms of the expectations of their employees?

Welcome to Plugging the Gap (my email newsletter about Covid-19 and its economics). In case you don’t know me, I’m an economist and professor at the University of Toronto. I have written lots of books including, most recently, on Covid-19. You can follow me on twitter (@joshgans) or subscribe to this email newsletter here.

Today’s post was triggered (and I think that is the right word) by this article in the New York Times on the backlash from some people over the extra leave time granted to their co-workers with children. The article also recounts how employers have reacted to other dimensions of employment policy including the suspending of employee reviews. None of these issues are new but, as with all things Covid-19, they have been laid bare again by the extreme events. This is one of those times where I think everyone is getting it a little wrong and I’ll explain why.

The NYT article is about technology companies so let’s make sure we all understand that they have issues that are different from many other workplaces. They are wealthier companies, they aren’t losing much (if any) ground because of the economic crisis, their stock options are doing well and, as it turns out, they were both prepared and able to have all of their employees work from home without real disruption. Except that is, for parents. If you had children of school age, you now had them all of the time. What’s more, even though that is left unstated in the NYT article (frustratingly so), the burden of that would fall mainly on women. I’m sure that men with children no doubt had new challenges but we all know how these things go.

Parental leave

The companies in the article — mainly, Facebook, Salesforce and Twitter — reacted to this right away. They granted parents time off. Salesforce gave them six weeks of leave, Facebook ten. These were obvious moves. As were the consequences. The NYT lists many complaints from those without children seeing this as unfair.

As companies wrestle with how best to support staff during the pandemic, some employees without children say that they feel underappreciated, and that they are being asked to shoulder a heavier workload. And parents are frustrated that their childless co-workers don’t understand how hard it is to balance work and child care, especially when day care centers are closed and they are trying to help their children learn at home.

And it is unfair. But then nothing about all this is fair. And using a term like fairness isn’t going to help anyone. It is better to ask, what if they hadn’t done this?

If parents didn’t have more leave, then you would have expected them to be working as per normal. You would then end up with canceled meetings, missed deadlines, disruptions during meetings, lower productivity and confusion. In other words, offices run smoothly when people understand not only what is expected of them but what is expected from their co-workers. What these companies were saying, don’t expect too much from your co-workers because we cannot provide them an adequate work environment.

Was this communicated? The NYT doesn’t say but one expects that it may not have. I’ve been in enough large working environments to know that sensible communication is not an abundant commodity. But there is also another underlying ripple. The divide between those with and without children is not new. In academia, many bristle when pre-tenure fathers are given an extra year before tenure review if they have children — the same as pre-tenure mothers. The bristling comes because there is suspicion that they don’t really need it. That could be true but I doubt that uneven parental leave policies are the way to overcome the real gender disparities we see. Instead, I would argue that it is incumbent on department heads to make sure people are using parental leave for its purpose and are not also traveling to conferences, coming into the office, etc., at the same rate as a normal year. If we are going to accept that we want to hire people who make different and consequential life choices and work with them, then we can expect working conditions to be the same for everyone all of the time. Academics have plenty to bristle about and suspicion that parenting is somehow not productivity reducing should be really low on the priority list.

Performance review and bonuses

What really got me, however, in the NYT piece was this policy from Facebook:

Every Facebook employee would receive bonus amounts usually reserved for very good performance scores, irking some childless employees who felt that those who worked more should be paid more.

First of all, FFS! Facebook foresaw that everyone would be working more and bumped everyone’s pay up for no real performance review. That was the way it decided to handle the disruptions they knew were coming. And then people complained that it applied to everyone. Heavy sigh.

The NYT reports about a contentious Facebook meeting. It is always hard to tell from second-hand reports but here is a bit.

When Sheryl Sandberg, Facebook’s chief operating officer, hosted a companywide videoconference on Aug. 20, more than 2,000 employees voted to ask her what more Facebook could do to support nonparents, since its other policies had benefited parents. …

Ms. Sandberg said she “disagreed with the premise of the question” that the leave policy and freeze on performance ratings were primarily benefiting parents. She added that larger-than-normal bonuses had been given to all employees and that everyone had received a $1,000 stipend to buy equipment for working from home.

The employees persisted. In a written comment, one said more than a thousand people agreed with the premise of the question and asked that Ms. Sandberg answer it again. She did, adding that Facebook has tried to design its leave policies to be “inclusive.”

“I do believe parents have certain challenges,” she said. “But everyone has challenges, and those challenges are very, very real.”

This is sort of “all lives mattery” in the response as reported. It shows the problem with arguments that accept that fairness is the premise of a policy. Leaders should avoid being drawn into it and be willing to profess and acknowledge that things may be unfair.

What the NYT did not discuss is whether it was, in fact, a good idea to give everyone pre-emptively a high-performance score and go from that. Remember the reason performance reviews and bonuses exist is to ensure that those who perform well are paid more. What Facebook and others were communicating was that would not be a criterion for the short-term. But if you think for a moment how screwy that is. They are not using explicit incentives for performance as a criterion precisely when every other mechanism they have for ensuring that people perform well has disappeared. There is no supervision. No real peer monitoring. No checking who is at work and who is not. And all this at a time when you really need people to do some incredible things to keep the whole operation going in an unprecedented crisis.

This is a common issue with incentives. I used to teach a case about a Boston manufacturing plant and how the plant manager was going to get their annual bonus. There was a whole exercise in accounting and benchmarking. Students spent their time obsessing over sales figures. And then they come to an item about the Blizzard of ‘78 (I may be getting the year wrong) that shut down the plant for a month or so. Should the plant manager be held accountable for the lack of production over that time?

Invariably, all students say no. It wouldn’t be fair. The plant manager didn’t cause the blizzard. It wasn’t their fault.

Of course, this is also the hook. “The issue is not the blizzard,” I tell them, “but how the manager responded to it.” Did they adjust the targets for the re-opening month because we expected the manager to make up for lost time? Did they consider what the manager needed to do beforehand to close the plant down safely? Yes, the blizzard was a hit but how the manager responded to it would really matter. Did you really want to tell the manager that should a blizzard hit, they are off the hook for their performance?

And herein lies the issue for employers with Covid-19. It made sense to calm the ship by removing anxiety over performance reviews. Whatever system they had in place wasn’t going to be able to cope with the crisis adequately anyway and so would be a waste of energy. But, at the same time, surely they did want to send a message that performance would matter and would be noted and would be acknowledged precisely because superior performance was needed. And do we really think, even if that wasn’t communicated, that performance won’t matter in some way? I think not. And then parents will be in the boat they often find themselves of being told an organisation is friendly to them and responsive to their needs when that isn’t the case.

There is no easy answer to any of this. It is what makes management hard and shows that thinking that you can ‘adjust the program’ and have things work out is a fantasy. In the end, the companies that had, I dare say it, a ‘culture’ where everyone understood that things are subjective and that it may take time for short-term shocks to be smoothed out and distributed more evenly, are the ones who will prove more resilient to major events like Covid-19.

What did I miss?