The gender pay gap nobody is talking about

Ratings Depression: Why does it contribute to the gender pay gap and how can we fix it?

The gender pay gap has been written about often, and it is one of many inequities that the COVID pandemic has exacerbated. Some have referred to our current economy as a “She-cession” because 80%+ of those who have left the workforce since August are women. The consequences are dire to our economy both immediately and possibly for decades to come. There are several concrete policy steps we can take to both reduce the gender pay gap and shorten the impact of the “She-cession.” I will focus on one here: Ratings depression.

But first, why should we care about getting women back to work? Despite our president saying phrases like “We’re getting your husbands back to work,” everyone should want to get women back to work too, and it isn’t an act of charity for women. You should want my contributions to tax revenue. You should want my leadership, which has created jobs, hired and promoted many, and driven year-over-year business growth and cost savings. Don’t do it because women need your help. We are not damsels in distress. Get women back to work because our economy depends on it.

There are some simple ways to solve the gender pay gap through policy, if our leaders are bold enough to want to save the economy. The first step is one I have never seen discussed in plain language, yet it has plagued women for decades. This is the gender pay gap nobody is talking about: Ratings depression post-leave. We need legal protections for anyone who takes leave (paid or unpaid) in the form of protection of their performance ratings. I first advocated for this in 2015 at Amazon, while I was in the process of providing HR leadership detailed accounts of the many ways their leave programs disadvantaged and discriminated against (primarily) women, who they have struggled to retain or make dramatic strides in growing as a % of many of their teams. This was met with a brush-off unfortunately — it was “not their job” to look at such a policy. (Where’s the ownership, folks?) Here’s what legal protections would look like: policy that states an employee who takes leave in the last 12 months cannot receive a performance rating lower than their last documented performance rating (if none exists, they receive a performance rating in good standing). This isn’t entirely unheard of. I found one company that had solved this, briefly noted in this 2015 LinkedIn post by Rachel Schall Thomas of LeanIn.Org:

“Companies need to take the perceived risk out of programs. For example, when parents at PwC take an extended leave, their performance rating from the year before carries over so they don’t need to worry [about] receiving a lower rating.”

Hear me out, because this is a dirty secret of sexism in corporate America that I saw firsthand at several companies. I will recount 3 stories as examples:

Laura’s story: Laura was an exceptional employee. She had received the highest possible performance rating in the last few review cycles. Still, when discussing ratings her manager said: “Well, she wasn’t here for the past few months so I can’t give her a rating as high as her peers” (she was on maternity leave at the time). I countered that she should only be evaluated for the time she was not on leave. I asked: How was she performing before she began leave? He said she was the best on the team. Retaining her rating put her in the highest possible pay raise bracket, which is exactly what her performance deserved. It also prevented a delay in her promotion cycle — in which prior ratings are always taken into consideration. She has since been promoted and is now a manager.

Christine’s story: At the time, Christine was on maternity leave. She had been my manager and is a woman of color. My interim manager said to me: “We’ve been able to get along just fine with her gone, so I don’t think we need her anymore.” Upon her return, she was demoted to a role with less responsibility. I was too insecure and early in my career to try to stop this, but I later referred her to another company where she was able to get a significant pay raise. Yes, the rest of the team indeed absorbed her work. It was her leadership that hired and trained a team that could do just that.

Michael’s story: I once sat through a talent review (discussion of employees and assignment of ratings) where a director tried to meet his “curve” by rating every member of his org who had been on leave as “least effective.” I called him out for discriminating against women, as did my manager at the time, but how many of those meetings have happened in rooms where no allies were there to speak up? Employees must be evaluated solely for the time they were not on leave, not penalized for taking leave.

We can never close the gender pay gap without policy protections, because your performance rating is directly connected to your compensation and promotion trajectory. This penalty is well documented in this study, which found,

“For those who took just one year off from work, women’s annual earnings were 39 percent lower than women who worked all 15 years between 2001 and 2015.”

If we care about solving the gender pay gap, we must preserve performance ratings for those who take leave. This will not happen by good intentions alone. Policy must protect workers. Ratings depression post-leave has immediate consequences to pay, as well as mid-term consequences to a promotion clock, and ultimately often permanent consequences to how much a woman makes in her lifetime. As people take leave during this pandemic — to facilitate remote school, care for ailing family, or even because they catch COVID themselves — it is crucial we protect their performance rating when they return from leave.

Until we have such protections legally, we need every ally to stand against ratings depression fiercely. Managers and anyone in a leadership role can do this. Human resources can do this. Women can do this together: demand to know your performance rating. Talk openly about pay with those around you. The culture (and sometimes policy) that has kept us silent about our pay serves only to prevent us from getting the pay we deserve.

Do you have a story about your leave impacting your job or pay? I’d love to hear it.

Names have been changed to protect identities in these stories.