As the COVID-19 pandemic made life harder for just about everyone, companies recognized the particular burden placed on parents and caregivers of children. Many employers who were financially able to do so launched new programs of support or enhanced existing ones. Paid leaves were extended, and stipends and online resources proliferated.
And then, the complaints started.
Some employees without children objected. Allegations of unfair treatment and discrimination against the childless, long simmering in organizations that had pushed to create more inclusive and supportive benefits, flared with new urgency. It's an ugly and painful conversation for the companies and employees involved, but one which reveals some fundamental contradictions at the heart of total rewards, the difference between equality and equity, and just how nebulous those most valorized of virtues—fairness and justice—truly are.
Compensation should focus on aligning the amount of value delivered to the employee with the value added by their work, and benefits should not.
The Usual Disclaimer
While we may allude to legal considerations, we are not lawyers, and any professional is advised to consult an experienced employment or labor attorney prior to engaging any area with significant complexity—like pay or benefits. Similarly, while both authors are employed as total rewards professionals, these words are our own and are informed by as broad a review of the space as we are capable of. They do not necessarily represent the views or actions of our current or past employers.
Fair is Foul, Foul is Fair
If a company announced that it was going to pay people more based on how many children they had, what the employee weighed, or even what their sex was, that company would find itself in an incredible maelstrom of legal, cultural, and ethical attacks. And rightfully so. The very idea offends our sensibilities—beyond being explicitly illegal in most jurisdictions.
Yet every company provides benefits and programs that cost more money or have different eligibility based on these very factors. All things being equal, an employee with a family costs the company more than a single employee. An employee over the age of 65 costs a company more than an employee under 30. But hiring only young and single people would be disastrous for morale, talent retention, and legal compliance.
There’s Only So Much Pie to Go Around
The field of total rewards is at its core about resource allocation. A company has only so much money and time to invest in attracting, rewarding, motivating, supporting, and recognizing employees, and the company tries to deploy the vast portfolio of possible programs and dollars in a way that is aligned with its overall people strategy. That means tradeoffs.
So a company balances direct compensation (salary, bonus, equity) and benefits/perks (health insurance, paid parental leave, stipends, commuter support). But not all elements of rewards are the same.
Equity, Equality, and the Allure of False Simplicity
When employees say that offering benefits designed to support parents more is unequal, they are technically right. It isn't equal. And that is the heart of this whole debate.
Equitable distribution of resources (distributive justice) is a critical concept within groups. If we view employees purely as a formula of input : output, any distribution of resources that deviates from direct business input seems unfair at first glance.
The failure at the heart of these "pure" equality arguments is that designing rewards purely for equality produces outcomes that are deeply inequitable. Imagine an employer that made it impossible for parents to remain employed, or one where only employees without caregiving duties could advance. The attrition, lost contribution, and flight of talent would be catastrophic—not just for the firm, but for the broader economy.
The Strategic Distinction: Compensation vs. Benefits
While total rewards practitioners view these elements holistically, the underlying mechanics require a sharp separation:
Compensation is a reward and retention vehicle delivered directly to the employee based on organizational impact, role, and calibrated performance. It is expected and proper that compensation differs profoundly from employee to employee based on output and market value. It is generally improper to alter compensation based on lifestyle, household structure, or demographic realities.
Benefits are a support and engagement vehicle designed around universal security and fundamental human needs. Employees take unequal advantage of benefits by design—robust medical programs exist so that people facing health crises remain employed; parental leaves exist so mothers and fathers remain in the workforce.
We can pay someone more for doing a great job. We should not give them better healthcare coverage for high performance, nor should we strip health benefits for lackluster quarters.
The Real Operational Bottleneck: Communication
The hardest part of total rewards is never the spreadsheet modeling—it is organizational communication. Employees should not need a total rewards degree to understand their packages; they should be focused on executing the core mission of the business. But when reward frameworks are opaque, perceived unfairness generates massive operational friction. Clear, principled differentiation between compensation and benefits is the single best foundation for organizational trust.