Paid vacation is one of the most priced commodities for many middle and lower rung employees in the corporate structure and increasingly there is more and more evidence that regimented rationing of vacation time is an outdated and often counter-productive idea.
A new article from FastCompany lists a number of companies that have reaped the benefits of letting their employees take time off without any limits. Companies like IBM, Netflix and Zappos have had unlimited paid time off for many years, but now more and more tech companies, upstart and established ones alike, are realizing the upside of unshackling their employees’ hands when it comes to choosing their time off.
GoHealthInsurance.com reports that they found 200% improvement in productivity last year after they did away with the old accrued vacations concept. Since HubSpot implemented the policy, the company has been ranked as the #2 fastest-growing software company on the Inc. 500. All these real world examples cannot be aberrations. It is clear that when employees are allowed to act and decide freely about their work environment they seem to actually put in more hours at work.
This is in direct contradiction to how many companies operate when it comes to giving freedom to their employees. Somehow, there is a pervasive idea in many workplaces that if the employees are not tracked for every hour they work, they would slack off. The thinking is that people naturally choose to not do work if given the option and therefore it is important for the company to make sure that it gets it’s every dollar’s worth it spends on the employee, including paid vacations and sick days, by tracking and rationing the hours. And then they wonder why the morale is low among its staff.
The examples listed in the FastCompany article show that people actually become more loyal to the company when they know that their employer trusts them to make the right choice. In a study conducted by CareerBuilder.com, among 5600 employees, 3 in 10 said they will be spending some time during their vacation doing work stuff and 30 percent reported that they will be in touch with their office during their vacation time.
It is not hard to imagine why people work more when they are free to take as many vacations as they need. They are better able to decide the best times to take time off from work and plan their work accordingly. Not everyone can fit into the standard two-week vacation schedule simply because everybody is different with different needs. If one person wants to take a day off every other week, but is capable of completing and exceeding his expectations, then there is no reason for that person to be spending wasteful hours at the office when they have no urge to be there.
One of the most unique examples of how employee time-off can be handled is exhibited by ‘The Motley Fool‘, a successful online financial services company. Every month they randomly pick one employee from the company and that person has to go on a mandatory ‘Fool’s Errand’ which is just a whimsical name for two consecutive weeks of vacation. That’s right, every month one employee has to take a 14 day vacation.
Here is a great quote from the Michael Mahoney, a vice president at GoHealthInsurance.com
“We don’t judge employees based on the number of lines of code they write, but instead on the impact their innovative ideas have on our users…If we trust employees to make the right decisions with the time they spend at work in pursuit of our aggressive goals, we can trust them to make responsible decisions about when they choose to take time off of work.”
One can only hope that more companies adopt this idea.
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