Can a Vacation Policy of No Policy be a Good Employee Policy?

It sounds like a dream, a company with a vacation or paid time off (PTO) policy that doesn't restrict or enforce any rules around the number off days an employee can take off. That's right, take 15, 20, 25+ days in a year – you decide.  Believe it or not, there are a growing number of companies who have removed the restrictions on common time off policies and are giving employees the ability to essentially manage not only their work, but their time off.  Netflix instituted such a policy along with a plan for creating a culture in which this policy will work.  Hubspot, IBM and Best Buy are a sampling of a few other companies that have also implemented similar policies.  So the question is, can this really work?  In a nutshell, it can, but requires a shift in thinking to a Results Oriented Workplace (ROW) and a shift to a cultural environment of trust and empowerment.   Additionally you'll want to think about communication of the policy and any special circumstances.

A results oriented workplace is one is which employees are given the work assignments, a deadline and they are expected to manage their work to quality completion.  In a ROW, Managers do not 'micromanage' their employees.   For many employees this type of environment allows them to work when they are most productive.  Let's face it, not all of us are at our best from 9:00 – 5:00 each day.  Many people are more productive either earlier or later in the day.  In a company where vacation is not monitored, employees must be responsible to manage their short term and long term assignments and their time off so that they are able to complete projects as required.

One of the keys to successful implementation of such a policy is to think it through first and then to effectively communicate the policy.  Even though it is a policy of no policy, there are guidelines that should be determined and discussed.  For example, consider how you will handle the following:

• What will be the effective date and will you pay employees for current balances?
• How should Managers track time so that they can measure abuse, if necessary?
• Is there a request process for taking time so that you know who is out and when?
• If an employee goes out on a leave (FMLA, STD, etc), how much time will they receive at full pay?
• Will sick time be tracked so that a doctor's note or medical certification can be requested?

Once you've determined how to handle these questions and any others that may come up, communicate!  For some employees, this can be a little nerve-wracking if they're used to the black and white, so you'll want to put them at ease and answer their questions.  For many of these employees, they may not end up taking time, whereas a traditional time off policy might have forced them to in the past.  Encourage employees to take a reasonable amount of time off.

A time off policy with no limitations has many benefits.  Employees feel empowered, trusted and free, which will promote employee morale and employee productivity.  Since there are no accruals to track, the administration of time off goes way down.  Additionally, because time is not accrued, there are no payouts upon termination.

For many of us, it's definitely an 'out of the box' policy, but could be the wave of the future.