The media have been buzzing recently about a New Zealand firm that has let its employees work only four days a week, while still getting paid for five days. Perpetual Guardian, which manages trusts, wills and estates, found in a two-month pilot program that although the firm's 240 employees worked less, productivity actually increased--as did job satisfaction.

The news reports were a bit fuzzy about some important details. So, as a CEO, I have a lot of questions. For example: Did the company stagger days off, so that some people stayed home on Monday, others on Tuesday, etc.? While productivity increased, how did the change affect profits? How did clients feel about the change? 

One of my questions was answered in a Fast Company story: How did the four-day workweek affect vacation time? In fact, vacation time is a problem that may stand in the way of Perpetual Guardian permanently instituting the schedule change; "under New Zealand law, workers accrue vacation time based on time spent in the office." That could be a deal breaker.

Although everyone (including journalists) loves the idea of more time off (with pay), I suspect that few companies--facing the need to balance employee satisfaction with financial performance--will move to a 32-hour workweek. But there is a strategy for reducing employees' stress while still keeping a five-day schedule.

That strategy? A Paid-Time Off (PTO) system that gives employees a generous bank of days that workers can use for any reason: illness, vacation, doctor's appointments, etc.

More than 20 years ago, Davis & Company stepped away from the traditional "leave" program most companies use, with separate allotments for holidays, sick days, personal days and vacation days.

We were ahead of our time. A 2010 survey conducted by WorldatWork, an association of human resources professionals, shows that PTO use grew by 43 percent from 2002 to 2010, while traditional programs declined by 24 percent. However, according to a Society of Human Resources Management 2017 survey, only 28% of companies offer a PTO bank.

Here's how our plan works:

We went further than most companies and included holidays in the pool. We officially close our offices for major U.S. holidays, so an employee can either use one of his/her PTO days or work and save his/her PTO for another time. (Almost everyone uses PTO to take the holiday.)

We give a lot of time off: 30 days a year for a new employee, and up to 39 days for a long-tenured worker. So nobody bemoans the "loss" of holidays or sick days; they've got plenty of days to use.

A new employee can take time right away (to be precise, one month after he/she starts). PTO is accrued at the rate of 2.5 days a month for new hires and those with the company for fewer than three years. If a holiday falls within an employee's first month, he/she can borrow the day from the next month.

Time earned during each year must by taken by December 31, but employees can carry over up to five days of unused time into the following year.

A key aspect of our program: we encourage our employees to use the time off that they're entitled to. Vacation days on paper don't reduce stress or allow people to recharge; it's essential to actually take days (or weeks) off.

The result? We've seen three positive effects:

  1. Fewer unplanned absences. Sure, people call in sick when they're sick or a child is under the weather. But we encourage employees to schedule any other PTO day with their manager. So we usually know when people will be out, and can plan our work accordingly.
  2. Employees "own" their time off. They're in control. And guess what: Because we treat them like adults, they act like adults.
  3. Better morale. We ask employees to work hard, but we also want them to take their PTO to reduce stress and recharge their batteries. (Most Americans are bad at taking time off; we're trying to get good at it.)

Although my team members will be sorry to hear that we're not instituting a four-day workweek, our PTO program still gives our employees the time off they need.